HomeMy WebLinkAboutOrdinance No. 2020-13 ORDINANCE NO.2020-13
AN ORDINANCE OF THE CITY OF FRIENDSWOOD,
TEXAS, GRANTING AN ELECTRICAL FRANCHISE TO
CENTERPOINT ENERGY PURSUANT TO TEXAS
UTILITIES CODE §§33.008, 181.042, AND 181.043;
STATING A PURPOSE; PROVIDING FOR A TERM OF
30 YEARS; PROVIDING FOR THE LOCATION OF
FACILITIES; PROVIDING FOR REPAIR OF
EXCAVATIONS AND OBSTRUCTIONS; PROVIDING FOR
INDEMNITY TO THE CITY OF FRIENDSWOOD
PROVIDING FOR STREET RENTAL; REPEALING THE
FORMER FRANCHISE, WHICH IS ORDINANCE NO. 84-
16A OF THE CITY OF FRIENDSWOOD; PROVIDING A
SEVERABILITY CLAUSE; PROVIDING AN OPEN
MEETINGS CLAUSE; PROVIDING FOR PUBLICATION
AND AN EFFECTIVE DATE.
* * * * * * * * * *
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD,
TEXAS:
Section 1. Parties. The City of Friendswood,Texas,herein called the City,a municipal
corporation created under Title 28 of the Texas Revised Civil Statutes, hereby grants the
nonexclusive right,privilege, and franchise herein stated to CenterPoint Energy, a corporation, its
successors and assigns,herein called Grantee or Company.
Section 2. Power to Grant Franchise. Pursuant to the Home Rule Charter of the City
of Friendswood, Texas, Sec. 9.02, the City Council shall have the power by ordinance to grant,
renew, extend and amend all franchises of all public utilities of every character operating within
the City. No franchises shall be for an indeterminate period, and no franchise shall be granted for
a term of more than 30 years from the date of grant, renewal or extension.
Section 3. Grant not to be Exclusive. Pursuant to the Home Rule Charter of the City
of Friendswood, Texas, Sec. 9.04,no grant or franchise to construct, maintain, or operate a public
utility and no renewal or extension of any such grant shall be exclusive.
Section 4. Right to Regulate. To the extent permitted by state law and pursuant to
Home Rule Charter of the City of Friendswood,Texas,Sec. 9.07,"All grants,renewals,extensions
or amendments of public utility franchises,whether it be so provided in the ordinance or not, shall
be subject to the right of the City: (a)to repeal the same by ordinance at any time for failure to
begin construction or operation within the time prescribed or otherwise to comply with the terms
of the franchise, such power to be exercised only after due notice and hearing; (b)to require an
adequate extension of plant and service as is necessary to provide adequate service to the public,
and maintenance of the plant and fixtures at the highest reasonable standard of efficiency; (c)to
establish reasonable standards of service and quality of products and prevent unjust discrimination
in service or rates;(d)to prescribe the form of accounts kept by each utility franchise;(e)to impose
reasonable regulations to insure safe,efficient and continuous service to the public. The franchise
holder in opening and refilling of all earth openings shall relay the pavement and to all other work
necessary to complete restoration of streets, sidewalks or grounds to a condition equally as good
or better as when disturbed."
Section 5. Nature of Grant. The City, acting pursuant to Texas Utilities Code Sections
33.008 and 181.043,hereby grants to Grantee a nonexclusive right,privilege, and franchise to use
the City's Public Rights-of-Way to construct, maintain, remove, and operate transmission and
distribution lines and pertinent facilities over, under, across, upon, and along the streets, alleys,
and other public property in the City for the purpose of conducting an electric delivery business
and to use its facilities for any other business purpose as the Grantee may desire from time to time.
Section 6. Purpose. This franchise is granted for the purpose of providing electric
service within the City and adjacent areas and transporting electric energy to, from, and beyond
the City.
Section 7. Term. This franchise shall exist for the term of 30 years from date of
passage.
Section 8. Location of Facilities. All poles erected by Grantee pursuant to the
authority herein granted shall be of sound material and reasonably straight and shall not be set in
any gutter or drain or drainage ditch. Grantee's poles and other facilities shall be placed and
erected in such a manner as not to interfere with traffic, and the location, relocation, construction,
and manner of erection of such poles and facilities shall at all times be subject to the reasonable
and lawful exercise of the police power of the City. No paving cuts of City property shall be made
by Grantee without first obtaining the permission of the City or the City official to whom this
responsibility is delegated. However, such paving cuts on City property may be made in order to
make emergency repairs to Grantee's lines or equipment provided that Grantee notify the City
official of such paving cuts as promptly as possible after beginning the work but not later than the
Ord No.2020-13 2
close of business on the next business day after the repairs are made. Grantee, whenever ordered
to do so by the governing body of the City, shall at its own expense, relocate, alter or remove its
facilities placed or maintained by Grantee under this franchise when the relocation, altering or
removal thereof may be reasonably necessary in the reconstruction or construction of any public
work project undertaken or directed by the City. The City acknowledges that any modifications
to the Grantee's facilities may affect the safety and reliability of electric transmission and delivery
within the City and the City hereby agrees to consult with Grantee on any such rearrangement,
relocation,alteration or removal before ordering Grantee to do so. Notwithstanding the foregoing,
Grantee shall not be responsible for relocation costs:
a. whereby City application,specific monies can be and are obtained from federal and
state sources for relocation costs, provided that no City matching funds would be required, the
scope of the City project would not be diminished, and the City would not be required to spend
additional monies;
b. the facilities to be moved were originally installed at the City's request (i.e.,
streetlights);
c. if the specific excavation, construction or relocation is done to accommodate the
actions or plans of private individuals or entities, then such private individuals or entities shall be
responsible for the relocation costs, provided that in no event shall the City be liable for such
relocation costs; or
d. state or federal law requires the City to pay for such relocation.
Section 9. Permits. The Franchise shall constitute a permit to perform all work on
Grantee's System within the Public Rights-of-Way and to park vehicles in the Streets and other
Public Rights-of-Way when necessary for the installation, removal, operation or maintenance of
Grantee's System. Grantee and contractors performing work for Grantee shall not be required to
obtain any permits in addition to the Franchise or to pay any fee in addition to the Annual Franchise
Fee in order to perform work on Grantee's System or to park within the Streets and other Public
Rights-of-Way. Grantee shall give City reasonable notice of the dates, location and nature of any
excavation work and shall cooperate with City to avoid unnecessary disruption, and Grantee shall
comply with all valid City ordinances governing time periods and standards relating to excavating
in the Public Rights-of-Way. Except as provided in Section 15,the Annual Franchise Fee payable
hereunder shall be the total compensation payable by Grantee to City for Grantee's use of the
Public Rights-of-Way for the conduct of its business under the Franchise. City shall not charge
Ord No.2020-13 3
any additional license, charge, fee, street or alley rental, or other character of charge or levy for
the use or occupancy of the Public Rights-of-Way in City,or any pole tax or inspection fee tax. If
City does charge Grantee any additional license, charge, fee, street or alley rental, or other
character of charge or levy,then Grantee may deduct the amount charged from the next succeeding
franchise payment or payments until fully reimbursed.
Following completion of work in the Public Rights-of-Way, Grantee shall repair the
affected Public Rights-of-Way as soon as reasonably possible, but in all cases, no street, alley,
highway or public place shall be encumbered for a longer period than shall be reasonably necessary
to execute the work.
Section 10. Quality of Service. The service furnished hereunder to City and its
inhabitants shall be,considering all circumstances,consistent with the Tariff issued to CenterPoint
Energy by the Public Utility Commission of Texas as well as applicable state and federal
regulations. Grantee will maintain its facilities in reasonable operating condition in accordance
with the foregoing Tariff and applicable state and federal regulations during the continuance of
this Franchise. Should Grantee fail or refuse to maintain its facilities in reasonable operating
condition in accordance with the Tariff and applicable state and federal regulations during the life
of this Franchise, then it shall forfeit and pay to City the sum of Twenty Five Dollars ($25) for
each day it shall so fail or refuse after reasonable notice thereof and a hearing thereon by City.
Any suit to recover such penalty shall be filed within one year from the date the penalty accrues.
Section 11. Excavations and Obstructions. Any and all excavations and obstructions in
and upon the streets, alleys and other public places in the City caused by Grantee's operations
under this Ordinance shall be repaired and removed by Grantee as quickly as is reasonably
possible,under the circumstances.City agrees to give Grantee 72 hours'notice when City or City's
contractors request the bracing of Grantees poles.
Section 12. INDEMNITY. GRANTEE SHALL FULLY INDEMNIFY AND SAVE
HARMLESS THE CITY FROM ANY AND ALL DAMAGE, LOSS, ACTION OR LOSS,
ACTION OR CAUSE OF ACTION ARISING IN WHOLE OR IN PART FROM
GRANTEE'S EXERCISE OF ANY OF ITS RIGHTS, PRIVILEGES,FRANCHISES AND
OBLIGATIONS HEREUNDER, EXCEPT TO THE EXTENT ARISING OUT OF THE
CITY'S SOLE NEGLIGENCE OR WILLFUL MISCONDUCT. IN THE EVENT OF
JOINT AND CONCURRENT NEGLIGENCE OR FAULT OF BOTH GRANTEE AND
THE CITY, RESPONSIBILITY AND INDEMNITY, TO THE EXTENT ALLOWED BY
Ord No.2020-13 4
LAW, IF ANY, SHALL BE APPORTIONED COMPARATIVELY IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS WITHOUT, HOWEVER, WAIVING
ANY GOVERNMENTAL IMMUNITY AVAILABLE TO THE CITY UNDER TEXAS
LAW AND WITHOUT WAIVING ANY OF THE DEFENSES OF THE PARTIES UNDER
TEXAS LAW. IT IS UNDERSTOOD THAT IT IS NOT THE INTENTION OF THE
PARTIES HERETO TO CREATE LIABILITY FOR THE BENEFIT OF THIRD
PARTIES, BUT THAT THIS SECTION SHALL BE SOLELY FOR THE BENEFIT OF
THE PARTIES HERETO AND SHALL NOT CREATE OR GRANT ANY RIGHTS,
CONTRACTUAL OR OTHERWISE,TO ANY PERSON OR ENTITY.
Section 13. Street Rents.
a. In consideration for the rights and privileges herein granted, Grantee agrees to pay
to City,an annual franchise fee(referred to herein as"Annual Franchise Fee"),subject to an Annual
Adjustment Factor as set forth below. Payment of the Annual Franchise Fee shall be the total
compensation payable to City in consideration for the right,privilege and franchise herein conferred
for Grantee's use of the Public Rights-of-Way to construct, operate, use and maintain its facilities
for the provision of electric transmission and distribution service and its right to use, license, or
exploit its facilities as permitted, herein.
The Annual Franchise Fee shall be calculated as follows:
1. The "Annual Franchise Fee" shall be one hundred forty-four
thousand one hundred seven Dollars and three cents
($144,107.03).
2. The Annual Franchise Fee for each twelve-month period
beginning July 1, 2021 (each a "Franchise Year") shall be
adjusted by multiplying$144,107.03 by the Annual Adjustment
Factor. The "Annual Adjustment Factor" for any given year
shall be a fraction, the numerator of which shall be the kWh
delivered by Grantee within the City(inclusive of street lighting)
in the previous calendar year and the denominator of which shall
be the kWh delivered by Grantee within the City (inclusive of
street lighting) in 2019, said amount being 88,764,339 kWh.
(Example: The Annual Franchise Fee for the Franchise Year
beginning July 1, 2021 = $144,107.03)x 2020 kWh
/88,764,339 kWh).
In no case,however, shall the Annual Franchise Fee be less than
the Annual Franchise Fee established in 1. above.
b. In calculating the amount to be paid each year, Grantee shall offset its Annual
Franchise Fee payments with the amount of the Municipal Account Franchise Credits and
Ord No.2020-13 5
Municipal Franchise Fee Credits provided in Grantee's tariffs and applicable to City in the prior
calendar year.
c. The Annual Franchise Fee shall be payable in equal monthly installments due the
first day of each calendar month. Grantee shall calculate the new franchise fee to be payable for
each Franchise Year beginning July 1, 2021 and shall provide the same along with the basis for
such calculation to City for its review no later than April 1st of each year. If Grantee does not
receive an objection from City by May 31st, Grantee shall implement the adjusted Annual
Franchise Fee payment on July 1st. If the term of this Franchise provided for in Section 7, above,
ends on any day other than the last day of the last Franchise Year, then the Annual Franchise Fee
for the final Franchise Year shall first be calculated pursuant to this Section 13 and then prorated
accordingly. Grantee shall begin paying the Annual Franchise Fee on the later of(a)the expiration
of the prior franchise or(b)the first day of the month that is three(3)months prior to the Effective
Date (the later of(a) or (b) being the "Payment Start Date"). (Example: If the Effective Date is
July 15th, the Payment Start Date would be the later of(a)the expiration of the prior franchise or
(b)the preceding April 1st.) If the Payment Start Date is any day other than July 1st, then the
Annual Franchise Fee for the period between the Payment Start Date and the following July 1st
shall first be calculated pursuant to this Section 13 and then prorated accordingly and net of any
amounts previously paid for such period.
d. The Franchise Fee payable hereunder shall be the total compensation payable by
the Grantee to the City for Grantee's use of the Public Rights-of-Way for the conduct of its
business under this franchise. City shall not charge any additional license, charge, fee, street or
alley rental, permit fee or other character of charge or levy for the use or occupancy of the Public
Rights-of-Way in City, or any pole tax or inspection fee tax. If the City does charge Grantee any
additional license, charge, fee, street or alley rental, or other character of charge or levy, then
Grantee may deduct the amount charged from the next succeeding Franchise Fee payment or
payments until fully reimbursed.
e. If, as the result of a final and non-appealable order issued by the PUCT, all or a
portion of the then-effective Annual Franchise Fee is expressly found to be unreasonable or is
otherwise expressly rejected or disallowed by the PUCT,then Grantee shall be permitted to reduce
the Annual Franchise Fee by such amount; provided, however, that Grantee shall be obligated to
support the reasonableness of the Annual Franchise Fee and shall not voluntarily agree to any
reduction thereof
f. The parties agree to meet to discuss adjustments to franchise fee either upon the
request of one of the parties or on a periodic basis as the parties may agree. The franchise fee shall
be adjusted provided that (a)the parties agree to a reasonable increase in the fee; (b) Grantee
obtains all necessary and final approvals for the recovery of any proposed increase of the franchise
fee; and (c)the increased fee or its recovery is not otherwise prohibited or disallowed by a
regulatory body or court having jurisdiction.
Ord No.2020-13 6
Section 14. Records and Reports.
a. Franchise Data. Grantee shall keep complete and accurate records of its business
and operations under and in connection with this Franchise. All such data shall be kept within
Grantee's computer and data systems at Grantee's appropriate business locations.
b. Access by City. The City may conduct an audit or other inquiry or may pursue a
cause of action in relation to the payment of the franchise fee only if such audit, inquiry, or pursuit
of a cause of action concerns a payment made less than two (2) years before the commencement
of such audit, inquiry, or pursuit of a cause of action. Each party shall bear its own costs of any
such audit or inquiry. Upon receipt of a written request from the City, all records related to
Grantee's operations under this Franchise and belonging to Grantee shall, to the extent permitted
by law,be made available for inspection and copying no later than thirty(30)days from receipt of
such request unless the parties mutually agree to a different time frame. Nothing herein obligates
Grantee to disclose third-party confidential or proprietary information. Amounts due to City for
past underpayments or amounts due Grantee for past overpayments shall include interest
calculated using the annual interest rates for overcharges as set by the Texas Public Utility
Commission. Said interest shall be payable on such sum from the date the initial payment was due
until it is paid.
Section 15. City Use of Grantee Facilities. In addition to the considerations set forth in
Section 13, Grantee shall furnish, free of charge, subject to the use of City, such pole and/or duct
space as may be required from time to time for the installation of City-owned traffic, police and
fire alarm system conductors; provided such conductor space does not exceed the available
capacity on any one existing pole or in one existing interior duct. Grantee shall allow for the
expanded use of existing energized conductors by City for the purposes of providing traffic signal
communication interconnectivity with prior written approval from Grantee. The specific location
for these traffic,police and fire alarm conductors on Grantee poles or ducts shall be determined by
Grantee and shall be allotted at the time specific applications for space are received from City. All
City traffic, police and fire alarm circuits on Grantee poles and ducts shall be designed and
installed, operated and maintained in compliance with the applicable provisions of the NESC and
other laws, statutes, codes and ordinances applicable to private parties and so as to create no
interference, corrosion, harm, damage or hazard with, to or from Grantee's System or Grantee's
business. All plans for such city traffic, police and fire alarm circuits must be submitted for
Grantee's written approval prior to installation. Any modifications to Grantee's System necessary
to accommodate such installation shall be paid by City. If, after installation, City's equipment is
found to interfere with Grantee's System or business, Grantee and City shall work together to
address the problem and, if deemed practical by Grantee, preserve City's access. Where main
Ord No.2020-13 7
underground duct lines are located between manholes, Grantee shall permit free of charge the
installation in one interior duct by City of its traffic, police or fire alarm signal cables; provided
space is available in an interior duct not suitable for power circuits without interference with
Grantee's system neutral conductors. All cables installed by City in Grantee ducts shall be of the
non-metallic sheath type to prevent corrosive or electrolytic action between City and Grantee
owned cables. A request for duct assignment shall in each instance be submitted to Grantee and a
sketch showing duct allocation shall be received from Grantee prior to the installation of City
cables in Grantee-owned duct lines. All City-owned conductors and cables, whether on poles or
in duct lines, shall be constructed,maintained and operated in such manner as to not interfere with
or create a hazard in the operation of Grantee's System or Grantee's business. If after installation,
City's equipment is found to interfere with Grantee's System or business, Grantee and City shall
work together to address the problem and, if deemed practical by Grantee, preserve City's access.
In addition to the consideration set forth in Section 13, Grantee shall permit City to use,
free of charge, extra space on its street light poles to install City-owned traffic control signs and
decorative banners, with prior written approval from Grantee and provided that such use is
consistent with the NESC and other applicable engineering and operational codes and standards.
NOTWITHSTANDING ANY OTHER PROVISION IN THIS FRANCHISE, IT IS
FURTHER AGREED THAT GRANTEE SHALL NOT BE RESPONSIBLE TO ANY
PARTY OR PARTIES WHATSOEVER FOR ANY CLAIMS, DEMANDS, LOSSES,
SUITS, JUDGMENTS FOR DAMAGES OR INJURIES TO PERSONS OR PROPERTY
BY REASON OF THE CONSTRUCTION, MAINTENANCE, INSPECTION OR USE OF
THE TRAFFIC SIGNAL LIGHT SYSTEMS, POLICE AND FIRE ALARM SYSTEMS,
TRAFFIC CONTROL SIGNS, OR DECORATIVE BANNERS BELONGING TO CITY
AND CONSTRUCTED UPON GRANTEE'S POLES OR STREET LIGHT POLES OR IN
ITS DUCTS, AND CITY SHALL INDEMNIFY AND HOLD GRANTEE HARMLESS
AGAINST ALL SUCH CLAIMS, LOSSES, DEMANDS, SUITS AND JUDGMENTS, TO
THE EXTENT PERMITTED BY LAW,BUT CITY DOES NOT,BY THIS AGREEMENT,
ADMIT PRIMARY LIABILITY TO ANY THIRD PARTY BY REASON OF CITY'S
OPERATION AND USE OF SUCH TRAFFIC SIGNAL LIGHT SYSTEMS,POLICE AND
FIRE ALARM SYSTEMS,TRAFFIC CONTROL SIGNS,OR DECORATIVE BANNERS,
SUCH BEING A FUNCTION OF GOVERNMENT.
Section 16. Reservation of Powers. In granting this Franchise, the City does not
surrender or to any extent lose, waive, impair or lessen the lawful powers, claims and rights, now
or hereafter vested in the City under the Constitution and statutes of the State of Texas and under
the Charter and valid Ordinances of the City of Friendswood or other applicable law, to regulate
public utilities within the City and to regulate the use of the Streets by the Grantee.
Ord No.2020-13 8
Section 17. Notice to Parties. Any notice or communication required or desired to be
served upon the City or Company shall be deemed sufficiently given if sent by registered or
certified mail, return receipt requested. Any such communication to the Company shall be sent
to:
General Counsel
CenterPoint Energy
P.O. Box 61867
Houston, TX 77208-1867
Any such communication to the City or the City Council shall be sent to:
City Manager
910 South Friendswood Drive
Friendswood, Texas 775546
Section 18. Prior Franchise Repealed. This franchise ordinance, upon acceptance by
the Grantee, shall replace and supersede that certain Electric Franchise Ordinance No. 84-16A
heretofore granted by the City to the Grantee, and its successors adopted on August 20, 1984.
Section 19. Severability Clause. Should any article, section, part, paragraph, sentence,
phrase, clause, or word of this ordinance, for any reason be held illegal, inoperative, or invalid, or
if any exception to or limitation upon any general provision herein contained be held to be
unconstitutional or invalid or ineffective, the remainder shall, nevertheless, stand effective and
valid as if it had been enacted and ordained without the portion held to be illegal, inoperative,
unconstitutional, invalid, or ineffective.
Section 20. Open Meetings Clause. That the City Council has found and determined
that the meeting at which this Ordinance is considered is open to the public and that notice thereof
was given in accordance with the provisions of the Texas Open Meetings Act, Texas Government
Code, Chapter 551, as amended, and that a quorum of the City Council was present.
Section 21. Publication, Passage and Effective date. Pursuant to Home Rule Charter of
the City of Friendswood,Texas, Sec. 9.03,this Ordinance shall be read at two(2)regular meetings
of the City Council. Within seven (7) days following the first reading of this Ordinance, the full
text of this Ordinance shall be published one (1)time in the official newspaper of the City, and the
expense of such publication shall be borne by the Company. This Ordinance shall take effect and
Ord No.2020-13 9
be in force from and after its passage and approval,and upon acceptance by the Company,the term
of this franchise shall begin and continue in accordance with Section 7.
Section 22. Compliance with Charter and Ordinances. This Franchise,the rights granted
hereby and the operations and activities performed by Grantee pursuant hereto shall be subject to
applicable provisions of the Charter of the City of Friendswood, Texas. The Franchise and rights
granted hereby and the operations and activities performed by Grantee pursuant hereto shall be
subject to all existing valid ordinances and regulations ofthe City currently in effect as ofthe Effective Date of
this Franchise Agreement insofar as such ordinances and regulation(a)do not shorten the term hereof
or terminate,abrogate,or materially and adversely affect the Franchise and right granted to Grantee
hereby,(b)do not conflict with or are not inconsistent with the terms and provisions contained in this
Ordinance,(c) domt prevent or interfere with Grantee's federal and state regulatory obligations or
(d) do not unreasonably regulate the Grantee's operations and activities in the City Right-of-Way.
If Grantee believes a future Ordinance unreasonably regulates its operations and activities in the
City Right-of-Way, City and Grantee shall meet and reach a mutually agreeable solution prior to
its application to the Grantee. All such conflicting or inconsistent ordinances are hereby deemed
inapplicable to Grantee to the extent of such conflict or inconsistency.
Section 23. Acceptance by Grantee. The Grantee shall,within thirty(30)days from the
date of this Ordinance is passed and approved, file with the City Secretary, a written statement
signed in its name and behalf, in the following form:
To the City of Friendswood,Texas:
"The Grantee for itself,its successors and assigns,hereby accepts the above and foregoing
Ordinance and agrees to be bound by all of its terms and provisions."
CenterPoint Energy
By: gc....5-\rick..0
Dated the 1 day of Ma..,,i ,2020.
Section 24. Adoption. Passed and adopted with all necessary procedural formalities by
the City Council of the City of Friendswood,Texas,at a regular meeting held at the regular place,
at which meeting a quorum was present throughout. This Ordinance shall take effect and be in
Ord No.2020-13 10
force from and after its passage and approval, and upon acceptance by the Grantee,the term of this
franchise shall begin and continue in accordance with Section 7 hereof.
PASSED AND APPROVED on first reading the 6th day of April, 2020.
PASSED AND APPROVED on second and final reading the 4th day of May, 2020.
4I AI
Mike Fore an, M.ye
ATTEST: .. . ....
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Melinda Welsh, City Secretary, TRMC :*
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APPROVED AS TO FORM:
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Mary K Fisc , City Attorney
Ord No. 2020-13 11