07/07/2008 Council Packet - Laserfiche WebLink

Home Search

lrequ e s'reesona � tt the he franchise right of `cities and refuse to collect franchise the right to strike the best deal it e City can ething of cer Memorandum June 19, 2008 he utilities, or 2) obtains 1 ion. iort vere a "tiebreaker" w . e prznciples of : �M � ` � cplll<��th the tnchise authors " the Legislttr� one In my opinion, if the term the ility "must "agree." 01 e court. the u t s because'' e utility can always refuse, agre leve the Legislature-gave cities more tan just that could walk awa" and require .Ices. fees. could with a utili e" a franch WaricanalY that must fa pr cities, sou can s WI - above,- ause comica all htte • in amo ubstantally egizrvali ave' generally agreed'witli a p ally "girl in to the process with the same with respect to fees. Co f revenue and the intent is to col xlrtie step, Nevertheless, it remains the City's right to leave out any agreement: substantially the same when it comes to imposing fees. The City ere with multiple utilities posed franchilsk ven pereegli B. Types of Franchise Fee Designs Percent of Gross Revenues The most common method of imposing a franchise fee, until recently, was the percentage of gross revenues formula. This form adds to each utility customer's bill a pro rata percentage, e.g. 3 %, of the utility's revenue derived from its operations in the city. For example, if a utility generated $2 million in gross revenue from its operations within a city, a 3% gross revenue franchise fee would be $60,000 a year. In its simplest form, the gross revenue fee spread the $60,000 across each customer in proportion to that customer's share of the total revenue. There is nothing prohibiting modifications to such a formula, however. Pros: 335300v1 JMS LN140 -105