G-08-07-10-9A1 - 7/10/2008ORDINANCE NO. C� -Qs-01---(0-04(
AN ORDINANCE AMENDING THE EXISTING GAS FRANCHISE
WITH ATMOS ENERGY CORPORATION TO PROVIDE FOR A
DIFFERENT CONSIDERATION; PROVIDING AN EFFECTIVE
DATE; PROVIDING FOR ACCEPTANCE BY ATMOS ENERGY
CORPORATION; PROVIDING FOR A SAVINGS CLAUSE AND
REPEALING CONFLICTING ORDINANCES OR RESOLUTIONS.
WHEREAS, Atmos Energy Corporation ("Atmos") is engaged in
the business of furnishing and supplying gas to the general
public in the City of Round Rock, ("City"), including the
transportation, delivery, sale, and distribution of gas in, out
of, and through the City for all purposes, and is using the
public streets, alleys, grounds and rights -of -ways within the
City for that purpose under the terms of a franchise ordinance
duly passed by the governing body of the City
by Atmos or its predecessor in interest; and
WHEREAS, the City and Atmos desire to amend said franchise
ordinance to provide for a different consideration;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF ROUND ROCK, TEXAS:
and
duly accepted
I.
SECTION 1: The consideration payable by Atmos for the
rights and privileges granted to Atmos by the franchise
ordinance duly passed by the governing body of this City and
accepted by Atmos or its predecessor in interest is hereby
changed to be five percent (5%) of the Gross Revenues, as
defined in the franchise ordinance.
0:\WDOX\ORDINANC\080626C1.DOC/rmc
SECTION 2: Franchise payments shall be made on the dates
prescribed in the existing franchise and shall be for the rights
and privileges of the respective period during which the payment
is made.
SECTION 3: This ordinance shall take effect on July 1,
2008. Atmos shall, within thirty (30) days from the receipt of
this ordinance, file its written acceptance of this ordinance
with the Office of the City Secretary in substantially the
following form:
To the Honorable Mayor and City Council:
Atmos Energy Corporation, acting by and
through the undersigned authorized officer,
hereby accepts in all ,xespects, on this the
304- day of
2008,
Ordinance No . (i -Q$- 04 O -9!d( amending the
current gas franchise between the City and
Atmos Energy Corporation.
Atmos Ene y Corporation
By
Al
V'/ -President Mio-Tex Division
SECTION 4: In all respects, except as specifically and
expressly amended by this ordinance, the existing franchise
ordinance heretofore duly passed by the governing body of the
City shall remain in full force and effect.
SECTION 5: The City shall provide a copy of this Ordinance
to Mr. David Park, VP of Rates and Regulatory Affairs, Atmos
Energy Corp., 5420 LBJ Freeway, Suite 1800, Dallas, Texas 75240,
no later than ten (10) business days after its final passage and
approval.
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II.
A. All ordinances, parts of ordinances, or resolutions in
conflict herewith are expressly repealed.
B. The invalidity of any section or provision of this
ordinance shall not invalidate other sections or provisions
thereof.
C. The City Council hereby finds and declares that
written notice of the date, hour, place and subject of the
meeting at which this Ordinance was adopted was posted and that
such meeting was open to the public as required by law at all
times during which this Ordinance and the subject matter hereof
were discussed, considered and formally acted upon, all as
required by the Open Meetings Act, Chapter 551, Texas Government
Code, as amended.
READ and APPROVED on first reading this the 2G day of
61A V) , 2008.
READ, APPROVED and ADOPTED on second reading this the
left day of aitt , 2008.
A-' CGRAW , Mayor
ATTEST:
takte
SARA L. WHITE, City Secretary
City of Round Rock, Texas
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DATE: July 1, 2008
SUBJECT: City Council Meeting—July 10, 2008
ITEM: *9A1. Consider an ordinance amending the consideration paid by Atmos Energy
Corporation for the Gas Franchise from 4% to 5% of gross revenues.
(Second Reading)
Department:
Staff Person:
Justification:
Finance
Cindy Demers, Finance Director
Paragraph 24 of the Atmos Texas Municipalities (ATM) Cities/Atmos settlement agreement
approved by the City Council in February provides that an ATM city can increase franchise fee
compensation to 5% of gross revenue with 60 days notification to Atmos. This action will
approve the increase of the franchise fee from 4% to 5% of gross revenue and initiate the
process to update the City's existing franchise agreement with Atmos.
Funding:
Cost: Enter amount or N/A
Source of funds: General Fund
Outside Resources: Jim Boyle, Herrera & Boyle, PLLC
Background Information:
In September 2007, Atmos Energy Corporation requested a $52 million system -wide revenue
increase. The City of Round Rock in coalition with several other Texas municipalities (Atmos
Texas Municipalities) denied the rate request and authorized the hiring of lawyers and rate
experts. The settlement that resulted from this process was approved by the City in February
2008. It provided for a $10 million increase, less than 20% of the requested amount and as a
member of ATM, the City Council may increase the franchise compensation up to 5% of gross
revenue.
Public Comment: N/A