CM-11-02-045ROUND ROCK, TEXAS
PURPOSE. PASSION. PROSPERITY.
City Manager Approval Summary Sheet
Consider executing a letter to Atmos Energy Corporation, Mid -Tex Division clarifying the
Item Caption: City's position on franchise fees.
Approval Date: February 25, 2011
Department: Finance Department
Project Manager: Cheryl Delaney Director, Finance Department
Item Summary:
The attached letter indicates the City's interpretation of the franchise definition between the City and Atmos Energy
Corporation as well as the election of the City to NOT receive an additional payment.
Strategic Plan Relevance:
13.0 Continue and enhance sound business and financial practices and tools.
Cost: No funding required for this item.
Source of Funds: No funding required for this item.
REV. 6/10/10
ROUND ROCK, TEXAS
PURPOSE. PASSION. PROSPERITY.
Mr. David Park
Vice President Rates and Regulatory Affairs
Atmos Energy Corporation, Mid -Tex Division
5420 LBJ Freeway, Ste. 1862
Dallas, TX 75240
RE: Franchise Fees on Franchise Fees
Dear Mr. Park:
To the extent that the following paragraphs are applicable, the selections below indicate
the City's interpretation of the franchise agreement between the City and Atmos Energy
Corporation ("Atmos") as well as the election of the City to receive an additional
payment consistent with the City's historical interpretation of the franchise agreement.
The City has selected 'Y' to indicate agreement or 'N' to indicate disagreement.
Franchise Fees other than on Value of Gas Transported
Y or N The City intends that all amounts billed to and collected from customers for
franchise fees (other than those assessed on the value of transported gas) be added
to the revenue amount that Atmos uses to calculate the City's franchise fee
payment.
Y or N The City elects to receive an additional payment for the period of time beginning
with January 1, 2009 that franchise fees (other than those assessed on the value of
transported gas) were not included in the calculation of the City's franchise fee
payment.
Franchise Fees on Value of Gas Transported
Y or N The City intends that the amount billed to and collected from transportation
customers for franchise fees assessed on the value of gas transported on behalf of
the customer be added to the revenue amount that Atmos uses to calculate the
City's franchise fee payment.
Y or N The City elects to receive an additional payment for the period of time beginning
with January 1, 2009 that franchise fees on the value of transported gas were not
included in the calculation of the City's franchise fee payment.
a t -t t -off
It is understood that by indicating agreement to any or all of the above statements, the
City explicitly agrees that any additional franchise fee amounts paid to the City by Atmos
are recoverable by Atmos from Company's customers within the City. It is also
understood that by indicating disagreement with or choosing not to select any or all of the
above statements, the City is explicitly releasing Atmos from any future claims with
respect to those items.
The City understands that this election letter must be returned to David Park at the
address above and postmarked on or before March 31, 2011 after which the City shall be
deemed to have rejected the options contained herein.
Sincerely,
Signature
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