G-02-10-24-10C5 - 10/24/2002ORDINANCE NO. 6.- Oe - - /Cc
AN ORDINANCE AMENDING THE EXISTING GAS FRANCHISE
BETWEEN THE CITY AND TXU GAS COMPANY, TO PROVIDE FOR
A DIFFERENT CONSIDERATION AND TO AUTHORIZE THE LEASE
OF FACILITIES WITHIN THE CITY'S RIGHTS-OF-WAY; PROVIDING
AN EFFECTIVE DATE; PROVIDING FOR ACCEPTANCE BY TXU
GAS COMPANY; FINDING AND DETERMINING THAT THE
MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO
THE PUBLIC AS REQUIRED BY LAW.
WHEREAS, TXU Gas Company (hereinafter called "TXU Gas") is,
through its TXU Gas Distribution division, engaged in the business
of furnishing and supplying gas to the general public in the 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
heretofore duly passed by the governing body of the City and duly
accepted by TXU Gas; and
WHEREAS, the City and TXU Gas desire to amend said franchise
ordinance to provide for a different consideration and to authorize
the lease of facilities within the City's rights-of-way; Now
Therefore
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS:
SECTION 1: The existing gas franchise ordinance
between the City and TXU Gas Company is amended as follows:
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A. Effective January 1, 2002, the consideration payable by TXU
Gas for the rights and privileges granted to TXU Gas by the
franchise ordinance heretofore duly passed by the governing
body of this City and duly accepted by TXU Gas is hereby
changed to be four percent (4%) of the Gross Revenues, as
defined in Section 1.B. below, received by TXU Gas.
B. "Gross Revenues" shall mean all revenue derived or
received, directly or indirectly, by the Company from or
in connection with the operation of the System within the
corporate limits of the City and including, without
limitation:
(1) all revenues received by the Company from the sale
of gas to all classes of customers within the City,
specifically excepting commercial governmental and
industrial governmental from classes of customers;
(2) all revenues received by the Company from the
transportation of gas through the pipeline system
of Company within the City to customers located
within the City;
(3) the value of gas transported by Company for
Transport Customers through the System of Company
within the City ("Third Party Sales"), with the
value of such gas to be reported by each Transport
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Customer to the Company, provided, however, that
should a Transport Customer refuse to furnish
Company its gas purchase price, Company shall
estimate same by utilizing TXU Gas Distribution's
monthly industrial Weighted Average Cost of Gas, as
reasonably near the time as the transportation
service is performed; and
(4) "Gross revenues" shall include:
(a) other revenues derived from the following
`miscellaneous charges':
i. charges to connect, disconnect, or
reconnect gas within the City;
ii. charges to handle returned checks from
consumers within the City;
iii. such other service charges and charges as
may, from time to time, be authorized in
the rates and charges on file with the
City; and
iv. contributions in aid of construction"
("CIAC");
(b) revenues billed but not ultimately collected
or received by the Company; and,
(c) gross receipts fees.
(5) "Gross revenues" shall not include:
(a) the revenue of any Person including, without
limitation, an affiliate, to the extent that
such revenue is also included in Gross
Revenues of the Company;
(b) sales taxes; and
(c) any interest income earned by the Company; and
(d) all monies received from the lease or sale of
real or personal property, provided, however,
that this exclusion does not apply to the
lease of facilities within the City's right of
way unless the lessee is also an entity that
pays franchise fees to the City.
C. Calculation and Payment of Franchise Fees Based on CIAC
(1) The franchise fee amounts based on "Contributions in
aid of Construction" ("CIAC") shall be calculated on
an annual calendar year basis, i.e., from January 1
through December 31 of each calendar year.
(2) The franchise fee amounts that are due based on
CIAC shall be paid at least once annually on or
before April 30 each year based on the total CIAC
recorded during the preceding calendar year.
D. Effect of Other Municipal Franchise Ordinance Fees
Accepted and Paid by TXU Gas:
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(1) If TXU Gas should at any time after the effective
date of this Ordinance agree to a new municipal
franchise ordinance, or renew an existing municipal
franchise ordinance, with another municipality,
which municipal franchise ordinance determines the
franchise fee owed to that municipality for the use
of its public rights-of-way in a manner that, if
applied to the City, would result in a franchise
fee greater than the amount otherwise due City
under this Ordinance, then the franchise fee to be
paid by TXU Gas to City pursuant to this Ordinance
shall be increased so that the amount due and to be
paid is equal to the amount that would be due and
payable to City were the franchise fee provisions
of that other franchise ordinance applied to City.
(2) The provisions of this Subsection D apply only to
the amount of the franchise fee to be paid and do
not apply to other franchise fee payment
provisions, including without limitation the timing
of such payments.
E. TXU Gas Franchise Fee Recovery Tariff
(1) TXU Gas may file with the City a tariff
amendment(s) to provide for the recovery of the
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franchise fees under this amendment.
(2) City agrees that (i) as regulatory authority, it
will adopt and approve the ordinance, rates or
tariff which provide for 100% recovery of such
franchise fees as part of TXU Gas' rates; (ii) if
the City intervenes in any regulatory proceeding
before a federal or state agency in which the
recovery of TXU Gas' franchise fees is an issue,
the City will take an affirmative position
supporting 100% recovery of such franchise fees by
TXU Gas and; (iii) in the event of an appeal of any
such regulatory proceeding in which the City has
intervened, the City will take an affirmative
position in any such appeals in support of the 100%
recovery of such franchise fees by TXU Gas.
(3) City agrees that it will take no action, nor cause
any other person or entity to take any action, to
prohibit the recovery of such franchise fees by TXU
Gas.
F. Lease of Facilities Within City's Rights -of -Way. TXU Gas
shall have the right to lease, license or otherwise grant
to a party other than TXU Gas the use of its facilities
within the City's public rights-of-way provided: (i) TXU
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Gas first notifies the City of the name of the lessee,
licensee or user; the type of service(s) intended to be
provided through the facilities; and the name and
telephone number of a contact person associated with such
lessee, licensee or user and (ii) TXU Gas makes the
franchise fee payment due on the revenues from such lease
pursuant to Sections I.A. and I.B. of this Ordinance.
This authority to Lease Facilities Within City's Rights-
of-Way shall not affect any such lessee, licensee or
user's obligation, if any, to pay franchise fees.
SECTION 2: In all respects, except as specifically and
expressly amended by this ordinance, the existing effective
franchise ordinance heretofore duly passed by the governing body of
the City and duly accepted by TXU Gas shall remain in full force
and effect according to its terms until said franchise ordinance
terminates as provided therein.
SECTION 3: This ordinance shall take effect upon its final
passage and TXU Gas' acceptance. TXU Gas shall, within thirty (30)
days from the passage of this ordinance, file its written
acceptance of this ordinance with the Office of the City Secretary
in substantially the following form:
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To the Honorable Mayor and City Council:
TXU Gas Distribution, a division of TXU Gas Company, acting by and through
the undersigned authorized officer, hereby accepts in all respects, on this the
day of , 20 , Ordinance No. amending the
current gas franchise between the City and TXU Gas and the same shall constitute
and be a binding contractual obligation of TXU Gas and the City.
TXU Gas Distribution
A division of TXU Gas Company
By:
Vice President
SECTION 4. 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.
nth
READ and APPROVED on first reading this the /U day of
()0/1-)51S/A) , 2002.
r /x.11
READ, APPROVED and ADOPTED on second reading this the
day of C.)e)LO'6)‘—)
, 2002.
kWELL, Mayor
Ci - of Round Rock, Texas
CHRISTINE R. MARTINEZ, City Secreta,
8
To the Honorable Mayor and City Council:
TXU Gas Distribution, a division of TXU Gas Company, acting by and through
the undersigned authorized officer, hereby accepts in all respects, on this the .713'414'
day of � 200 , Ordinance No.6-02-10 .4 -lots amending the
current gas franchise between the City and TXU Gas and the same shall constitute
and be a binding contractual: obligation of TXU Gas and the City.
TXU Gas Distribution
A division of TXU Gas Company
By:
Vice President
CTION 4. The City Council hereby finds and declares that
:r.)1: en notice of the date, hour,
place and subject of the meeting
.1 +° cti this Ordinance was adopted was posted and that such
was open to the public as required by law at all times
du'- which this Ordinance and the subject matter hereof were
., considered and formally acted upon, all as required by
'=) Meetings Act, Chapter 551, Texas Government Code, as
READ and APPROVED on first reading this the
/� day of
141/
, 2002.
READ, APPROVED and ADOPTED on second reading this the CN
•
'•Uyt,LJ
, 2002.
R. MARTINEZ, City Secreta
8
WELL, Mayor
of Round Rock, Texas
DATE:
October 18, 2002
SUBJECT: City Council Meeting — October 24, 2002
ITEM: * 10.C.5.
Resource:
History:
Consider an ordinance authorizing the Mayor to amend the existing
gas franchise agreement with TXU Gas Company. (Second Reading)
David Kautz, Chief Financial Officer
Franchise fees are paid by the gas utility in exchange for using the
City's rights of way. As a result of a recent lawsuit settlement
between several Texas cities (including Round Rock) and TXU Gas,
the City must consider an amendment to the current gas franchise
ordinance. The ordinance provides that the franchise fee increases to
4% (from the current 3%), extends the franchise fee to new customer
classes and clarifies the various fees to be included in Gross Receipts
(the basis of the franchise fee calculation).
Funding: N/A
Cost: N/A
Source of Funds: N/A
Outside Resources:
Impact/Benefit:
Public Comment:
Sponsor:
Strasburger, Attorneys At Law
Minor overall effect on customer bills is expected as a result of the
changed franchise fee because of lower gas prices. The fee change
reflects the lawsuit settlement and provides for uniform franchise fees
in the TXU Gas service area. The franchise fee change for an average
residence may be 35 cents per month. Monthly bills fluctuate mainly
because of changes in gas costs.
The extension of the franchise to new customer classes which were
previously exempt from the fee will be of greater significance (at 4%
of the bill amount).
N/A
N/A