City Council Study Session Agenda and Packet 2004 10 12

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COUNCIL COMMUNICATION TO: MAYOR AND CITY COUNCIL FROM: WILLIAM A. SIMMONS CITY MANAGER DATE: October 12, 2004 SUBJECT: Discussion/Direction - Review Proposed Franchise Agreement with Public Service Company ORIGINATING DEPARTMENT: City Manager's Office SUMMARY: Please find attached the most recent redline draft of the gas and electric franchise received from PSCO. City staff with assistance from the City Attorney has been negotiating the proposed franchise over the past five to six months. The City received an initial PSCO draft and has responded twice with suggested changes. The attached draft is the most recent response from PSCO to the City's suggested changes. At this point, staff would like to get direction from City Council on the few remaining issues prior to responding to the latest draft. Rather than review each change suggested by PSCO, the following addresses the remaining issues in a broad perspective. The issues for City Council consideration are as follows: 1) The term proposed by PSCO is 20 years. 2) The City suggested a "Maintenance of Franchise Fee" section (3.7) to provide for revenue neutrality should the franchise fee calculation method be altered (for example, if the fee changed to a consumption -based calculation rather than the current gross revenue method). This section was deleted and the PSCO draft relies on Section 3.8. Section 3.8 does directly cover a conversion to a consumption -based calculation, but not the broader concept of revenue maintenance. 3) In Section 4.1 PSCO deleted the City's language that would have addressed the desire of the City to have PSCO commit to a "high" level of reliability in providing gas and electricity to its residents. Additionally, in Section 4.2 PSCO deleted the City's attempt to place some time restrictions on the Company to replace /repair street lighting operations. This issue has been raised by the Public Works Department as they would like some specificity in the franchise regarding reliability and a deadline for service response. Other deadlines for Company actions included by the City in the franchise language have also been deleted throughout the document (For example, Sections 4.4 and 13.1). ` Staff along with the City Attorney will be present at the October 12 study session to discuss the issues referenced above, and to receive and discuss any Council comments on the most current draft of the franchise agreement. RECOMMENDATION: Discussion/Direction SUBJECT Review Proposed Franchise Agreement with Public Service Company — Discussion/Direction AGENDA ITEM 1