DATE: March 2, 2018
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
Kristine Tallent, Assistant City Administrator/CFO
SUBJECT:
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Consideration of Ordinance 2018-05, An Ordinance Granting a natural gas Franchise Agreement with Atmos Energy Corporation (COF Contract No. 2018-0032). (03/08/18 Finance 4-0; 04/10/18 1st BOMA Reading Deferred to May 8, 2018 7-0) FIRST OF TWO READINGS
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Purpose
The purpose of this memo is to provide information to the Franklin Board of Mayor and Aldermen (BOMA) concerning the granting of a natural gas franchise agreement to Atmos Energy Corporation .
Background
The City has had a franchise agreement with Atmos Energy or its predecessor for many years. The current agreement expires at the end of November 2018. The City is allowed to impose a franchise fee for use of City right of way. In the current agreement, a fee is based on a charge per hundred cubic feet of gas delivered to residential and commercial customers and is added to customer bills.
The proposed Ordinance is essentially a continuation of the current agreement at existing rates. The only significant difference between the current agreement and the proposed Ordinance is the term. Ordinance 2013-50 had a term of five (5) years while the proposed Ordinance 2018-0032 is for a term of ten (10) years.
Financial Impact
The City currently collects approximately $1 million per year under the existing agreement, with revenues accounted for within the City’s General Fund. FY 2017 audited revenues were $993,932.37. The exact revenue received varies with the volume of natural gas delivered to customers by Atmos.
Recommendation
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Staff recommends approval of Ordinance 2018-0032 to continue the franchise agreement between the City and Atmos Energy Corporation.