12 - ONCOR FRANCHISE AGREEMENT EXTENSION

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Item No. 12 memorandum TO: City Council John Godwin, City Manager FROM: Gene Anderson, Finance Director SUBJECT: ONCOR FRANCHISE AGREEMENT EXTENSION DATE: September 9, 2016 BACKGROUND: The City of Paris has historically granted Oncor Electric Delivery Company, LLC or its predecessors a franchise to provide the delivery of electricity to residents and businesses located within the City by operating in City rights -of -way. STATUS OF ISSUE: The most recent franchise agreement with Oncor Electric Delivery Company expired June 30, 2016 and an extension was approved by the City Council through September 30, 2016. The staff has been in negotiations with Oncor for a new franchise agreement, but the agreement will not be ready by the end of September plus the new franchise ordinance will require three public readings. The new extension agreement being presented for approval allows Oncor and the City to continue to follow the terms of the last franchise agreement until a new franchise agreement is approved by the City Council and Oncor or April 1, 2017 whichever comes first. BUDGET: This franchise produces approximately $1,350,000 in revenue annually. RECOMMENDATION: Motion to approve a letter of understanding between Oncor and the City of Paris.