12 - FIRST READING - ORDINANCE GRANTING FRANCHISE TO ATMOS

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Item No. 12 memorandum TO: City Council John Godwin, City Manager FROM: Gene Anderson, Finance Director SUBJECT: FIRST READING ON AN ORDINANCE GRANTING A FRANCHISE TO ATMOS ENERGY CORPORATION DATE: July 30, 2015 BACKGROUND: Utility companies that wish to use the City's right -of -ways for distribution of their services can only do so under the authority of a franchise agreement approved by a City Council ordinance. Atmos Energy had been operating under a franchise originally granted to Lone Star Gas Company. This franchise agreement expired April 13, 2015, but Atmos will continue to operate under the terms of that franchise until a new franchise agreement has been approved. The proposed effective date of the new ordinance is October 1, 2015 with a maximum ending date of September 30, 2030. STATUS OF ISSUE: Adoption of a new franchise ordinance requires three public readings on three different dates. The first reading will be August 10, 2015 at the Council's regular meeting. BUDGET: The franchise fee under this proposed ordinance is 5% of gross revenues as defined in the ordinance. The previous franchise ordinance also required a 5% fee. RECOMMENDATION: Public reading only. No action required at this time.