HomeMy WebLinkAboutOrdinance 4449 ORDINANCE NO. 4449
AN ORDINANCE SETTING THE FRANCHISE FEE
OF FOUR AND ONE-QUARTER PERCENT (41/4 %)
ON THE GROSS REVENUES OF THE CITY WATER
AND SEWER FUNDS AND THREE PERCENT (3 %)
ON THE GROSS REVENUES OF THE SOLID WASTE
FUNDS AND REPEALING ORDINANCE NO. 3804
WHEREAS, A.C.A. §14-200-101 (a) (1) gives the City Council jurisdiction
and authority to determine a reasonable franchise fee for public utilities which
are permitted to occupy city streets, easements, right-of-ways and other public
places in an amount of up to Four and One-quarter percent (41/4%); and
WHEREAS, in order to equalize the amount of franchise fee for each
utility and to provide sufficient funding to permit raises for police and fire
personnel pursuant to the special 2002 Hay Plan study, it is necessary to raise
additional revenue.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
THE CITY OF FAYETTEVILLE, ARKANSAS:
Section 1 . That the City Council of the City of Fayetteville, Arkansas
hereby determines that the Water and Sewer Fund shall pay to the City of
Fayetteville General Fund a reasonable franchise fee in the amount of four and
one-quarter percent (4 1/4%) of annual total gross water sale revenues for the
privilege of operating a water transmission system within or below city streets,
city easements, right-of-ways and other public places in the City of Fayetteville
and elsewhere within the water district served by the City of Fayetteville.
Section 2. That the City Council of the City of Fayetteville, Arkansas
hereby determines that the Water and Sewer Fund shall pay to the City of
Fayetteville General Fund a reasonable franchise fee in the amount of four and
one-quarter percent (41/4%) of annual total gross sewer service revenues that for
the privilege of operating a sewer collection system within or below city streets,
city easements, right of ways and other public places within the area served by
the City of Fayetteville sewer system.
Section 3. That the City Council of the City of Fayetteville, Arkansas
hereby determines that the Solid Waste Fund shall pay to the City of Fayetteville
4449
General Fund a reasonable franchise fee in the amount of three percent (3%) of
annual total gross solid waste revenues for the privilege of operating a solid
waste collection system upon the streets, avenues, alleys, roads, and public
places in the City of Fayetteville.
Section 4. That the City Council of the City of Fayetteville, Arkansas
hereby determines that the franchise fee shall be based upon the prior calendar
year's revenues.
Section 5. That the City Council of the City of Fayetteville, Arkansas
hereby repeals Ordinance No. 3804 and any other ordinance that is in conflict
with this franchise fee ordinance.
of F A S�D and APPROVED this the 17th day of December, 2002.
a fY n APPROVED:
.t By:
DAN COODY, M r
ATTEST:
Bather Woodruff, City Clerk
• i
NAME OF FILE: Ordinance No. 4449
CROSS REFERENCE:
Item # Date Document
1 12/17/02 10rd. 4449
2 11 /20/02 1 Staff Review Form w/attachments:
11/20/02 memo to City Council
copy of Franchise Fee Analysis
3 12/27/02 memo to Steve Davis
4 01/01 /03 lAffidavit of Publication
NOTES :
. • Franchise Fees
. STAFF REVIEW FORM C. 9. Pagel
XX AGENDA REQUEST
CONTRACT REVIEW
GRANT REVIEW
For the Fayetteville City Council Meeting of : December 3, 2002
FROM:
Stephen Davis Budget & Research Administrative Services
Name Division - Department
ACTION REQUIRED : . Approve changes to the Franchise Fee Ordinances between the City of Fayetteville and
Arkansas Western Gas, Southwestern Bell, City of Fayetteville Water Utility, City of Fayetteville Sewer Utility,
City of Fayetteville Solid Waste Utility, SWEPCO and Ozarks Electric Cooperative to increase the franchise
fees to 4.25% of gross revenues.
COST TO CITY :
No cost to the City . $ .
Cost of this request Category/Project Budget Program Category % Project Name
$
Account Number Funds Used to Date Program / Project Category Name
Project Number Remaining Balance Fund Name
BUDGET REVIEW: Budgeted Item Budget Adjustment Attached
//- 2U -oL
Budget M er Date Administrative Services Director Date
CONTRACT/GRANT/LEASE REVIEW:
to i-
Acco&nting Manager Date Inal A itor Date
/ I LoOZ
City At orney
Date ADA Coordinator Date
al � aDok
Purchasing Manager Date Grant Coordinator Date .
STAFF RECC14MENDATION : Staff recommends adoption of franchise fee ordinace amendments.
Cross Reference
. Division Head - Date
New Item : Yea . No
Dep rtmen irector Date Previous Ord/Res # :
� C/ ZO OZ Orig . Contract Date
Admi is tive Services Director D to
Orig . Contract Number
Mayor Date
H:\BUDGE RResou 003\Franchise fee ordinance revisions rate increase 11 /20/2002 1
Franchise Fees •
C, 9; page * �taff Review Form - Page 2
Description Franchise Fee Ordinace Revision- Rate Meeting Date December 3 , 2002
Increase
Comments : Reference Comments :
Budget Manager
Accounting Manager
City Attorney
O!z
air
Purchasing Manager
ADA Coordinator
Internal Auditor
Grants Coordinator
H:\BUDGET\Resource\2003\Franchise fee ordinance revisions rate increase 11 /20/2002
Franchise Fees
FAL YL C. 9• Page
1HE CRY OF FAYET rEVQJA ARKANSAS
TO: Fayetteville City Council
THROUGH: Dan Coody, Mayor
FROM: Stephen Davis, Administrative Services Director - Int4;1/ „l _
DATE: November 20, 2002
SUBJECT: Franchise Fee Ordinance Revisions — Rate Increase
This agenda item requests that City Council approve the necessary franchise fee ordinance
amendments to increase the utility franchise fees collected in General Fund.
During the City Council Budget Briefing held November 12, Staff presented the overall funding
needed to continue on-going operations in General Fund. Additionally, Staff identified the
additional annual cost of the pay range adjustment for uniform Fire and Police employees to be
approximately $987,000. Subsequent to the November 12 meeting the City's compensation
consultant, Hay Management Group, has estimated the cost of the pay compression for non-uniform
employees, City-wide, to be between $600,000 and $800,000.
Staff has developed the following proposal that if accepted by City Council, can provide the funding
to address both the uniform employee pay range adjustment and the non-uniform pay compression.
Phase in the uniform pay range adjustment and the non-uniform pay compression.
1 . This proposal seeks to develop the plan that provides funding for 2/3 of the pay range
adjustment for uniform employees or approximately $661 ,000 in 2003 and funds
approximately 2/3 of the pay compression estimate for non-uniform employees in General
Fund or approximately $237,000.
The second part of the plan is to assess property millages in 2003 to provide enough funding
to pay for the remainder of the 2002 pay range adjustment for uniform employees and fully
fund any pay range adjustment that may be necessary as determined in the 2003 pay survey.
One mil will generate approximately $610,000 annually.
2. Thus will increase franchise fees to 4.25% beginning in the fust quarter 2003 and will
provide up to an additional $1 . 1 million in annual revenue. The cost to the, average
household will be approximately $2.50 per month.
Acceptance of this phase in plan, by City Council, will provide Staff with more time to develop a
more permanent funding mechanism for these pay adjustments.
Please contact Stephen Davis if you have any questions or need additional information concerning
this item.
H:\BUDGETaesource\2003Vranchise fee ordinance revisions rate increase.doc
Franchise Fees •
C. 9. Page 4 •
City of Fayetteville, Arkansas
Franchise Fee Analysis
Ut0hfes and ordinance reaulremems:
Arkansas Western Gas: Ordinance 0 3804 awes fief the company shall pay 3% of Its annual sales before taxes to residential and
commercial consumers and 1% to industrial consumers.
Southwestern Bell: Ordinance #2990 (amending Ord. #2892) states the company shall pay 4% of access line biting during the
preceding year or $137,048 whichever is greater. Section 3 states the company shall have ninety days from
and atter the passage and approval of this ordinance to file its written acceptance of this ordinance with the
City Clerk, and upon such acceptance being filed, this ordinance shall be considered as taking effect and
being in force from and after the date of Its passage and approval by the mayor. (Also in Section 9.
Ordinance #2892)
Cox Communications: Ordinance #3413 (Ord. #3882 transferred rights to TCA) states the company shag pay 5% of Ns annual
gross revenues.
Fayetteville Water. '' d Ordinance #3804 states the fund shall pay 3% of annual gross water sales revenues.
Fayetteville Sewer: Ordinance #3804 states the fund shall pay 3% of annual gross saver charges revenues.
Fayeltwille Slid Waste: Ordinance 53804 states the fund shall pay 3% of annual gross sanitation fee revenues.
SW EPOO: Ordinance #2742 states the company agrees to pay 3% of gross revenues to domestic customers and 1% to
Industrial consumers.
Ozarks Electric Cooperadve: Ordinance #2741 states the company agrees to pay 3% of gross revenues to domestic consumers and 1%
to IndwMal consumers
State Laws aovemhna franchise taxes anti In Neu of taxes:
§14.234-114 Payment from water revenues in lieu of taxes (1) A sum equal to five percent (5%) of gross Income from water sales during the
preceding calendar year. plus (2) A sum equal to the amounts the municipality would have received from the waterworks system as property
taxes for to preceding calendar year N the waterworks systems property had been privately owned and subject to tax by the municipality. For .
to purpose of this computation, the waterworks property shall be deemed to have an assessed value equal to twenty percent (20%) of book
value as reflected by the waterworks systems usual accounting procedures.
§14-200101 Except as provided by In §23d-201, every dry and town shall have jurisdiction to determine the quality and character of each kind
of, and rates for, product or service to be furnished or rendered by any public utility within the city or town and all other terms and conditions,
permitted to occupy the streets, highways; or other public places within the municipality, and the ordinance or resolution shall be deemed prima
fade reasonable, provided that no franchise fee shall exceed the higher of to amount in effect as to that entity on January 1, 1997 or four and
one-quarter percent (4 1/4%), unless agreed to by the affected utility or approved by the voters of the municipality.
Maximum 4.25%
1999 2000 2001 2002 2003 2003
Franchise Revenues (Cunard %) Actual Actual Actual Estimated Projected Projected . .
Arkansas Western Gas (3%) $ 344,059 $ 389,456 $ 648,903 $ 4439700 $ 444.000 $ 629,000
Southwestern Bell (4%) 348,435 363,185 360,797 357,800 367,000 389,900
Cox Communk adons (5%) 360,581 371,813 390,063 398,200 408,000 408,000
Fayetteville Water (3%) 327.278 318,020 313,656 314,003 320,000 453,300
Fayetteville Sewer (3%) 247,740 257,472 . 251,184 255,653 259,000 386,900
Fayetteville Solid Waste (3%) 125,508 132,072 136,332 141,819 158,000 2230800
SWEPCO (3%) 743,261 771 ,461 925,397 9880000 1,013,000 1 ,435,100
Ozarks Electric Cooperative (3%) 261,247 2850297 308,816 359,300 368,000 521,300
Total $. 2,7580108 $ 21888,576 $ 3,335,148 $ 3,258,575 $ 3,337,000 $ 4,427,300
Additional Revenue Potential for 2003 $ 1 ,090,300
Equates to $30.00/year/household or $2.50/month
HABUDGE7\Budgel Document\Work Schedules\Council Briefing\Frenchise Fes Analysis - 2003.x1s
PAY ETTEVI &E
THE CITY OF FAYETTEVILLE. ARKANSAS
DEPARTMENTAL CORRESPONDENCE
To: Steve Davis
Administration
From: Heather Woodruff, City Clerk
Date: December 27, 2002
Attached is a copy of Ordinance No. 4449 setting the Franchise Fee of 4 Ya% on the gross
revenues of the City Water and Sewer Funds and 3% on the gross revenues of the Solid
Waste Funds and repealing ordinance number 3804.
The original will be microfilmed and filed with the City Clerk.
cc: Nancy Smith, Internal Auditor
Marsha Farthing, Accounting
Kit Williams, City Attorney
Kevin Springer, Budget
NORTHW*ST ARKANSAS AXTION
Alkarislas Demo Gazette
1vYY� ecu rl �Ll�iED �E VED
IRAN to 40d
CRY OF AYETTEw
t#irvoFFlc��
AFFIDAVIT OF PUBLICATION
I , Laj 7 , I,, h,,, I_ / , do solemnly swear that I am
Legal Clerk of the Arkansas Democrat-Gazette newspaper, printed and
published in Lowell , Arkansas, and that from my own personal knowledge
and reference to the files of said publication , the advertisement of:
�yy was inserted in the regular editions on
** Publication Charge : $ c3l- 9&
Subscribed and sworn to before me this
� 003
day of
ORDINANCE NO. 4449
AN ORDINANCE SETTING THE FRANCHISE FEE OF FCR
AND ONE-ouARTEA PERCENT (4 %) ON THE GROSS
REVENUES OF THE CITY WATER AND SEWER FUNDS AND
THREE PERCENT (3%) ON THE GROSS REVENUES OF THE
Nota / SOLID WASTE FUNDS AND REPEAUNG ORDINANCE NO. City J _4__�"®
�{�,� 3804 V of Fayetteville
V nln,ial Seal WHEREAS, A.C.A. §14-200-101 (a) (4) gK a the Ciry Council lurladctbn and authorityto determine
TAMMY ALLEN areasonable frerchsefee for public utllltleswhich wePermldedtoOccupydrysleets, e�semens; gm-
�ee..�� Of= and other public ptaa9s In an amount of up to Four and One-qupderpament (4 :%): and
'
My C mm i saoorp ®sisas WHEREAS, In a der to aqua ze the amont of franchise fee for each uWtty and to Provide sufficient
WASHINGTON COU funding to permit raises for pdce end the personnel pureuent to the spodel 2002 Hay Plan study, it Is
necessary to raise acolitrevenue.My Commission Expires 11 -05-2011 THEREFORE,BE R ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE ,
ARKANSAS:
rr Socepn 1. That the City A
Coolot of the Ay of Fayettevile, Arluan v hereby deterftM that Die Water•
Please do not pay from Affidavit. erns Seer Fund fence pay to the City d Fayetteville General Fund a reasonable handsso lea in d•
arnOure of four 619qu Wpemernt (4 %) of annual total gross water sae nal ervRB for the prMags
An invoice will be sent.
of operating a water frartern s4m system .dden Or below dry streets. dN eesonenta, 6014-of-Ways end
other public places In the City of Fayetteville and dsewTere wtthd the water tlbtnts servad by the Gy Of
Fayedavile. _
Section 2. That the City Council of the Ciry of Fayetteville, Arkansas hereby datOndPOe that the Water;
end Smar Fund shal pay to the Gry of Fayedevile General Fund a reasonable henbNW fee 11,14.
RECEIVED prWag of our and pa smer er percent (4 %) d annus tote gross Bawer city Oa revenues that forays
chrount of ourand a sewar collectionroar syaem of a n or baov dry siSmS dry e89B NOM fight of ways
and Otho public pieces wltNn the eras sar a by the Gry of Fayetteville sewer system.
Section 3. That the Gry Council of the Cay of Fayetteville, Arkansas hereby deterrnlnss Net the Sand
JAN 0 6 2003 Waste Fund shop pay to the City of Fayettevile General Fund a naesonsMe franchises too h the amourtt
of three percent (3%) of annual total gross sold waste revenues for the PdvlOga Of Operating a solid
waste coledian system upon the streets; pvernras, alleys. roads, enc pubic places d the City of
CITY OF FAYETTEVILLE Fayetteville.
CITY CLERK'S OFFICE Batson 4 That the City Council of the sty M Faye11048, Arkansas hereby detenNnea that the franchise
fee shat be based upon Ota OW Warder years hNSMU06.
Section 5. That the City Condl of Ne City Of Fayedet•e, Arkansas hereby repeals Ordinance No. 3804
and any other ordina toa that is h aonakY Wth bub franchise fee Ordinance.
PASSED and APPROVED the the 17th day of December. 2002.
APPROVED:
By:
DAN GOODY, Mayor
ATTEST:
By:
Heather woo". city C7e&
212 NORTH EAST AVENUE P.O. BOX 1607 FAYETTEVILLE, ARKANSAS 72702 (501 ) 442-1700
