Utility Franchise Fee OrdinanceMEMORANDUM
TO:
FROM:
SUBJECT:
September 10, 2003
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Utility Franchise Fee
Discussions have taken place with Aquila and Alliant on the implementation of the Utility
Franchise Fee. Both organizations advise th
that they need until the 15 of the month to
report on the previous month's receipts, so that requirement is being changed.
Alliant advises that the only accounts for which it cannot charge the fee are the City
accounts. All other Dubuque customers will be charged the fee and the City will need to
rebate to all of the customers who are fully or partially sales-tax exempt.
Aquila advises that it will not charge the fee to any customers that the City advises
Aquila are fully exempt from sales taxes, and therefore exempt from the franchise fee.
However, the City will need to provide a rebate to any customer who is only partially
sales-tax exempt. Aquila has also asked that we include a provision to defend Aquila if
legal action is brought against Aquila challenging the calculation of the franchise fee.
Any other changes are non-substantive.
Finance Director Ken TeKippe is preparing a rebate procedure.
I respectfully request Mayor and City Council approval of these ordinance amendments.
M~chae C. Van Milligen "'
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Ken TeKippe, Finance Director
Pauline Joyce, Administrative Services Manager
Preparer: Barry A. Lindahl 300 Main Street Suite 330 Dubuque IA 52001{563) 583-4113
ORDINANCE NO. 75-03
AMENDING ORDINANCE NO. 58-03 ESTABLISHING A FRANCHISE FEE OF TWO
PERCENT (2%) OF THE GROSS REVENUE OF INTERSTATE POWER COMPANY,
ITS SUCCESSORS AND ASSIGNS, GENERATED FROM THE SALE OF
ELECTRICITY WITHIN THE CITY OF DUBUQUE
Whereas, City of Dubuque Ordinance No. 58-93 (City of Dubuque Code of
Ordinances Appendix D), adopted by the City Council on the 4th day of October
1993, granted to Interstate Power Company, its successors and assigns
(hereinafter referred to collectively as the Company), nonexclusive authority for a
period of twenty-five (25) years to maintain and operate its electrical system
within the limits of the City of Dubuque; and
Whereas, Ordinance No. 58-93 provides that the City Council may, impose
a franchise fee not to exceed three (3) percent of the gross revenue of the
Company generated from the sale of electricity within the City of Dubuque; and
Whereas, the City Council has determined that a franchise fee is in the best
interests of the City of Dubuque; and
Whereas, the City Council by the adoption of Ordinance No. 58-03
established a franchise fee; and
Whereas, the City Council has determined that an amendment to Ordinance
No. 58-03 is necessary.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. Ordinance No. 58-03 is amended to read as follows:
ORDINANCE NO. 58-03
ESTABLISHING A FRANCHISE FEE OF TWO PERCENT (2%) OF THE
GROSS REVENUE OF INTERSTATE POWER COMPANY, ITS
SUCCESSORS AND ASSIGNS, GENERATED FROM THE SALE OF
ELECTRICITY WITHIN THE CITY OF DUBUQUE
Section 1. Effective October 1, 2003 and for the term of the
franchise granted by Ordinance No. 58-93, there is hereby imposed
upon the Company a fee equal to two percent (2%) of the gross
revenue generated from the sale of electricity within the City of
Dubuque.
Section 2. The Company shall on the fifteenth day of each
month, commencing November 15, 2003, provide to the City Manager
in a form acceptable to the City Manager records establishing the
gross revenues from the sale of electricity by the Company within
the City of Dubuque for the preceding month and shall pay the fee to
the City within thirty (30) days following the last day of the preceding
month.
Section 3. The fee imposed by Sec. 1 shall not apply to any sale of
electricity by the Company that is exempt under Iowa Code § 422.45 from
the tax imposed by Iowa Code § 422.43 and in computing the amount of the
fee, the Company shall not include such sales, unless it is impracticable to
do so, in which event the City Manager may provide for a rebate of the
amount of the fee for such exempt sales of electricity to the Company's
customers.
Section 2. This ordinance shall take effect upon publication.
Passed, approved and adopted this 15th day of September, 2003.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, CMC
City Clerk
Terrance M. Dugga~,~for
F:'~USER$~
Preparer: Barry A. Lindah1300 Main Street Suite 330 Dubuque IA 52001(563) 583-4113
ORDINANCE NO. 76-03
AMENDING ORDINANCE NO. 59-03 ESTABLISHING A FRANCHISE FEE OF TWO
PERCENT (2%) OF THE GROSS REVENUE OF PEOPLES NATURAL GAS
COMPANY, ITS SUCCESSORS AND ASSIGNS, GENERATED FROM THE
DISTRIBUTION AND SALE OF NATURAL GAS OR MIXED GAS WITHIN THE CITY
OF DUBUQUE
Whereas, City of Dubuque Ordinance No. 43-93 (City of Dubuque Code of
Ordinances Appendix C), adopted by the City Council on the 19th day of July,
1993, granted to Peoples Natural Gas Company, its successors and assigns
(hereinafter referred to collectively as the Company), nonexclusive authority for a
period of twenty-five (25) years to maintain and operate its gas distribution
system within the limits of the City of Dubuque; and
Whereas, Ordinance No. 43-93 provides that the City Council may, impose
a franchise fee not to exceed three (3) percent of the gross revenue of the
Company generated from the sale of natural and mixed gas within the City of
Dubuque; and
Whereas, the City Council has determined that a franchise fee is in the best
interests of the City of Dubuque; and
Whereas, the City Council by the adoption of Ordinance No. 59-03 establish
a franchise fee; and
Whereas, the City Council has determined that an amendment to Ordinance
No. 59-03 is necessary.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF DUBUQUE, IOWA:
Section 1. Ordinance No. 59-03 is amended to read as follows:
ORDINANCE NO. 59-03
ESTABLISHING A FRANCHISE FEE OF TWO PERCENT (2%) OF THE
GROSS REVENUE OF PEOPLES NATURAL GAS COMPANY, ITS
SUCCESSORS AND ASSIGNS, GENERATED FROM THE
DISTRIBUTION AND SALE OF NATURAL GAS OR MIXED GAS
WITHIN THE CITY OF DUBUQUE
Section 1. Effective October 1, 2003 and for the term of the
franchise granted by Ordinance No. 43-93, there is hereby imposed
upon the Company a fee equal to two percent (2%) of the gross
revenue generated from the sale of natural and mixed gas within the
City of Dubuque.
Section 2. The Company shall on the fifteenth day of each
month, commencing November 15, 2003, provide to the City Manager
in a form acceptable to the City Manager records establishing the
gross revenues from the sale of natural and mixed gas by the
Company within the City of Dubuque for the preceding month and
shall pay the fee to the City within thirty (30) days following the last
day of the preceding month.
Section 3. The fee imposed by Sec. I shall not apply to any
sale of natural and mixed gas by the Company that is exempt under
Iowa Code § 422.45 from the tax imposed by Iowa Code § 422.43. The
City shall, prior to October 1, 2003, and thereafter as persons on the
exemption list are changed by the City, provide the Company with a
list of the names of persons who are exempt from the fee and in
computing the amount of the fee, the Company shall not include any
sales to such persons.
The City Manager shall provide a procedure for the rebate of
the fee to persons who are partially exempt under § 422.45 from the
tax imposed by Iowa Code § 422.43 for sales of natural and mixed
gas to the Company's customers.
Section 4. If for any reason the time and manner of collecting,
or any aspect of the franchise fee, is challenged by or before the
Iowa Utilities Board, Company shall promptly give notice to City and
the Company shall, in any case, diligently and continuously
exercises its efforts to sustain said fee and payments and the time
and manner of its collection. If at any time the Iowa Utilities Board, or
any other authority having proper jurisdiction, prohibits the City from
imposing the franchise fee called for herein, the Company will no
longer be obligated to collect and pay the franchise fee herein. The
City agrees to save harmless the Company, its employees or agents
from and against all claims, demands, losses and expenses arising
out of the collection of the franchise fee from the Company's
customers or in remitting the franchise fee amounts collected to the
City; provided, however, that the City shall not be required to save
harmless the Company from claims, demands, losses and expenses
arising out of the negligence of the Company, its employees or
agents
Section 5. The amount billed by the Company for the sale of
natural gas or mixed gas to its customers may be adjusted for any
net write-off of uncollectible accounts and corrections of bills
theretofore rendered, and past or future franchise fees remitted to
the City may be adjusted accordingly by the Company to reflect the
lawful or necessary correction to billing and collection from its
customers for natural gas sold within the corporate limits of the City.
Section 6. The City shall provide copies of annexation
ordinances to the Company on a timely basis to ensure appropriate
franchise fee collection from customers within the corporate limits of
the City.
Section 2. This ordinance shall take effect upon publication.
Passed, approved and adopted this 15th day of September, 2003.
Terrance M. Duggan, Mayor
Attest:
Jeanne F. Schneider, CMC City Clerk
15th day of September ,2003.
Effect of Amendment
ORDINANCE NO. 58-03
ESTABLISHING A FRANCHISE FEE OF TWO PERCENT (2%) OF THE
GROSS REVENUE OF INTERSTATE POWER COMPANY, ITS SUCCESSORS
AND ASSIGNS, GENERATED FROM THE SALE OF ELECTRICITY WITHIN
THE CITY OF DUBUQUE
Whereas, City of Dubuque Ordinance No. 58-93 (City of Dubuque
Code of Ordinances Appendix D), adopted by the City Council on the 4th
day of October 1993, granted to Interstate Power Company, its successors
and assigns (hereinafter referred to collectively as the Company),
nonexclusive authority for a period of twenty-five (25) years to maintain
and operate its electrical system within the limits of the City of Dubuque;
and
Whereas, Ordinance No. 58-93 provides that the City Council may,
impose a franchise fee not to exceed three (3) percent of the gross revenue
of the Company generated from the sale of electricity within the City of
Dubuque; and
Whereas, the City Council has determined that a franchise fee is in
the best interests of the City of Dubuque.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
THE CITY OF DUBUQUE, IOWA:
Section 1. Effective October 1, 2003 and for the term of the franchise
granted by Ordinance No. 58-93, there is hereby imposed upon the
Company a fee equal to two percent (2%) of the gross revenue generated
from the sale of electricity within the City of Dubuque.
Section 2. The Company shall on the fifteenth day of each month
commencin.q November 15, 2003~ provide to the City Manager in a form
acceptable to the City Manager records establishing the gross revenues
from the sale of electricity within the City of Dubuque and shall pay the fee
to the City within thirty (30) days following the last day of the preceding
month.
Section 3. The fee imposed by Sec. I shall not apply to any sale of
electricity by the Company that is exempt under Iowa Code § 422.45 from
the tax imposed by Iowa Code § 422.43 and in computing the amount of the
fee, the Company shall not include such sales, unless it is impracticable to
do so, in which event the City Manager may provide for a rebate of the
amount of the fee for such exempt sales of electricity to the Company's
customers.
Effect of Amendment
ORDINANCE NO. 59-03
ESTABLISHING A FRANCHISE FEE OF TWO PERCENT (2%)
OF THE GROSS REVENUE OF PEOPLES NATURAL GAS
COMPANY, ITS SUCCESSORS AND ASSIGNS, GENERATED
FROM THE DISTRIBUTION AND SALE OF NATURAL GAS OR
MIXED GAS WITHIN THE CITY OF DUBUQUE
Section 1. Effective October 1, 2003 and for the term of
the franchise granted by Ordinance No. 43-93, there is hereby
imposed upon the Company a fee equal to two percent (2%) of
the gross revenue generated from the sale of natural and
mixed gas within the City of Dubuque.
Section 2. The Company shall on the fifteenth day of
each month, commencin,q November 15, 2003, provide to the
City Manager in a form acceptable to the City Manager records
establishing the gross revenues from the sale of natural and
mixed gas by the Company within the City of Dubuque for the
preceding month and shall pay the fee to the City within thirty
(30) days following the last day of the preceding month.
Section 3. The fee imposed by Sec. I shall not apply to
any sale of natural and mixed gas by the Company that is
exempt under Iowa Code § 422.45 from the tax imposed by
Iowa Code § 422.43. The City shall, prior to October 1, 2003,
and thereafter as persons on the exemption list are changed
by the City, provide the Company with a list of the names of
persons who are exempt from the fee and in computinR the
amount of the fee, the Company shall not include any sales to
such persons.
The City Mana.qer shall provide a procedure for the
rebate of the fee to persons who are partially exempt under §
422.45 from the tax imposed by Iowa Code § 422.43 for sales of
natural and mixed .clas to the Company's customers.
Section 4. If for any reason the time and manner of
collectin.q, or any aspect of the franchise fee, is challen.qed by
or before the Iowa Utilities Board, Company shall promptly
.qive notice to City and the Company shall, in any case,
dili.qently and continuously exercises its efforts to sustain said
fee and payments and the time and manner of its collection. If
at any time the Iowa Utilities Board, or any other authority
havinR proper jurisdiction, prohibits the City from imposin.q
the franchise fee Called for herein, the Company will no Ion.qer
be obliRated to collect and pay the franchise fee herein. The
City aRrees to save harmless the Company, its employees or
a.qents from and a.qainst all claims, demands, losses and
expenses arisin.q out of the collection of the franchise fee from
the Company's customers or in remittin.q the franchise fee
amounts collected to the City; provided~ however~ that the City
shall not be required to save harmless the Company from
claims, demands, losses and expenses arisinR out of the
neqliRence of the Company, its employees or a.qents.
Section 5. The amount billed by the Company for the
sale of natural .qas or mixed .qas to its customers may be
adiusted for any net write-off of uncollectible accounts and
corrections of bills theretofore rendered, and past or future
franchise fees remitted to the City may be adjusted
accordin,qly by the Company to reflect the lawful or necessary
correction to billin.q and collection from its customers for
natural .qas sold within the corporate limits of the City.
Section 6. The City shall provide copies of annexation
ordinances to the Company on a timely basis to ensure
appropriate franchise fee collection from customers within the
corporate limits of the City.