Black Hills Energy Corporation Franchise Amendment Copyright 2014
City of Dubuque Items to be set for Public Hearing # 2.
ITEM TITLE: Black Hills Energy Corporation Franchise Amendment
SUMMARY: City Attorney recommending approval of a resolution setting a public
hearing for January 5, 2015.
RESOLUTION Setting a Public Hearing on an amendment to City Of
Dubuque Code of Ordinances Sec. 11-4-23: Franchise Fee, authorizing
the City Council to impose a franchise fee not to exceed three percent
(3%) on the gross revenue generated from the distribution and sale of
natural gas or mixed gas within the City of Dubuque, by increasing such
authority to five percent (5%).
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Adopt Resolution(s)
ATTACHMENTS:
Description Type
❑ Staff Memo Staff Memo
❑ Resolution Resolutions
❑ Ordinance Ordinance
THE CITY OF
DUB-�6 E MEMORANDUM
Masterpiece on the Mississippi
BARRY LINDAHL
CITY ATTORNEY
To: Mayor Roy D. Buol and
Members of the City Council
DATE: December 9, 2014
RE: Resolution Setting a Public Hearing on an Ordinance Amending City of
Dubuque Code of Ordinances 11-4-23 Authorizing the City Council To
Impose a Franchise Fee Not To Exceed Three Percent
In 1993, the City Council adopted an ordinance granting to Peoples Natural Gas
Company, its successors and assigns, a non-exclusive authority for a period of 25 years
to maintain and operate its gas distribution system within the city of Dubuque. Black
Hills Energy Corporation is the successor to Peoples Natural Gas Company.
The franchise agreement in Section 11-4-23 provides that the City Council may impose
a franchise fee not to exceed 3% of the gross revenue of the company generated from
the sale of natural and mixed gas within the city.
The attached ordinance authorizes the City Council to impose a franchise fee not to
exceed 5% on the gross revenue generated from the distribution from the sale of natural
and mixed gas within the city.
Iowa law requires the City Council to hold a public hearing on the question on the
adoption of the ordinance amending the franchise agreement. A copy of the ordinance
is attached.
The attached resolution sets a public hearing on the question of the adoption of the
ordinance amending the franchise agreement for January 5, 2015. The resolution also
dispenses with an election on the adoption of the ordinance as provided by Iowa law.
I recommend that the City Council adopt the resolution setting a public hearing.
BAL:tIs
Attachment
cc Michael C. Van Milligen, City Manager
F:\USERS\tsteckle\Lindahl\Franchise Fee Notebook\Black Hills\MayorCouncil_ResolutionSettingPublicHearing_BlackH ills_120914.doc
OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA
SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944
TELEPHONE (563)583-4113/FAX (563)583-1040/EMAIL balesq@cityofdubuque.org
Preparer: Barry A. Lindahl, Esq. Address: Suite 330, 300 Main Street, Dubuque, IA 52001
Telephone: (563) 583-4113
RESOLUTION NO. 389-14
SETTING A PUBLIC HEARING ON AN AMENDMENT TO CITY OF DUBUQUE
CODE OF ORDINANCES SEC. 11-4-23: FRANCHISE FEE, AUTHORIZING THE
CITY COUNCIL TO IMPOSE A FRANCHISE FEE NOT TO EXCEED THREE
PERCENT (3%) ON THE GROSS REVENUE GENERATED FROM THE
DISTRIBUTION AND SALE OF NATURAL GAS OR MIXED GAS WITHIN THE
CITY OF DUBUQUE, BY INCREASING SUCH AUTHORITY TO FIVE PERCENT
(5%)
Whereas, City of Dubuque Ordinance No. 43-93 (City of Dubuque Code of
Ordinances Title 11, Chapter 4), 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 (the Franchise Agreement); and
Whereas, Black Hills Energy Corporation is the successor to Peoples Natural
Gas Company; and
Whereas, Code of Ordinances §11-4-23, provides that the City Council may
impose a franchise fee not to exceed three percent (3%) 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 it is in the best interests of
the City of Dubuque to increase the authority for such franchise fee to five percent
(5%); and
Whereas, Iowa law requires that the City Council hold a public hearing on
the question of the adoption of an Ordinance amending the Franchise Agreement, a
copy of which is attached hereto and is on file in the Office of the City Clerk, City
Hall, 50 W. 13th Street, Dubuque, Iowa.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
DUBUQUE, IOWA AS FOLLOWS:
Section 1. A public hearing on the question of the adoption of the attached
Ordinance amending the Franchise Agreement with Black Hills Energy Corporation is
hereby set for the 5th day of January, 2015 in the City Council Chambers, Historic
Federal Building, 350 West 6th Street, Dubuque, Iowa, beginning at 6:30 p.m.
Section 2. The City Council hereby dispenses with an election on the adoption
of the Ordinance as provided by Iowa Code sec. 364.2(4)(b).
law
Section 3. The City Clerk shall publish notice of the public hearing as required by
Passed, approved and adopted the 15th day of Decem'er, 2014.
Roy D. B I, Mayor
Attest:
Trish L. Gleason, Assistant City Clerk
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Preparer: Barry A. Lindahl, Esq. Address: Suite 330, 300 Main Street, Dubuque, IA 52001
Telephone: (563) 583-4113
ORDINANCE NO. -15
AMENDING CITY OF DUBUQUE CODE OF ORDINANCES SEC. 11-4-23:
FRANCHISE FEE, AUTHORIZING THE CITY COUNCIL TO IMPOSE A
FRANCHISE FEE NOT TO EXCEED THREE PERCENT (3%) ON THE GROSS
REVENUE GENERATED FROM THE DISTRIBUTION AND SALE OF
NATURAL GAS OR MIXED GAS WITHIN THE CITY OF DUBUQUE, BY
INCREASING SUCH AUTHORITY TO FIVE PERCENT (5%)
Whereas, City of Dubuque Ordinance No. 43-93 (City of Dubuque Code of
Ordinances Title 11 , Chapter 4), 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, Black Hills Energy Corporation is the successor to Peoples
Natural Gas Company; and
Whereas, Ordinance No. 43-93, now Code of Ordinances §11-4-23,
provides that the City Council may impose a franchise fee not to exceed three
percent (3%) 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 it is in the best interests of
the City of Dubuque to increase the authority for such franchise fee to five
percent (5%).
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF
THE CITY OF DUBUQUE, IOWA:
120214bal
Section 1 . City of Dubuque Code of Ordinances § 11-4-23 is hereby amended to
read as follows:
11-4-23: FRANCHISE FEE
A. The city council may impose a franchise fee not to exceed five percent (5%) of the
gross revenue of the company generated from the sale of natural and mixed gas
within the city; the city may also impose upon the company a franchise fee of five
per cent (5%) of revenue derived by the company from the acquisition, transmission,
transportation or distribution of natural and mixed gas sold to customers within the
city by suppliers other than the company through the company's distribution system
and if the revenue thus generated is not known then upon the value of the natural
and mixed gas thus delivered as determined by presuming the cost of gas is the
same as if sold by the company under the terms of its then current tariff, provided,
however, that the fee shall not be effective against the company unless and until the
city imposes a fee or tax of the same percentage on the gross revenue of sales of
energy within the city by all other energy suppliers with which the city has in effect a
franchise agreement allowing such fee. Any such franchise fee imposed shall be a
direct charge to customers to the extent required by the Iowa utilities board.
B. 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.
C. 1 . The fee shall not apply to any sale of natural and mixed gas by the company that
is exempt under Iowa Code section 423.3 from the tax imposed by Iowa Code
section 423.2 and in computing the amount of the fee, the company shall not include
such sales. The city manager shall provide a rebate of the amount of the fee for
such exempt sales of natural and mixed gas to company's customers provided a
written request is submitted by a customer to the city manager in the city's fiscal year
(July 1 - June 30) in which the customer pays such fees.
2. Any rebate of franchise fees which may have been available under any prior
amendment or ordinance which was not paid prior to July 1 , 2013, is declared void
and any claim for any such rebate shall not be honored or paid by the city.
D. 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
exercise 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
2
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.
E. 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.
F. 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 the day of 2015.
Roy D. Buol, Mayor
Attest:
Kevin S. Firnstahl, City Clerk
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ACCEPTANCE
The forgoing ordinance granting a franchise is hereby accepted by Black Hills Energy
Corporation on this day of 12015.
By:
Laura Roussell
External Affairs Manager
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EFFECT OF AMENDMENT
11-4-23: FRANCHISE FEE
A. The city council may , OR 46 GliGG.etiOR after a r„hr,. heerinn and 61POR RR effiFA;Rt,„e
„n+e „f ,u of +he n,en,he.G of the G96IRGil, impose a franchise fee not to exceed five
thFee percent (53%) of the gross revenue of the company generated from the sale of
natural and mixed gas within the city; the city may also impose upon the company a
franchise fee of five per cent (5%) of revenue derived by the company from the
acquisition, transmission, transportation or distribution of natural and mixed gas sold
to customers within the city by suppliers other than the company through the
company's distribution system and if the revenue thus generated is not known then
upon the value of the natural and mixed gas thus delivered as determined by
presuming the cost of gas is the same as if sold by the company under the terms of
its then current tariff, provided, however, that the fee shall not be effective against
the company unless and until the city imposes a fee or tax of the same percentage
on the gross revenue of sales of energy within the city by all other energy suppliers
with which the city has in effect a franchise agreement allowing such fee. Any such
franchise fee imposed shall be a direct charge to customers aceto the extent required
by the Iowa utilities board.
B. 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.
C. 1 . Effen#i„e july 1 , 20131 fee imposed by sen+inn 1 of eFdonenne SO 03 as ameRded
The fee shall not
apply to any sale of natural and mixed gas by the company that is exempt under
Iowa Code section 423.3 from the tax imposed by Iowa Code section 423.2 and in
computing the amount of the fee, the company shall not include such sale, 6 1� G;f
— tk;e–The city manager shall provide a
rebate of the amount of the fee for such exempt sales of natural and mixed gas to
company's customers provided a written request is submitted by a customer to the
city manager in the city's fiscal year (July 1 - June 30) in which the customer pays
such fees.
2. Any rebate of franchise fees which may have been available under any prior
amendment or ordinance which was not paid prior to July 1 , 2013, is declared void
and any claim for any such rebate shall not be honored or paid by the city.
D. 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
5
exercise 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.
E. 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.
F. 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.
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