HomeMy WebLinkAboutB- 7 Public Utility Franchise Fees of
NNp ce
The City of Azusa 'ijjI.
415 It/Po�7 ' 213 E.Foothill Blvd.,Azusa California 91702 4
(626)812-5224 Fax(626)334-6358
Geoffrey J.Craig
Assistant City Manager
TO: HONORABLE MAYOR& MEMBERS OF HE CITY COUNCIL
'1
FROM: GEOFF CRAIG,ASST. CITY MANAGER/
VIA: RICK COLE,CITY MANAGER
DATE: JUNE 5,2000
SUBJECT: PUBLIC UTILITY FRANCHISE FEES
Recommendation
State law subjects companies that transport natural gas and/or electricity within municipal rights-of-
way to payment of a surcharge, or franchise, to the municipality. Azusa receives such payments
from Southern California Edison, Southern California Gas and from its own utilities, which serve
as an important source of revenue to the General Fund. In light of this,it is worthwhile to formally
recognize the Broughton Act and the Franchise Act as the basis for the City's franchising and to
ensure that all applicable utility franchise,business license and users taxes are being properly levied,
collected and remitted,as well as to provide for franchising new types of utilities that may be yet to
come. Staff is recommending that Council conduct second reading on an ordinance that would
enable Azusa to do so.
Background
According to the Public Utilities Code,companies that transport natural gas and/or electricity over
utility and non-utility transmission or distribution systems are subject to a municipal surcharge. This
surcharge is designed to replace,but not increase,franchise fees, so that companies like Enron,that
will use the transmission or distribution systems of companies, like Southern California Edison
Company, that have entered into franchise fee agreements with the City, share commensurately in
the burden of compensating the City for the private use of public lands.
The Southern California Edison Company has advised that it will be at least two years before Edison
will be allowing any other company to use its lines in Azusa for the transportation of power.
However,the Southern California Gas Company does have several transportation customers within
Azusa's jurisdiction. The Gas Company has advised that,in accordance with State law and The Gas
Company's filed tariffs to implement the law,it is collecting and remitting to the city the appropriate
surcharge on gas transportation volumes delivered through meters in Azusa. However, staff would
like to ensure that all said transportation customers are properly licensed to do business in Azusa and
that both the surcharge and any applicable utility users tax are being properly collected and remitted.
4d /BOO