Just when the budget process couldn't get more interesting ...
Yesterday we noted that some on the council, and City Manager Mary Suhm, have pointed out that at the end of the year, the city's franchise fee contract with Atmos Energy is set to expire. Suhm notes, on Page 24 of today's budget amendment workshop briefing:
The current gas franchise with Atmos Energy expires in December 2009. To be consistent with those franchises that are based on a percent of revenues (cable and water/sewer), a new franchise which increases the fee from 4% to 5% is recommended. The additional revenue generated by the franchise fee increase is projected to be $1.3 million; assuming an April 2010 implementation. A council vote, prior to April, is required to implement the new franchise.
This morning, Ron Natinsky got the council to barely okee-doke his proposal to save rec center and senior programs using the franchise fee hike; he also found some money for the library to buy materials. But not before Angela Hunt and other council members asked, more or less, "Um, isn't that really just a disguised tax increase?" To which Natinsky said, more or less, "Nope, it's a fee." Win!
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Either way, if the council votes to up the franchise fee -- which it would more or less do next Wednesday, when the council puts its stamp on the budget or else -- it will be a rate hike. Gerald Hunter, director of communications for Atmos Energy Corp. on LBJ Freeway, says so. "That's correct," he tells Unfair Park. Because, he explains, that franchise fee is "collected on behalf of the city where the utility operates in return for the right to use the rights of way, or the conveyances, throughout the community for delivering utility services." And if you look on your Atmos bill, it's right there: "RIDER FF: 0.04082."
Hunter then told me to call Ray Granado, media relations rep for Dallas County, who'd have more specifics. Granado said he was kind of aware of the proposed rate hike: "I know that's still in the works." But when told council had pretty much decided to go ahead with the move to fill in a few budget blanks, he said, well, he'd like to call me back in a few. So.
Update at 2:42 p.m.: Granado called back and said, "We're not aware of the council's actions today, but we are in the process of negotiating with the city, and that is to renew our expiring franchise agreement. We are in negotiations with the city, and right now it's too early to comment on how those negotiations may turn out." He says Atmos officials weren't aware an increase was on the briefing agenda for today.