Summary
To: Town Commission
From: Stefan Massol, Director of Support Services
Date: 8/17/2021
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Subject:
Title
Second Reading of Ordinance 536: Renewal of Clearwater Gas Franchise Agreement
Summary:
The Town Commission considered renewal of the Town's expiring Gas Franchise agreement with the City of Clearwater at the July 20, 2021 meeting. Ordnance 536 was approved on first reading that same date with a renewal rate of 5.5%.
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Body
Background/Problem Discussion: Under Ordinance 298 the Town of Belleair entered into a Gas Franchise Agreement with the City of Clearwater on April 17, 1990. In the agreement, Clearwater would agree to consider requests for extension of service based on a feasibility formula. The formula is in effect system-wide for purposes of determining the financial feasibility of extending services to new addresses. The agreement also establishes a franchise fee rate of 5.5% for natural gas receipts in Belleair, which would be the same rate currently in place.
The entire agreement is available for review.
Financial Implications: The updated agreement would reflect a reduction from 30-year term to a 15-year term. Additionally, the franchise fee payment to the Town of Belleair by City of Clearwater would remain at 5.5%. Payments are made quarterly, and the franchise fee is calculated based on gross gas receipts for addresses located within the jurisdictional boundary of the Town of Belleair.
There are 20 jurisdictions that have gas service agreements with Clearwater Gas. Four jurisdictions have no franchise fees. The remaining 16 have rates varying from 5% to 6%, with 7 at 5% and 9 at 6%. The Town's franchise fee rate of 5.5% is right in the middle of other jurisdictions. This generates approximately $22,000 annually for the Town's General Fund.
As part of the Strategic Plan, the Town is committed to "develop and maintain a diverse portfolio of funding sources". As...
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