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Commission debates audit and past underpayments as it considers new gas-franchise ordinance
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Summary
On second reading, the commission reviewed a proposed 30-year franchise with Florida Public Utilities that would set a 6% gross-revenue franchise fee and strengthen audit and documentation requirements; commissioners pressed staff on an earlier audit suggesting possible past underpayments and on whether the city can recoup funds.
The City Commission discussed Ordinance 51-48-25 on April 13, a proposed 30-year franchise for Florida Public Utilities (FPU) that would set a 6% gross-revenue franchise fee, add explicit city auditing rights, require annual backup documentation and impose a 15% penalty on underpayments found through audit.
Melissa Anderson, senior assistant city attorney, summarized the ordinance changes, saying the new definition means the franchise fee “is an amount equal to 6% of the company's gross revenues without offset for the payment of any other City Of West Palm Beach fees or taxes.” She said section 8 adds audit authority and a backup-documentation requirement, and that failure to provide customer billing lists could be considered a material breach.
Commissioners focused on an audit staff reviewed that indicated possible prior underpayments. Commissioner Fox pressed staff on whether past discrepancies had been recovered; city negotiators and finance staff said records are incomplete and recovering historic underpayments would require forensic work and could be limited by statutes of limitation. An assistant city finance official said payments are made quarterly and that the ordinance's audit and penalty provisions are intended to improve future compliance.
An FPU representative, who identified himself as Ari from external affairs, told the commission the company has continued paying franchise fees in good faith while negotiations proceeded and said the proposed enforcement provisions aim to prevent future issues. He declined to comment on earlier audit negotiations.
Commissioners asked whether FPU owns the gas lines within the city; FPU's representative confirmed the company owns and maintains the distribution pipes. The commission did not reach a final vote on second reading during the meeting after a motion was made but not seconded; commissioners said they may reconvene the item to allow additional discussion about possible remedies for prior discrepancies and about whether the city should pursue an external forensic audit.
