Foley council adopts franchise ordinances and summary-publication resolution for utility fees

Foley’s City Council voted to adopt four franchise ordinances and a related resolution authorizing summary publication of the ordinances and franchise fees for utility providers.

A city staff member explained that franchise agreements set expectations for construction, operation and maintenance of equipment in the city right-of-way and allow the city to collect a franchise fee that the utility then remits to the city. The staff presentation said Excel Energy asked that the franchise agreement and the fee schedule be adopted as separate ordinances to make future fee changes easier. The staff member said the city would begin collecting the fee from Excel in January 2025 and is negotiating comparable language with East Central Energy so the same fee structure applies to both providers.

Why it matters: Council members said franchise fees broaden the tax base because they apply to utility users rather than property owners and could generate new revenue for restoration and right-of-way work. The staff presentation included a projection, developed with Excel, of roughly $75,000 in the first full annual cycle from Excel’s customer accounts (staff cautioned this is a projection and actual receipts may differ).

Council action and procedure: A council member moved to adopt ordinances 483, 484, 485 and 486 together and to approve a resolution authorizing summary publication of the ordinances and fees; the motion was seconded and carried. The meeting record shows the motion carried and the ordinances and resolution were adopted.

What the ordinances require and limits: Staff said state statute requires the city to collect the same fee from each utility holding a franchise agreement, and that fees are intended to defray municipal expenses associated with utilities and right-of-way restoration. Staff also noted the franchise agreement contains a provision for the parties to confer about safety concerns and potential removal of facilities; the agreement does not allocate responsibility for every possible removal on its face and staff said insurance/certificates will be provided by the utility upon request.

Next steps: Staff will finalize the franchise ordinances and publish the authorized summary; fee collection from Excel is scheduled to begin in January 2025, and staff will present proposed language for East Central Energy so the fees will apply uniformly when both agreements are in place.