Regarding Proposition 409 and 410 which are propositions on the August 2nd primary ballot asking voter to approve or deny franchise agreements with APS and Alliant Gas – I had some questions. I.e., If the franchise agreements did not include fees which are collected from the consumer, would the agreements require a ballot initiative? Can the Town inter into a franchise agreements or licensing agreements with these utilities if no franchise fees are collected? What happens if both or either of the proposition are voted down? Will we continue with the current agreements? Will the Town charge the utilities a permit fee for each project undertaken by the utility companies? Will the Arizona Corporation Commission allow the utilities to increase their customer service fees to cover their loss of revenue?
I have talked to our Town Manager, Troy Smith; our Town Attorney, John Paladini; a lawyer from the AZ League of Cities and Towns; an administrator from the AZ League of Cities and Towns and I have received conflicting and inconsistent information. The most consistent response I received was “I’m not sure.” I have not talked with anyone who could give me definite answers to my questions. As part of the franchise agreement, a franchise fee is theoretically paid to the Town by the utilities.
However, the utilities are allowed to turn around and collect that fee from the citizen rate payers – their customers. So, the citizens ultimately pay the franchise fee. It is a way for the Town to generate revenue from the citizens in an obscure fashion. The Town may justify collecting the fee from the citizens in order to cover the administrative costs of the permitting process. In principle I do not like the backdoor manner in which our citizens are assessed a fee (tax) that is not fully disclosed in an upfront and transparent manner. We do need to recognize that there are administrative costs in issuing permits and working with the utilities. Costs that the utilities and the Town are trying to recoup. What I want to know is if we charge the utilities permit fees for each project, will the utilities simply pass that cost on to the consumer? Can we have a franchise or license agreement with the utilities that does not include a fee that is passed on to the consumer? I suspect that if the franchise agreements are not approved that the citizens end up paying the cost one way or another; and additional administrative cost may be incurred by the Town.
This information we are seeking and asking for should have been included in the required official public notification in the newspaper, but then I’m assuming someone really knows.
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