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<br /> -' <br />e M I NUT E S <br /> Eugene City Council <br /> Dinner/Work Session <br /> BJ's Restaurant--44 East 7th Avenue <br /> September 25, 1989 <br /> 5:30 p.m. <br /> COUNCILORS PRESENT: Ruth Bascom, Shawn Boles, Debra Ehrman, Bobby Green, <br /> Emily Schue, Freeman Holmer, Rob Bennett, Roger Rutan. <br /> The adjourned meeting of September 20, 1989, of the Eugene City Council was called <br /> to order by Mayor Jeff Miller. <br /> 1. PACIFIC NORTHWEST NATURAL GAS FRANCHISE RATE RENEGOTIATION <br /> Tony Mounts, Finance Division, gave the staff report. Mr. Mounts said that as the <br /> City's franchise agreements have expired in recent years, the City has been <br /> increasing the franchise fees from three percent to five percent of gross reve- <br /> nues. This increase reflects the growing cost of maintaining the public way and <br /> represents a return on the public investment in the infrastructure. The City of <br /> Eugene currently has franchise agreements with US West, AT&T, TCI Cable, Pacific <br />e Northwest Natural Gas, and Burlington Northern Railroad. Mr. Mounts explained <br /> that franchise agreements cover the use of public right-of-way by a private <br /> corporation. <br /> Mr. Mounts said that the City's existing franchise with Pacific Northwest Natural <br /> Gas was adopted in 1979. Section 10 of the agreement provides that lithe amount of <br /> the annual compensation shall be subject to renegotiation and redetermination at <br /> the end of the first 10-year period for the franchise term." The current fran- <br /> chise fee is three percent of the gross revenues earned within the city limits. <br /> Staff is proposing to increase the rate to five percent of gross revenue. Assum- <br /> ing the increase is effective in October or November, the rate increase will yield <br /> in excess of $100,000 this year. The rate increase is expected to yield approxi- <br /> mately $180,000 additional revenue for the General Fund per year. <br /> Mr. Mounts reviewed the franchise rates for natural gas companies in other Oregon <br /> cities. Rates for these cities were all at, or scheduled to become, five percent. <br /> Mr. Mounts reported that Pacific Northwest Natural Gas does not support the rate <br /> increase. The company is concerned about how the increase will affect its custom- <br /> ers and feels it has an obligation to avoid cost increases for their customers. <br /> The company also expressed concern that, because of clauses in franchise agree- <br /> ments with other small cities, it would have to increase the franchise rates in <br /> those cities. <br />e MINUTES--Eugene City Council September 25, 1989 Page 1 <br /> Dinner/Work Session <br />