Title
Ordinance Granting a Franchise to Southwest Gas Corporation (Ordinance S-44545)
Description
An ordinance granting Southwest Gas Corporation, a California corporation, and its permitted successors and assigns, the right, privilege and franchise to construct, maintain, and operate its gas system and gas system facilities, upon, over, along, across and under the present and future public rights-of-way. These public rights-of-way include, but are not limited to, present and future public roads, public streets, alleys, ways, bridges, and highways of the City. The franchise permits Southwest Gas to supply natural and artificial gas, including gas manufactured by any method whatsoever, or gas containing a mixture of natural and artificial gas to the City, its successors, inhabitants, and all individuals and entities, either within or beyond Phoenix corporate boundaries, for all purposes. The franchise prescribes certain rights, duties, terms, and conditions, and provides for the submission to qualified Phoenix electors for their approval. If approved by qualified Phoenix electors in an election, the franchise is effective Jan.1, 2019.
Report
Summary
Southwest Gas Corporation currently operates within the City of Phoenix under a twenty-five year franchise agreement, originally approved by Phoenix voters on Oct. 5, 1993. The existing franchise agreement will expire on Dec. 31, 2018.
Contract Term
If approved by Phoenix qualified electors in an election, the new franchise agreement (Attachment A) will have a 25-year term that begins on Jan. 1, 2019 and expires on Dec. 31, 2043.
Financial Impact
In consideration of the grant of this franchise, Southwest Gas Corporation will pay to the City:
1. franchise fee equal to two percent (2%) of the gross revenues of Southwest Gas Corporation;
2. general ad valorem property taxes;
3. transaction privilege and use tax authorized by City ordinance;
4. other charges, taxes or fees levied upon businesses generally throughout the City; and
5. applicable City right-of-way management and inspection fees, and pavement damage fees established by ordinance necessary for the services provided by Southwest Gas Corporation under this franchise.
Concurrence/Previous Council Action
The City Council approved the referral to voters for their approval or rejection a gas franchise with Southwest Gas Corporation on April 18, 2018.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua, the Street Transportation Department, and the City Engineer.