Bylaws    Item #   9. b.            
Regular Council Meeting Agenda
Meeting Date: 02/11/2019  
Title: Bylaw C-1064-19 First Reading - Natural Gas Franchise Agreement - Pungur-Buick
Department: Corporate Services
Where People Choose to Live - A dynamic city with an exceptional quality of life
Spruce Grove has a robust, growing economic base that generates balanced revenues to support the City’s high standards for services and programs.

Request for Decision Summary
To authorize entering a new natural gas franchise agreement for the purpose of changing the method of collection of franchise fees and increasing the rate as approved in the 2019 - 2021 Corporate Plan.

Proposed Motion
That first reading be given to Bylaw C-1064-19 - Natural Gas Franchise Agreement.
A Natural Gas Franchise Agreement exists to grant exclusive rights within a Municipal Area to:
  • provide natural gas distribution service;
  • construct, operate, and maintain the natural gas distribution system; and
  • use portions of roads, rights-of-way, and other lands owned, controlled or managed by the municipality which have been designated by the municipality for such use and which are necessary to provide natural gas distribution
A franchise fee is paid to the municipality in exchange for these rights.

In the 2019 - 2021 Corporate Plan, a service change initiative proposed changing the rate calculation method and increasing the rate charged to natural gas franchise ratepayers within the community.  The Corporate Plan initiative proposed changing the rate calculation method to the one more commonly used by municipalities and increasing the rate to 25% in 2019. (page 300 - Corporate Plan 2019 - 2021)  The Corporate Plan was approved by Council November 26, 2018.   The process to fulfill this Corporate Plan decision now requires giving first reading to Bylaw C-1064-19.   
Council does have the option to not increase rates at this time which would have significant implications to the approved Corporate Plan revenues.  This would require a review of the Corporate Plan and is not recommended by Administration.
After first reading is given to this bylaw, the municipality will submit an application package to ATCO Gas and Pipelines Ltd.  ATCO will then provide the municipality with the required information to be advertised in the newspaper with the widest circulation within the municipality for a period of 14 days.  This advertisement will include the actual impact to ratepayers as calculated by ATCO and is a legal advertisement and the required communication process for these applications.  If the City receives any notice of objections or concerns, these must be communicated to ATCO.  ATCO will prepare the information required for the Alberta Utilities Commission (AUC) to support the application.  When the application is reviewed by AUC, they will conduct a hearing into the application and render a decision.  Upon approval of the application, the municipality will then be required to give 2nd and 3rd reading to the bylaw and sign the agreement in order to begin receiving franchise fees under the new agreement.
The financial impact of the 2019 change is as outlined on page 300 of the Corporate Plan.  Revenue projection for 2019 - $661,072.  Estimated Impact to ratepayer $3.75 per month.

Bylaw C-1064-19
Schedule A - ATCO Agreement