1. In its monthly billing, the Company shall include a franchise fee at a rate of three percent (3.00%) of the gross receipts from the sale of electricity to the Company’s electric customers located within the corporate limits of the City.
(Ord. 2023-27 – Jan. 24 Supp.)
2. Franchise fees shall be applied to all customers’ bills in accordance with Iowa Code Chapter 364.2 and 423B.5. The amount of the franchise fee shall be shown separately on the utility bill to each individual customer.
3. In the event the City raises the rate of franchise fees above zero percent (0%), the Company will commence collecting franchise fees on or before the first Company billing cycle of the first calendar month following ninety (90) days of receipt of information required of the City to implement the change to the franchise fee rate. This information shall include but not be limited to a copy of the City’s Revenue Purpose Statement and written proof of legal adoption and publication of the Revenue Purpose Statement, the City’s list of City utility accounts exempt per Iowa law from the franchise fee, signed Nondisclosure Agreement pertaining to the protection of the confidentiality of utility service address information provided by the Company to the City, and the City’s verified utility customer service address list. The Company shall not commence assessing the franchise fee until it has received written approval of the amended tax rider tariff from the Iowa Utilities Board.
4. The City and the Company recognize that the regular costs of franchise fee administration are not charged directly to the City. The City agrees it shall reimburse the Company for any initial or ongoing costs incurred by the Company in collecting franchise fees that the City and the Company agree is in excess of typical costs of franchise fee administration.
5. Upon receipt of a final and unappealable order or approval authorizing annexation or changes in the corporate limits of said City, the City Clerk shall provide written notification by certified mail to an officer of Company of such annexation or change in the limits of said City, and the Company shall apply the franchise fee to its customers who are affected by the annexation or change in the corporate limits of the City, commencing on an agreed upon date which is not less than ninety (90) days from receipt of the information required of the City to implement the franchise fee. The Company shall have no obligation to collect franchise fees from customers in any annexed area until and unless the following have all been provided to the Company by certified mail: such final and unappealable orders or approvals, the City’s list of City utility accounts exempt from the franchise fee in the annexed area, and the City’s verified utility customer service address list for the annexed area.
6. The City shall indemnify the Company from claims of any nature arising out of or related to the imposition and collection of the franchise fee. In addition, the Company shall not be liable for collecting franchise fees from any customer incorrectly identified or not identified by the City as being subject to the franchise fee or being exempt from the imposition of the franchise fee.
7. The Company shall remit franchise fee revenues, minus uncollectible amounts, to the City no more frequently than on or before the last business day of the month following each calendar year quarter. Company shall notify City at least thirty (30) days in advance of any changes made in this collection schedule, including any alterations in the calendar quarters or any other changes in the remittance periods.
8. The City shall give the Company a minimum 6-month notice prior to the request to implement any adjustment in the percentage of franchise fee to be collected pursuant to this subsection. The City agrees to modify the level of franchise fees imposed only once in any 24-month period. When any such ordinance increasing, decreasing, modifying or eliminating the franchise fee shall become effective, billings reflecting the change shall commence on an agreed upon date which is not less than ninety (90) days following written notice to the Company by certified mail. The Company shall not be required to implement such new percentage unless and until it has received appropriate official documentation of final action by the city council. In no event may the percentage of franchise fee exceed the statutory amount authorized by Iowa law.
9. The City shall be solely responsible for the proper use of any amounts collected as franchise fees, and shall only use such fees as collected for a purpose as allowed by applicable law.
10. The Company shall not under any circumstances be required to return or refund any franchise fees that have been collected from City customers and remitted to the City. In the event the Company is required to provide data or information in defense of the City’s imposition of franchise fees or the Company is required to assist the City in identifying customers or calculating any franchise fee refunds for groups of customers or individual customers, the City shall reimburse the Company for reasonable expenses incurred by the Company to provide such data or information.
11. Collection of the franchise fee shall cease at the earlier of the modification or repeal of the franchise fee or the end of the ordinance term.
A. In the event the City contemplates (i) entering into a franchise agreement with another person/entity to sell electricity at retail to City consumers that imposes a franchise fee or its lawful equivalent at a lesser rate than provided in this ordinance, or (ii) adding additional territory wherein a franchise fee would not be imposed upon all persons selling electricity to consumers within the additional territory, then not later than ninety (90) days prior to taking the action set forth in subsection (i) or (ii), the City shall provide written notice to the Company. The Parties shall have a ninety (90) day period following receipt of the written notice by Company to negotiate in good faith a mutually acceptable amendment to the franchise fees imposed. If the Parties cannot agree on a mutually agreeable fee level, after negotiating in good faith for ninety days, then either Party shall have the right to terminate this franchise agreement upon thirty (30) days’ written notice to the other Party.
B. The obligation to collect and remit the fee imposed by this ordinance shall be modified if the Iowa General Assembly enacts legislation, or any Iowa court issues a final judicial decision regarding franchise fees, or the Iowa Utilities Board issues a final nonappealable order (collectively, “Final Franchise Fee Action”) that modifies, but does not repeal, the ability of the City to impose a franchise fee or the ability of Company to collect from City customers and remit franchise fees to City. Within sixty (60) days of Final Franchise Fee Action, the City shall notify Company and the parties shall meet to determine whether this ordinance can be revised, and, if so, how to revise the franchise fee on a continuing basis to meet revised legal requirements. After Final Franchise Fee Action and until passage by the City of revisions to the franchise fee ordinance, Company may temporarily adjust or discontinue collection and remittance of the franchise fee if it believes in good faith that it is required to do so in order to comply with revised legal requirements.
C. The obligation to collect and remit the fee imposed by this ordinance is repealed, effective as of the date specified below with no liability therefor, if:
(1) Any of the imposition, collection or remittance of a franchise fee is ruled to be unlawful by the Supreme Court of Iowa, effective as of the date of such ruling or as may be specified by that Court; or
(2) The Iowa General Assembly enacts legislation making imposition, collection or remittance of a franchise fee unlawful, effective as of the date lawfully specified by the General Assembly; or
(3) The Iowa Utilities Board, or any successor agency, denies the Company the right to impose, collect or remit a franchise fee provided such denial is affirmed by the Supreme Court of Iowa, effective as of the date of the final agency order from which the appeal is taken.
12. With the exception of the franchise fee imposed by this ordinance, the Company shall not be required to make any payments or pay any fees to the City in exchange for the Company’s provision of electrical services to its customers in the City and for the Company’s use of streets, alleys and public places in the said City and other administrative or regulatory costs with regard to said franchise; and said poles, lines, wires, conduits and other appliances for the distribution of electric current along, under and upon the streets, alleys and public places in the said City to supply individuals, corpora-tions, communities, and municipali-ties both inside and outside of said City with electric light, heat and power shall be exempt from any special tax, assessment, license or rental charge during the entire term of this ordinance.