ITEM #: 10.
DATE: 11/04/2024
AI #:2275 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: |
APPROVAL OF A FRANCHISE AGREEMENT WITH LIBERTY UTILITIES (LITCHFIELD PARK WATER AND SEWER) CORP. FOR A SPECIAL ELECTION TO BE HELD MAY 20, 2025
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| STAFF PRESENTER(S): |
Roric Massey, City Attorney |
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| SUMMARY |
| This franchise agreement grants Liberty Utilities (Litchfield Park Water and Sewer) Corp. (“Liberty”) the right to construct, maintain and operate water distribution facilities and wastewater collection facilities within rights-of-way located within the City of Goodyear to provide water services and wastewater collection services in those areas designated by the Arizona Corporation Commission. The franchise agreement would be approved or rejected by the qualified electors of the City of Goodyear at the May 20, 2025, Special Election. |
| STRATEGIC PLAN ALIGNMENT |
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| RECOMMENDATION |
| ADOPT RESOLUTION NO. 2024-2432
APPROVING A FRANCHISE AGREEMENT BETWEEN THE CITY OF GOODYEAR AND LIBERTY UTILITIES (LITCHFIELD PARK WATER AND SEWER) CORP., ITS SUCCESSORS AND ASSIGNS, AND PLACING THE APPROVAL OF THE FRANCHISE AGREEMENT ON THE BALLOT OF A SPECIAL ELECTION TO BE HELD ON MAY 20, 2025 THAT GRANTS LIBERTY UTILITIES (LITCHFIELD PARK WATER AND SEWER) CORP., ITS SUCCESSORS AND ASSIGNS, THE RIGHT, PRIVILEGE AND FRANCHISE TO CONSTRUCT, MAINTAIN AND OPERATE UPON, OVER, AND/OR ALONG THE PUBLIC RIGHTS-OF-WAY IN THE CITY OF GOODYEAR, ARIZONA, AND FUTURE ADDITIONS THERETO, WATER DELIVERY AND WASTEWATER COLLECTION SYSTEMS WITH ALL NECESSARY APPURTENANCES, FOR THE PURPOSE OF SUPPLYING WATER AND COLLECTING WASTEWATER TO THE CITY, ITS SUCCESSORS, THE INHABITANTS THEREOF, AND PERSONS AND CORPORATIONS EITHER WITHIN OR BEYOND THE LIMITS THEREOF, FOR ALL PURPOSES, PRESCRIBING CERTAIN RIGHTS, DUTIES, TERMS AND CONDITIONS IN RESPECT THERETO
. (Roric Massey, City Attorney) |
| FISCAL IMPACT |
| This franchise agreement requires Liberty to pay the City of Goodyear three percent (3%) of the gross profits of the sale of water services or wastewater collection services within the boundaries of the city as a franchise fee. Currently, Liberty does not have a license agreement or a franchise agreement to install infrastructure in the right-of-way and has not paid either a license fee or a franchise fee to the City. Under the franchise agreement Liberty will also be responsible for paying permit fees to the city for the installation of their water or wastewater facilities. However, Liberty will deduct the total amount in permit fees paid to the city for all permit fees paid to install their infrastructure within the city right-of-way. The city could collect approximately $75,000 annually in franchise fee payments from Liberty prior to any deductions for permit fees paid. Costs associated with the special election have been included as a part of the FY2025 budget. |
| BACKGROUND AND PREVIOUS ACTIONS |
| Liberty is a regulated water and wastewater, company providing local water service and wastewater collection and treatment service within the City of Goodyear as well as Litchfield Park, Avondale, Buckeye, Glendale, Goodyear, and unincorporated Maricopa County. Liberty previously operated within Goodyear under the name Litchfield Park Water and Sewer Corporation. Liberty has been providing water service and wastewater collection and treatment services within the City of Goodyear without a license or franchise agreement and now intends to enter into a franchise agreement with the city. |
| STAFF ANALYSIS |
Franchise agreements are authorized by the Arizona Constitution and the Goodyear City Charter. Franchise agreements are important because they provide stability and help the City of Goodyear effectively plan for the future in coordination with public utility companies. The city currently has franchise agreements with Arizona Public Service (APS) for the provision of electrical services and Southwest Gas for the provision of natural gas services.
This franchise agreement is a contract between the City of Goodyear and Liberty. The franchise agreement gives Liberty a non-exclusive right to use the city's streets, alleys, and other public rights-of-way to construct, maintain, and operate their water distribution and wastewater collection facilities within the rights-of-way safely and efficiently in order to serve their customers within the City of Goodyear. The city will collect a three percent (3%) franchise fee for Liberty’s provision of water distribution and wastewater collection services provided to customers within the City of Goodyear. Liberty is responsible for the installation and maintenance of its infrastructure at its own cost and shall be required to relocate their infrastructure when the city constructs improvements to or within the right-of-way. The franchise agreement also ensures Liberty is using rights-of-way safely and efficiently and they comply with city regulations. Within the franchise agreement, Liberty commits to designing, constructing and completing any projects in a timely fashion and in partnership with the City. Liberty will consult and coordinate with City on a regular basis to ensure emergencies, damage mitigation, traffic control, or defaults are addressed to the best of their ability.
The Arizona Constitution requires that voters in the city approve a municipal franchise agreement. Liberty will be responsible for costs incurred by the City for holding a general election to approve this franchise agreement and the City will equitably apportion only those costs attributable to the election of this franchise agreement to Liberty if other items are on the ballot. If approved by a majority of the voters at the May 20, 2025 Special Election, this franchise agreement will be effective for a term of 25-years, which is the maximum allowed by the Arizona Constitution, and will go into effect June 1, 2025. Unless terminated earlier by a written agreement this franchise agreement will be effective through May 30, 2050. |
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