Council considers ONG franchise

25-year agreement proposed; April election considered

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Yukon City Attorney Gary Miller

By Conrad Dudderar
Associate Editor

Yukon voters are expected to head to the polls this spring as the City of Yukon considers establishing an Oklahoma Natural Gas (ONG) franchise.

The Yukon City Council has been asked to consider passing an 11-page ordinance granting One Gas, Inc. – through its ONG company division – a 25-year “non-exclusive franchise” to install, operate and maintain a distribution system “within, along, across, over and under” City of Yukon public easements “for the transportation, distribution and/or sale of gas to consumers and the public.”

The proposed ordinance will be considered at the next city council meeting Feb. 4, along with a five-page resolution calling a Tuesday, April 7 special election for qualified City of Yukon voters to consider the franchise agreement.

Yukon City Attorney Gary Miller provided copies of the ordinance, resolution and a sample ballot to council members at their Jan. 21st study session inside the conference room of the Centennial Building, 12 S 5th.

“You can get a large company that’s organized, that’s in the business, that’s taking care of the business – they can take care of it much better under that (franchise) ordinance,” Miller said. “All those things that are defined and set out in there, they can do a lot better job taking care of us than they can under a two-page contract.”

Granting a franchise would allow the City of Yukon to give ONG reassurance “that they’re going to be able to take care of us for 25 years so they can do long-range planning,” Miller added.

3 PERCENT COLLECTION

ONG Regional Manager Martie Oyler

Martie Oyler, ONG’s regional manager for economic development/community relations, confirmed that ONG will cover the cost of the planned Yukon election.

“Part of the franchise ordinance agreement is that we would collect 3 percent from the residential, commercial and industrial bills; and we would pass that on to the City,” Oyler said. “The franchise agreement gives us the right to use the public ways to distribute natural gas.

“Currently we’re operating under a gross receipts ordinance that was approved in 1942.”

The current gross receipts ordinance – approved by the council – allows ONG to collect 2 percent.

“A franchise agreement really protects both the utility and the community,” Oyler told council members. “It states all the responsibilities of both sides. By the public voting, it gives us the right to use the public ways.”

The City of Yukon now derives 2 percent of gross receipts from residential and commercial ONG customers – about $134,000 collected in the past 12 months.

That amount would increase under the proposed franchise agreement having a 3 percent collection rate.

“Right now, we’re collecting two percent, and we will begin collecting three,” Oyler explained. “We collect it on the (customer’s) bill and then we pass it through to the City.”

ONG has been in Oklahoma since 1906 and most of its communities charge a 3 percent franchise fee, Oyler told Yukon city leaders.

“We have a franchise in most of our larger communities and we’re working on getting more,” she said. “This gives us an opportunity to be able to plan, know we’re going to be in that community and have that commitment for 25 years.”

All other major utility companies beside ONG already have franchise agreements with the City of Yukon, according to City Manager Jim Crosby.

“ONG has not had a (City of Yukon) franchise and would like to bring a franchise forward,” Crosby advised council members. “We could keep it at 2 percent if that’s your desire.”

The franchise agreement would guarantee ONG’s use of the City’s right-of-way for 25 years, the city manager noted.