By Conrad Dudderar
A Tuesday, April 7 election has been set for Yukon voters to consider establishing an Oklahoma Natural Gas (ONG) franchise with a 2 percent collection fee.
The Yukon City Council, at its Feb. 4 meeting, voted 4-1 to approve an 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 proposal would allow ONG to collect 2 percent from residential, commercial and industrial bills and pass those funds along to the City of Yukon. ONG officials had proposed a 3 percent fee.
ONG is now operating under a gross receipts ordinance that was approved by the city council in 1942. This ordinance already allows ONG to collect 2 percent from its Yukon customers that is passed through to the City budget.
“I feel like, as a City, that we don’t want to inflict any more additional taxes,” Ward 2 Council Member Shelli Selby said. “Staying at 2 percent is more ideal that going with 3 percent and hurting the taxpayers.”
The City of Yukon now derives 2 percent of gross receipts from residential and commercial ONG customers – about $110,000 annually.
ONG has been in Oklahoma since 1906 and most of its communities charge a 3 percent franchise tax.
At-Large City Council Member Jeff Wootton cast the lone dissenting vote on the ordinance, preferring the franchise fee be 0 or 1 percent to lessen the cost to taxpayers. Wootton noted many residents weren’t aware they have been paying a 2 percent fee to ONG, passed through to the City.
“If we’re going to tax people, they should know,” Wootton said. “We don’t have to tax for everything. During my campaign for city council, I said I wanted to roll some taxes back.
“It is the people’s money.”
UP TO VOTERS
It will be up to Yukon voters on April 7 to decide whether to formally approve the 25-year ONG franchise. By a 5-0 vote, the city council OK’d calling the special election.
“It’s the people’s choice,” Wootton said. “This is a chance for them to voice their opinion.”
The franchise agreement would give ONG the right to use the public ways to distribute natural gas. If approved by voters, it would guarantee the company’s use of the City of Yukon’s right-of-way for 25 years.
Establishing this franchise would protect “the safety and welfare of our community”, City Manager Jim Crosby said.
The proposed ordinance outlines regulations ONG must follow and provides for “indemnification of the City of Yukon.”
“We want to make sure we’re covered in case there’s any problems,” Crosby said. “It specifically designates what (ONG) can and can’t do.”
The 1942 gross receipts ordinance doesn’t specify rules, requirements and standards of construction that ONG must follow or provide indemnification to the City of Yukon in case of an accident, the city manager noted.
“It is very important that we understand that when they come here and work in our right-of-way, that we can control what they do,” he said.
All other major utility companies beside ONG already have franchise agreements with the City of Yukon, according to Crosby.
ONG will cover the cost of the April 7 election.