HomeMy WebLinkAboutM-82-0202CITY OF MIAMI. tLOpibA
INTER -OFFICE MEMOAANOUI
to. Howard V. Gary
City Manager
DATE February 2, 1982 PILc:
SUBJECT Florida Power and Light Company
Franchise Renewal
"'Clark Merrill PErERENCES Schedule of Payments
Assistant to the City Manager FP&L Present Agreement
Intergovernmental Affairs E!NCLOSLAES FP&L Classes of Customers
FP&L Franchise Fees Paid to City
The Florida Power and Light (FP&L) franchise agreement with the City of Miami will
expire on March 31, 1984. There are additional revenues that could be paid to the
City if the franchise is renewed early. Before any negotiations take place with
officials from FP&L, the following issues need to be discussed:
Industrial Customers
The present Miami franchise agreement does not provide for payments
from industrial customers to be included in the revenue base upon
which the six percent (6'c*) fee is applied. An industrial customer
is classified as a business that manufactures a product on the prem-
ises. (Bakeries, garment makers, etc.). FP&L is including this
provision in agreements in other Florida cities. Such a change to
Miami's franchise agreement would increase the fee by approximately
$380,000 per year.
Pre -payment of Annual Franchise Fee vs Monthly Payments
When the franchise was approved in 1954, FP&L was required by the
agreement to pay the annual fee to the City on July 1st of that
first year, based upon revenues collected from Miami residential
and commercial customers during the prior twelve (12) month period.
FP&L contends that this amounts to a pre -payment of the franchise
fee. The company has been including monthly payments of the fee
in recent franchise agreements approved in other cities. There
would be a significant negative impact on the City's budget rev-
enues if monthly payments did not begin until almost a year after
the last lump -sum annual payment of the franchise fee was paid.
The attached fee payment schedule illustrates how the City's bud-
get revenues would be affected. The 1983-84 budget could lose
$5,000,000 in revenue from this resource and much more if elec-
tric rates increase and depending upon when the monthly payments
begin.
I believe there are ways that these problems can be resolved but we should begin now
to work out financial models with the staff of FP&L that can be submitted to the
Commission for review and discussion.
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�/• Vol,
Howard V. Gary page 2 DATE: February 2 11982
FROM: Clark Merrill RES Florida Power and Light
Company Franchise Renewal
Renegotiating a new franchise this year will incresae revenues that will be needed in
next year's* budget•as well as resolve a problem that will surely be facing us next
year.
I am proceeding on the assumption that the Court has properly addressed the issue of
a referendum not being necessary.
CM/ah
g2 - 2 U2
ATTACHMENT 1
SCHEDULE OF PAYMENTS CHART
Florida Power and Light Company Franchise Fee Payments
. to the City of Miami
(Transition from Existing Pre -Payment Paid Annually to Monthly Payments)
ity of Miami Franchise Agreement Franchise Fee Franchise Fie
Fiscal Years Periods Payment Dates Payments
March 31, 1980
July 1, 1480 $7.0 Million
October 1981
(FY'80-81)
October 1982
(FY'81-82)
October 1983
(FY'82-B3)
October 1984
(FY'83-84)
October 1985
(FY'84-85)
= CM/ah
2/2/82
March 31, 1981
March 31, 1982
March 31, 1983
FIARCH 31, 1984
=EQAGIGdISE=D�QEEUif1I=EXPI@ES===
July 1, 1981 $7.5 Million
July 1, 1982 $8.0 Million
July 1, 1983
$8.5 Million
(Estimated)(Last Payment
Under Present Agreement)
Monthly Payments
Industrial
May b
750,000
$ 32,000
June
750,000
32,000
July
750,000
32,000
August
750,000
32,000
September
750,000(53,750,000) 32,000($160,000)
OCTOBER 1984
750,000
32,000
November
750,000
32,000
December
750,000
32,000
January
750,000
32,00)
February
750,000
32,000
March
750,000
32,000
April
750,000
32,000
May
750,000
32,000
June
750,000
32,000
July
750,000
32,000
August
750,000
32,000
September
750,000
32,000
OCTOBER 1985
$9,000,000 $384,000
NOTE: Numbers are used only for reference.
ASSUMPTIONS: Franchise Fee Payment Estimates as Shown
Monthly Payments would be in nevFranchise Agreement
Monthly Payments would begin May 1 of New Franchise Year
8 2 - z 0 2
T ORDINANCE NO. 4914
AN ORDINANCE GRAT.":ING TO FLORIDA POWER & LIOHT COMPANY
ITS SUCCESSORS AND ASSIGNS, AN ELECTRIC FRANCHISE, AND
IMPOSING PROVISIONS AND CONDITIONS RELATING THERETO
BE IT ORDAINED Vi THE COMN,ISSION OF THE CITY OF MIAMI, FLORIDA:
Section 1. That there is hereby granted to Florida Power & Light
Company (herein called the "Grantee"), its successors and assigns, the
non-exclusive right, privilege ^r franchise to construct, maintain and
operate in, under, upon, over and aernss the present and future streets,
alleys, bridges, easements and ether public places of the City of Via:.:,
Florida (herein called the "Grantor"), and its successors, in accordance
with established practice with respect to electrical construction and
maintenance, fir the period ^f thirty (30) years from, the date of acce}t-
ance hereof, electric light and power facilities (including conduits,
poles, wires and transmission lines, and, fir its owr, use, telephone sad
telegraph lines) for the purpose of supplying electricity for light,heat,
power and other purposes to Grantor, and its successors, the inhattitants
thereof, and pers,-ins and corp^ratinns beyond the linits thereof.
Section 2. That Granter hereby reserves the right at and after the
expiration of this grant to purchase the property e�f Grantee used under
this grant, as provided by the Lars of. Florida, in effect at the tine of
Grantee's acceptance hereof, including Section. 167.22 of the Florida
Statutes of 1951, and as a condition precedent to the taking effect of
this grant, Grantee shall give and grant to the Grantor the right to
purchase so reserved. Grantee shall be deemed to have given and granted
such right of purchase by its acceptance hereof, which shall be filed kit`:
the Grantor's clerk within thirty (30) days after this ordinance takes
effect.
Section 3. That the facilities shall be so located or relocated
and so erected as to interfere as little as possible with traffic over
said streets, alleys, bridges and public places, and with reasonable
egress fror.. and ingress to abutting property. The location or relocation
of all facilities shall be made under the supervision and with the ap-
proval of such representatives as the governing body of Grantor may desig-
nate for the purpose, but not sc as unreasonably to interfere with the
proper operation of Grantee's fac111ties and service. That when any per-
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. 1 • �J
tion of a street is excavated by Grantee in the location or relocation of
s any of its facilities, the portion of the street to excavated shall,
within a ressonsble time and as early as practicable after such excava-
tion, be replaced by the Grantee at its expense and in as good condition
as it was'pt the time of such excavation. Provided, however, that nothing
herein contained shall be construed to make the Grantor liable to the
Grantee for any cost or expense in connection with the construction, re-
construction, repair or relocation of Grantee's conduits, poles, towers
and appurtenances thereto in streets, highways and other public places
made necessary by the widening, grading, paving or otherwise imFrcvinc by
said Granter, of any of the present and future streets, avenues, alleys,
highways, bridges, easements and other public places used or occupied by
the Grantee hereunder.
Section. A. That Grantor shall in no way be liable or responsible
for any accident or damage that may occur in the construction, operation
or maintenance by Grantee of its facilities hereunder, and the acceptance
of this ordinance shall be deemed an agreement on the part of Grantee, to
Indemnify Grantor and hold it harmless against any and all liability, loss,
cost, danaie or expense, which may accrue to Grantor by reasc+r. of the
neglect, default, or misconduct of Grantee in the construction., operation
or maintenance of its facilities hereunder.
Section 5. That all rates and rules and regulations established
by Grantee frog. time to time shall at all times be reasonable and
Grantee's rates for electricity shall at all times be sutject tc such
regulation as may be provided by law.
Section. 6. That on each July 1 during this grant, the Grantee, its
successors and assigns, shall pay to the Grantor and its successors an
amount which added to the amount of all taxes, licenses, and other im-
positions (except amounts for assessments for special benefits, such
as sidewalks, street paving and sitrilar improvements) levied or imposed
by the Grantor upon. the Grantee's electric property, business, or opera-
tions, and those of Grantee's electric subsidiaries for the preceding
calendar year, will equal 6% of Grantee's revenues from the sale of elec-
trical energy to residential and commercial customers within the corper-
ate limits of the Grantor for the twelve (12) fiscal months preceding the
applicable anniversary date; however, the July 1, 1954, payment shall be
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Ir82-202
based upon reside* al and commercial !revenues for t' twelve (19) fiscal
months preceding the effective date of this grant. Nothing herein shall
be construed to be a limitation on the assessment and collection of valid
taxes, licenses and other impositions by the Grantor on and from the
'Grantee ip excess of such 6% amount.
Section 7. As a further consideration of this franchise, said
Grantor agrees not to engage in the business of distributing and selling
electricity during the life of this franchise or any extension thereof in
competition with the Grantee, its successors and assigns, until after (a)
the adoption of a resolution giving notice to the Grantee of the decision
of the Grantor to engage in such business, (b) the adoption nct less than
six months thereafter of an ordinance by a vote of at least four -fifths
of the members of the cormission giving effect to such decisior. ant (c)
the approval of such ordinance by a majority of the qualified voters of
the City of Muni voting at an election held therefor not less than six
months after the adoption of such ordinance.
Section 8. That failure on the part of Grantee to cor.;ly in any
substantial respect with any of the provisions of this ordinance shall
be grounds for a forfeiture of this grant, but no such forfeiture shall
take effect if the reasonatleness or propriety thereof is protested by
Grantee until a court of competent jurisdiction. (witt, right of a;peF.l in
either party) shall have found that Grantee has failed tc conrly in a sut-
stantial respect with any of the provisions of this franchise, and the
Grantee shall have six (6) months after the final determination of the
question, to make good the default before a forfeiture shall result with
the right in Grantor at its discretion to grant such additional tine to
Grantee for com;llance as necessities in the case require; provided, how-
ever, that the provisions of this Section shall not be construed as Ir.-
pairing any alternative right or rights which the Grantor may have with
respect to the forfeiture of franchises under the Constitution or the
general laws of Florida or the Charter of the Grantor.
Section. g. This ordinance shall take effect when it has bee- ap-
proved by a majority of the qualified voters of the City of Mian: voting
at an election held therefor in accordance with the provisions cf the
City Charter.
Section 1C. That all ordinances and parts of ordinances in conflict
herewith be and the same are hereby repealed.
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82-202
PASSEL on first reading by title only on the 6th day of Jar uary,
1954.
PASSED AND ADOPTED on Second and final reading in full on the 3rd
day of Ppbruary, 1954.
ATTEST:
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MISCELLANEOUS
P,
CLASSES OF CUSTOMERS
Residential. Service supplied for all domestic purposes in a private residence or individually metered
apartment unit. Domestic facilities on the same premises outside of a single dwelling, including
garage, pool, servants' quarters, etc., used solely by or for an individual family may also be sup-
plied on this schedule through the meter provided for the private dwelling unit.
Commercial and General Service. Service used for commercial and professional activities in es•
tablishments and for purposes not otherwise classified for rate purposes, including: airports, banks,
billboards, boarding houses, churches, clubs, commercial buildings, freight terminals, garages, hos.
pitals, hotels, master -metered apartment houses, office buildings, parking lots, passenger stations, per-
sonal service establishments, restaurants, rooming houses, schools, self service laundries, signs, stores,
theatres and the like.
Industrial. Service to power equipment used for manufacturing or processing purposes, and to the
lighting within and about the buildings, structures and premises housing and enclosing the power -
driven and operated machinery and equipment and incident to the use thereof. Also included is ser.
vice to a limited number of activities such as boatyards, laundry and dry cleaning plants, cold stor-
age plants, cotton gins, steam laundries, machine shops, rebuilders of airplanes and airplane engines,
mines, fruit, meat and vegetable packing and precooling plants, quarries, radio and TV transmitting
stations, and railroad shops.
Government and Municipal. Service used only by a governmental entity.
Other. Sen•ice which does not fall within any of the above classifications.
Issued b) Robert H. F1te
President and General Manager
FR. 1.11%r. %%&#Uof IA. ILt..
82-�U2
Florida power and Lig4h, Company
mP Y
Franchise Fees Paid to City of Miami
(Payments made on July 1st)
Year Ended
3/31/54
3/31/55
3/ 31/56
3/31/57
3/ 31/ 56
3/31/59
3/31/60
3/31/61
3/31/62
3/31/63
3/31/64
3/31/65
3/31/66
3/31/67
3/31/68
3/31/E9
3; 31/70
3/ 31/ 71
3/31; 72
3/31/73
3/31!74
3/ 331/75
3/31/7E
3/31/77
3/31/7E
3/31/79
3/31/8)
3/31/61
Amount
S 579,337.88
635,052.30
710,049.28
752,493.37
915,856.05
904,633.25
652,070.03
821,771.19
933,096.8E
977,603.67
1,063,397.92
1,OE;,3E6.25
1,08E,754.E3
1,133,327.39
798,298.1E
914,402.17
1,062 463. 93
1,271,735.9--
1,435.970.69
1,65E,095.75
2,397,891.33
3,520,605.94
4,117,464.53
4,079,041.16
4,853,025.25
5,144,463.32
6,326,548.71
7,660,545.02
S57,886,49E.9=
S 8,027,0K .0'-,
(estirnated;
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