Agenda 07/12/2022 Item #16K 1 (Impose a franchise fee on TECO for Natural Gas Services)07/12/2022
EXECUTIVE SUMMARY
Recommendation to accept an update regarding whether the County may impose a franchise fee on
TECO for natural gas services.
OBJECTIVE: To provide information as to whether the County may impose a franchise fee on TECO
for natural gas services.
CONSIDERATIONS: At the June 28, 2022, regular meeting of the Board of County Commissioners,
Commissioner Saunders requested the County Attorney to provide information as to whether the County
may require a franchise fee for TECO.
Municipalities have clear legislative authority to impose taxes upon utilities pursuant to Fla. Stat.
166.23 1, but the Florida legislature does not afford the same ability to non -charter counties. Absent this
express statutory authority, a non -charter county (such as Collier County) may not impose a tax on a
utility. However, much like an impact fee, Florida caselaw pen -nits a County to charge a utility/franchise
fee. There are two ways of doing so.
The most direct route, authorized by the Florida Supreme Court in Alachua County v. State, 737 So.2d
1065 (Fla. 1999), is to negotiate a utility or franchise fee with the utility at a bargained upon rate. A
common example of this is FP&L, which is generally amenable to such agreements (note that the
franchise fee is then passed through down to FP&L's customers).
The second route to take is to impose the fee by ordinance. This approach was authorized in Santa Rosa
County v. Gulf Power Co., 63 5 So.2d 96 (Fla. I st DCA 1994). Like an impact fee, for a utility/franchise
fee to be valid there must be a nexus between the fee and value of the right-of-way. Like an impact fee,
this would need to be supported by an appropriate study.
To the County Attorney's knowledge, Indian River County is the only county in Florida with an
ordinance that requires natural gas companies to enter into a franchise agreement to utilize county rights -
of -way. Indian River's franchise fee is 6%, which appears to be the same rate that municipalities typically
charge.
TECO has not returned this Office's calls, accordingly, I do not know whether TECO would be receptive
to entering into an agreement with the County. With respect to estimating the income stream to the
County in imposing a fee, I have been unable to ascertain though internet searches TECO's income in
Collier County.
FISCAL IMPACT: Unknown at this time.
GROWTH MANAGEMENT IMPACT: None.
RECOMMENDATION: That the Board accept this update regarding a franchise fee for natural gas
utilities.
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07/12/2022
COLLIER COUNTY
Board of County Commissioners
Item Number: 16.K.1
Doc ID: 22713
Item Summary: Recommendation to accept an update regarding whether the County may impose
a franchise fee on TECO for natural gas services.
Meeting Date: 07/12/2022
Prepared by:
Title: Legal Assistant — County Attorney's Office
Name: Wanda Rodriguez
07/05/2022 3:03 PM
Submitted by:
Title: County Attorney — County Attorney's Office
Name: Jeffrey A. Klatzkow
07/05/2022 3:03 PM
Approved By:
Review:
Office of Management and Budget
County Attorney's Office
Office of Management and Budget
Facilities Management
County Managers Office
Board of County Commissioners
Debra Windsor Level 3 OMB Gatekeeper Review
Jeffrey A. Klatzkow Level 3 County Attorney's Office Review
Susan Usher Additional Reviewer
Ed Finn Additional Reviewer
Amy Patterson Level 4 County Manager Review
Geoffrey Willig Meeting Pending
Completed
07/05/2022 3:07 PM
Completed
07/05/2022 3:44 PM
Completed
07/06/2022 1:31 PM
Completed
07/06/2022 3:22 PM
Completed
07/06/2022 4:02 PM
07/12/2022 9:00 AM
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