Sheridan Councilors Discuss Whether Franchise Fee Was Necessary

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An ordinance that establishes a franchise deal between Sheridan and CenturyLink® was read on January 22, 2019, at the City Council meeting, urging talk over whether the proposed franchise fee of three percent was required.

Mark Collins, the City Administrator, pointed out that the agreement’s main purpose was to form one that worked similar to contracts it had with other utility firms. Through the years, it has been passed to the best internet provider through mergers and acquisitions. As per Sheridan Utilities Director, Dan Roberts, several of the terms require updating, and that the agreement’s format causes it to appear different from other franchise deals.

Collins said, “From a risk-liability standard, and also to have some uniformity with our other franchise holders, I think it was important to make sure that we had an agreement, so that way, we didn’t have somebody that was basically a standout or standalone.” He also added that the franchise fee’s existence and the amount would be at the mayor and council’s discretion.

The City Councilor, Jacob Martin, was not sure of the advantage of a fee, considering that it is paid for by subscribers in an added cost’s form to their utility bills.

Martin said, “I would just like to not have the franchise fee or take it down from 3 percent to 1 percent or renegotiate to not have it at all. But I do like everything else in the agreement, and I appreciate the work staff did with things like indemnification and the insurance.”

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The City Councilor, Aaron Linden, asked the City Lawyer, Brendon Kerns, whether taking away this fee would lead to legal consequences or not. The City Attorney replied that in nature they would not be legal.

Kerns said, “There’s no issues necessarily in terms of the other franchise holders, but of course, you do have to look at your overarching policy that the city wants to set.” He further added that franchise fees are often put toward projects benefitting utility companies as well as their subscribers, which makes the services better. Thayer Shafer, the Councilor, echoed this point of view.

Shafer said, “The franchise fees come from the telephone act, and it was basically to provide for the maintenance of the right of ways that the telephone company is basically renting.”

“For the advantages it provides,” Shafer added, “they are not unreasonable.” As per the information that CenturyLink® provided to Sheridan, the average subscriber in the city would pay sixty-nine cents a month for the fee.

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