PRESENTER: Presenter
Valeria M. Acevedo, City Attorney
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SUBJECT: Title
Approval of a Non-Exclusive License Agreement with Universal Natural Gas, Inc. for use of Public Right of Way.
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DEPARTMENT: City Attorney’s Office
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COUNCIL DISTRICTS IMPACTED: Citywide
BACKGROUND INFORMATION:
Universal Natural Gas (“UniGas”) started in 1993 as a family-owned gas distribution utility serving the Magnolia/Woodlands area north of Houston, Texas. Over time, UniGas has expanded into every major market throughout Texas and currently has over 30,000 residential and commercial natural gas customers. UniGas primarily serves growth markets and new master-planned communities outside of the core metropolitan centers where new infrastructure is most needed. UniGas is dedicated to delivering safe and reliable natural gas services while also meeting the growing needs of these emerging master-planned communities and developments in New Braunfels and the surrounding area. To operate in the City of New Braunfels, the company needs a franchise agreement and a license to use the City’s ROW. The three proposed developments that fall inside of the New Braunfels city limits include:
• Saengerhall Meadows (235 lots)
• Grace Meadows (550 lots)
• Wunderlich (284 lots)
Some key terms of this agreement include, but are not limited to, the following:
ROW USE FEES: Once the above listed developments are fully-built out, UniGas estimates that they will be paying the ROW Use Fee for Year 1 at $45,092. There is an escalator that will be applied the final year (year 25) which will be $115,575. See Exhibit B to the Agreement for details. The fee Right-of-Way Access is based on a dollar per linear foot for UniGas property located within the City’s ROW that will serve customers outside the city limits through gas lines located in the city limits.
TERM: The term of the ROW License Agreement is 15 years with 3 (3) year options to renew.
RELOCATION COSTS BORNE BY UNIGAS: If deemed necessary by the Director of Public Works or CEO of NBU that lines be relocated, then UniGas shall be responsible for such relocation costs.
ISSUE:
This Right of Way (ROW) License Agreement will require UniGas to compensate the City for use of its ROW.
FISCAL IMPACT:
Over the term of this agreement, the City can expect to receive approximately $1,877,867. Fees are due to the City twice per year: January 31st (for the last six months of the prior calendar year) and July 31st (for the first six months of the calendar year). See Sec. 9(B).
Recommendation
RECOMMENDATION:
Staff recommends approval.