SLT, STPUD at odds over franchise agreement
South Tahoe PUD does not pay a fee to have its water and sewer lines on South Lake Tahoe property. Photo/LTN file
By Kathryn Reed
South Lake Tahoe since earlier this summer has been paying South Tahoe Public Utility District for water and sewer just like any other customer. South Tahoe PUD, though, is not paying the city a franchise agreement like all the other water companies in town.
If the city has its way, there will be franchise deal in place – and soon. South Lake Tahoe officials want to correct what they see as a 50-year-old problem.
“It’s a standard practice that utilities pay for the right to use a city’s property,” City Manager Nancy Kerry told Lake Tahoe News.
Tahoe Keys, Lukins and Lakeside water districts all pay 2 percent of their gross revenues to the city per their franchise agreements. South Tahoe PUD never has. When STPUD acquired smaller water districts that were paying the fee, the practice stopped. The city never pursued its right to those dollars.
The city in 1966 – just after becoming incorporated – entered into 50-year franchise agreements with the various water districts. Those all expire at the end of this year.
City Attorney Tom Watson told Lake Tahoe News that state law allows cities to create an ordinance – like South Lake Tahoe has – to impose the franchise fee.
The city has been talking with the four water districts about 10-year franchise agreements, with the goal of treating them all the same. The council will likely discuss the issue Oct. 20.
South Tahoe PUD has the topic on Thursday’s agenda. The Sept. 3 item is to discuss the proposed franchise agreement and direct staff.
“Since we have not seen anything at all at this point, I would rather not speculate on possibilities. We have chosen not to begin any research or analysis until we actually see what is proposed,” STPUD General Manager Richard Solbrig told Lake Tahoe News.
However, according to city officials the two entities have been discussing the issue for several months. The last meeting was Monday, though an agreement was not reached.
The contract the two had expired at the end of July. Former City Manager Dave Jinkens negotiated it at a time when the district was doing a lot of work in the redevelopment area near Stateline. It included free water and sewer for the city, while the district paid nothing.
Kerry said not paying a water-sewer bill saved the city about $100,000 a year. She added that STPUD is saving about $500,000 a year by not having a franchise agreement.
Franchise agreements between municipalities and utility companies are fairly routine. The whole point is that the utilities are essentially renting space owned by the city – albeit underground in this case – in order to operate their business.
Kerry said the proposal that will be before the council this fall is to have the STPUD franchise fee be dedicated to the replacement of roads. Money from the other water districts goes toward the broader public works budget.
STPUD does not have a franchise agreement with El Dorado County. Lake Tahoe News on Aug. 28 asked El Dorado County Counsel Robyn Drivon about any agreements with West Slope water providers. She said she would look into it, but has not responded.
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Notes:
· The STPUD board meeting is Sept. 3 at 2pm, 1275 Meadow Crest Drive, South Lake Tahoe.
· Also on the agenda are formal mutual aid agreements with Tahoe Keys and Lukins. “The agreement will provide the backup reliability sought by the state inspector. The agreements should be virtually identical, except for any differences in the physical connections,” Solbrig said.
Get it right SLT, charging one and not the other. Disgraceful.
STPUD is a public agency, the others are not. This is just another attempt by the City to increase taxes on us.
All franchise agreements should be the same. Funds paid should be spent the same.
Sounds like the little guys (Keys, Lukins, Lakeside) have been discriminated against (treated differently) for 50 years. There customers have paid a tax while STPUD’s did not.
I don’t get it, a tax on the water company to pay for roads? Is this for sewer to? Is the city gonna get another half million from us?
This is what happens when bumpkins are placed in charge. Similar to failing to require a construction performance bond for the convention center, waiving rights to future tax collections on Heavenly gondola ticket sales, and other redevelopment misadventures.
The city should pay for it’s free fire protection, provided by STPUD.
I agree with Pierini – let the City take their Franchise fee – but STPUD needs to bill them for all the various services provided the City which haven’t been accounted for.
BTW ……. STPUD has shares a utility easement with all other utility companies …….. Are all the other utility companies being charged a Franchise fee for using that too ?
Franchise fees are for companies that provide public utilities, i.e. Liberty Utilities, Charter, Southwest Gas, AT&T and PRIVATE water companies. Municipalities can’t assess franchise fees on PUBLIC agencies. Ten minutes of research and a couple of phone calls could have resolved this issue. Moreover, STPUD would just pass this fee onto ratepayers; who’s kidding who? It’s the city’s intent to get into our pockets one way or another. SLT doesn’t need gamesmanship, it needs leadership. I dream of a day someone of worth steps forward.
Well put Mr. Stone, I have nothing to add, I have said it all numerous times. Most of these operations are corrupt in one way or another. All I know is as a customer we are the ones paying all the unfair rate increases and from what I can tell its never ever going to stop. Till such a time some of us can’t afford to live up here, only if you work for the City, County and the biggest scam of them all STPUD.
It is a little known fact that STPUD charges EVERY household for 3 sewer units if it has at least 2 bedrooms. They do not seem to be counting ACTUAL sewer units. So a small home with one bathroom and one kitchen, (2 sewer units), and two bedrooms, is charged as if the home has TWO bathrooms and one kitchen . The bill will show THREE sewer units are charged when there are only TWO. EVERY 2 BEDROOM HOME PAYS FOR THREE SEWER UNITS WHETHER THEY HAVE THEM OR NOT. Excuse me? When questioned, you will be directed to some pretzel logic reasoning buried in their own rule set. Yet, if you actually add the third sewer unit, or another bathroom, you will be charged for an additional sewer unit fee for a sewer unit that they have already been charging you for the whole time!!! That is an outrage and needs a class action suit brought against these clowns. Rules like that breaks the trust of ratepayers. Are we in Russia?……
Good luck on that one, STPUD is untouchable and have been since their miserable corrupt conception. The only people that reap the all almighty dollar whether they earn it or not are their employee’s, everybody know this that are familiar with STPUD unethical tactics.
I agree Atomic. Class action is in order for these crooks. Just wait until Jan next year when our rates jump 17%.
LouP Pierini and eric stone are correct. Here are just some of the many facts that will come out of this. There are no public utilitiy districts in the state of california that pay franchise fees to cities. STPUD had a trade of services agreement whereby the city got free water in exchange for STPUD not paying encroachment fees when digging. However STPUD is laughingly called the city road repair program because the city has taken every advantage under the law to make STPUD pay and repair large sections such as half of keys blvd recently. STPUD pays half a million dollars a year to pay off the city redevelopment debt. STPUD AS Lou said provides ALL the fire protection including all the fire hydrants that the city now doesnt have the money to service. There is so much more if comparisons are made between the long term financial stewardship of the two governments. The bottom line is that one poorly run out of money city is picking a popular issue in road repairs in order to justify a desperate attempt to steal funds from another better run agency causing rates to go up that they can deny responsibility for. For years in jealousy they have bad mouthed STPUD because rates could be raised and now under this city caused tax increase the district could be blamed instead of the city. It is a semi clever scheme that tries to compare private companies with public utilities in order to create taxation through STPUD without representation.We guess their first City hidden tax will try to be half a million. With their desperate financial shape what would stop them from taking millions more with what utility service provided? I am one STPUD board member who just helped lower our cone connection fees by 25%. I am going to fight to every length possible to stop this attempted theft by proxy of your taxes. Dont confuse other grievances against STPUD with some sort of payback by the public. It wont be the district that suffers. It will be you paying taxes that the city has taken. The meeting is at 2pm today. Come hear for yourself.