052-14 - Cascade Natural Gas Corporation - Correspondence 3-13-2017 Adopted OrdinanceCITY OF PORT ORCHARD `
City Clerk's Office
216 Prospect Street, Port Orchard, WA 98366
Voice: (36o) 876-4407 • Fax: (36o) 895-9029
cityclerk@cityofportorchard.us
www.cityofportorchard.us
March 13, 2017
Cascade Natural Gas Corporation
Director, NW Region
6313 Kitsap Way
Bremerton, WA 98312
Dear Director:
This letter is to follow up on the City of Port Orchard's letter to you, dated March 3,
2017, in which the City provided Cascade Natural Gas Corporation (CNG) with adequate
notice of the City's intent to exercise its right to increase the excise tax CNG pays on its
gross earnings from the sale of natural gas in the City to six percent (6%), the maximum
amount allowed by law.
At the April 11, 2017 City Council meeting, the Council approved the proposed increase
to the excise tax that CNG pays to the City from 2% to 6% per month. I have enclosed a
copy of the adopted Ordinance confirming the increase.
Pursuant to RCW 35.21.865, the rate change cannot take effect before the expiration of
sixty (6o) days following the enactment of the ordinance. The effective date of the
enclosed Ordinance will be June 27, 2017.
The City appreciates your cooperation in this matter. Please let me know if you have any
questions.
Sincerely,
CI?dy
PORT
r
Brinearson, CMC, CPRO
City Clerk/Asst. to the Mayor
Encl: Adopted Ordinance
c: Mayor and City Treasurer
ORDINANCE NO.012-17
AN ORDINANCE OF THE CITY OF PORT ORCHARD, WASHINGTON,
AMENDING THE GROSS EARNINGS — EXCISE TAX PROVISIONS OF
CHAPTER 5.68 ("NATURAL GAS FRANCHISE") OF THE PORT
ORCHARD MUNICIPAL CODE; PROVIDING FOR SEVERABILITY;
AND SETTING AN EFFECTIVE DATE.
WHEREAS, on June 24, 2014, the City Council adopted Ordinance No. 010-14 granting
Cascade Natural Gas Corporation ("CNG") a franchise to provide for the distribution and sale of
natural gas in the City of Port Orchard, as codified in chapter 5.68 of the Port Orchard Municipal
Code ("POMC"); and
WHEREAS, POMC 5.68.120 provides that the franchise rights granted are conditioned
upon the monthly payment by CNG to the city of an excise tax consisting of two percent (2%) of
its gross earnings from the sale of natural gas in the city, as compensation and as consideration
for the use of the public right-of-way; and
WHEREAS, pursuant to POMC 5.68.120, the city has the right, upon adequate notice to
CNG, to increase the excise tax CNG pays on its gross earnings up to the maximum amount
allowed by law; and
WHEREAS, administrative costs accrue to the city for permitting, license, and franchise,
to inspect plans and construction, and the preparation of detailed statements that assure the city
maintains safe, healthy, productive, and aesthetically and culturally pleasing surroundings
without environment degradation, and public works, clerk, legal, and finance have
responsibilities resulting in expenses associated with the administration of the franchise
agreement; and
WHEREAS, the City Treasurer has provided adequate written notice to CNG of the city's
intent to increase this excise tax; and
WHEREAS, pursuant to RCW 35.21.870, the maximum amount that the city may impose
on the privilege of conducting a natural gas business as an excise tax, without the prior approval
of a majority of the voters of the city, is six percent (6%) of CNG's gross earnings; and
WHEREAS, pursuant to RCW 35.21.865, a change in this excise tax rate may not take
effect before the expiration of sixty (60) days following the enactment of the ordinance
establishing the change; now, therefore,
THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, DO ORDAIN AS
FOLLOWS:
Ordinance No. 012-17
Page 2 of 3
SECTION 1. Port Orchard Municipal Code Section 5.68.120 is hereby amended to read
as follows:
5.68.120 Gross earnings — Excise tax.
The right and privileges hereby granted are upon condition that the CNG,
its successors or assigns, shall pay, as compensation and as a consideration for the
use of the streets, avenues, alleys, and public grounds of the city, for the purposes
herein designated, the full sum and amount of six percent (6%) of its gross
earnings from the sale of gas in the city, monthly into the treasury of the city for
the use and benefit of the city. CNG's payment of the compensation shall be made
on or before the last day of each month following the month in which the tax
accrued from the granting of this franchise. And for the purpose of ascertaining
the gross earnings upon which payment shall be made, as aforesaid, an accurate
account of such earnings shall be kept by CNG, and an abstract and account
thereof furnished by it to the city treasurer of the city on or before the last day of
each month following the month in which the tax accrued, the truth of which
abstract shall be verified by affidavit of CNG. For the purpose of verification of
such statements, the books of CNG shall be at all times opened for the inspection
of such officer, person or persons as may be appointed for that purpose by the
city. And for the purpose of securing to the city the payment of the aforesaid per
centum, the city shall have a lien for the payment of the said per centum and the
same shall be charged against all of the property, estate and effects of the said
company whatsoever, real, personal or mixed, and may be enforced by the city by
civil action. But nothing contained herein shall be held to impair the rights of the
city in enforcing the terms and conditions of this franchise. The city reserves the
right, upon adequate notice to CNG, to increase the excise tax CNG pays on its
gross earnings from the sale of gas in the city up to the maximum amount allowed
by law. (Ord. 010-14 § 12).
SECTION 2. 5everability. If any section, sentence, clause or phrase of this Ordinance
should be held to be unconstitutional or unlawful by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of any other
section, sentence, clause or phrase of this Ordinance.
SECTION 3. Publication. This Ordinance shall be published by an approved summary
consisting of the title.
SECTION 4. Effective Date. This Ordinance shall take effect and be in full force and effect
five days after publication, as provided by law. The rate change will take effect sixty days
thereafter.
Ordinance No. 012-17
Page 3 of 3
PASSED by the City Council of the City of Port Orchard, APPROVED by the Mayor and
attested by the Clerk in authentication of such passage this 11th day of April 2017.
ATTEST:
Br y Frinearson, CIVIC, City Clerk
APPROVED AS TO FORM:
on Cates, City Attorney
PUBLISHED: April 21, 2017
EFFECTIVE DATE: April 26, 2017
��ty� • FC? Oij • ■ ��i
Robert Putaansuu, Mayor
- ' SEAL
SPONSOR:
bhn Clauson, Councilmember