Memorandum

City of Lawrence

Legal Services Department

TO:	David L. Corliss, City Manager
FROM:	Toni Ramirez Wheeler, Interim Director of Legal Services
CC:	Debbie Van Saun, Assistant City Manager
Date:	December 6, 2006
RE:	Ordinances Amending Franchise Fees for Worldnet, L.L.C. and the World Company

As part of the 2007 City of Lawrence Budget, the City Commission authorized the preparation of ordinances phasing in amendments in the franchise fees paid by utility providers in the City. 

Attached please find Ordinance No. 8058 which amends the franchise fee Worldnet L.L.C. pays to construct, use, and maintain telecommunications lines and cables to provide telephone service to the City and its residents.  Currently, Worldnet pays two percent (2%) of gross revenue for local exchange telecommunications service.  Under the ordinance, Worldnet will pay four percent (4%) of gross revenue through June 30, 2007.  On and after July 1, 2007, the fee will increase to five percent (5%) of gross revenue for local exchange telecommunications service.  The fee modification will be effective 90 days after the effective date of the ordinance.

Ordinance No. 8059 amends the franchise fee the World Company pays to provide cable service to the City and its residents.  The current franchise fee is 3.25%.  The ordinance modifies that fee to four percent of gross revenue through June 30, 2007.  On and after July 1, 2007, the fee increases to five percent (5%) of gross revenue derived from the operation of the World Company’s cable system.  The ordinance also reflects changes in federal law which no longer permits the City to collect a fee from the World Company for cable information services.  The fee modification will be effective 90 days after the effective date of the ordinance.

Staff recommends the adoption of the ordinances on first reading.