Memorandum
City of Lawrence
City Manager’s Office
|
TO:
|
David L. Corliss,
City Manager
|
|
FROM:
|
Jonathan
Douglass, Assistant to
the City Manager
|
|
CC:
|
Cynthia Boecker,
Assistant City Manager
Diane
Stoddard, Assistant
City Manager
|
|
DATE:
|
November 26, 2007
|
|
RE:
|
Aquila Franchise Transfer Request
|
Aquila, Inc. holds a franchise to
sell natural gas to the City of Lawrence
and its residents through November of 2009 which automatically renews for an
additional five year period unless notice is given by the City. On February 6,
2007, Aquila entered into an Asset Purchase Agreement under which Aquila will
transfer its gas utility operations in Kansas
to Black Hills / Kansas Gas Utility Company,
LLC, which transaction is anticipated to close during the first quarter of
2008.
Aquila is requesting the City’s
consent to the assignment of the franchise to Black Hills, and to Black Hills’ assumption
of Aquila’s obligations under the franchise. City
staff recommends approval of this request.
NOTE: The City has received comments
from LRM about the location of Aquila’s underground
facilities. Last summer while making street repairs for the City’s Mill and
Overlay program, two gas lines were encountered directly beneath the pavement.
At one of those locations the line was ruptured. Fortunately no one was hurt,
but the issues associated with underground facilities having inadequate cover
are both a safety and liability issue for contractors and the City. Staff is meeting
with Aquila the afternoon of Thursday,
December 6, to discuss how we can better address these concerns. Staff will be
available to comment on this meeting during the December 11 City Commission
meeting.
ACTION: Approve a request from Aquila, Inc. to
transfer its franchise to Black Hills / Kansas
Gas Company, LLC, and authorize the Mayor to sign the Franchise Transfer
Consent letter.
Attachments: Franchise Transfer Consent Request
Franchise Transfer Consent Letter