Memorandum

City of Lawrence

Department of Legal Services

TO:	David L. Corliss, City Manager Diane Stoddard, Assistant City Manager Cynthia Boecker, Assistant City Manager
FROM:	Toni Ramirez Wheeler, Director of Legal Services R. Scott Wagner, Management Analyst
CC:	Jonathan Douglas, Assistant to the City Manager
DATE:	February 29, 2008
RE:	Aquila Franchise Assignment Request

Aquila, Inc. (a successor to Kansas Public Service) holds a franchise to sell natural gas to the City of Lawrence and its residents through November of 2009. This franchise 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. This transaction is anticipated to close during the first quarter of 2008.

Aquila, Inc. is requesting the City’s consent to the assignment of the franchise to Black Hills / Kansas Gas Utility Company, LLC (Franchise Transfer Consent Request). Assignment of the franchise is permitted under the franchise ordinance (see §11 – Ordinance 7155). If the assignment is authorized, pursuant to §11 of Ordinance 7155 - Black Hills / Kansas Gas Utility Company, LLC, will be bound by the terms and provisions of the entire franchise agreement.

City legal staff recommends adoption of the attached ordinance authorizing the City Manager to execute the franchise transfer consent request.

ACTION: Adopt Ordinance 8242 authorizing the City Manager to enter into an agreement with Aquila, Inc. to assign its franchise to Black Hills / Kansas Gas Company, LLC.

Attachments:

Franchise Transfer Consent Letter

Ordinance 8242