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Date of Issue: August 06, 2008

City pursues agreement with gas company

Yellow coils of pipeline are stored in the parking lot at Manatee Public Beach in Holmes Beach. The material is part of an ongoing project by TECO's Peoples Gas to bring a natural gas line from Bradenton to Anna Maria Island. Work on the pipeline was wrapping up in Bradenton Beach last week and was expected to move to the mainland this week. Islander Photo: Lisa Neff

Holmes Beach city officials want a percentage of revenue that the sale of natural gas to customers in the city by TECO/Peoples Gas will bring.

City officials were surprised earlier this summer when they learned of TECO’s plans to install a natural gas line from 75th Street in Bradenton along Manatee Avenue to Holmes Beach and south into Bradenton Beach.

TECO representatives informed Holmes Beach and Bradenton Beach officials after their permitting process was complete with the Florida Department of Transportation, which holds most of the rights of way where the line will be placed.

Installation of the line began in Bradenton Beach last month, without city action because none was needed, said Mayor Michael Pierce. The pipeline is being installed on state rights of way there.

In Holmes Beach, the company does need city permission to install part of the pipeline because sections will be in the municipal rights of way.

And with the permission will come a franchise agreement, said Holmes Beach Mayor Rich Bohnenberger.

A memo from city attorney Jim Dye to city clerk Brooke Bennett said the proposed agreement is standard. “Please note the franchise fee is a percentage of sales, which is not unusual,” Dye wrote. “The amount of sales is probably not going to be great initially.”

The proposed fee to be paid to the city would be “equal to 6 percent of the company’s gross revenue, less any adjustments for uncollectable amounts, from the sale of natural gas to customers within the corporate limits of the city,” according to the draft agreement.

Dye noted that the proposed pipeline route reaches into Holmes Beach at the AMI Bridge and “loops north for a short ways before heading south into Bradenton Beach and then back across the Cortez Bridge.”

During a meeting July 22, city commissioners, the mayor, city attorney Patricia Petruff and representatives of TECO/Peoples Gas reviewed the proposed agreement.

Petruff identified possible areas in the document that need clarification or revision, including the proposed 30-year term of the franchise agreement.

“Thirty years is a long time,” Petruff said.

Commissioners agreed, saying they would be more comfortable with a 15-year term.

Petruff also suggested that the company signatory should be Tampa Bay Electric Company rather than Peoples Gas, which is a division of TECO.

“It’s problematic for something that is not a legal entity to be signing a legal document,” Petruff said.

Peoples Gas representative Leroy Sullivan Jr. said he would take the questions back to the company’s legal staff and Petruff said she would draft a letter outlining the city’s concerns.

Sullivan said the company wants to move quickly to finish the pipeline installation before the Anna Maria Island Bridge closes for 45 days beginning Sept. 29.

While the city and the company negotiate an agreement, work on the gasline may soon shift from the Island to the mainland and west along Manatee Avenue.

To expedite the project, city commissioners want to hold a first reading on an ordinance adopting the franchise agreement on Aug. 12. They may convene for a special meeting Aug. 19 for a public hearing and final reading.