Three of four franchise fees pass

Franchise fees have officially been instituted with the majority of utility companies that operate within the City of Sundance. A final reading will still be necessary for the city’s agreement with Range Communications, however, after the cooperative questioned wording that speaks to how it may recoup those fees from its members.

Chief Government Relations Officer Jason Hendricks visited with the council last week to request a few alterations to the wording of Range’s agreement. As Mayor Paul Brooks stepped away due to conflict of interest, he shared a recap as to why the city pursued franchise agreements in the first place.

Sundance applies for a lot of grant money to make improvements within the community, he said.

“We’re asking for a lot of state money: are we doing our part?” he queried.

When those applications are made, Brooks explained, the state wants to know that the city is already doing as much as possible within its means to raise its own revenue.

“They don’t ever really say that you have to be looking at your revenue sources…but that’s kind of their underlying theme,” he said.

The council wants to keep moving the town forward, Brooks said, and therefore wants to continue applying for grants. There had been discussion of franchise fees as a potential revenue source for the city, but when Visionary Communications approached the council and offered to enter into one, it brought the conversation front and center.

As Hendricks began his address, he reminded the council that Range already brings revenue to the city through means such as property tax and sales tax from online sales, such as when people download music.

“We think that we’ve done pretty well for Sundance,” he said, pointing out that the city is the “envy” of communities across the state that would love to have fiber internet.

Hendricks proposed a number of changes to the wording of Range’s franchise agreement, most of which were just “name change kind of stuff.” However, he felt that one section in particular requires attention.

At present, the wording states that Range, at its discretion, may pass the fees on to its customers.

“We’re not sure if we would do that or not,” Hendricks said. “Some places we do and some we don’t.”

Whether or not the cooperative does so, however, is not the issue. Hendricks wished to point out that legislation passed by the Wyoming Legislature in 2020 says differently.

According to the new law on right-of-way franchise fees, fees shall, “Be passed through to customers unless otherwise agreed.”

“The default really is that we can pass this on to customers…we just wanted to bring it to the council’s attention,” said Hendricks.

City Attorney Mark Hughes took the opportunity to question what Hendricks means when he says that Range passes the fees on to customers in some places and not other. “When don’t you?” he asked.

Hendricks explained that it varies for a number of reasons. For example, not all communities require franchise fees and in some places it’s relatively small or is not monetary in nature.

“It just varies,” he said, pointing out also that Range until recently was four different corporations that are now rolled up into one, so each may have had different relationships with their towns and different outlooks on the matter.

Hughes expressed that he is against this as a city attorney; having looked at a few other cities, he said, none he has ever heard of pass the fee directly to customers.

“All it is is a pass-through tax if you do that,” he said. Instead, he suggested that most companies socialize the fee among their entire customer base.

Hughes also spoke to the need for franchise fees, stating that he feels Range is a great company and wants it to continue operating in the city, as it has been a beneficial relationship for the community. However, with the decline in revenue for Wyoming municipalities, he said the city needs other sources of revenue so as to continue providing services.

Range has been operating here for 45 years, “making money off the citizens of Sundance without ever paying a franchise fee,” he pointed out.

Hendricks confirmed that Range is cooperative to the idea of franchise fees, but was surprised to hear they would be instituted because the city has not done so before.

“It’s a fee and it’s something we weren’t planning on,” he said.

Hughes expressed that he understands where Range is coming from. He reiterated that Range is a great company, but that the city does need revenue and, “Every little bit helps, I can tell you that.”

The council decided to pass the franchise agreements for Sundance Cable Television, Visionary Communication and Powder River Energy on their third and final reading. The franchise agreement with Range was passed on its second reading with the understanding that Hughes and Hendricks will have time to engage in final discussions over the wording before the final reading.