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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Nevada County Grand Jury • 2000-2001

Nevada County Utility Franchises Reason for Investigation The Nevada County Civil Grand Jury has the responsibility to*

17 pages

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⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.

⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

Findings 7 findings

The California Public Utilities Code Section 6201-6205.1, known as the Franchise Act of 1937, authorizes municipalities including counties to grant franchises to utilities to establish operations within the localities and to collect a franchise fee for using public facilities such as roads. Such fees apply to private-sector utilities only.

In Nevada County franchises are established by contract and documented in most cases in County Code and several ordinances. County Code establishes the fees a franchisee shall pay to the county. These regulations cover cable TV entertainment transmissions, garbage collection, and the Sierra Pacific Power Company. PG&E is not covered in the County Code and there is no general section that describes gas and electric franchises. PG&E operates under a 1948 contract with the county under the same general terms as for Sierra Pacific Power. Telephone service is not covered by code, and Pacific Bell pays no franchise fees as far as the Grand Jury can determine.

Franchise fees contribute approximately $600,000 to the county general fund, or about 3% of total local fees and taxes. The breakdown by franchise type is as follows: Franchise Type FY 1999/2000 Cable TV 146,516.04 Garbage 226,107.47 Electric* 211.973.13 Gas* 25,617.26 Total 610.213.90 *Includes PG&E and Sierra Pacific Power

County Code specifies that cable TV franchisees pay a maximum of 5% of gross revenue each year. The Board of Supervisors sets the actual percentage paid. This is a non-exclusive franchise of fifteen years duration. In practice, the county conforms to County Code in determining the revenue formula The county is not in conformance with the County Code requirement to audit the franchisee at least once every three years to assure that the county has received the appropriate amount of revenue.

County Code states, "The grantee of a [garbage] franchise hereunder shall pay to the county. during the term of such franchise, the sum of fifty dollars per calendar year or portion thereof." Taken literally, the county would receive a total of $50 per year. This is a non- exclusive franchise, which is not to exceed twenty-five years duration. • In practice, the county does not conform to the County Code. Franchisees pay an annual fee of 4% of gross revenue where garbage service is mandatory. Where it is voluntary. fees are 3% of gross revenue. The county is not required to conduct an audit. However, it has no method for assuring the accuracy of fee payments.

County Code says that the Sierra Pacific Power Company shall pay between 1% and 2% of the gross annual receipts. This is a non-exclusive franchise for fifty years.

Money received by the county is based upon statements and reports provided by each franchisee. The county has never conducted any type of audit of the current utility franchises. CONCLUSIONS

Recommendations 2

R1

Review and update the County Code (Nevada County General Code Chapter II: Franchises) to: • Include all utility franchises operating within the county. • Establish a definitive method for calculating each franchise fee. · Establish procedures to insure that the county is receiving all agreed-to fees from franchises operating within the county. These procedures should include audits and/or other reviews of each franchise.
R2

Perform the required audits and/or reviews, as stated in the updated County Code, of each franchise at the earliest opportunity.

Conclusions 3

CL1

There are no apparent procedures and practices in place to guarantee that the county is receiving agreed-to fees from all franchises operating within the county.
CL2

If the County Code requires an audit of the cable TV franchise, audits of the other franchises should also be required.
CL3

The County Code does not include all utility franchises within the county (i.e. PG&E). It does not guide the method for calculating all franchise fees due to the county.

No Responses Found 1

Government entities assigned to respond to this report. No response documents have been linked in our database.

Nevada County County

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.