Provo did some housecleaning in 1990, sweeping out the old franchise and utility ordinances to replace them with less clutter.
The new ordinances also are intended to plug up some holes.Everyone in town with natural gas, electricity, cable television or a telephone is affected by the franchise and utility ordinances. Most people don't think about them much. At most, the tax rate may be noticed on a bill.
However, the state of the franchise and utility agreements can significantly affect every user. Assistant City Attorney Robert West said the city grants franchise and utility rights for the benefit of the residents.
"The overhaul is to provide a basic framework to allow the city to deal with (new technology) and deregulation," West said.
In the past, the city has been reactive rather than active, said West. The new ordinances will make it easier for the city to respond to change.
West began work on the city's franchise and utility ordinances early in 1990 in response to No. 45 of the many goals Mayor Joe Jenkins set for the city.
At the end of 1990, Provo's franchise agreement with TCI Cablevision of Utah expired. Because cable television is also subject to federal law, Provo's revision placed it in a new ordinance specifically for cable television and related industries. That ordinance was adopted by the City Council on Sept. 25. Provo is still in negotiations with TCI for a new franchise agreement.
Confusion about the expiration date of the franchise agreement with Mountain Bell (now US WEST) and Mountain Fuel also prompted the review of the ordinances.
The ordinance for utilities and franchises not related to cable television was passed by the City Council on Dec. 18. An important feature of the new ordinance is that it plugs some holes.
For example, now all utilities and businesses in competition with the utilities are taxed at an equal rate. Under the old ordinance, some competing business did not pay the same taxes.
Another hole plugged is that the tax is now imposed on the place of consumption as well as purchase. A large user who purchases natural gas out of state to avoid paying a utilities tax will still be subject to the tax under the new ordinance.
Jenkins said the new ordinances do not raise the tax rates. In fact, they are lowered very slightly for Provo Power users as the new ordinance reverses a temporary - and small - double taxation.
For a short time, residents of Provo paid tax on a tax as a result of a state audit of Provo Power. West explained that a state audit said the utility revenue tax of 3 percent was actually a cost of doing business and was taxable by the 2 percent sales tax on utilities.
On a $100 power bill, the utility tax would be $3 and sales tax $2. For a short time, power users actually paid $5.06 instead of $5 in tax.