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Gainesville to lose revenue due to state law change
Officials: At least $50K in franchise fees now gone
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Gainesville City Council approved a new law to help stem losses from a 2008 change in state law that is expected to cost the city $50,000 to $75,000 in franchise fees.

“We’ll just have to absorb it,” Gainesville City Manager Kip Padgett said.

The City Council approved a new ordinance Thursday morning that amended the city’s code on licensing, permitting and business regulations for the use of city right-of-ways. The ordinance institutes an access permit fee on companies, insurance and bonding requirements and the ability to penalize companies.

“The money collected for the use of city right-of-way was formerly collected through franchise agreements,” Financial Services Manager Beverly Williams said in an email.

The law, Senate Bill 379, allows telecom companies that pay cities 3 percent of their local retail customer revenue to construct, maintain and operate through or on any land in Georgia and exercise eminent domain. Rates for companies with no local retail customers and only using the right of way are set by Georgia Department of Transportation rules.

The 2008 legislation grandfathered existing agreements and named Dec. 31, 2012, as the expiration date. Gainesville’s agreement with BellSouth, part of AT&T Inc., required a 4 percent fee, but that will drop by 1 percentage point when the agreement expires Monday. Revenue from Windstream, the other telecommunications company with which the city has a franchise agreement, isn’t expected to be affected, Williams said.

“The ordinance provides protection to the city by allowing the city to require proof of insurance and bonding from telecommunication companies doing work on our right of way, as well as a requirement that they register with the city as they do work on the city’s right of way,” Williams said.

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