DESTIN — The City Council on Monday unanimously approved having Councilman Parker Destin serve as the city’s primary negotiator in the city’s ongoing contract talks with Gulf Power.
The city entered into a 30-year franchise agreement with the company in May 1986. The contract has been extended several times, but is now set to expire May 19.
At Monday’s meeting, Destin made a motion that called for him to be appointed as the city’s primary negotiator in the contract discussions, with City Manager Carisse LeJeune, City Attorney Jeff Burns and special legal counsel Robert Scheffel “Schef” Wright serving in advisory roles.
Besides continuing to help the city in the contract talks and serving other clients, Wright, who is a member of a Tallahassee law firm, represents The Howard Group real-estate development company in Miramar Beach. The Howard Group supports undergrounding at least some of the electric utility lines in Destin and backs the city’s option to purchase the local electric utility.
Gulf Power has agreed to provide by about June a non-binding cost estimate to bury the entire electric utility distribution system with the city limits, according to information from LeJeune.
At Monday’s meeting, Destin said he is well aware of the May 19 contract expiration date and will work on negotiating an agreement that is mutually beneficial to the city and Gulf Power.
If the negotiations fail, the council would be able to exercise the option of purchasing the utility before the current agreement expires. Destin specifically included that option in his overall motion.
After Mayor Gary Jarvis asked Destin how much he would be paid for serving as the city’s primary negotiator, Destin, who is an attorney, replied that it would be a pro bono role.
By approving Destin’s motion, the council rejected LeJeune’s recommended motion to have her and Wright meet with Gulf Power officials to finalize a draft franchise agreement with a 15-year term, a purchase option, a franchise fee of up to 6 percent and other items.
The city’s current 4 percent franchise fee that is charged to Gulf Power generated $1,606,876 for the city in fiscal 2017, according to city spokesman Doug Rainer. Such fees are part of customers’ utility bills.
There are about 15,600 retail electric customers in Destin.
The council on Monday could have chosen the option of exercising its option to purchase the utility, although that option is opposed by many residents. The council also had the ability to take no action and let the franchise agreement expire.
In response to questions from the Daily News regarding the benefits of a franchise agreement, Rainer said in an email on Monday that such an agreement “gives a municipality the ability to contract with a service provider and allows for their use of public rights-of-way for which the municipality receives a franchise fee.”
In addition, “A franchise agreement outlines specific service requirements, as well as other elements for public benefit such as use of easements for public pathways, undergrounding utilities, upgraded lighting, implementing energy conservation programs and utility purchase options,” Rainer said. “If no franchise agreement existed, a utility would have no obligation to provide any service or benefit other than the most basic service levels required.”