The Enid News and Eagle, Enid, OK

Local and State News

June 30, 2014

Key vote Tuesday night on negotiations with ONG

ENID, Okla. — In a move that’s part negotiating tactic and part safety net, the city of Enid will vote Tuesday night to consider buying back gas rights from Oklahoma Natural Gas.

The city and ONG are nearing the deadline for renewal of a 25-year franchise agreement that allows the company to distribute and sell gas here, but the two sides disagree on terms.

In the 6 p.m. meeting, City Attorney Andrea Chism will ask Enid City Commission to approve a resolution declaring its intent to buy back the franchise. If approved, it gives the mayor the ability to begin that process.

City officials were offended at a clause in ONG’s proposed contract that would significantly increase the cost of ending the next agreement early. The commissioners also asked their attorney to negotiate for a higher fee that ONG would pay in exchange for the right to operate here.

City Manager Eric Benson said the resolution will allow negotiators to keep working, and that it’s too early to predict the outcome.

“There are certain date protocols we have to observe. If we did nothing, then the protocols would engage and the decision would no longer be ours,” he said when reached Monday. “This maintains the opportunity to continue the dialogue and, thus, the negotiations. Since we can’t agree to the final elements, we have to continue the negotiation.”

As for the agreement, “I think we’re closer than we have been,” Benson said.

In a meeting earlier this month, city commissioners rejected ONG’s proposed contract, in a bid to give their chief negotiator, Chism, the power to drive a harder bargain.

Along with wanting to increase the 4 percent charge on gas sales that goes back to the city, commissioners were upset over a last-minute addition to the contract.

The city of Enid allows ONG rights of way and permission to sell natural gas to its residents for a fee. If city officials were to later change their mind and provide that service themselves, similar to how they operate the water utility, the contract allows the city to “buy out” ONG. Chism said the company came to the city with a buyout penalty that effectively would quadruple the cost of terminating the franchise. This, she said, was a surprise.

“The language they’re proposing is so onerous, it’s obscene,” Ward 3 Commissioner Ben Ezzell said in a public meeting earlier this month. “We have no way to predict what it’s going to be in 25 years, and I’m not going to hamstring (a future) commission.”

The practical effect of a delayed deal is minimal in the short term. ONG will continue to provide gas service, and instead of the franchise coming to a citywide vote in October, it likely will be voted on later.

In the June 3 meeting where commissioners denied the contract, Mayor Bill Shewey parted with his fellow commissioners.

The commission also will vote to settle a legal claim with a former firefighter.

Nancy Morgan was hurt in a training exercise in 2011. According to the city, she said she suffered injuries to her head, neck, shoulders, back, hip, knees and jaw and also “psychological overlay.”

The city admitted to neck, back, shoulder and knee injuries, but denied the others.

“In an effort to reduce the city’s exposure and risk, the parties met in mediation. The parties agreed, subject to final approval of the City Commission, to settle all claims, fully and finally for the amount of $205,000, of which $35,000 has already been paid,” Tuesday’s agenda states.

If the commission approves the settlement, $170,000 will be levied to the tax rolls.

The city usually meets in regular session at 6:30 p.m., but temporarily moved the time up to 6 p.m. The regular study session begins at 5 p.m. and includes discussion on water strategy. The meetings will be in the City Administration Building, 401 W. Garriott.

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