EPCOR Franchise Extension Election
Surprise voters will be asked to approve a franchise extension with EPCOR Water Arizona, Inc. (“EPCOR”) in the November 2, 2021 election. EPCOR is one of several public water utility companies that, in addition to the City of Surprise, provides water and/or wastewater/sewer services to certain City of Surprise residents.
Voter approval would allow EPCOR to continue to construct, maintain, and operate a potable water delivery system and a wastewater collection, treatment, and disposal system throughout the city public rights-of-way, such as roads and sidewalks.
Surprise voters approved a 25-year franchise agreement with EPCOR (then consisting of Citizens Utilities Company, Sun City Water Company, and Sun City Sewer Company) in July 1995, allowing this same type of use. However, that agreement has expired and must be extended to allow for EPCOR’s continued operation within the Corporate Boundaries of Surprise.
EPCOR desires to extend this agreement, and at the Regular City Council Meeting held on April 6, 2021, the Surprise City Council found that it would be in the best interests of, and beneficial to, the City of Surprise to continue the grant of a franchise to EPCOR. At that same meeting, City Council called for a special election to be held on November 2, 2021, so Surprise voters can determine approval of the franchise. All qualified voters in the city may participate, whether or not they are EPCOR customers. This election will not change EPCOR’s service area.
If approved, EPCOR would pay a 2% franchise fee to the city; the same percent they paid under the previous agreement. That money goes into the city’s General Fund, which pays for public safety, parks, street maintenance and more.
- What is a “franchise?”
A franchise is the privilege granted by a municipality, such as the city of Surprise, to a public utility company for use of the municipality’s public rights-of-way, such as its roads, sidewalks, and other thoroughfares.
- Where does the City get its authority to grant franchises?
The Arizona Constitution and state statutes give the voters of a municipality the authority to grant a franchise:
- Arizona, State Constitution, Art. 13, Sec. 4: “No municipal corporation shall ever grant, extend, or renew a franchise without the approval of a majority of the qualified electors residing within its corporate limits who shall vote thereon at a general or special election, and the legislative body of any such corporation shall submit any such matter for approval or disapproval to such electors at any general municipal election, or call a special election for such purpose at any time upon thirty days' notice. No franchise shall be granted, extended, or renewed for a longer time than twenty-five years.”
- Arizona, Arizona Revised Statutes (A.R.S.) § 9-501: “A municipal corporation shall not grant a franchise for a public utility to be operated by the grantee unless authorized by a majority vote of the qualified voters of the municipal corporation at a regular election or at a special election duly and regularly called by the governing body of the municipal corporation for that purpose.”
- Why is EPCOR required to renew its franchise?
- The City of Surprise first granted EPCOR (then consisting of Citizens Utilities Company, Sun City Water Company, and Sun City Sewer Company) a franchise on July 13, 1995 for a 25-year period, which has since expired.
- The Arizona Constitution and statutes both provide that franchises are not to be extended for a period greater than 25 years without voter approval:
- State Constitution, Art. 13, Sec. 4: “No franchise shall be granted, extended, or renewed for a longer time than twenty-five years.”
- A.R.S. § 9-502(F): “A franchise shall not be granted for a longer term than twenty-five years.”
- With voter approval, a new 25-year franchise will be granted by the City of Surprise to EPCOR for the continued provision of EPCOR services to its current customers within the City of Surprise utilizing the City’s public rights-of-way.
- What will the franchise allow EPCOR to do?
If the voters approve the franchise, EPCOR will be authorized to continue to use the City’s public rights-of-way to construct, maintain, and operate a potable water delivery system and a wastewater collection, treatment, and disposal system for the purpose of supplying potable water and providing wastewater collection, treatment, and disposal services to certain City residents.
The franchise will not change your water service provider; and does not grant authority to change your utility rate.
- Why is this issue being decided by the voters/electorate?
Both the State Constitution and state statutes require this process for the extension of an expired franchise. Per State law, the question of whether a municipality shall grant or extend a franchise is a question that must be decided by the voters.
- State Constitution, Art. 13, Sec. 4: “No municipal corporation shall ever grant, extend, or renew a franchise without the approval of a majority of the qualified electors residing within its corporate limits who shall vote thereon at a general or special election, and the legislative body of any such corporation shall submit any such matter for approval or disapproval to such electors at any general municipal election, or call a special election for such purpose at any time upon thirty days' notice.”
- A.R.S. § 9-502(B): “If the governing body deems the granting of the franchise beneficial to the municipal corporation, it shall pass a resolution, to be spread on its record, stating that fact, and shall submit the question to the qualified electors as to whether or not the franchise shall be granted at the following regular election held in the municipal corporation or at a special election called for that purpose.”
- A.R.S. § 9-502(E): “If a majority of the votes cast is in favor of granting the franchise, the governing body shall grant the franchise only in the form filed and published.”
- What is the “franchise fee” that the City will be assessing on EPCOR per the franchise agreement?
- A franchise fee is a fee paid by a franchisee, in this case EPCOR, to a franchisor, the City of Surprise, for the right to use the City’s rights-of-way, such as streets and sidewalks.
- The City of Surprise assesses a franchise fee on all of its franchisees. Examples are:
- Southwest Gas – 2%;
- Arizona Public Service Company – 2%; and
- Previously, EPCOR – 2%.
- Proposed EPCOR franchise fee – 2%. (This is the same percentage as their previous agreement.)
- The franchise fee is separate from the rates that a utility may charge its users.
- The money received by the city from this fee goes into the city’s General Fund, which pays for public safety, parks, street maintenance and more.
- If I am an EPCOR customer within the City of Surprise, will granting a continued franchise to EPCOR affect my water or wastewater/sewer services rates?
- This franchise only grants EPCOR a license to continue to operate within the City’s public rights-of-way. It is not for the setting of utility rates.
- The City does not affect, influence, or otherwise participate in the setting of rates for water or wastewater/sewer services of other public water utility companies.
- The franchise fee proposed by the city under the new agreement is the same as it was under the previous 25-year agreement, which is 2%.
- Rates for EPCOR customers are set by a process controlled by the Arizona Corporation Commission, including filing applications with the Commission, review of such applications, public hearing processes, opinions and orders issued by applicable judges, and a voting process by the Commission.
- How do I determine whether I am an EPCOR or City of Surprise water or wastewater/sewer customer?
One way to determine your water or sewer provider is by checking your utility bill. You may also find your utility providers by typing your address into the City’s “My Surprise Address” online tool at www.surpriseaz.gov/MySurpriseAddress
- Will this election affect or change who provides my water or wastewater/sewer service?
No. The granting of a franchise will only grant EPCOR a license to continue to operate within the City’s public rights-of-way, and does not specifically expand or narrow EPCOR’s service area or to whom EPCOR provides services. If you are a City of Surprise water or wastewater/sewer customer before the election, you will remain a City of Surprise customer after the election.
- I am a resident of the City of Surprise, but not an EPCOR customer. Can I vote in this election?
Yes. Any qualified elector who is a resident of the City of Surprise may vote in the franchise election.
- How do I vote in this election?
This will be a mail ballot election. All registered voters in Surprise will be mailed a ballot. Here are some important dates:
- October 4 – Voter Registration Deadline (Voter registration information is available at http://maricopa.vote)
- October 6 – Ballots Mailed & Drop Boxes Available
- October 22 – Last Day to Request a Ballot in the Mail
- October 25 – Replacement Ballot Voting Begins at City Hall
- October 26 – Last Day to Mail Back Your Ballot
- November 2 – Election Day!
- Where can I find a copy of the proposed franchise agreement that will be entered into between the City of Surprise and EPCOR upon voter approval?
The entire proposed franchise agreement is located, here: Proposed EPCOR Franchise Agreement