Gas Franchise Debate #1 -- July 21, 2005 -- Collinsville, OK -- www.cvilleok.com

What started as two concurrent meetings at two locations (by opposite sides in the Collinsville gas franchise issue) merged into a single meeting at the Library Thursday night July 21st. The resulting meeting was a bit spirited without a clear cut moderator, but likely achieved a better understanding of the issues on both sides than separate meetings could have.

The "Citizens for Reliable Gas Service" (which opposes the City purchase of ONG's franchise) started their meeting with Developer Kyle Smalygo. Kyle listing five major questions he didn't have answers for:

What is the value of the gas system?
Who sets the rates paid by gas customers?
Would a city run gas system be as safe and reliable as ONG's?
Would a city run gas system provide the same services as ONG's?
Would a city run gas system provide the same growth potential as ONG's?

About 15 minutes after the meeting started, Mayor Stan Sallee and many other supporter of the franchise buyout arrived at the Library. When asked to answer some of the questions above, the Mayor started reading a prepared statement. Additional question interrupted that statement and after about 15 minutes many of those opposed to the buyout were trying to reclaim 'their" meeting. Eventually, the Mayor was joined by Jim Stout of ONG in fielding questions and the free style question and answer session flowed a bit better.

The majority of questions derived from a lack of specific numbers and plans being provided to voters before they vote August 9th. Mayor Sallee stated that the city commission had made their decision based on specific numbers but have not made those numbers public as "negotiations" with ONG were not complete. Those numbers are based on inputs from the city's appraisal of the ONG gas system as well as discussions with others with gas industry experience. Jim Stout stated that ONG was not quite ready to release their appraisal figures either but implied they could be made public before August 9th. The Mayor then stated he thought the city commission would likely release their figures once ONG released their's.

Ward 2 City Commissioner and Vice Mayor Gail Rogers wanted it made clear she was opposed to the City purchase of the gas franchise. Rogers stated "I don't think the city can run the gas system as efficiently as ONG".

Hundreds of good topics were raised on both sides and I'll try to list a few of those in table form (on another page) and add a few samples here:

1) Kyle Smalygo (& ONG) stated that a $1.5 million dollar ONG expansion of service to the new housing developments on Highway 20 (nearing Hwy 75 to the west) was put on hold when the city voted to exercise the franchise buyout option.

2) ONG stated they made a net profit of $61 per Collinsville customer last year (from a gross revenue of $1.488 million and either 1872 [or 2200?] customers). They also stated that the profit came from fees as no money was make on the "cost of gas". Those additional fees include (from my most recent ONG bill):

Customer Charge
Delivery Fee
Riders and Other fees
City Tax
County Tax
Gross Receipts

3) Mayor Sallee said the City was committed to provide the same level of service as ONG and he felt the City could do that by charging the customer the same or less than ONG. But the Mayor was unwilling to release (at least for now) the specific numbers to support that claim.