South Plains cities share struggles collecting fees from communications company

It took more than two years, but Wolfforth finally got its money from a local cable, Internet and telephone provider accused by several South Plains cities of short-changing them on franchise fees in recent years.

City manager Darrell Newsom said Wolfforth received two checks for about $27,000 from NTS Communications Thursday morning — three days after the city’s auditors told the Wolfforth City Council the company had not paid its franchise fees since Sept. 2010 at the end of that fiscal year.

“By having those checks and getting the bulk of what we expected, that helps us a lot,” he said.

Wolfforth is just one of a handful of South Plains cities, including Lubbock, whose leaders have had to hound Lubbock-based NTS Communications in pursuing more than $1 million in outstanding franchise fees.

Wolfforth city secretary Debbie Perkey estimated NTS owed her city about $25,000 in franchise fees, basing the amount on the $12,000 to $13,000 per year the company paid Wolfforth before 2010 for easement rights for utility lines on city property.

Newsom said NTS’s franchise fee is a relatively small portion of the city’s $2.1-million revenue, but is worth pursuing.

Wolfforth also receives about $150,000 per year in franchise fees from such companies as AT&T, Atmos Energy, Xcel Energy and an assortment of small phone and data carriers with franchise agreements with the Public Utility Commission of Texas to pay cities a 5-percent fee on gross revenue for easement rights.

Perkey said she’s not aware of late franchise fee payments from other companies.

Spokespersons for NTS did not return Avalanche-Journal requests for comment Dec. 19 or 20. On Dec. 20, Windy Lee, NTS’s vice president of human resources, said she was not familiar with her company’s franchise fees but would have a company spokesperson contact the Avalanche-Journal.

The utility company is responsible for providing with each payment “a summary explaining the basis for the calculation of the fee,” according to the Public Utility Commission’s Texas Utilities Code.

Cities and utilities are responsible for covering their own costs in examining fees.

Perkey said the city’s estimate of franchise fees owed by NTS is approximate, does not include interest for the late payments, and is reliant on data provided by NTS, which has a state charter to operate and pay franchise fees in Wolfforth, Levelland, Slaton, Plainview, Lubbock and other South Plains cities.

The city discovered the shortfall while looking into its franchise fees in response to an unrelated information request earlier this year, Newsom said.

Newsom said he’s not certain if the $27,000 covers the past two years, pending an evaluation by the city’s auditors.

He also did not know why NTS’s payments were late in the first place.

Newsom and other city leaders said the company has not provided an explanation for the late payments.

The only legal recourse cities have in a fee dispute is through district court, said Terry Hadley, a spokesman for the Public Utility Commission of Texas.

But area cities have yet to take such fee disputes with NTS to court, instead relying on back-and-forth communication and negotiation so far.

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