Franchise fees are another source of funding the village uses to deliver high quality services. Franchise fees are assessed on cable and utility companies as part of a franchise agreement with the village to serve customers in its jurisdiction. As provided and / or required by federal and state law, a franchise agreement grants permission for the cable operator and utility provider to operate and maintain their cable system and public utilities in the village’s right-of-way. The franchise agreement allows cable and utility providers to use the public right-of-way to upgrade its equipment, install new lines, move its facilities by excavating and replacing streets, and bury pipes and lines. The franchise fee serves as compensation to the local government for industry’s use of the right-of-way.
Comcast and Xcel Energy pay franchise fees based on their current franchise agreements with the village. The franchise fees are calculated based on 3% (with a maximum of 5%) of the company’s gross revenues within the village. Comcast and Xcel Energy collect the 3% franchise fee from their Greenwood Village customer’s monthly bills, and then transfer the franchise fee payments to the village.
Where Do Franchise Fees Go?
Depending on the needs of the community, franchise fees can be earmarked for a dedicated service or contributed to a local government’s general revenues. The village collects approximately $1,450,000 in franchise fees on an annual basis that are distributed into the village’s general fund for delivery of services.