West Lake Hills Weighs a 25-Year Texas Gas Service Franchise at 5%

West Lake Hills' 25-year natural gas franchise with Texas Gas Service expired Sept. 1. On Wednesday, the City Council is set to consider a replacement that would run another 25 years and pay the city 5% of the company's local gross receipts.

The ordinance is on the agenda for the council's regular meeting at 6:30 p.m. Wednesday, Oct. 28, in the Council Chambers of the Municipal Building, 4010 Bee Cave Road. The meeting can also be watched on Zoom.

What the franchise does

A franchise is the city's permission for a utility to run lines under public streets and rights-of-way. According to the staff report in the meeting packet, the current agreement was approved in 2001. The new one would let ONE Gas, Inc., through its Texas Gas Service division, keep using city rights-of-way to serve West Lake Hills homes and businesses.

The proposed franchise is non-exclusive. It sets out who is responsible for construction, permits, maintenance, moving lines, restoring streets, insurance and indemnification. In return, Texas Gas Service would send the city a fee of 5% of gross receipts from gas sales, transportation and certain regulated service charges inside city limits. The fee would be paid twice a year, in January and July. In the 15th year, the city and the company could revisit the financial terms, including the fee.

Illustrative: a residential natural gas meter in Laramie, Wyoming, in 2024. This is not a West Lake Hills meter. Photo: Tony Webster / Wikimedia Commons, CC BY 2.0.

Council wanted more protections

The staff report says that at a September workshop, council members asked for language about avoiding environmentally sensitive areas where possible and restoring them afterward, and about abandoning and removing decommissioned lines. Those revisions are still with the city's legal counsel. If the draft is not ready before Wednesday, the report says, the council will need to extend the old agreement another 30 days and move the new franchise to the first meeting in November.

The item was postponed once already, on Oct. 14, while staff waited to meet with Texas Gas. The agenda lists it as Ordinance 2026-013, but the staff report calls it Ordinance 2026-012. Staff recommend approval.

Other business: an engineer, a strategic plan and a new administrator

The consent agenda includes a work order with Colliers Engineering & Design for development plan review in fiscal 2026-27, not to exceed $140,000, paid from the General Fund. Colliers has served as the city engineer under a master services agreement since June 27, 2025. The packet says a city engineer position is budgeted this year. Once that person is hired, they would take over development review, and Colliers would be used only as needed.

The council will also review an update to the city's strategic plan and cast West Lake Hills' one vote for the Texas Municipal League Region 10 director. The candidates are Smithville council member Jimmy Jenkins, the incumbent, and Leander Mayor Na'Cole Thompson.

After a closed session on personnel, the council may vote on appointing a city administrator. Jennifer Bills has been serving in the job on an interim basis. The agenda does not name a candidate.

How to weigh in

Residents may email written comments, or a request to speak, to [email protected] by 1 p.m. Wednesday. Speakers get five minutes. Meeting files are posted on the city's CivicClerk portal.

West Lake Hills is not the only small Texas city working out utility deals this fall. See how Alpine handled a lease for smart water and gas meters. With the Nov. 3 election close, voters can also check what is on every Texas ballot.

A 25-year contract will likely outlast most of the people who vote on it. Getting the street-restoration and old-pipe language right now is worth an extra month if that is what it takes.