Minutes - Council - 05/27/2003 - Laserfiche WebLink

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the terms made no mention of possible franchise fees. Franchise fee terms were clearly stated in the Connexus Energy and City of Anoka Electric Ordinance adopted November 24, 1992. City Administrator Norman noted that the change was made at the request of Centerpoint Energy. Councilmember Elvig inquired if the action before them would hold the City responsible for establishing franchise fees. City Administrator Norman explained that what is before them is nothing more than an update of the current agreement and extending the agreement for 20 years. Councilmember Kurak inquired if the franchise fee is charged back to the user. City Administrator Norman explained that as of today there is no franchise fee. Motion by Councilmember Kurak, seconded by Councilmember Pearson, to schedule a public hearing to introduce an ordinance establishing a Gas Franchise with Centerpoint Energy. Further discussion: City Attorney Goodrich noted that notice of the public hearing has to be published in the Ramsey Resident. Finance Officer Lund noted that the notice will be included in the next edition of the Ramsey Resident going out at the end of the month. Councilmember Elvig requested that the article in the Ramsey Resident be extremely clear that the action is to not establish franchise fees that will be passed onto the residents. Motion carried. Voting Yes: Mayor Gamec, and Councilmembers Kurak, Pearson, Cook, Elvig, Strommen, and Zimmerman. Voting No: None. Case #8: Consider Proposed Ordinances Implementing an Electric Franchise Fee on Connexus Energy and City of Anoka Electric for Providing Electric Service within the City of Ramsey and Implementing a Gas Franchise Fee on Centerpoint Energy for Providing Gas Service within the City of Ramsey Finance Officer Lund stated that for the past several years, cities have been restricted to varying State mandate levy limitations. This has resulted in severe restrictions on operations of growing cities such as Ramsey. During this current period of growth within the City, Ramsey is being faced with levy limits and loss of Local Government Aid and the Market Value Homestead Credit. Ms. Lund reviewed the recently passed legislation and how it impacts the City's Local Government Aid. She explained that the City, in 2004, will receive $282,000 in Local Government Aid as compared to $765,000. The City will be allowed to levy back 60 percent of the difference, but the City will not be allowed to account for any growth in 2004. Levy limits force a large burden on the City. In 2003, personnel costs alone increased over $350,000. The City will need to address ever-increasing health costs and inflationary costs in 2004. This does not even address the issue of costs associated with a growing community. In dealing with the revenue shortfalls placed upon the City, the City is proposing the adoption of a franchise fee as a possible revenue source. Franchise ordinances currently exist with Connexus Energy, City of City Council/May 27, 2003 Page 14 of 18