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City Administrator Schroeder commented that the commercial properties pay 30 percent of the taxes. Councilmember Beyer stated that this is not a large dollar amount being discussed and added that she is in disagreement with having AEC do all the City's billing in the first place. Ms. Hartstated that an additional alternative would be to impose a franchise fee of approximately 1 percent to 1-1/2 percent. 'It could be collected from Minnegasco, Anoka City Electric Utility and Anoka Electric Cooperative. At 1 percent, the City would collect approximately $52,269, which would cover'the annual costs associated with the capital recovery' costs and operation and maintenance costs at virtually no cost to the City. She added that this program could also be used to fund other programs such as curbside recycling, Councilmember Hardin felt that it makes good sense to bill all utility services. He stated it's a good way to let residents know how much these services cost. Mr. Schroeder stated that we are trying to figure out how to charge for recycling and street lights and that Staff doesn't see it as productive to get businesses to pay for services that are not really a benefit to them. Councilmember Beyer stated she would be in favor of the franchise fee, and cautioned that she did not want the City becoming too dependent upon AEC. Councilmember Zimmerman agreed with Councilmember Hardin's comment that the residents should know what amount is being paid for certain services. He suggested that the Committee table a decision on this issue until there is more information available such as would AEC waive the subscription fee. Staff could also present ways of making the residents aware of the costs. Mayor Gilbertson inquired if there would be a cap on the franchise fee. He felt that the resident's concerns about that fee is that it would keep going up. Maybe an amount should be locked in. Councilmember Zimmerman suggested that maybe residents think services are free (e.g. curbside recycling) and that it would be good for them to see what things actually costs. Motion by Councilmember Zimmerman and seconded by Councilmember Hardin to table the case on the funding source for priority arterial street lights and direct Staff to find out if AEC would waive the subscription fee, to have more information available regarding the franchise fee such as placing a cap on it, etc. and also alternative funding (e.g. levying, etc.) Motion carded. Voting Yes: Councilmembers Zimmerman, Hardin and Peterson. Voting No: Mayor Gilbertson and Councilmember Beyer. Case #4: Minnesota Sawdust Plant Acquisition City Administrator Schroeder stated that the sellers of the facility located at 14100 Jaspar Street N.W., Ramsey, have signed a purchase agreement for $310,000. He presented the Committee with a proposed remodeling budget and is recommending that this would be a $590,000 project. The fund set up for the purchase of this facility will have a fund balance of $60,000 at year end. This would leave a loan amount of $280,000. He felt that the facility would have a value of between $700,000 to $900,000 when completed. Mr. Schroeder added that the cost to purchase the building plus the remodeling costs is still significantly below the cost to construct a new building. Finance Committee/June 28, 1994 Page 3 of 4