Agenda - Council - 11/26/1996 - Laserfiche WebLink

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I I I I I I I I I I I I I I I I I I INTRODUCTION OF UTILITY FRANCHISE FEE By: Ryan R. Schroeder, City Administrator /::C. CAS : # / Background:: This item apl~_ areal on the agendas for both October 22 and November 12,1996. At the November meeting, Council requested consideration of dedicating by ordinance the proceeds on any franchise fees received, i The enclosed ordinance, by Subdivision 6, states that "all revenues collected pursuant to thi~ section shall be dedicated exclusively for funding of the City's street maintenance programs." PrOposed to Council is that revenues be directed to the Public Improvement Revolving Fund in orde~ to eliminate the property assessment portion of the sealcoating program. As presented at the last meeting, the revenues into this fund will be sufficient to pay all sealcoating costs (with adc~ption of the franchise fee as presented) through the year 2002. In our cash flows, we have not projected receipt of interest earnings from the TIF fund, receipt of year-end excess general fund r~enues, or increases in revenues from franchise fees due to new construction. As these revenuesi are realized, our ability to fund the sealcoating program without running a single year deficit improves. Even if these revenues are not realized, we can still fund the program for years 2003 and; 2004. However, the deficits in those years are currently projected to be significant (absent the abOve) but the fund will still have a positive balance after 2004 of just under $1,000,000 gi~&n the above. The average homeowner impact of the proposed fee is $14/year. The average sealcoating assessment cumntly is $150. On average, implementation of the franchise fee saves the residential customer mon4y. It is also proposed, with adoption of this fee, that the elimination of the sealcoafing assessment be immediate (effective with the 1997 program). This results' in a secondary benefit of savings in staff time, postage and publication costs. The case mem6randum from the previous meeting is enclosed for your reference. It should be emphasized, hogeever, that implementation of this fee is in recognition that the utilities are currently utilizing our rig~hts-of-way at no charge, a use for which there should be a charge. The franchise fee is a method to impose this charge. It should also be pointed out that, while it is expected that for the next 12 ~ears the TIF districts will pay for most commercialfmdustrial street maintenance, them is a C/I le~y of the franchise fee proposed in addition to that upon residential utility revenues. Council ActiOn: Motion to introduce Ordinance 96- XX entitled "Electric and Gas Franchise Fees". Reviewed City AdministratOr City Attorney FC: 11/26/96 /jmt