Agenda - Council - 12/10/1996 - Laserfiche WebLink

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! ! ! I I I I I I I I I I II CASE INTRODUCTION OF UTILITY FRANCHISE FEE By: Ryan R. Schroeder Background: Included as exhibits in this case are the exhibits from the October 22 and November 26, 1996 deliberations of~ the issue. At the last meeting, the Finance Committee recommended introduction of a utilxty franchise fee ordinance. The Council determined not to introduce the ordinance after the question was ~r~_'sed as to the impact on dirt streets by the transfer of fee revenue to the Public Improvement Re~ volving Fund (PIR). Staff had not proposed use of any of the revenues to deal with the paving of the existing seven miles of unpaved streets in Ramsey (about 5% of the total street mileage).; In the 1994 buqlget, Council had provided for a street paving program with an allocation of $20,000 toward, the effort. Intended was that the City would subsidize the costs of paving the remaining dirt sd'eets over a three-year period. The subsidy would have assured that the resulting assessments wod, ld not have exceeded the typical cost of assessments for this type of work (of the remaining dirt sffeets, many have significant front footages and, therefore, significant assessments under the current: program). During 1994, Council chose not to proceed with the program. In the 1997 budget, staff has proposed the same program again. We have recommended setting aside $20,000 from the contingency budget as an infusion to the PIR in order to provide the fa'st year funding for Street paving should Council determine in 1997 to allocate funds in that manner. While the above does not dedicate franchise fee revenue to the paving effort, it does provide an affirmative respor~se to the concern that those on dirt streets are paying fees without a corresponding beriefit. Council is also reminded that we have previously determined that over the long run, this minor amount of the street mileage as unpaved represents a potential burden upon the municipal operati6ns. For instance, we currently own two road graders, specifically because of the amount of unpaved surfaces in inventory at the time the graders were purchased. At the time of replacement for thi~ equipment, we would hope to eliminate one of the graders in exchange for a lighter piece of eqtiipment. Elimination of unpaved surfaces will facilitate that occurring. It was discussed at the last review of the franchise fee proposal, that implementation of such represents a cost savings over the long term to the typical residential customer from the present system of benefit a~sessments for sealcoating. It was also noted by Councilmember Zimmerman that large lots would tend to experience a greater savings than smaller lots. (Larger lots are the predominant land uie in Ramsey by about 2 to 1.) Therefore, it seems reasonable that adoption of the fee ordinance represents a good value to the residential customer base. Council Action: Motion to introduce Ordinance 96-XX endtled "Electric and Gas Franchise Fees". Reviewed by: City Administrator CC: 12/10/96