Agenda - Council - 10/14/2003 - Laserfiche WebLink

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RE-INTRO] ~UCE ORDINANCES IMPLEMENTING A GAS FRANCHISE FEE ON C~ENTERPOINT ENERGY, MINNEGASCO, A DIVISION OF CENTERPOINT ENERGY RESOURCES CORP., A DELAWARE CORPORAl?ION, FOR PROVIDING GAS ENERGY SERVICE WITHIN THE CITY OF RAMSEY, AND IMPLEMENTING AN ELECTRIC FRANCHISE FEE ON CONNEXUS ENERGY, A MINNESOTA COOPERATIVE, AND THE CITY OF ANOKA, A MUNICIPAL ELECTRIC DISTRIBUTOR, FOR PROVIDING ELECTRIC ENERGY SERVICE WITHIN THE CITY OF RAMSEY, MINNESOTA. By: Diana Lund, Finance Officer Background: Ordinances representing a franchise fee with a fixed percentage rate of 4.5% were presented to Council for review and discussion at its regular meeting of May 27, 2003, introduced at at public hearing on June 24, 2003, and brought to Council for adoption on 'July 22, 2003. The final adoption of these Ordinances was tabled at the July 22, 2003, meeting to allow Council the opportunity to further review the 2004 General Fund Budget and examine other revenue sources. The Council has conducted work sessions regarding the 2004 General Fund budget and at this point in the budget process, it has been determined that the 2004 General Fund Budget will not work (Expenditures = Revenues) if a franchise fee is not implemented to offset the Stata mandated levy freeze and the cuts in Local Government Aid and Market Value Homestead Credit. Upon further examination of the franchise fee and the 2004 budget, it was determined that a per meter fee on residential and commercial properties would be the most desirable franchise fee method to implement. By having a set rate, all accounts would know their monthly charge and would not be "surprised" if the rates for gas and electric increased. As this is a reintroduction of the franchise fee ordinance, the City is not required to hold another public hearing. Information regarding franchise fees had been submitted to the public in the Kamsey Resident, Cable TV and the Anoka Union prior to the June 24, 2003, public hearing. The effected companies of Connexus Energy, City of Anoka, and CenterPoint Ehergy, Minnegasco were mailed copies of the City's proposed ordinances. A sunset clause has been added to Section 7. The franchise fee ordinances are set to expire on Dec,mber 31, 2006. Franchise fees can be set in three ways: a percent of the utility's gross revenues within the City; a charge per unit of energy used; or a flat money fee for every meter or property in the City. After the franchise fee programs are in place, the companies will make quarterly payments to the City.