Agenda - Council - 10/28/2003 - Laserfiche WebLink

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ADOPT ORDINANCES IMPLEMENTING A GAS FRANCHISE FEE ON CENTER.P DINT ENERGY, MINNEGASCO, A DMSION OF CENTERPOINT ENERG~ RESOURCES CORP., A DELAWARE CORPORATION, FOR PROVIDIN ,I~ GAS ENERGY SERVICE WITHIN THE CITY OF RAMSEY, AND IMPLE[MENTING AN ELECTRIC FRANCHISE FEE ON CONNEXUS ENERGY,~ 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, Einance Officer Background:: Ordinances r~resenting 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 ~ public hearing on June 2~; 2003, and brought to Council for adoption on July 22, 2003~r The final adoption of these Ordinances was tabled at the July 22, 2003, meeting to all~w Council the opportunity to further review the 2004 General Fund Budget and e:$amine other revenue sources. Revised Ordinances establishing a per-meter franchise fee _~,as re-introduced at the October 14, 2003, City Council meeting. The Council Has conducted work sessions regarding the 2004 General Fund budget and at this point in t~e budget process, it has been determined that the 2004 General Fund Budget will n~t work (Expenditures = Revenues) if a franchise fee is not implemented to offset the Sta~ mandated levy freeze and the cuts in Local Government Aid and Market Value Homesl;ead Credit. Upon further ~xamination 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. A sunset clause has been added to Section 7. The franchise fee ordinances are set to expire on December 31, 2006. Franchise feea can be set in three ways: a percent of the utility's gross revenues within the City; a ch~lrge per unit of energy used; or a flat money fee for every meter or property in the City. A~fter the franchise fee programs are in place, the companies will make [ quarterly payrlaents to the City. .r The City of R[amsey is proposing a franchise fee of $3.00/per meter on all residential meters for bo~ gas and electric service which would result in an overall annual franchise fee to a reside~ tial user in the amount of $72.00. A $6.00/per meter would be charged on all commercial accounts with a total franchise fee of $144.00. With the set rates of $3.00 and $6.00 for residential and commercial accounts respectively, the City would -137-