Minutes - Council Work Session - 03/20/2012

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planning or coming up with new ideas. He believed this resulted in someone being proactive as opposed to someone answering the phone. Councilmember Elvig stated if you want it, you have to go get it. He noted Ramsey has been brilliant over the last 15 years at capturing industry, creating a backbone industrial base. He felt someone was needed to captain that equation. Councilmember Wise stated it seems like the biggest chunk of the City's budget goes back to the road program Councilmember Elvig's stated the numbers make sense to him, are a starting point, but are still short. He believed the economic development position should be reconsidered and suggested giving City Administrator Ulrich time to look at the numbers. Mayor Ramsey noted Councilmember Elvig's suggestion would cut the general fund levy and implement a franchise fee to be revenue neutral. However, he believed that Connexus will be opposed to a franchise fee. He stated the difference to collect from businesses and churches is about $20,000 a year. Mayor Ramsey asked why the Council would consider going through that heartache to create another "wheel" for $20,000 /year, He stated he would prefer to raise those funds through the general fund. Councilmember Wise stated it may be tax neutral but the benefit is that it would not be an expense to the citizen since they will not be paying an assessment. He noted a franchise fee is massively lower than an assessment and there would need to be an education piece for residents. Mayor Ramsey indicated the franchise fee would have to be double to get rid of assessment. Councilmember Backous stated Connexus is against a franchise fee of $28 /month but may not be opposed if the franchise fee is less than $10 /month. He indicated Connexus also understands the problem and while $20,000 may be a "drop in bucket" now, it will grow over time. City Administrator Ulrich cautioned the Council that if it only makes budget cuts without instituting a franchise fee, the budget shortfall problem will be back. In addition, if there is a lot of public backlash on a franchise fee, the Council may decide to not more forward. Finance Officer Lund referenced the staff report exhibit of Anoka County cities that charge a franchise fee. She noted the City of Coon Rapids collects over $3 million from franchise fees, equaling 12% of its general fund budget. It was also noted that a franchise fee would be a constant amount for property owners since it was not based on property value. Councilmember McGlone stated his property taxes went up on all of his houses. Mayor Ramsey stated he is not as concerned with the fairness issue, noting people moved to Ramsey because the land was cheap and they could get large lots. Now, 40 years later, those residents have road frontage to pay for. He described the change in his economic status since 2004 and stated he would not be party to any more taxation. City Council Work Session / March 20, 2012 Page 9of12