Minutes - Council Work Session - 04/10/2012

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City Administrator Ulrich noted staff had previously estimated the need for $3 million per year for full reconstruction if there are no assessments so this proposal is still short in terms of a full reconstruction effort. Mayor Ramsey asked about the monthly franchise fee. Finance Officer Lund clarified it is actually $7 per month per utility, for a total of $14 /month. City Administrator Ulrich stated this concept puts into place the proposed staff reductions, lowers the levy by taking off $1.5 million, and then replaces it with the franchise fee implementation. Mayor Ramsey noted it seems that adding the franchise fee on top will result in a tax capacity rate of 52 %. City Administrator Ulrich stated the publicized tax capacity rate would be 38.7 %. Councilmember Backous stated he thinks the franchise fee is a tax when it comes down to it, but it shows the public there are two pieces, the road reconstruction budget and the levy. He noted the taxpayer would be paying the same dollar amount but the franchise fee brings in more payers. The idea was to present it properly and he supported the franchise fee. Mayor Ramsey stated it has been indicated that the advantage of the franchise fee is to bring in more entities but that portion only equals about $40,000, which he considers a minute amount. Mayor Ramsey stated he does not support "pulling wool over resident's eyes," thinks it gives the wrong perception, and supports putting all road costs in the general fund budget. Councilmember Wise arrived at 5:16 p.m. Mayor Ramsey noted this proposal puts $1 5 million into the general fund budget with a 52% tax capacity rate, which is 10% more than the current rate so it does not accomplish what needs to be accomplished. Councilmember Tossey stated he knows the goal is to rid the City of assessments but if the City can pay down assessments and avoid a franchise fee with savings in the budget, it may lower the assessment amount to where residents would reconsider counter petitioning a project. Mayor Ramsey doubted that would occur. He felt the odds were slim that a project will get done if assessed at 100% because it will be counter petitioned. In addition, the City is getting push back on reconstruction projects that are 50% assessed. Mayor Ramsey felt roads are a core function as well as police and fire and, unfortunately, the City has neglected that responsibility for years. He did not support adding another 30% tax on residents and suggested the Council reassess core functions and adjust accordingly. Mayor Ramsey stated he would not vote to increase taxes or institute a franchise fee. Rather, he supported reassessing services provided to residents, even if that results in cutting back the core services of police and fire. City Council Work Session / April 10, 2012 Page 2 of 13