Minutes - Council Work Session - 04/10/2012

Home

(franchise fee), residents do not feel as much "pain." She stated she has talked with a few people about these ideas and found it was fairly well received. Councilmember Strommen noted the City did a formal study and franchise fees were well received because people can plan for it, a small amount each month. She noted that reconstruction projects don't come along very often but residents can't plan for them. In addition, franchise fees would start to bring in and build funds today and can be reconsidered in the future if the Council desires. She also felt staff's plan presented a balanced approach. In terms of cuts to the general fund budget, Councilmember Strommen stated she needed to understand the context and how the service level may change, noting residents want to know the level of service they are getting for what they pay. Mayor Ramsey stated he would also like to see that information. He agreed the Council studied assessments but he felt the question was not asked correctly. Councilmember Backous asked on average, what is the assessment. Public Works Olson answered that it varies dramatically on each project and the highest was Garnet Street with $22,000 principal, $27,000 with interest added, and a ten -year payoff. He explained that a residential urban lot with less frontage would equal $9- 10,000 if 100% assessed. Councilmember Backous noted that would equal about $75 /month for ten years. He asked if residents would rather pay $75 /month for ten years or $14 /month forever, thinking residents would probably support the assessment. Councilmember Tossey noted the Council is talking about an assessment plus a franchise fee, and he does not support using both. Councilmember McGlone asked about raising taxes on all $14 /month instead of considering a $14 /month franchise fee. Finance Officer Lund stated it would be about a 46% tax capacity. Councilmember McGlone noted property taxes are deductable but franchise fees are not. Mayor Ramsey asked staff to address the 30/40/50 plan he had proposed because as more development happens, more funds are collected and the road funding also increases. Finance Officer Lund asked if the percentages include debt service. Mayor Ramsey stated he was addressing the amount of money the City spends every year and he does not want taxes to go up. Finance Officer Lund asked if the percentages are calculated on the total budget or the total levy, noting the budget will be $10 million and the levy has debt service added to it. In addition, staffing is only a general fund number so there are many variables. City Council Work Session / April 10, 2012 Page 8 of 13