Minutes - Council Work Session - 03/19/2013

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Acting Mayor Backous noted a general levy tax would leave out tax- exempt properties. Finance Director Lund stated when the budget is presented and the tax rate is shown, the City needs to focus on what the budget encompasses. City Attorney Ulrich stated for those opposed to a franchise fee, would a smaller amount ($3 /month) that generates $200,000 per year be acceptable. He explained the City allows utility companies to use its rights -of -way to make money for their operation and then the utility company passes the fee on to its customers. Councilmember LeTourneau asked how often the utility companies pass on the franchise fee cost. City Administrator Ulrich advised utility companies pass on the cost (franchise fee) 100% of the time. Councilmember LeTourneau noted the utility companies then do not look at it as a fee for using the City's rights -of -way. Acting Mayor Backous indicated a lower franchise fee may not be enough to make it worthwhile. Councilmember Elvig stated if a future Council decides to cut taxes, it may use funds dedicated for road purposes. He supported holding an open forum to gain public input, noting the survey showed 73% supported a franchise fee to fund road reconstruction. Councilmember Elvig stated in this case, a franchise fee can probably not be sunset since road reconstruction is an ongoing issue. He suggested franchise fee language clearly explaining this is a City of Ramsey fee for roads. Councilmember Riley stated he thinks instituting a smaller franchise fee makes things worse and does not fix the problem. He noted if only a five -year plan, it would not get to the "blip" shown on a previous chart when the biggest need exists. Councilmember Riley stated support to consider a General Fund increase with those funds being locked up for road projects. He agreed it will be a sales job to describe the need, that all are involved, there would be no assessments, and it is tax deductible. He noted, all have indicated the calculations can be refined and if the schedule can be pushed out, then the formula can be recalculated. Interim Engineer Nelson reviewed the franchise fee calculation and resulting revenue it would generate. He asked what additional information is needed for the Council to make a decision and reminded all that Garnet and 168 is in the CIP for 2013. If it is to be constructed, plans and specs will need to start fairly soon and policy decisions made whether or not to levy an assessment. He indicated this will be presented at the April meeting and in the mean time, staff will refine the numbers. City Council Work Session / March 19, 2013 Page 11 of 16