Agenda - Council Work Session - 08/27/2013

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communicating to their customers that the franchise fee is being imposed by the city is critical to them. As such, we would work with each utility to assist them in drafting language to be added to their invoices to alert their customers to the fact that the franchise fees are a pass through expense initiated by the city to help pay for our long term street improvement program. The city of Elk River developed and published such literature when adopting their franchise fees to help their utility providers spread the word to their customers regarding the purpose and intent of the franchise fee, and to make sure their customers know the fee was initiated by the city to help pay for their street improvement projects. If Council so chooses, staff can prepare similar literature that could be mailed with our utility bills, posted to our web site, etc. to assist our local utility providers. Examples of Elk River's literature will be available at the workshop Tuesday evening. Funding Source: Staff recommends utilizing Franchise Fees to fund the city's long -term street maintenance and reconstruction program in the future. Although these fees are essentially taxes, the term franchise fee follows state statute language so staff recommends using the same language to avoid any confusion by the public. Council Action: Staff is requesting Council direction regarding their preferred funding options to help pay for the city's long -term street maintenance and reconstruction program. If franchise fees are to be pursued, staff requests Council direction on the monthly amount to be charged each utility, as well as a proposed sunset date for the ordinances. Most franchise fee Ordinances tend to have a 20 year sunset date, but in this case it might make sense to apply a 5 or 10 year sunset date to the Ordinances to align with our CIP. With this information in hand, staff can then begin developing the draft franchise fee Ordinances for each of the utilities, and can work with them to develop clear language for their use in communicating the purpose of the fee and the fact that it is being initiated by the city and not the utility themselves. Figure 1 - LT SMP Est Costs PR Fig. 2 SMP Fund Opt ProsCons Fig. 3 FF Calcs LMC HB Ch25 Attachments Form Review Inbox Reviewed By Date Diana Lund Diana Lund 08/22/2013 02:26 PM Kurt Ulrich Kurt Ulrich 08/22/2013 03:26 PM Form Started By: Bruce Westby Started On: 08/01/2013 09:00 AM Final Approval Date: 08/22/2013