Agenda - Council - 10/08/2013 - Laserfiche WebLink

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would likely raise their rates to cover their assessments. The adoption of utility franchise fees with our electric and gas utility providers (Anoka Electric, CenterPoint Energy, and Connexus Energy) would allow the city to charge these utilities for their use of public right-of-ways to conduct their business. While these fees would be passed along to their customers, it would allow those paying the fee to budget for a relatively small monthly fee to help fund the street maintenance program. Council also made it clear by consensus that the following terms and conditions would need to be applied before a franchise fee program would be adopted. • Ensure that all franchise fees collected are only spent on street maintenance program projects and not on other projects. • Include 5 year sunset terms on all new Franchise Ordinances to allow a thorough review of revenues versus expenditures, and to consider other potential funding sources and make adjustments as desired or needed. This would include MSA fund considerations. • Charge each gas and electric utility a fixed franchise fee amount of $8 per month per account across commercial, industrial, and residential properties alike. • Develop an equitable rebate program to prevent those currently paying an assessment levied with a street improvement project, or who paid their assessment up -front but would otherwise still be paying an assessment, from paying franchise fees on top of their assessment. Franchise Fee Ordinance Adoption Process On September loth Council ordered two Public Hearings for October 8th, 2013. The first Public Hearing is required to introduce Franchise Ordinances with Anoka Municipal Utility and Connexus Energy since the city's existing franchise ordinance with these two companies expired on January 4th, 2013. Council therefore needs to adopt two new Franchise Ordinances with Anoka Municipal Utility and Connexus Energy prior to adopting three new Franchise Fee Ordinances with Anoka Municipal Utility, CenterPoint Energy, and Connexus Energy. CenterPoint Energy's existing Franchise Ordinance does not expire until 2023. Once the Franchise Fee Ordinances are adopted by Council, published, and each utility is notified via certified mail that the ordinances were adopted, a waiting period of at least 90 days is required to allow the utility companies time to review and respond to the ordinances. Since the utility companies provided the city with the draft ordinance language, staff is not anticipating any requested revisions. Following the 90 day review period, the franchise fee ordinances become effective and the city can begin collecting franchise fees. If the ordinances are adopted on October 22 nd, franchise fees could begin to be collected in February of 2014. Notification: Notifications of the Public Hearing were posted in the Anoka County Union on September 27th, as well as in the special October 2013 edition of the Ramsey Resident mailed on September 25th. Observations/Alternatives: Franchise fees, which cities are authorized by state statute to impose upon utilities operating within the public right-of-way, are fees charged to private utilities that benefit from using public right-of-ways to conduct their business. This fee is typically passed along to the consumer in the utility company's invoices, along with a note stating that the fee is being imposed by the city. If possible, we will work with the utility companies to make sure the note refers to the city's long-term street maintenance program, although this will likely not be possible. Again, per Council direction this fee would be dedicated solely to help pay for the maintenance of city streets and would eliminate the use of special assessments as long as the Franchise Agreements remain in force. Franchise fees of $8 per month per each gas and electric utility serving commercial, industrial and residential properties throughout the city would generate approximately $1,700,000 in annual revenues to help pay for our long-term street maintenance program. A public Open House was held on Tuesday, October lst. It is estimated there were approximately 25 public attendees. The most common comments received included concerns that the fees collected would be used for other