Agenda - Council - 10/22/2013 - Laserfiche WebLink

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anyone served by multiple electric meters with different feed points would be charged multiple electric franchise fees. This billing system is currently in place with the utility companies. However, Council could choose to apply rebates for residential properties served through multiple meters, though this would impact revenues slightly. Based on public comment received both before and during the Public Hearings, City staff has also evaluated several tiered rate options, including tiered rates for both residential and commercial classes. Staff is prepared to discuss these tiered rate options with Council if desired, either during the Council workshop and/or at the Council meeting. If a tiered residential franchise fee were to be adopted to distribute franchise fees across a range of property valuations, all rebates would be applied in a similar manner to the special assessment rebates, but impacts to staff time would be greater to implement and maintain this rebate program since the number of rebates would increase substantially and since ownership and property valuations can change from year to year. Attached is a franchise fee revenue evaluation spreadsheet which shows the projected revenues and the rebate amounts. Based on Council's direction this evening, and assuming staff will receive current accountings from CenterPoint within the next week, staff will refine the revenue projections so they are available before Council is asked to consider adopting the franchise fee ordinances. Franchise Fee Ordinance Adoption Process On October 8th, the City Council held a Public Hearing introducing franchise fee ordinances with Anoka Municipal Utility, CenterPoint Energy, and Connexus Energy. After closing the Public Hearing, Council passed a motion to continue the introduction of the ordinances to October 22nd to allow staff to address the public comment received. If Council supports the draft ordinances attached and wishes to pursue the adoption of franchise fee ordinances, a second reading of the ordinances should be called for November 12th. Should Council adopt the franchise fee ordinances, the ordinances would need to be published, after which each utility would need to be notified via certified mail that the ordinances were adopted. A waiting period of at least 90 days is then required to allow the utility companies time to review and comment on the ordinances. Following the 90 day review period, the franchise fee ordinances could become effective and the city could begin collecting franchise fees. If the ordinances are adopted on November 12 th, franchise fees could begin to be collected in March of 2014. Notification: None required. Observations/Alternatives: The franchise fee as currently proposed the fees equally between the electric and gas utilities since they impact roughly the same area of city right-of-ways. Residential and commercial properties are treated alike and charged the same fee. The utility companies have indicated that they could accommodate commercial tiered rates based on their existing classes if Council wishes to pursue that option. However, all utilities can only accommodate one residential rate class so if a tiered fee structure is pursued for residential properties, such a program would need to be administered by City staff which would have significant impacts on staff time. Alternatives: Alternative #1 - Call for a second reading of the franchise fee ordinances on November 12, 2013 as drafted. Alternative #2 - Call for a second reading of the franchise fee ordinances on November 12, 2013 after making minor modifications as directed. Alternative #3 — Direct staff to make major modifications to the franchise fee ordinances and call for a new Public Hearing on November 12, 2013 to introduce the revised franchise fee ordinances. Funding Source: