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

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franchise fee of $8 per utility per month to raise $1.7 million, which is about 12.6% of the proposed 2014 budget. The offset would be the elimination of special assessments for City road improvement projects. City Engineer Westby stated as directed by the Council, staff incorporated ordinance language to address: 1) A five -year sunset term; 2) Elimination of special assessments while a franchise fee is in place for street maintenance projects; 3) Funds collected would be dedicated solely to street maintenance projects; and, 4) A rebate program incorporated as part of the franchise fee program to rebate the lesser of the two costs (franchise fee or special assessments). City Engineer Westby read the sections of the ordinances that relate to these four items and explained that going forward, there would be no new assessments over the life of this franchise fee ordinance. Councilmember Tossey stated, based on discussion at the Work Session, he will not argue every point but while there will be a decrease in the tax capacity by 1 %, that is because there is more capacity since a TIF District came off -line. He felt it was disingenuous to say there would be a tax reduction as residents will be paying franchise fees of $192 per year, which is a high increase. He agreed there are issues with special assessments but there is nothing to prevent future Councils from still doing both special assessments and franchise fees. He thinks those issues should be addressed within the Charter. Councilmember Kuzma stated there has been a lot of discussion about tax increases but the issue is the problem with roads and aging infrastructure that is not being addressed. He noted residents need to realize that if nothing is done, in four to five years there will be more serious assessments. Councilmember Kuzma stated the Council wants to address this problem now. Councilmember Backous stated the ordinance includes an exclusivity clause to assure franchise fee revenue is only spent on road reconstruction, yet it leaves the Council open to also using the levy towards roads. He stated the Council wants to assure accountability with both franchise fees and the levy so he would ask whether it should all be in one place. Mayor Strommen stated that clause does not force it all to be in one place but does force the City to dedicate franchise fees for that purpose. She suggested that point be discussed further. Charter Commission Chair Field stated the Charter Commission convened yesterday to discuss the issue of a possible Charter amendment pertaining to alternative funding sources, in particular the use of franchise fees as a funding source. He presented background on the City's Charter (Constitution), noting only 4% of the State's municipalities use a Charter to govern its affairs and the rest utilize statutory authority. Ramsey is a Home Rule Charter City and the Charter can institute powers, as long as they do not conflict with State law. Chair Field stated the Charter Commission meets to consider constitutional issues, and chose to act on the franchise fee discussion. He reported on the proceedings of the October 21, 2013, Charter Commission meeting, discussions held, and motion approved on a 6 -1 vote to amend the City Charter, Section 10.4, Power of Regulation Reserve. The first sentence currently reads: "Subject to any applicable State Statutes, the Council may by ordinance reasonably regulate and control the exercise of any franchise, including the maximum rates, fares, or prices to be charged by the grantee." The proposed amendment would add the following language to that sentence: "except City Council / October 22, 2013 Page 6 of 11