Minutes - Council Work Session - 08/27/2013

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its preferred funding option to help pay for the City's long -term SMP. If franchise fees are to be pursued, staff requests direction on the monthly amount to be charged each utility as well as a proposed sunset date for the ordinance. He noted 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 align with the City's CIP. Mayor Strommen stated the issue of funding road projects was under discussion by the City Council in 2008 and it is still being talked about today. She stated staff is recommending franchise fees; however, Councilmember Tossey has indicated he would not support franchise fees. Mayor Strommen stated the one -time funding options and MSA borrowing have already been used and the City Council does need to make this decision. She suggested the City Council make initial comments /questions tonight and that additional Work Sessions be scheduled so this matter can be decided. Councilmember Kuzma stated if levied, then owners of bigger houses will pay more of the costs; however, a franchise fee would be the same amount for all. Councilmember Riley asked if Garnet Street was constructed 60 years ago, and whether 60 years is a reasonable number or the best number to use. City Engineer Westby stated based on soils, there is no reason the City cannot get 60 years out of a road if the roads are scheduled for regular maintenance. He stated Garnet Street was not constructed to standards. Councilmember Riley asked where cuts should be made to cover a $1.7 million shortfall. Councilmember Tossey arrived at 6:50 p.m. Finance Director Lund stated as a point of comparison, the Police Department has a budget of $3.1 million. Councilmember Riley stated support to hold another Work Session to discuss this issue and applauded staff for providing all of the information needed to make this decision. Finance Director Lund asked if the consideration is full funding for road reconstruction from the franchise fee with no funding from the levy. Mayor Strommen stated that decision has not yet been made. She asked what it would do to the tax capacity if the City Council decided to levy for the shortfall of $1.7 million. Finance Director Lund stated the 48% tax capacity includes the $900,000, which represents a basis of about a one percent increase in the tax capacity. Mayor Strommen pointed out that whether paid through assessment, tax levy, or franchise fee, the residents and property owners end up paying for the costs. City Council Work Session / August 27, 2013 Page 5 of 6