Minutes - Council Work Session - 10/22/2013

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Mayor Strommen stated Charter Commission Chair Field will be given an opportunity to offer information during the regular Council meeting. City Attorney Langel stated last night the Charter Commission met to discuss the pending franchise fee ordinances and had extensive discussion about types of funding available for road improvements, but mostly focused on the power to impose this fee, sections of the Charter that impact the imposition of the fee, and rights of the Charter Commission to place parameters on the City for imposing such a fee. Following discussion, the Charter Commission passed a motion to amend Chapter 10.4 of the Charter. That Chapter currently contains a sentence indicating: "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." City Attorney Langel stated that Chapter gives the Council the authority to impose a franchise fee. The amendment was to limit that Council authority given in Chapter 10.4 by referencing language in State Statute 216.B36 that contains a sentence indicating: "Under the license, permit, right or franchise, the utility may be obligated by any municipality to pay to the municipality fees to raise revenue or defray increased municipal costs accruing as a result of utility operations, or both." City Attorney Langel explained this language allows the City to impose a franchise fee to raise fees, without a particular reason, or to off set costs of utility operations. The Charter Commission referenced that Statute language; however, worded the amendment to limit the City's ability to impose franchise fees except for the purpose of defraying municipal costs as a result of utility operations. This would not allow a franchise fee to generate additional revenues and drastically limit the City's ability to make much money from franchise fees. City Attorney Langel stated with the wording of "defraying municipal costs," there is a question on what costs would be considered and how they could be calculated. Because of this, franchise fees would be of limited use to the City as a revenue generator. He indicated the Charter Commission motion was made and passed and expressly submitted under Minnesota Statute 410.12.7, which is a method of amending the Charter by sending it to the Council, not for general or special election. Under that procedure a public hearing has to be published and held within one month, the City Council vote has to occur within a month of the public hearing, and it has to be unanimous to approve the Charter amendment. City Attorney Langel stated Commissioner Niska had indicated that the intent of the motion was to start a dialogue with the Council about franchise fees and not the expectation that this amendment would be approved by unanimous decision of the Council. Mayor Strommen stated the main impetus of the Charter Commission was to start a dialogue with the Council and create some parameters around a franchise fee. She stated the Council can also discuss if it wants to consider alternative options as presented by staff. Councilmember LeTourneau stated he is not quite sure of the process, noting that as of last night, the Charter Commission made a recommendation that calls for a certain set of circumstances to occur. City Attorney Langel stated the Charter Commission recommended an amendment to the Charter pursuant to Statute that requires public hearing and unanimous Council decision. City Council Work Session / October 22, 2013 Page 2 of 8