Agenda - Council Work Session - 12/10/2013

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Purpose. The Ramsey City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide natural gas and electric services within the City. Pursuant to the Franchise Agreement the City has the right to impose a franchise fee on Company. All franchise fee revenues generated through this ordinance shall be collected in lieu of special assessments for street maintenance projects, and shall be dedicated only to long -term street maintenance program projects including pavement preservation and street reconstruction projects. • Five (5) year sunset terms must be used for any new franchise fee ordinance. Effective Date. This ordinance takes effect as provided by the City Charter. This ordinance shall terminate 5 years from the date passed and adopted by the City. If the termination date falls within the middle of a 3 month collection period, the ordinance shall terminate at the end of the collection period. • An equitable rebate program must be implemented to prevent anyone paying an assessment levied with a street maintenance project, or who pre -paid their assessment but would otherwise still be paying, from paying franchise fees on top of assessments. Rebate Program. The City will rebate the lesser annual amount paid for franchise fees versus special assessments over the remaining term of the special assessments, regardless if the assessment was pre paid or is currently being paid through property taxes. Rebates will be in the form of a credit to the fourth quarter municipal utility bill of qualifying property addresses. This rebate program applies strictly to qualifying property addresses during the effective term of their current assessment or this ordinance, whichever expires first. • Franchise fee revenues must cover the shortfall amount of $1,700,000 so it was proposed each gas and electric utility be charged $8 per month per account across all commercial, industrial, and residential properties. If the Council were to consider a recommendation for an alternative Charter amendment, the following quantifiable provisions could be considered. • % of annual levy cap (e.g., revenue collected via the franchise fee shall not exceed 20% of the City's annual levy). • Defined dollar amount (e.g., revenue collected via franchise fees shall not exceed $1.7 million annually) • % of utility gross revenues (e.g., revenue collected via franchise fees shall not exceed 10% of the utility's gross revenue). • Phase -out over 5 years (e.g., 100% year 1, 80% year 2, 60% year 3, and so on) • Require that any fee be proportional to property value. (e.g., lower valued properties would be charged lower fees) Timeframe: Approximately 30 minutes. Funding Source: Responsible Party(ies): City Council and City Attorney Outcome: To direct the City Attorney to draft a proposed alternative Charter amendment that may define different parameters within the Charter in regard to franchise fees and /or special assessments, based upon discussion. Funding Options Ordinance Attachments Form Review