Agenda - Council Work Session - 01/14/2014

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CC Work Session 2. 2. Meeting Date: 01/14/2014 Information Title: Review Proposed Charter Amendment Language related to Franchise Fees Purpose /Background: Purpose: To review and discuss draft language to amend the City's Charter relating to franchise fees. If there is a consensus with regard to the proposed ordinance, it will be forwarded to the regular Council agenda to approve the language and then to the Charter Commission for review and discussion. Background: In March 2013, the City Council discussed the implementation of a long term road maintenance policy. The discussion was held in work session where Council received a history of previous discussions relating to funding options for such maintenance policy. The historical information included the results from a 2011 survey of 300 residents. Residents indicated in their responses that the two largest issues facing the City over the upcoming years were The COR and maintaining an aging roadway system. The citizens were asked to choose between three financing scenarios with regard to funding the road reconstruction /maintenance Option 1 was to raise the general fund levy to accommodate the need; Option 2 was to assess 100 percent of the costs to the benefiting property owners; and Option 3 was to implement a new revenue source (franchise fee). The option that received the most support was implementation of the franchise fee for road reconstruction. A very lengthy discussion ensued relating to road reconstruction - the condition of the roads - the cost of reconstruction - and payment options - getting rid of assessments - not raising the tax levy - establishing a franchise fee - and amount, etc. On May 28, 2013, City Engineer Westby provided an update on staffs approach to the City's Long -term Street Reconstruction Program by developing typical sections and street width for both urban and rural sections as well as determining underlying soils that impact the depth of the pavements. On July 9, Council discussed, in work session, a topic report titled Review of Long -Term Street Maintenance and Reconstruction Financing Options and Cost Estimate Assumptions. A fairly lengthy discussion took place regarding design assumptions and cost analysis as well as what should be included in the cost for inflation. On August 27, in work session, staff presented further information relating to the maintenance program, costs and funding options. Staff recommended utilizing franchise fees to fund the City's long -term street maintenance and reconstructing program. Staff requested Council direction regarding their preferred funding options. Following discussion, Council directed staff to schedule a work session to discuss further. As per Council direction, staff scheduled discussion at the September 3 City Council work session - same recommendation - utilizing franchise fees to fund the City's long -term street maintenance and reconstruction program. Following discussion, the majority consensus of the City Council supported a franchise fee at $8 /month /utility (both residential and commercial) that is dedicated for roads, a five -year sunset with "lock box" language, no special assessments, and a rebate program for property owners already paying a road assessment. On September 10, a case was brought before the Council to approve the draft franchise agreement and ordinance terms, and to order the public hearings for October 8, 2013. Council ordered such public hearings. October 8, Council conducted the public hearing for introduction of franchise ordinances with Anoka Municipal Utility and Connexus Energy as the former agreements had expired. Also for public hearing was introduction of franchise fee ordinance with Anoka Municipal Utility, CenterPoint Energy and Connexus Energy. The vote was to postpone introduction of all ordinances to the next meeting.