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City Engineer Westby stated those types of roads (converting gravel to pavement) were not <br />within the calculations to be funded by a franchise fee. <br />City Attorney Langel stated this may be a definition issue, whether street construction from <br />gravel to asphalt could be eligible for special assessments. <br />Public Works Superintendent Riemer stated that would be a road construction project, not a <br />reconstruction project. <br />Councilmember Kuzma stated the perception of the public is that if there is a franchise fee, there <br />will be no assessment for roads whether new or reconstructed. He agreed with the need to assure <br />the language and intent is clear. <br />City Attorney Langel stated the language can be clarified to make that distinction. <br />Councilmember Johns stated in the case of a new road, the property owner would then be <br />assessed plus pay a franchise fee on their utility bill. <br />City Attorney Langel stated he will refine the language to indicate that type of new road <br />construction projects would be assessed and not part of the franchise fee rebate. He continued <br />review and explanation of the language, noting the franchise fee would be established by an <br />ordinance. <br />Mayor Strommen asked if it can be part of the rates and fees consideration. <br />City Attorney Langel stated there is nothing in the franchise law indicating it has to be a separate <br />and distinct ordinance separate from the rate and fee ordinance. . <br />Councilmember Kuzma asked if Finance Director Lund has looked at the impact of a 20% cap <br />and the amount of revenue it would generate. He noted if that percentage cannot get to the $8 <br />rate, it may not be productive to consider creation of a franchise fee. <br />Councilmember Tossey arrived at 5:58 p.m. <br />Finance Director Lund explained that based on 20% of the current levy, in the 2013 budget, it <br />would be about $1.6 million plus there would be a rebate of special assessments so it would <br />probably be at $1.3 million. In 2014, it was at $8.5 million but special assessments would not be <br />rebated and there would be additional administration costs. <br />Councilmember LeTourneau asked if the franchise fee would be recalculated and reposted to <br />residents each year since sometimes it would go up and sometimes it would go down. He <br />expressed concern that process may cause confusion and concern with the constituency. <br />Councilmember Kuzma stated the biggest issue will be with the first year and if it gets close to <br />the mark, maybe it could be lowered a little bit and adjusted with the levy while still providing a <br />consistent method to fund road maintenance. <br />City Council Work Session / January 14, 2014 <br />Page 4 of 9 <br />