Minutes - Charter Commission - 10/21/2013

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be held accountable. He noted a franchise fee is a temporary solution and urged the Commission to find a solution that is in the best interests of City residents. Commissioner Deemer stated the 30% increase would be a City tax levy, not property tax increase. He added there is a discrepancy in the percentages comparison and the proposed franchise fee is "double dipping." He added CenterPoint Energy should be included and adjusted. Commissioner Bendtsen stated the 30% increase is not based on individual tax but rather on the total $1.7 million, which the City hopes to raise. He reviewed the figures submitted to City staff, which represents a combined total of $305,000 or 30 %: 2013 levy amount of $8 million; proposed 2014 levy amount of $725,000; as well as $1.7 million that the City hopes to raise. He added he submitted the figures to the City Administrator last week and requested that staff review the information for errors. City Administrator Ulrich confirmed that the totals are correct, but stressed that this is a new level of programming, and some method of funding must be determined Chairperson Field stated it would not be possible for the Commission to amend the Charter at this meeting due to procedural constraints. He added, in his opinion, this matter should be considered worthy of a referendum ballot as it would create a new funding source with no limits or conditions. He noted that other Midwestern cities not located in Minnesota have statutorily closed franchise fees and put limits on their ability to raise funds. Commissioner Niska stated the Commission should be concerned with structural issues related to good government. He added that Councilmember Backous characterized a "shadow tax" as outside of that which elected officials are usually held accountable, and which is not tied to any service. He noted this raises questions regarding whether limitations should be opposed, and whether the City should have full authority under State Statute to charge franchise fees. He stressed that it is a question for citizens to answer if there is good will to undertake it. Commissioner Zaetsch stated Statute 216b.36 cross - references Statute 477a.016 under which local governments cannot impose a new sales tax. He added this funding source should be considered a sales tax on selling energy. He expressed his concern that what staff is proposing is a pass - through and an indirect sales tax, which is more onerous and unfair than a regular sales tax because there is no scale. Commissioner Zaetsch stated that policy should be decided ultimately by those ultimately subject to a citizen's vote. He noted the Commission is a unique group appointed by a presiding District Judge, and they are charged with recommending policy. He added it is not the Charter Commission's role to pre -empt the Council in political matters. Commissioner Sivertson asked what percentage of property taxes is currently dedicated to roads, and whether it has been sufficient. City Administrator Ulrich stated the 2014 budget includes approximately $500,000 in the general fund dedicated to road repairs and maintenance. He added this represents 5% of the budget. He noted an additional $1.7 million is needed, for a total of $2.2 million. Charter Commission /October 21, 2013 Page 5 of 11