Agenda - Council - 11/10/1992 - Laserfiche WebLink

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I I '1 I I I I I '1 I I I ! I I I I I I CASE ~ INTRODUCE FRANCHISE FEE ORDINANCE ~, :ir By: Ryan R. Schroeder, City Administrator BackgroUnd: For the p~st sbveral years, cities have been restricted to varying State mandated levy limitations~, Tills has resulted in severe restrictions on operations of growing cities such as Ramsey. iAt :the same time the State has reduced the actual dollars received in local government aids. Finally in the Ii'st few years, the State has begun billing us in additional ways such as fees for PCA~ ~Ni~r and other State departmental operations and most recently implementation of a sales ~x. ~ s a resuli: oLt~e above, cities have taken the approach of billing for services received by pecifie tn~ivkluals or businesses over and above levels received by the general public. As this relates~to U~ility companies, we allow them to have the exclusive use of a portion of our right'of-w~ysi IC_L~renfly we have 147.8 miles of right-of-way. A_~__~We this is an a~set ~,~lue of $I4,336,600. To date, the utilities have not reimbursed the City of Ramsey _for th~ portion of the right-of-ways for which they have received the use. 'We have als0 ,not llilled them for services received when a new utility line or repair of a line occurs. If. shduld be noted here that if we need utility lines to move due to a public construction prbject such as I53rd Avenue N.W., we will receive a bill. As a resul~ of !he above, the City has proposed adoption of a franchise ordinance with Anoka M~icil~al Electric and Anoka Electric Cooperative. A franchise ordinance currently exists wifl'/;Mi~west Gas. Within the proposed electric ordinance there is a fee provision in consideratlon!{~f the rights granted to the electric distributors under the ordinance. The Midwest: ~as :O, rdinanee is silent on a possible franchise fee. It is the Staff position that pursuant~to an,~ttomey General opinion the fee levied upon the gas company is appropriate in exchalage f0t fights received within the franchise. The following are enclosed with this l) projected Franchise Fees and Property Tax Received from Fictitious 50 lot subdivision 2)~992 Tax Capacity Comparison of 20 Area Cities 3) [1992 Tax Capacity Comparison of Minnesota Cities with Populations Between 10,000 and 20,000 4) !989 Per Capita Expenditures (Excluding Capital Outlay) for Minnesota Cities with Populations from 10,000 to 20,000 5) Proposed Ordinance establishing elecrric and gas franchise fees for the Ci~, r~f Ramsey The following ihfomtion is pertinent to this case: · 1993 Local Government Aid (LGA) to the City of Ramsev will be $230,799 less tila~ th6 $446,122 payment received in 1989. ~ addition'to previous cuts, cities risk losing additional LGA in the December payrnent for 1992 and for the year of 1993. ~or the City of Ramsey, the remaining LGA of $215,323 is pa~rialiy, perhapsI full>,, at risk. · With th~ change in law which ~rrmk, es ci~' purchases now subject to Minnesota sales tax~ the!City will incur a 199> sales tax cost in the range of $30,000 to $60.000. This, when combined with the LGA decrease, results a bottom line loss in revenue or into'eaSe in expenditures that has a $276.000 impact for the year of 1993. Th, proposed, 1993 property' ~ievy will increase the City's revenue by $~9.~1~ p.rO~vid~ the State does not reduce transfer pa~ents for HACA during 199~. After recognition of this revenue, the City. of Ramsey s financial status still is irnpazted ir,