Agenda - Council - 09/14/1993 - Laserfiche WebLink

Home

I I I '1 I I I I I I I I I I I I I I I # INTRODUCTION OF A FRANCHISE FEE ORDINANCE By: Ryan R. Schroeder, City Administrator Background: As Council is aware, as part of the preparation for both the 1992 and 1993 budgets, the City has discussed implementation of a utility franchise fee against the revenues of Anoka Electric Cooperative, the Anoka Municipal Electric Utility and Midwest Gas (now a subsidiary of Minnegasco). This was last discussed by the Council on January 26, 1993, at which point the Council directed that the issue not come back to the table until at least after the 1993 Legislative session. Staff took the position that upon completion of this session, it was more timely to bring the discussion back to the table as pan of the preparation of the 1994 budget document. Therefore, the issue is once again in front of you. Council was recently forwarde~i all of the documentation relative to this issue. This included all the past minutes from the last two years as well as several exhibits displaying the various needs and impacts of a franchise fee. Past discussions have centered around whether the fee ought to be levied against all utility customers, just a portion of those customers or whether there should be disparate fees between various classes of customer base. The following exlfibits are enclosed with this case: 1) 2) 3) 4) The Projected 1994 Utility Franchise Revenue @ Selected Rates A compilation of revenues received by Midwest Gas during 1992 A compilation of revenues received by Anoka Electric Cooperative during 1992 The Franchise Ordinance which would be proposed should Council deem it as appropriate. In preparation of the 1994 budget document, Staff has assumed a franchise fee in the amount 1/2% against all customers of the three utilities. In the enclosed table, you will see that this raises revenue of $33,825 with given assnmptions. Because of these assumptions, we have actually projected a somewhat higher revenue base within the 1994 budget document. As is the case with the City of Coon Rapids, we have proposed in the preparation of the budget that these revenues be dedicated to the street light utility. Dedication of these revenues will allow for installation and operation of our "A" priority street lights which have not been developer funded. You will note that in the proposed Capital Improvements Program, the "A" priority street lights are projected as a 1995 expenditure with the "B" and "C" priority street lights in 1996 and 1997, respectively. It is expected that a 1/2% utility franchise fee over the next two or three years will be sufficient to fund not only the "A" priority street lights, but the bulk of the "B" priorities as well. It is Staffs position that new funding sources of at least the "A" priority lights should be aggressively pursued, given our projections for cash flows in the general fund and other funds over the next few years. We do not expect for existing sources such as the general fund to have the capacity to provide for intersection lighting. We also believe that the general fund should not be burdened with additional programming at this point in time. Council will note that in our budget discussions, we are attempting to set up long-term funding for a myriad of activities outside of the general fund. Street lighting would be one of those. Therefore, it is the Staff position that as part of this budgeting process, Council pass upon a utility franchise fee in the amount of I/2% effective January 1, 1994. If Council believes the above has merit at this time, we would ask that you provide for the introduction of the ordinance and schedule