Agenda - Council Work Session - 05/28/2019

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• A: The staff would have to figure out how to address that if the City goes with franchise fees. • Q: Assuming we do the franchise fee option, for how many years is that fee locked in? • A: Generally, it's set for five years and then the city would evaluate current needs. Franchise Fee Amounts • Q: Is the franchise fee based on usage? • A: No, it's a fixed amount for residential properties. For commercial, it's based on meter size. • Q: As our city grows, could we expect the franchise fee to increase? • A: It depends but not necessarily. If you're growing the number of users in the system, the fund also grows. In 2015, franchise fees were implemented in another city and they haven't had to raise the rates yet. • Q: Comment from former mayor of Ramsey: Several years ago, we had a franchise fee in Ramsey. We sunset it, which was probably a mistake. If we'd kept it, we might not have the road problems we do. People got used to it and they knew what fee to expect. And growth took care of the money. If we'd kept it, you'd be paying $6/month. • A: The City had a franchise fee in 2003 for period of nine months and then sunset. Ramsey used franchise fees to make up from shortfall of LGA & MVHC cuts. We collected the shortfall after 9 months and the City Council ended the fee. The fee was $3 each utility for both residential and commercial properties. We had proposed a % fee, but there was too much opposition from commercial businesses. • Q: Elk River's franchise fee is $9.50. What is Rogers' fee? • A: It's $9 in Rogers. • Q: How much will the franchise fee go up? • A: Usually cities set it for 5 years and then evaluate needs at that time. • Q: Do cities typically keep the fee at the same amount? • A: Yes, most cities have not increased it, and growth helps allow that. • Q: If we paid $120/year in franchise fees, do we know the total amount the City would bring in? • A: That would be one of the City Council's next steps if they go forward with investigating franchise fees — to work with the utilities and analyze the numbers. • Q: So under a franchise fee system, all I pay is around $100-$200/year and I'd never pay for an assessment? • A: Yes, that's right. • Q: What's realistic in terms of a monthly franchise fee? $10? $20? • A: It would likely not be $20. Rogers is $9, Brooklyn Park is $14. We need to run those numbers.