Agenda - Council - 07/14/2020 - Laserfiche WebLink

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Councilmember Kuzma stated that he supports the franchise fee option. He noted that throughout the past five years he has seen the hardship that the assessment process has placed on families and believes that this will be an easier method for dedicated road funding. Councilmember Menth agreed that this is an easier method to budget, will provide dedicated road funding to solve the continued problem of roads in the community and is an issue that cannot continue to be kicked down the road. Motion by Councilmember Kuzma, seconded by Councilmember Menth, to Schedule Public Hearing to Introduce Ordinances #20-11 (Centerpoint Energy), #20-12 (Connexus Energy), #20- 13 (City of Anoka Electric) establishing franchise fees on gas and electric utilities. Further discussion: Councilmember Musgrove stated that she noticed the franchise fee term would be five years, but road funding is based on ten years and asked for clarification. Finance Director Lund replied that the Capital Improvement Plan is a ten-year plan. She explained that previously a five-year road plan was required for bonding. She explained that the roadwork would be completed based on the funds that would be available through the franchise fees collected. Councilmember Musgrove stated that she does not support franchise fees and believes that the roads should instead be funded through the tax levy. She believed that this is a tax on the poorest residents and gives no incentive for the government to maintain a stable tax levy. She believed that the City would be more consciousness about taxing residents if the road financing were included in the levy. Councilmember Riley commented that this would meet the needs of the City, as the roads need improvement. He commented that this would reduce the overall cost of road projects, as there would be a 10 percent administrative savings. He noted that this would also be dedicated funding that would only be used for road improvements. He stated that this would also sunset after five years, similar to the assessment process. He stated that he has great expectations for this program. Councilmember Specht commented that he is not in favor of this as non -profits will also have to contribute, he felt that this would not impact properties of different values in the same way, and would not be eligible as a property tax refund. He believed it would be more effective to fund the roads through the general fund. Councilmember Kuzma stated that in the discussions that have been had is that if this funding were placed on the general levy, this would impact the City's tax rate significantly. He commented that the roads need to be fixed and everyone uses the roads, therefore this seems to be a good solution. Mayor LeTourneau stated that there were a number of years where the community has asked for the roads to be maintained but they had not been maintained because the Council was not able to include that in the general levy, which is how the assessment plan came forward. He stated that this is another solution that would provide dedicated funding for road maintenance. He stated that the five-year sunset would allow the City to try this method. He stated that if the City discovers that this is not a good plan, the Council can reverse that. He acknowledged that this is a tough decision and an issue that needs to be resolved. Councilmember Heinrich stated that she noticed that everyone agrees that the roads need to be funded but the method has not been agreed upon. She stated that she is not supporting this because she does not support regressive taxes or removing road funding from the general tax levy. She stated that she likes the guidelines in place, so if this does move forward, she is comfortable with the five-year sunset and that this would be dedicated funding for roads. City Council / June 23, 2020 Page 5 of 21