Agenda - Council Work Session - 12/14/2021

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encouragement and support for beekeepers. He offered to answer any questions the City Council may have about beekeeping. Sarah Grubner, 9431 176th Avenue, stated she and her family live on a 6-acre homestead in Ramsey, which has been a lifelong dream for her. She added her family has chickens and a rooster, and today a baby chick was born. She noted her family has cats and wants to have several dogs. She noted the number of dogs and cats should be separate, and the size of cows should be considered. Motion carried. Voting Yes: Mayor Kuzma, Councilmembers Heineman, Howell, Musgrove, Riley, Specht, and Woestehoff. Voting No: None. 7. COUNCIL BUSINESS 7.01: Adopt Ordinance #21-16 Repealing Ordinances #20-11, #20-12, and #20-13 in regard to Franchise Fees on Centerpoint Energy, Connexus Energy and City of Anoka Electric City Administrator Ulrich reviewed the second reading and proposed adoption of an Ordinance repealing Ordinances 20-11, 20-12 and 20-13 regarding franchise fees on Centerpoint Energy, Connexus Energy and City of Anoka Electric. He stated this Ordinance would eliminate franchise fees adopted for 2021, as well as part of 2020. He noted the franchise fees would be repealed and revenues would be replaced through tax levy. Mayor Kuzma stated he is opposed to this Ordinance being repealed as the City does not, in his opinion, have a good path moving forward. He added there have been very few complaints from residents about the franchise fee, and the program has been working. He noted the 2022 budget process has not been completed, and union contracts are not negotiated, and he does not support repealing a process before there is a working plan in place to replace it. Mayor Kuzma stated a levy increase of 20-27% could be anticipated to replace the franchise fees, while the proposed budget was a 12% increase. He added the City could lose its bond rating if it becomes necessary to tap into reserves. He noted, without a plan in place, it is the wrong time to do this, and he will not be supporting it. Councilmember Howell stated the tax increase would have been 17% if the previous City Council had added the franchise fee to the levy, but instead, the percentage was distributed inequitably across home values, and some people paid heavily. She added, for instance, a home with a value of $172,000 had a tax increase of 40%, while a home with a value of $450,000 increased 6.6%. She noted the franchise fee simply disguised the tax increase, and she does not support that, as it is not fair for some neighbors to pay higher taxes. She noted she will be supporting the Ordinance. Councilmember Heineman stated, at the Council's last meeting, he commented that the franchise fee is a regressive tax. He added residents should pay taxes that are proportional to their home value, which is a regressive tax. He noted $300,000 is the breaking point, and homes with a value of $336,000 would pay the same as the franchise fee, if a 15% tax levy is added. He noted the vast City Council / July 27, 2021 Page 7 of 25