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MINUTI/S <br />CITY COUNCIL <br />MARCH 2G, 2003 <br />noted that Little Canada has one of the lowest per capita spending ratios in <br />Ramsey County. <br />The City Administrator commented that eliminating the City's LGA is one <br />thing, but noted that the Market Value Homestead Credit is a credit that <br />the State gave to property owners. Cities have nothing to do with that <br />credit. By eliminating it, the State is shifting the burden of this credit onto <br />the cities. The Administrator also noted that the Sheriff's Department has <br />submitted their proposed 2004 Budget that reflects a $20,000 increase for <br />Little Canada. While this is one of the lowest increases proposed over the <br />last several years, it is an additional $20,000 in revenue that the City must <br />raise. <br />The City Administrator indicated that he will put together a packet of <br />information for the Council that can be used to lobby legislators on these <br />issues. <br />The City Administrator reviewed staff's 2003, 2004, and 2005 Budget <br />a<~alysis and the projected budget shortfall for each year. The <br />Administrator indicated that the 2003 shortfall can be addressed, the <br />difficulty comes in the years 2004 and 2005. <br />The Council begatr by reviewing the information relative to a 5% <br />surcharge on the electrical utility, and the Administrator's estimate that <br />this surcharge could produce an annual revenue of $268,000. He noted <br />that several cities have already enacted these franchise fees and several are <br />looking at doing so. The Administrator indicated that City's current <br />franchise agreement with Xcel Energy expires in 2008. Xcel has indicated <br />that they would be willing to reopen the franchise agreement and re- <br />negotiate anew 20-year franchise agreement. As part of that negotiation, <br />Xcel would like the City to agree to not charging permit fees for work in <br />the rights-of--way. They have also proposed the City conduct a periodic <br />review of the franchise fee. The Administrator estimated that negotiation <br />of the issue could take four to six months. He also reported that the City <br />can place a fi'anchise fee on gas and/or electric service. There is no limit <br />on the level of the franchise fee. The fee can also be structured as to its <br />impact on certain classes of customers. <br />Anderson suggested that renegotiation of the franchise protect the City's <br />ability to increase the level of the franchise fee. Fahey felt that a periodic <br />review provision would do that. Fahey also noted that implementation of <br />this fee will allow the City to maintain its level of service and not reduce <br />staff. <br />2 <br />