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MINUTES <br />CITY COUNCIL <br />JULY 23, 2003 <br />Anderson asked if Xcel's decision to go with flat fees was being applied to <br />all cities. 7urek replied that this would be Xcel's policy going forward. <br />Given the prices spikes that occur in gas, Xcel feels that a percentage fee <br />was unfair to these customers. Jurek reported that due to the loss of local <br />government aids, Xcel is being approached by many cities on the issue of <br />franchise fees. In order to address the issue in a consistent manner, Xcel <br />formed a committee to develop a policy for addressing this issue. One of <br />the concerns that Xcel had with a percentage franchise fee was that the <br />amount a commercial customer pays in franchise fees was not <br />proportionate to the amount of City services the customer receives. Xcel <br />did not believe that a large volume user was generally using a larger <br />amount of City services. <br />Anderson indicated that while he appreciated the viewpoint, the fact was <br />that property taxes are based on valuations and a different class rates <br />between residential and commercial properties, for example. Anderson <br />noted that the City does not look to Xcel Energy to explain why tax rates <br />are as they are. Therefore, Xcel Energy should not be the decision maker <br />on flat franchise fee versus percentage. Anderson stated that he could <br />understand that the flat fee may be cheaper to administer than the <br />percentage fee. Jurek reported that she checked with the billing <br />department and it is not. <br />Anderson stated that if it will not cost Xcel any more money to administer <br />a percentage fee over a flat fee, then he feels the decision is firmly within <br />the City's jurisdiction to make. <br />The City Administrator asked about the imposition of a percentage fee on <br />electric service only given the more stable price for this utility. Jurek <br />stated that it was her understanding that a flat fee was preferable both gas <br />and electric. <br />Fahey asked the City Attorney if the City had the authority to amend the <br />ordinance to impose the percentage fee on gas and electric without <br />opening up the franchise agreement. The City Attorney replied that the <br />City had this authority. <br />Mr. Fahey introduced the following resolution and moved its adoption: <br />RESOLUTION NO. 2003-7-I70 -INSTRUCTING THE CITY <br />ATTORNEY TO PREPARE AMENDMENTS TO THE CITY'S GAS <br />AND ELECTRIC ORDINANCES RELATIVE TO IMPOSITION OF A <br />PERCENTAGE FRANCHISE FEE ON EACH UTILITY FOR <br />CONSIDERATION AT TIIEAUGUST 13, 2003 COUNCIL MEETING <br />17 <br />