08-13-2003 Council Minutes - Laserfiche WebLink

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iVI1NUTES CITY COUNCIL AUGUST 13, 2003 The City Attorney noted that Little Canada is looking for additional revenues through collection of a franchise fee. Without the assistance of Xcel, the City cannot collect this franchise fee. The Attorney indicated that to some extent the issue of flat fee versus percentage fee is at a stalemate. He indicated that in his experience working with utilities, it is preferable to work from a mutually negotiated agreement. The Attorney stated that it was his position that Little Canada has the authority to attempt to establish a franchise fee under the current franchise ordinance. However, the result may be that Xcel will probably take the position that they will not collect the fee unless it is a flat fee. Therefore, depending on the City's need for revenue, the quickest course of action is to reach an agreement on the method of collection of this fee, that is mutual agreement on flat fee or percentage fee. Fahey indicated that as he has looked at the issue of flat fee versus percentage fee, the impact of one versus the other is substantially with the large commercial users. Fahey also noted that less than 1 % of the users in the City fall into the category of large commercial users. Fahey further noted that The issue is one of fairness as under a flat fee the large commercial users (less than 1% of all users) are being subsidized by the smaller users. Fahey asked staff's position on the proposed franchise agreement submitted by Xcel. The City Administrator felt there were two issues of concern with the agreement. The first is the issue of abandoned infrastructure with Xcel proposing that rather than remove abandoned lines, they would be left in the ground. The second issue is the need to clarify Xcel's financial responsibility in relocating their infrastructure should reconstruction of a road or other work done by the City within its rights-of--way require the need for utility relocation. The City Administrator felt that the City needed to retain the ability for full use of its rights-of--way. The Administrator indicated, however, that the proposed franchise agreement is a substantial improvement over the current agreement. Blesener reviewed Attachment A of City staff's August 8`~' report, specifically the differences in the amount of flat franchise fees for gas and electric as applied to the various user classifications. Blesener suggested that to provide for the most equity in a flat fee situation, it would be necessary to break down the large commercial and industrial classification into subcategories. Blesener also suggested that the Council consider applying the franchise fee to electric users only if the franchise fee is a flat fee.