07-12-2023 Workshop Minutes - Laserfiche WebLink

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MINUTES OF THE WORKSHOP MEETING CITY COUNCIL LITTLE CANADA, MINNESOTA JULY 1212023 Pursuant to due call and notice thereof a Workshop meeting of the City Council of Little Canada, Minnesota was convened on the 12th day of July, 2023 in the Council Chambers of the City Center located at 515 Little Canada Road in said City. Mayor Tom Fischer called the meeting to order at 6:00 p.m. and the following members of the City Council were present at roll call: CITY COUNCIL: Mayor Fischer, Council Members T. Miller, Gutierrez, Kwapick and D. Miller (arrived at 6:25 p.m.). Absent: None. ALSO PRESENT: City Administrator Chris Heineman, Community Development Director Corrin Wendell, Public Works Director Bill Dircks, Parks & Roe/Community Services Director Bryce Shearen, Finance Director Sam Magureanu and City Clerk/HR Manager Heidi Heller. DISCUSS PROPOSED AMENDMENTS TO GAS & ELECTRIC FRANCHISE AGREEMENT The City Administrator explained that the Minnesota Public Utilities Commission regulates public utilities and has authorized cities to impose a franchise fee on energy providers for utilization of public rights -of -way through a utility franchise agreement. He stated that when a franchise fee is levied on a private utility, it is passed on directly to customers and itemized on all customer's bills. He noted that franchise fees are an equitable way to raise funds for important infrastructure needs since every type of property in the city pays them. He stated the City of Little Canada has a long history of partnering with Xcel Energy, and both gas and electric franchise agreements have been in place for many years, although we have only levied a franchise fee for the electric franchise. He explained that the current version of the Electric Franchise Fee was initially adopted in 2003 and was updated on May 12, 2010. He noted that Franchise Agreements with Xcel Energy have a 20-year term, and the current agreement is set to expire on August 26, 2023. The City Administrator stated that City Staff has been in communication with Xcel Energy, and a letter was submitted to the Minnesota Public Utilities Commission (PUC) extending the terms of the current agreement until a new franchise agreement is negotiated, but no later than one year after expiration of the 20-year term, which means no later than August 25, 2024. The City Administrator stated that as we consider potential revisions to the franchise fees, one of the key questions will be how much revenue is needed on an annual basis from franchise fees. He explained that capital infrastructure costs have increased significantly in the past decade, and staff are looking at the possibility of increasing the existing electrical franchise fees and/or adding a gas franchise fee in order to generate additional revenues to fund the increased cost for capital infrastructure. He stated the last amendment to the City's electric franchise fees was in May 2010 when the City Council approved a 57% rate increase. He noted this was the first time an increase took place since the Franchise Agreement was initially implemented in 2001. He stated this increase added approximately $130,000 in annual franchise revenues, bringing collections to approximately $335,000 per year.