07-12-2023 Workshop Minutes - Laserfiche WebLink

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WORKSHOP MINUTES CITY COUNCIL JULY 12, 2023 The City Administrator explained that franchise fees have provided an essential source of revenues for the Capital Infrastructure Fund 450, and these fees have exclusively been used to fund street infrastructure capital projects. He noted that other sources of revenue for Fund 450 are approximately $400,000 per year of Municipal State Aid (MSA) funds and approximately $160,000 of General Property Tax Levy each year. He noted that other revenues are mostly one-time contributions to the fund, such as grants, or special assessment revenues which are the residents share of a street improvement project. He explained that the current proposed 2024-2033 ten-year Capital Improvement Plan (CIP) expects an estimated deficit of $3,502,607. The City Administrator stated that the recommendation is not to reduce the funding since that would eliminate a funding source, but noted that Little Canada is charging about half the amount that most other cities currently are. He stated that adding a gas franchise fee is also being considered. He explained that anytime the City wants to change the amount of the franchise fees, the agreement with Xcel Energy needs to be opened up and that is a big process. Fischer stated that the Council seems to be in agreement with keeping the electrical franchise fee and increasing it, but that adding the new gas franchise fee could be more difficult. The City Administrator reviewed what other cities have for gas franchise fees, and noted that most have both electric and gas franchise fees. The Finance Director explained that these fees would continue to pay for improvement projects. He noted that the costs for these improvements are increasing, but the revenues to pay for these is not keeping up so there will be deficits in the fund soon. The City Administrator explained that if more franchise fees are collected, then some money that currently goes towards improvements could be directed to the General Fund instead to help cover increasing policing and staff costs. Kwapick suggested making the electric fee higher and not adding the gas fee. T. Miller stated that she feels the fees should be separate in order to be more transparent for residents to understand that there are two fees instead of having one higher fee, even though they both go to the same place. She noted that people may compare the fee amount to another city's amount and not realize that Little Canada only charges one fee. The City Administrator stated that staff will bring this back to Council in the near future. PRELIMINARY REVIEW OF PROPOSED STORMWATER UTILITY FEE The City Administrator stated that staff has been talking about adding a stormwater fee for the last few years in order to help fund the stormwater maintenance costs that the City is currently paying for. The City Engineer stated that an overwhelming majority of cities in the metro area have stormwater fees in order to support the water utility systems. He explained that the City owns and maintains a growing network of stormwater infrastructure such as rain gardens, manholes and catch basins, culvers, ditches, conveyance piping, infiltration & filtration basins and constructed stormwater ponds. He stated that the increased revenue can help with flood mitigation and water quality improvements. He noted that stormwater requirements are continually getting more restrictive and cities have to do more to fulfill permit requirements. He stated that funding currently only comes from Franchise Fees and property taxes. He stated that stormwater improvements or repairs done during street improvement projects are paid only by the city, not through assessments. `a