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<br />Proposed Electric Franchise Fee Increase:
<br />City staff initially brought forward the topic of potential increases to the franchise fees at the at the
<br />Council Workshop on July 12th. Based on initial information provided at the workshop, City Council
<br />directed staff to move forward with a 50% increase in electric franchise fees. The increase is projected
<br />to bring an additional $180,000 per year or $1,800,000 over a ten-year period. The last amendment to
<br />the electric franchise fees was in 2010 when the City Council approved a 57% rate increase, which was
<br />the only increase since the Franchise Fee Agreement was initially implemented in 2001. The graph
<br />below shows a history of the electric franchise fees collected over the past 18 years.
<br />
<br />2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
<br /> Franchise Fees $215,637 $210,835 $214,984 $209,895 $198,537 $272,464 $337,787 $335,798 $336,566 $336,081 $339,949 $356,543 $358,795 $356,925 $358,146 $361,335 $363,071 $358,953
<br /> $-
<br /> $50,000
<br /> $100,000
<br /> $150,000
<br /> $200,000
<br /> $250,000
<br /> $300,000
<br /> $350,000
<br /> $400,000
<br />Franchise Fee Revenues last 18 years
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<br />Proposed Gas Franchise Fee:
<br />As stated previously, the City of Little Canada has both gas and electric franchise agreements in place,
<br />however we have only established an Ordinance to levy a franchise fee for the electric franchise. Based
<br />on the information presented at the July 12 workshop, the Council recommended against implementing
<br />a gas franchise fee at this time. Since the last workshop, staff realized that there are several other long-
<br />term funding needs that could benefit from a gas franchise fee and were not discussed at the workshop.
<br />City staff has identified additional expenditures that align with Minnesota Statute 216B.36, and could
<br />be funded through a gas or electric franchise fee.
<br />
<br />One type of expenditure that relates directly to the electric and gas utilities for public street lights. All
<br />street lights on public streets, in public parks, on city property, and in public rights-of-way (ROW) are
<br />the financial responsibility of the City. These expenditures have traditionally been budgeted and paid
<br />for by the General Fund. As noted below, these costs have increased substantially in recent years from
<br />$58,000 in 2019 to $72,000 in 2023. If the City Council were to replace the revenue source from a
<br />levy to a gas franchise fee, this could potentially decrease the 2024 levy by approximately 1.7%.
<br />
<br />Another important consideration that could be funded with a gas franchise fee is Gateway Signage.
<br />Enhancing identity and empowering community is one of the strategic directions, and a key initiative
<br />related to this direction was to update Little Canada’s gateway signs located at multiple entry points
<br />to the City of Little Canada in order to enhance the community’s identity.
<br />
<br />2019 2020 2021 2022 2023 Projected
<br />Street Lights Cost 58,215$ 59,670$ 61,480$ 65,091$ 72,971$
<br />% Change 2.50%3.03%5.87%12.11%
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