09-13-2023 Workshop Packet - Laserfiche WebLink

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Capital Infrastructure Fund 450 Projected Fund Balance Update: The City Council also directed staff to continue moving forward with a Storm Water utility fee at the July 12th meeting. The implementation of the Storm Water Utility Fee will decrease the burden on the Capital Infrastructure Fund 450 by $2,263,000. All of the cost related to storm water infrastructure projects are anticipated to be financed with revenues generated from the storm water utility fee. The implementation of these changes significantly improved the projected fund balance, initially projected at a deficit of approximately 4 million. After the storm water expenditures have been excluded, the current Capital Improvement Plan (CIP) total estimated expenditures decreased and totals $18,375,570 for the 10-year period from 2024-2033. Included in the total expenditures, a $1,084,520 for inflation over the ten-year period has been projected and included. The total estimated revenues for the 2024-2033 CIP are $17,933,841 (all sources presently identified including the additional $180,000 increase in electric franchise fees). The estimated beginning fund balance in 2024 is $1,328,327, which projects the fund ability to maintain a positive fund balance for the ten-year proposed 2024-2033 CIP. Additional Information and Considerations: According to Minnesota Statute 216B.36, a city may impose a franchise fee on a gas or electric utility for the use of the public right-of-way by adopting an ordinance that establishes fee terms, including structure, collection, schedule and effective dates. Franchise fees are established by ordinance which provides an opportunity for the City Council to adjust these fees as needed. When comparing franchise fees to property taxes as a revenue source, advantages include: • Wider base than property taxes • Diversifies the City’s revenue sources • Reliable source of revenue on an annual basis • A flat-rate franchise fee is the same for each property, making it easy to administer. • New construction would contribute immediately, which would eliminate the one to two-year lag for the City to receive property taxes for property owners receiving municipal services. Attachments: • CenterPoint Gas Rate Book – Franchise Fees • Xcel Gas Rate Book – Franchise Fees • Xcel Electric Rate Book – Franchise Fees