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MAYOR <br />13i1) Mescne r <br />COUNCIL <br />Rick Montour <br />Barbara Allan <br />John Kris <br />Michael McGraw <br />515 Little Canada Road, Little Canada, MN 55117-1600 ADMINISTRATOR <br />(651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson <br />www.ci.little-canadann.us <br />MEMORANDUM <br />TO: Mayor Blesener and Members of the City Council <br />FROM: Joel Hanson, City Administrator <br />DATE: March 31, 2008 <br />RE: Electric Franchise Fee Ordinance Amendment <br />In 2003, the City enacted an Electric Franchise Ordinance as well as an Electric <br />Franchise Fee Ordinance which allows the collection of an electric franchise fee by the <br />City of Little Canada. Since that time, this franchise fee has averaged approximately <br />$210,000 per year in additional revenue for the City of Little Canada. This franchise fee <br />was implemented to offset the reductions in Local Government Aid and the Market Value <br />Homestead Credit (MVHC) that were implemented as a result of the 2003/2004 State <br />budget deficit. If State cuts were discontinued, the money would remain in the <br />Infrastructure Fund (450) to help with our street reconstruction program. (MVHC was <br />also reduced in 2005!) The Electric Franchise Fee has been a great stabilizer for the <br />City's operational budget in terms absorbing cuts and /or reductions passed on to the City <br />by the State. <br />The Franchise Fee Ordinance provides for a sunset of the franchise fee on December 31, <br />2008. Given continuing uncertainty related to State aids as well as future street <br />reconstruction needs, it is the recommendation of City staff that the franchise fee be <br />extended to coincide with the 20 -year term (through September of 2023) of the Electric <br />Franchise at the same rate as was originally adopted (see Exhibit "A "). <br />1 <br />