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Section 9.2 <br />This section discusses the separate ordinance that establishes the fee to be charged. <br />Changes in fees will require a 60 -day notice. This section contains language that <br />precludes preferential treatment of residential customers over other classes in the fee <br />structure. This restriction may require further evaluation. <br />Section 9.4 Precludes the franchise fee from being changed more frequently than annually. <br />Section 9.5 Requires the City to impose a like charge on other providers within the City. In our <br />case this is not applicable. <br />Ordinance Implementing Electric Service Fee <br />Section 1, Subdivision 2 <br />Section 1, Subdivision 8 <br />Gas Franchise Ordinance <br />Establishes the fee to be charged. <br />Provides the sunset clause requested. <br />This agreement is structured substantially the same as the electric agreement with one exception. <br />Section 9.1 of the agreement sets a flat fee as opposed to a percentage of billed fees. Collette Jureck, <br />Xcel Energy, indicated in her email to the City that Xcel's lawyers were more comfortable with this <br />arrangement for the gas fee. Jureck indicated to us that the volatility in gas prices is driving their <br />desire for a fixed fee. We also noted that a flat fee is regressive and may be more preferential to <br />commercial users at the rates suggested in the email. The implementation of a flat fee versus a <br />percentage fee should be a discussion point. <br />Ordinance Implementing Gas Service Fee <br />Again, this ordinance is very similar to the electric franchise fee ordinance with the exception <br />previously noted. <br />Upon a more thorough review by staff, Council, and the City Attorney, more discussion points may <br />be raised <br />The current timeline for implementing the fee appears to be on track for an October 3" i <br />implementation. <br />Initially a $250,000 franchise fee was discussed in order to fund estimated budget shortfalls through <br />2005. The $250,000 estimated shortfall was based on the proposed legislation at that point in time. <br />Attachment E updates the impact to the General Fund of the final legislation and other actions taken <br />or under consideration by the City Council. <br />2 <br />