04-02-2012 Council Work Session Minutes

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CITY COUNCIL WORK SESSION April 2, 2012 APPROVED 1 CITY OF LINO LAKES 2 MINUTES 3 4 DATE : April 2,2012 5 TIME STARTED : 5:30 p.m. 6 TIME ENDED : 8:50 p.m. 7 MEMBERS PRESENT : Council Member Stoesz(arrived at 5:55 pm), 8 O'Donnell, Rafferty,Roeser and Mayor Reinert 9 MEMBERS ABSENT : None 10 11 Staff members present: City Administrator Jeff Karlson; City Engineer Jason Wedel; 12 Director of Public Safety John Swenson; City Attorney Joe Langel; Director of Finance 13 Al Rolek; Director of Public Services Rick DeGardner; Economic Development 14 Coordinator Mary Divine; City Clerk Julie Bartell 15 16 1. Commissioner Scott Bundy—Update on Centennial Utilities Franchise 17 Agreement— Scott Bundy,the Lino Lakes representative to the Centennial Utilities 18 Commission, addressed the council. He confirmed that the city's franchise agreement 19 with Centennial Utilities has expired and the commission has proposed a new agreement 20 with some different terms. He is a full voting member of the commission so he has been 21 privy to the commission's discussion on the agreement. He is interested in receiving 22 guidance from the council on the matter of a renewal agreement. 23 24 City Attorney Langel reviewed the situation with the council. The franchise agreement 25 that originated in 1987 has expired and Centennial Utilities has proposed terms for a new 26 agreement, including a change in the franchise fees. He has discussed both the fees and 27 the status of the agreement with the Utility's attorney and they disagree on whether or not 28 the utility has an obligation to continue collecting the fees. His understanding is that the 29 franchise is essentially a contract and when the contract expires,the terms continue and 30 the services continue until the two parties reach a new agreement. He noted that, for 31 instance,the franchise agreement proposed by CenterPoint Energy includes language that 32 carries the fee forward. The franchise fees collected by Centennial should be continued 33 as the contract is worked out. Mr. Bundy suggested that there has been discussion that 34 the utility will stop collecting the fee. Mr. Langel said that would be unfortunate and 35 could lead to litigation. 36 37 Mr. Langel noted that the practice of charging the franchise fee is a policy decision for the 38 council. It seems that the Utility is requesting that the city call for the same franchise fee 39 for all the gas utilities operating in the city or they will not collect any fee. 40 41 The mayor remarked that it is unfortunate that the city is just receiving a letter of 42 demands rather than having a discussion as long term partners in this business should. 43 He wants to have that professional level discussion but isn't sure when that can happen. 44 A council member remarked that the city needs to find out if the fee is being collected 45 first and then explore further the difference between Centennial as a non-profit and the 1