04/02/2012 Council Packet - Laserfiche WebLink

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WS — Item 1 WORK SESSION STAFF REPORT Work Session Item 1 Date: April 2, 2012 To: City Council From: Jeff Karlson, Administrator Re: Centennial Utilities Franchise Agreement Background At the March work session I provided Centennial Utilities' proposed franchise ordinance, which includes a provision that Centennial will stop collecting a franchise fee if Lino Lakes does not collect "a fee or tax of the same or greater percentage of the receipts" from other gas utility customers in the City. City Attorney Joes Langel is of the opinion that the gas utility's threat to unilaterally stop collecting the franchise fee without a new agreement is without any legal basis. I asked Lino Lakes' lone representative on the Centennial Utility Commission, Scott Bundy, to appear at the April 2 work session to give the Council his perspective on the franchise renewal agreement. Another provision in the proposed renewal is to exclude Lino Lakes from having a representative on the Commission. Mr. Bundy was surprised to hear that since this issue did not come up during any meetings he participated in. Mr. Langel has spoken with Circle Pines' attorney and they disagree on the collection of the franchise fees after the expiration of the agreement on March 31, 2012. It has been communicated to both Joe and I that Centennial will no longer be collecting the seven percent franchise fee without a new agreement. Centennial is willing to negotiate new terms of the agreement, but until a settlement is reached they will not be collecting the fees as of April 1. Since this could involve future litigation, I asked Mr. Langel to be present at the work session to discuss the franchise agreement with the Council. Requested Council Direction No action required. Attachments Centennial Utilities' New Franchise Proposal