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WS — Item 5 <br />WORK SESSION STAFF REPORT <br />Work Session Item 5 <br />Date: Council Work Session, May 5, 2008 <br />To: City Council <br />From: Gordon Heitke <br />Re: Development of New Franchise Agreements <br />Background <br />As discussed at the April 7, 2008 Council Work Session, the 1988 franchise agreements <br />with Xcel Energy will be expiring in June. The Council directed staff to incorporate the <br />ability to establish franchise fees in the new Xcel Energy agreements and to further <br />explore the idea of establishing franchise fees for the other utilities. Staff has consulted <br />with Mr. James Strommen, attorney with Kennedy and Graven, who specializes in utility <br />franchise agreements and negotiations. (Mr. Strommen participated in the development <br />and subsequent revisions to the LMC Model Right -of -Way Ordinance, used by cities <br />throughout Minnesota. He also prepared a draft Lino Lakes Right -of -Way Ordinance in <br />2002.) <br />Mr. Strommen has prepared a memo (attached) which includes his recommendations <br />regarding negotiating new agreements with Xcel Energy and the other utilities, if desired. <br />He is strongly recommending the adoption of the Right -of -Way Ordinance, with updates. <br />The City has the power to adopt this ordinance which regulates the public rights -of -way, <br />thereby eliminating the need to negotiate these issues in the franchise agreements. He is <br />also recommending the establishment of one uniform franchise agreement for all utilities <br />and a common rate design and amount for each type of utility. <br />Requested Council Direction <br />Staff is seeking direction as to whether the Council wishes to proceed with the <br />preparation and adoption of the Right -of -Way Ordinance, establishment of a common <br />franchise agreement, and development of a proposed rate design and amount for each <br />utility, as recommended by legal counsel. <br />1 <br />