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STAFF ORIGINATOR: <br />MEETING DATE: <br />TOPIC: <br />VOTE REQUIRED: <br />BACKGROUND: <br />AGENDA ITEM 4B <br />Linda Waite Smith, City Administrator <br />August 13, 2001 <br />Adopt Resolution 01-118 Authorizing Cap on <br />Franchise Fees Collected by Centennial Utilities from <br />Customers Located In Lino Lakes <br />3/5 <br />Approximately 700 homes and 100 businesses in Lino Lakes receive natural gas service <br />from Centennial Utilities (formerly Circle Pines Utilities). The City of Lino Lakes has a <br />franchise agreement with Centennial Utilities that includes a seven percent franchise fee <br />on sales to these customers. The fee is collected in one year and remitted to the City the <br />following year. The 2001 Lino Lakes budget includes estimated revenue of $42,000 from <br />this franchise. <br />The winter of 2000-2001 was particularly long and natural gas prices experienced a <br />drastic increase. As a result, the seven percent fee on sales is projected to reach more <br />than $89,000 in 2001. Because this potential windfall for the City is the result of <br />circumstances beyond the control of the customers, the City Council has considered <br />capping the amount of fees collected in 2001 in order to avoid customers being penalized. <br />Resolution 01-118 authorizes capping the amount of franchise fee collected in 2001 from <br />Centennial Utilities customers located in Lino Lakes to a total of $56,600, which is the <br />same amount collected in 2000 and remitted to the City in 2001. <br />OPTIONS <br />1. Adopt Resolution 01-118 <br />2. Decline to adopt Resolution 01-118 <br />3. Return to staff for further review <br />RECOMMENDATION: <br />1. Adopt Resolution 01-118 <br />J:\lsmith\franchi s\CAP. doc <br />