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HomeMy WebLinkAbout2000-015 Council OrdinancesCouncil Member adoption: SLR 0 e -to bei i , 2DOb, introduced the following ordinance and moved its CITY OF LINO LAKES ANOKA COUNTY, MINNESOTA ORDINANCE NO. 15-00 AN ORDINANCE IMPLEMENTING A FRANCHISE FEE ON RELIANT ENERGY MINNEGASCO'S OPERATIONS WITHIN THE CITY OF LINO LAKES. THE CITY COUNCIL OF LINO LAKES, ANOKA COUNTY, MINNESOTA,. ORDAINS: SECTION 1. The City of Lino Lakes Municipal Code is hereby amended to include reference to the following Ordinance. Subdivision 1. Purpose. The Lino Lakes City Council has determined that it is in the best interests of the City to impose a franchise fee or equivalent fee on those public utility companies that provide gas or electric services within the City. Pursuant to City Ordinance No. 14-00, a Franchise Agreement between the City and Reliant Energy Minnegasco ("Minnegasco"), the City has the right to impose a franchise fee. Subd. 2. Franchise Fee. A franchise fee in the form of a per meter fee is hereby imposed on Minnegasco under its gas Franchise in the amount shown below, commencing with the Minnegasco January 2001 billing month. Note that this chart is for Year 2001 and amounts will increase 3% per year. Classification Monthly Fee Annual Fee Residential $ 1.50 $ 18.00 Commercial A $ 1.50 $ 18.00 Commercial B $ 3.50 $ 42.00 Commercial C $ 12.00 $ 144.00 SVDF-A $ 25.00 $ 300.00 SVDF-B $150.00 $1,800.00 • Subd. 3. Payment. The Fee shall be payable to the City in accordance with the terms set forth in the Franchise. Subd. 4. Surcharge. The City acknowledges that Minnegasco may choose to add the full amount of the Fee as a customer surcharge to reimburse the Company for the Fee. Minnegasco shall provide to the City a copy of the proposed customer bill line item describing the Fee thirty days before the first bill collecting the Fee is sent to customers. Subd. 5. Proof of Customer Usage. Minnegasco shall make each payment when due and shall quarterly furnish a complete and correct statement of customers for said quarter. Minnegasco shall permit the City and its designated representative reasonable access to the company's records for the purpose of verifying such statements. • Subd. 6. Enforcement. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with the Franchise. Subd. 7. Effective Date of Franchise Fee. The effective date of this Ordinance is from and after its passage and publication. SECTION 2. This ordinance takes effect as provided herein. Read and passed by the City Council of the City of Lino Lakes this day of , 2000. John Bergeson, Mayor Ry-Chel Gaustad, CMC City Clerk APPROVED AS TO FORM: Wm. G. Hawkins, City Attorney The motion for adoption of the foregoing ordinance was dulyby seconded Council Member and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: Whereupon said ordinance was declared dulyassed and adopted. p p COUNCIL MINUTES OCTOBER 23, 2000 PUBLIC HEARING, FIRST READING, Ordinance No. 15 — 00, Establishing a Meter Fee for Customers of Reliant Energy Minnegasco (3/5 Vote Required) — Staff advised the City's expired franchise agreement with Reliant Energy Minnegasco did not contain a franchise fee. In 1999 the City Council directed staff to negotiate a new agreement that included a franchise fee. That agreement is contained in proposed Ordinance No. 14 — 00. In conjunction with the agreement, Ordinance No. 15 — 00 establishes a meter fee equivalent to approximately 3% of the average customer bill in each category of customers. In August 2000, letters were sent to more than 3,400 customers of Reliant Energy Minnegasco informing them of the proposed fee and opportunities to provide feedback. The City Administrator received and documented 28 phone calls opposing the meter fee. Ordinances require two (2) readings and a public hearing. A public hearing for Ordinance No. 15 — 00 was held September 25, 2000 and continued to October 9, 2000. The first reading was scheduled for October 9 and tabled in order to obtain additional information. The continued public hearing and the first reading of the ordinance are now scheduled for this evening. The second reading is scheduled for November 13, 2000. Acting Mayor Dahl opened the public hearing at 6:48 p.m. Mr. Robert Bening, 6788 East Shadow Lake Drive, came forward and stated he had presented questions to the Council at the last public hearing. He stated he has not yet received a response. Acting Mayor Dahl stated the questions were given to the City Administrator. The City Administrator is currently on medical leave. The Administration Director stated the City was having a hard time figuring out the types of customers of the utilities companies regarding business vs. residential use. Mr. Bening stated he had requested figures that included residential numbers. The Administration Director excused himself from the meeting to look for information regarding Mr. Bening's request. Council Member Reinert stated the information that was requested is trying to show that the meter fee is unfair. He stated it is reasonable to assume that not everyone will be charged the same. Mr. Bening stated he would like to know the figures regarding usage. Acting Mayor Dahl stated that businesses are being charged differently than residents. Council Member Reinert stated he is also concerned about the issue of fairness. Council Member Carlson distributed a letter she received earlier in the day indicating opposition to the meter fee. She stated that at the last meeting, the issue of the Charter Commission's position was 3 COUNCIL MINUTES OCTOBER 23, 2000 brought up. She asked Acting Mayor Dahl to read the minutes from the Charter Commission's meeting regarding this issue. Acting Mayor Dahl read the draft minutes from the meeting of the Charter Commission. The minutes indicated the Charter Commission does not support the use of a franchise fee to pay for road reconstruction. The Administration Director provided Mr. Bening with information regarding his questions and the types of utility services. He reviewed the usage relating to residential use for each company. Mr. Bening stated the information answers his question to a certain extent. He clarified the number of residents using natural gas. He stated that he presumes all commercial uses natural gas. He stated that right now there are about 100 residential NSP customers that will not be included in the meter fee. He stated he would prefer a more equitable way to fund roads. He requested the proposed meter fee be denied. He stated there is a mechanism within the City Charter to provides for road reconstruction. Mr. Warren Ahers, 6426 Polka Drive, came forward and asked what money has been used before for street repairs. He stated the City has been going for 28 years without this fund. Acting Mayor Dahl advised the meter fee will be used for road reconstruction, not road repairs. Mr. Ahers asked what means the City has used in the past for road reconstruction. Acting Mayor Dahl stated road reconstruction has been put on a ballot in the past. Mr. Ahers asked who will benefit from the road reconstruction. The Administration Director stated the meter fee will not be used for new roads. The Council needs to pass a referendum to reconstruct roads because the City Charter prohibits the use of general funds for road reconstruction. The City Council has been asked to find a fund for reconstruction. The idea of a franchise fee came up and road reconstruction seemed like a logical placed for the money to go. Mr. Ahers asked if the City gets gas tax money. The Administration Director stated the gas tax money goes to state or federal roadways. Mr. Ahers stated the franchise fee bothers him. He stated it sounds like a bad set up. The City Engineer stated the City of Lino Lakes gets tax revenue for heavier used roadways. Developers pay for new roads within the City. The franchise fee will go towards road reconstruction on existing roadways within the City. The Charter does have a tool for road reconstruction and it did work last time. Council Member O'Donnell moved to close the public hearing at 7:03 p.m. Council Member Carlson seconded the motion. Motion carried unanimously. 4 COUNCIL MINUTES OCTOBER 23, 2000 Council Member O'Donnell clarified with the City Attorney that a Council Member can vote against his own motion. Council Member O'Donnell moved to approve FIRST READING, Ordinance No. 15 — 00, as presented. Council Member Carlson seconded the motion. Council Member Carlson advised the City Administrator did give Council Members a report with information about Mr. Bening's questions before she went on medical leave. However, she stated she is opposed to the franchise fee for other reasons. She stated that her decision is based on an additional tax to citizens. She stated there would have to be a very good reason to be in favor of another tax. She stated one reason to be in favor of the tax is if the Charter Commission supported the franchise fee. The Charter Commission did not give the Council a letter of support or have a representative present for the public hearing. She stated she believes there should be a united front between the City Council and Charter Commission to come up with a solution. Council Member Reinert stated he has an issue with fairness regarding the fee. The City has two (2) suppliers of services. There is a fee for the customers of Circle Pines Utilities. In fairness, the City should impose a tax on the rest of the citizens. He noted he is not in favor of the fee. However, in fairness, there will be a competitive advantage for Reliant if they do not have the fee. He stated he has gone back and forth on this issue relating to fairness and competitiveness. He stated he does not agree with the fee and does not support it. He stated there is still an issue of fairness. He requested the Council have discussions about helping out the Circle Pines Utilities customers. He stated it would be fair if all fees were erased and then the City collection from everyone. He noted Reliant Energy only has a franchise fee in four (4) cities. There has been an outcry about the fee. The City needs to find dollars in another way for road reconstruction. Council Member O'Donnell stated he agrees with the points made by Council Member Carlson and Council Member Reinert. He noted that Reliant Energy pays taxes to the City and Circle Pines Utilities does not. Council Member Reinert stated Circle Pines Utilities is charging its customers 7% for the franchise fee. Four (4) percent of that is for property tax; 3% is for the franchise fee. They do not pay taxes because they are a municipality. He stated the City should go after the removal of the 3% charged to customer's bills. That would level out the playing field. He stated it was a struggle for him to decide how to vote. Acting Mayor Dahl stated she is a member of the Charter Commission. She stated she listened to input at the Charter Commission's last meeting. She stated she believes the City Charter does work for reconstruction. The fee will only amount to $60,000 per year. She stated she will not support the franchise fee. She noted that a city that borders Lino Lakes had a franchise fee and eliminated it. Council Member Carlson voted no. Council Member O'Donnell voted no. Council Member Reinert voted no. Acting Mayor Dahl voted no. Motion failed unanimously. 5 COUNCIL MINUTES OCTOBER 23, 2000 FINANCE DEPARTMENT REPORT, AL ROLEK PUBLIC HEARING, Resolution No. 00 —104, Authorizing City Clerk to Certify Delinquent Water & Sewer Utility Bills, Dan Tesch — Staff advised that each year the Utility Department experiences difficulty collecting some quarterly sewer and water utility bills. Notification has been forwarded to those residents having outstanding bills explaining the deadline for payment of those bills is November 1, 2000. Most bills unpaid when a resident moves from the City are turned over to a collection agency and delinquent bills of current residents are certified to Anoka County by resolution for collection with the property taxes. The residents named in Resolution No. 00 — 104 have received the required notification of this public hearing. Tonight they will have the opportunity to speak to the City Council about their delinquent bills. Acting Mayor Dahl opened the public hearing at 7:16 p.m. Council Member Carlson moved to close the public hearing at 7:16 p.m. Council Member Reinert seconded the motion. Motion carried unanimously. Council Member Carlson moved to adopt Resolution No. 00 — 104, as presented. Council Member O'Donnell seconded the motion. Motion carried unanimously. Resolution No. 00 — 104 can be found in the City Clerk's office. PUBLIC SAFETY DEPARTMENT REPORT, DAVE PECCHIA There was no Public Safety Department report. PUBLIC SERVICES DEPARTMENT REPORT, RICK DEGARDNER Resolution No. 00 — 101, Accept Donations for Family Turkey Shoot (3/5 Vote Required) — Staff advised the Lino Lakes Parks and Recreation Department sought program sponsors for its Family Turkey Shoot to be held on Saturday, November 11, 2000. The event is a free holiday event of the families of Lino Lakes that consists of low-key competition in a variety of athletic events for prizes. The Lino Lakes State Bank and the Lino Lakes Lions Club, as program sponsors, have donated $350.00 to help defer costs of this family event. Also, Circle Pines Lexington Lions Club, as a program sponsor, has donated $250.00 to help defer costs of this family event. Also, the Forest Lake Area Athletic Association (FLAAA), as a program sponsor, has donated $100.00 to help defer costs of this family event. Resolution No. 00 — 101 accepts donations for the Family Turkey Shoot. 6