HomeMy WebLinkAbout2001-118 Council ResolutionCouncil Member Dahl introduced the following resolution and moved its
adoption:
CITY OF LINO LAKES
RESOLUTION NO. 01-118
RESOLUTION AUTHORIZING CAP ON 2001 FRANCHISE FEES COLLECTED
BY CENTENNIAL UTILITIES FROM LINO LAKES CUSTOMERS
WHEREAS, the City of Lino Lakes has a franchise agreement with Centennial Utilities,
and
WHEREAS, the franchise agreement includes a seven percent fee charged on natural
gas sales to customers located in Lino Lakes, and
WHEREAS, during the winter of 2000-2001 natural gas prices experienced a drastic
increase; and
.-� WHEREAS, the amount of franchise fee revenue that resulted from the spike in prices
was double the anticipated amount; and
WHEREAS, the City of Lino Lakes does not want to see residents and businesses
penalized by circumstances beyond their control.
NOW, THEREFORE BE IT RESOLVED, that the City of Lino Lakes City Council
authorizes a cap of $56,600 for franchise fees collected in 2001 from Centennial Utilities
customers located in Lino Lakes.
Adopt by the Lino Lakes City Council this 13th day of August 2001.
John T. Berg'eson, Mayor
�U
erk-Treasurer
er, Deputy
The motion for the adoption of the foregoing resolution as duly s onded by Council
Member Reinert and upon vote being taken thereon, e following voted in
favorthereof: Bergeson, Carlson , Dahl, O'Donnell, Reinert
The following voted against the same:
none
Whereupon said resolution was declared duly passed and adopted.
STAFF ORIGINATOR:
MEETING DATE:
TOPIC:
VOTE REQUIRED:
BACKGROUND:
AGENDA ITEM 4B
Linda Waite Smith, City Administrator
August 13, 2001
Adopt Resolution 01-118 Authorizing Cap on
Franchise Fees Collected by Centennial Utilities from
Customers Located In Lino Lakes
3/5
Approximately 700 homes and 100 businesses in Lino Lakes receive natural gas service
from Centennial Utilities (formerly Circle Pines Utilities). The City of Lino Lakes has a
franchise agreement with Centennial Utilities that includes a seven percent franchise fee
on sales to these customers. The fee is collected in one year and remitted to the City the
following year. The 2001 Lino Lakes budget includes estimated revenue of $42,000 from
this franchise.
The winter of 2000-2001 was particularly long and natural gas prices experienced a
drastic increase. As a result, the seven percent fee on sales is projected to reach more
than $89,000 in 2001. Because this potential windfall for the City is the result of
circumstances beyond the control of the customers, the City Council has considered
capping the amount of fees collected in 2001 in order to avoid customers being penalized.
Resolution 01-118 authorizes capping the amount of franchise fee collected in 2001 from
Centennial Utilities customers located in Lino Lakes to a total of $56,600, which is the
same amount collected in 2000 and remitted to the City in 2001.
OPTIONS
1. Adopt Resolution 01-118
2. Decline to adopt Resolution 01-118
3. Return to staff for further review
RECOMMENDATION:
1. Adopt Resolution 01-118
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