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Mounds View City Council August 23, 2010 Regular Meeting Page 3 Dan Mueller, 8343 Groveland Road, stated he was not in favor of extra fees or taxes, but felt this franchise fee did assist the City by creating better roads along with funding additional police and fire department needs. He hoped the Council would support the franchise fee and not fear the loss of votes, because it was an election year. Hearing no further public input, Mayor Flaherty closed the public hearing at 7:19 p.m. Mayor Flaherty questioned how the franchise fees were distributed in the City's funds. Finance Director Beer stated 50% went into the street improvement fund and 50% went into the general fund. He indicated the percentage increase would generate an additional $4,900 for each fund. MOTION/SECOND: Mueller/Gunn. To approve the Second Reading and Adopt Ordinance 849, Implementing a Franchise Fee on Center Point Energy Natural Gas Operations within the City of Mounds View, viewing the pending, and that a summary Ordinance be published. MOTION AMENDMENT: Hull/Flaherty. To Reduce the Franchise Fee from 3.87% to 3.75%. Council Member Mueller stated she was not in favor of the amendment to her motion. Council Member Hull stated he has been consistent in voting against increased franchise fees. He had concerns with this type of taxation and would like the fee to be reduced. Council Member Stigney indicated that by lowering the franchise fee, the City would need to increase taxes on to the residents. He stated the City would then need to potentially raise the levy. He felt it did not make sense to reduce the franchise fee. Council Member Mueller understood that franchise fees affected every structure that uses energy in the City; however, this was based on consumption. She indicated this was a fair and equitable fee. Mayor Flaherty stated fees were a form of taxation and was originally instituted to help the City in tough financial times. However, it was to sunset and be phased out. He indicated the original intent of the fee from 1992 has been lost. Council Member Stigney indicated the Council had to address the needs of the City at this time and the franchise fee was assisting the City financially at this time, especially with the large TIF districts. He felt it would be foolishness to change the fee at this time. Council Member Gunn explained the Council had no idea what the economy would do from 1992 to 2010, or that LGA would be cut. She was in favor of keeping the franchise fee and reviewing the need for it on a yearly basis. Mayor Flaherty commented the government continues to add fees that get absorbed into budgets and are not able to ever be resolved.