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Mounds View City Council August 23, 2010 Regular Meeting Page 5 fee to assist the City financially. He requested the Council focus less on the previous suggestion to sunset the fee and instead use the franchise fee to eliminate the need to increase property taxes. Gary Quick, 8330 Knollwood Drive, explained he was on the Council when the franchise fee was installed and increased. The fee assisted the City through tough financial times and had a sunset clause to allow the Council to review the fee. Hearing no further public input, Mayor Flaherty closed the public hearing at 7:42 p.m. Mayor Flaherty commented the franchise fee has been in place for 18 years and stated the original intent was to create a revenue source but was not intended to be long term. He agreed the City needed additional revenue sources, and should perhaps look at other sources. MOTION/SECOND: Stigney/Mueller. To approve the Second Reading and Adopt Ordinance 850, Implementing a Franchise Fee on Xcel Energy Electric and Natural Gas Operations within the City of Mounds View, waive the reading, and that a suminary Ordinance be published, amending the franchise increase to 3.95%. Council Member Stigney again reiterated the fact that the franchise fee increase would assist the City with the budget by increasing revenues and making the levy increase more manageable. Council Member Hull requested a motion amendment to reduce the franchise fee to 3.75%. He stated this was based on the same rationale as previously stated. MOTION AMENDMENT: Hull/Flaherty. To Reduce the Franchise Fee to 3.75%. Council Member Mueller stated the fee would greater benefit the City if not reduced. She explained if the franchise fees were reduced, properly taxes would have to be increased. Council Member Hull further reviewed the numbers on the franchise fee and felt people should be impacted based on income and not with just a flat fee. Council Member Stigney suggested the Council not reduce the franchise fee as taxes would then need to be increased. He indicated there was a direct correlation between the two. Now was not the time to reduce the rate, and that this should not be considered until the TIF districts end. Mayor Flaherly indicated he did not feel the fee would ever go away and that this was not the original intent. Council Member Mueller stated as the TIF districts expire the City's revenue streams would begin to increase. Now was not the time to reduce or alter the franchise fee. AMENDMENT VOTE: Ayes — 2 Nays — 3(Stigney, Mueller, Gunn) Motion failed.