Agenda Packets - 1999/10/11 - Laserfiche WebLink

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October 7, 1999 To: Honorable Mayor and City Council From: Chuck Whiting, City Administrator Re: October 11, 1999 City Council Meeting Here's what we have for Monday: 5.A. Special Order of Business—Council and Staff Rules of Conduct: Mayor Dan thought it would be a good idea to recognize the"10 commandments"the Council came up with last spring with Carl Neu. I expect to have the rules on a board by meeting time with signature places for everyone. 10. A. Consideration of Ordinance 641, Implementing a Franchise Fee on Electric and Gas Companies for the Operation of the Utility within the City: We have a public hearing scheduled for 7:15 on this item for public comment on the ordinance. The Council reviewed this matter at the work session last Monday and has discussed it at various times before. To recap, the franchise fee is currently set at 2.5% on the usage of gas and electric by utility users in the community. In the history of the franchise fee, the first five years the franchise fee was set at 3% and went into the general fund. I am not familiar with the reasons given at the time for establishing this charge,but as we have learned over time it has become a vital part of the City's revenue budget. Two years ago the City Council considered ways to reduce or eliminate the franchise fee and struck upon the policy of reducing it by .5% every other year until it is eliminated. By setting a year sunset on the ordinance, the Council understood it would revisit this item annually. Last year the Council renewed the ordinance again for one year at 2.5%. The discussion this year has taken a different approach. With the interest expressed in creating a fund for future street improvements, the funding of that fund has led the Council to consider the future of the franchise fee. From the discussion Monday evening, this appears to be the sole reason for consideration of this increase. As I attempted to express on Monday, it is doubtful that franchise fee funds will on their own be able to fund all street improvements in the future,but it appears that intuitively the Council understands that such a fund will require building up the fund to a useful amount. For Monday, the increase to 4% creates an estimated $115,000 to $120,000 of additional revenues. The city's 1999 budget estimate for franchise fee at 2.5% is $195,000. Ordinance 641 authorizes the change and the Council can also determine when or if to sunset it. One year was mentioned Monday, longer periods have been discussed earlier. Some additional comment, while a public hearing is set for Monday everyone should remember that the charter does not require public hearings to be published. The public has the ability to overturn an ordinance after the fact. I have received calls on this subject and notified three people that either would be interested or report that this item is before the Council, Phil Sipe at Sysco,Nancy Ngo at the Pioneer Press and Carol Frey at the Chamber.