Agenda Packets - 2011/10/10 - Laserfiche WebLink

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Mounds View City Council August 22, 2011 Regular Meeting Page 3 an Ordinance Implementing a Franchise Fee on Xcel Energy Electric and Natural Gas Operations 1 within the City of Mounds View and publish an Ordinance summary. 2 3 Council Member Hull stated he would not support the short term budget fix that was established 4 in the 1990’s as the City has now become dependent on the funds. 5 6 Council Member Mueller indicated she supported the Ordinance as the fees were passed along to 7 all energy consumers in the City. These fees are used to support police and fire services in the 8 community. She explained the franchise fee used to be 4% and has been reduced to 3.87%. 9 10 Council Member Stigney did not support the franchise fee as presented. He felt the franchise fee 11 should be increased to 4% to assist the City in recapturing revenues. He suggested a friendly 12 amendment to the motion to raise the franchise fee to 4%. 13 14 FRIENDLY AMENDMENT: Stigney/Gunn. To increase the Franchise Fee for Xcel Energy 15 Electric and Natural Gas Operations within the City of Mounds View to 4%. 16 17 Council Member Stigney stated the increase would only minimally impact the tax payers while 18 bringing in additional revenues from across the community. 19 20 Mayor Flaherty disagreed with the amendment stating the franchise fee was a temporary fix that 21 has been used year after year in the budget. The City has become reliant on the franchise fee 22 funds. 23 24 Council Member Mueller indicated the franchise fees were created at a time when income was 25 being lost from TIF districts. She did not feel the City could cut $500,000 out of the budget at 26 this time while providing adequate services to the community. She would support the increase in 27 the franchise fee to 4%. 28 29 Council Member Stigney agreed that the Council did not have a way to offset these funds within 30 the budget. He felt the increase to 4% would greatly benefit the tax payers in the end. 31 32 Council Member Gunn commented if the franchise fee were to be eliminated, the City had no 33 plan to make up these funds. The City has become reliant on these funds and until there was a 34 way to make up $500,000 within the budget, the franchise fee could not be eliminated. 35 36 Council Member Hull stated the funds could be made up by slightly increasing property taxes 37 which were tax deductible. The impact on residents would be minimal. 38 39 Finance Director Beer clarified that the increase would be more than $35, which is being paid in 40 franchise fees. He estimated this expense to be more like $50-60 per year. 41 42 Council Member Hull agreed to support the franchise fee at 4%. 43 44 AMENDMENT VOTE: 45