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Item No: 7A Meeting Date: May 11, 2009 Type of Business: CB Administrator Review: ______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Jim Ericson, Clerk-Administrator Item Title/Subject: Second Reading and Adoption of Ordinance 819, an Ordinance Amending Chapter 7, Section 7.03, of the City Charter Relating to “Fees” Background: The Charter Commission has adopted a resolution to amend the City Charter in Section 7.03 relating to “fees”. The amendments serve to clarify which fees are subject to annual increase limitations and referendum requirements. The limits, generally speaking, are as follows: Either the prior year tax levy dollar amount increased by a maximum of 5%, or the Minneapolis / St. Paul CPI plus 2%, whichever is less. The Charter Commission approved Resolution 2009-02d at their meeting on March 12, 2009. The resolution is attached for your reference. Background: A public hearing was held on April 13, 2009 to consider the first reading and introduction of the subject ordinance. While the first reading was ultimately approved, there were two questions raised regarding the language which I will restate and address in this report. The ordinance was reviewed and discussed again on April 27, 2009. One minor change was agreed to, however because not all Council members were in attendance, action could not occur on the ordinance. The Chair of the Charter Commission, Jonathan Thomas, was in attendance for the April 27th meeting of the Council and agreed that the change would not alter the original intent of the Commission’s recommendation. Discussion: One of the proposed amendments to the Charter contemplated by Ord 819 is to exclude the annual reauthorization of the utility franchise fee from the limitations imposed in Section 7.03. Without the proposed exclusion, a strict interpretation of the Charter would require that the City conduct a referendum EVERY year to continue with the gas and electric franchise fee, which sunsets annually. The Council asked what happens when the Franchises agreements expire and new Franchise agreements are adopted—would the proposed exclusion apply even then? Staff’s interpretation is that the annual reauthorization applies to the franchise fee and is not tied to approvals of new Franchise agreements, which would occur Nov 2012 in the case of Xcel and July 2019 in the case of CenterPoint. Chair Thomas did not disagree with this interpretation.