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Item No. 7I Meeting Date: August 11, 2008 Type of Business: Council Business Administrator Review: ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: First Reading and Introduction of Ordinance 811, an Ordinance Implementing a Franchise Fee on Center Point Energy Natural Gas Operations within the City of Mounds View Attached is an ordinance to receive an introduction and first reading. The second reading and adoption will be held at a Public Hearing on Monday, August 25, 2008. A notice of the Public Hearing will be published in the August 13, 2008 edition of the New Brighton-Mounds View Bulletin. This ordinance continues the agreement with Center Point Energy under which Center Point Energy will collect a franchise fee in the amount of 4% of Center Point’s natural gas gross operating revenues for services within the City of Mounds View during the year 2009. Ordinance 625 passed on June 28, 1999 originally enacted the franchise agreement. It provides that the City may impose a franchise fee of not more than 4% of Center Point’s gross operating revenues at any time through July 1, 2019. The franchise fee was first collected in 2001. It has been the practice to include a sunset provision in the ordinance requiring it to be re- enacted each year. The Council may want to consider extending this period if the franchise fee becomes an integral part of financing street improvements. Franchise fees collected under this agreement are minimal due to Center Point Energy’s small customer base within the City of Mounds View. Enactment of the ordinance is important to maintain equity in relation to the City’s treatment of Xcel Energy. The ordinance will be brought back to the City Council for second reading and adoption at the August 25, 2008 meeting. It will be published in the Bulletin and take effect 30 days after publication. Respectfully Submitted, Mark Beer