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Agenda Section: 9 .F. <br /> 00 MMDs REQUEST FOR COUNCIL CONSIDERATION Report Number: 92-337C <br /> t Date: <br /> 11111, <br /> STAFF REPORT cow 1 Action: <br /> 7-23-92 <br /> ❑ Special Order of Business <br /> CITY COUNCIL MEETING DATE JULY 27 , 1992 ❑ Public Hearings <br /> ❑ Consent Agenda <br /> ® Council Business <br /> Item Description: Consideration of Setting a Public Hearing for 7 :15 p.m. , August <br /> 24 , 1992 to Consider an Ordinance Implementing a Franchise Fee on Gas and <br /> P..1ertrir Utilities <br /> Administrator's Review/Recommendation: <br /> - No comments to supplement this report <br /> - Comments attached. <br /> Explanation/Summaiy (attach supplement sheets as necessary.) <br /> $UMMARY: <br /> Over the past several years cities have experienced declining revenues <br /> due to such factors as State cuts to Local Government Aid, reductions in <br /> residential and commercial/industrial property tax rates, reduced <br /> investment earnings, less construction and development resulting in <br /> declines in permit fees and now a recession that is further exacerbating <br /> an already dangerous situation. <br /> Declining revenues, coupled with costly legislative mandates every year, <br /> changes in pay equity regulations, increased equipment and operating <br /> costs have put cities in a Catch 22 -- demands from residents to do more <br /> and more with less and less. The consequences of this dilemma is the <br /> move toward user fees, franchise fees and other non-property tax <br /> revenues. <br /> A franchise fee is an example of a user fee based revenue program <br /> imposed on a company conducting business for profit within the City <br /> limits. The City currently has a franchise agreement with North Central <br /> Cable (soon to be Meredith) . The Cable Company conducts business in the <br /> City and for that privilege, the company pays the City a franchise fee <br /> of 5% to be used only for the City's municipal cable operations. <br /> A franchise fee on gas and electri - 1 revenues would not be restrictcd <br /> and could be used to buy down property taxes. <br /> As per City Charter, a public hearing is required prior to the <br /> consideration of an or. .nce establishing franchise fees. <br /> Samanth- Orduno, City Adm. istrator <br /> RECOMMENDATION; <br /> Motion to set a public hearing for 7: 15 p.m. on August 24, 1992 to <br /> consider an ordinance implementing a franchise fee on gas and electric <br /> utilities <br />