Agenda Packets - 1992/10/13 - Laserfiche WebLink

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STAFF REPORT OCTOBER 13, 1992 PAGE THREE raise the needed revenue to offset the drastic, anticipated LGA cuts without service reductions or future higher property taxes. * Action by the Legislature to change the property tax rate structure (while good for most of the City's residents and businesses) has resulted in reduced revenues for the City at a time when the City's operational expenses are increasing. * Implementation by the State sales tax onto all City purchases has resulted in a $60, 000-80, 000 expenditure to the City. * The state of the economy has resulted in lower investment earnings, fewer construction permits, less economic development revenues for the City - monies used to offset expenses and keep property taxes down. Meetings with representatives from the business and residential community have resulted in discussions on the following points: * Most notably and most appreciated, a recognition both by representatives of residents and businesses that the City has in the past and continues to be frugal and economically sensitive to the taxpayers and that many events outside the control of the City have resulted in the City's need to be creative in finding revenue sources. * The need for a sunset clause for the franchise fee (3 , 5 or 10 years) . * A sliding scale of fees for commercial/industrial consumers. * Without a sliding scale of fees, the preference for increased property taxes vs thranchise fee. The Franchise Agreements provide that the City may impose a maximum of 4% on NSP's gross operating revenues for the rights to transmit and furnish electric and gas energy to the residents and business of Mounds View. How the fee is structured is left to the discretion of the City as long as the fee structure never exceeds a total of 4% of revenues. Alternatives to the straight 4% across the board (on both electric and gas, residential and business) are prPsent_Pd below. The Ordinance implementing the fee has been left blank in the section which establishes the rate and its structure. Upon conclusion of Council's discussion, the Section II of Proposed Ordinance No. 519 can be filled in with the option which the Council has agreed upon.