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• <br /> iliounds View City Council Page Three <br /> egular Meeting November 12, 1991 <br /> Orduno stated that it catches up in terms of growth. There is a 10% growth <br /> rate and the contingency fund is factored in. The City doesn't anticipate <br /> the level of use to be consistent. In the third year it will not make as <br /> much money. <br /> Mr. Werner asked then if there would be the possibility of a greater deficit <br /> in years 4 and 5 causing an increase in user fee? <br /> Orduno stated that there is always that possibility if the utility <br /> continues . Orduno further stated that utility revenues don't always remain <br /> stable, the rate could increase or it could just as easily decrease. <br /> Utility Franchise Fee <br /> Mr. Dave Schwartz , NSP representative, commended the Council and staff for <br /> its openness of the issues to the residents of this community. Mr. Schwartz <br /> stated that this does not happen in every community. <br /> Mr. Schwartz explained some of the concerns that NSP has with regards to the <br /> utility franchise fee. NSP cannot spread this franchise fee to all rate <br /> 40Payers . According to the franchise agreement, the fee must be collected <br /> m those persons who directly benefit, which are the residents of the <br /> mmunity. Mr. Schwartz stated that NSP is often looked at as the bad guy, <br /> using the City's streets and right-of-ways to do business without paying for <br /> this use. The truth is NSP pays personal property tax in large amounts . In <br /> Ramsey County NSP pays $5 million per year in real estate taxes and $10 . 6 <br /> million in personal property tax to keep facilities in right-of-ways and <br /> county roads . <br /> Another concern Mr. Schwartz had was that not all residents in Mounds View <br /> use natural gas and those people who do have it will be penalized by this <br /> fee and it is not an equitable tax. Mr. Schwartz stated that in this era <br /> people have become energy conscious and have cut down on their use of energy <br /> just to be taxed again. Those people—hen—beg±n to figure, why <br /> conserve? <br /> Bill Werner, Jr. , 2442 Sherwood Road, asked if the franchise agreement was a <br /> legal document executed between the City of Mounds View and NSP and if it is <br /> a state law or a state mandate. <br /> Mr. Schwartz indicated that the agreement is a contract to do business in <br /> this community. Some franchise agreements do not have the fee provision for <br /> collection of the franchi a fee. <br /> • <br /> Mayor Linke stated that the electric and gas are separate and there could be <br /> two franchise fees . One utility could have a fee and the other one not have <br /> iiia e. The City of Mounds View has both gas and electric franchises . <br />