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Item No.7 D <br />Type of Business: CB <br />WK: Work Session; PH: Public Hearing; <br />CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report <br />To: Honorable Mayor and City Council <br />From: Charles Hansen, Finance Director <br />Item Title/Subject: Introduction and First Reading of an Ordinance <br />Implementing a Franchise Fee on Xcel Energy <br />Electric and Natural Gas Operations within the <br />City of Mounds View for the Year 2002 <br />Date of Report: October 16, 2001 <br /> <br />Attached is an ordinance to receive a first reading on Monday, October 22, 2001. <br />This ordinance continues the agreement with Xcel Energy under which Xcel <br />Energy will collect a franchise fee in the amount of 4% of Xcel’s electric and <br />natural gas gross operating revenues for services within the City of Mounds View <br />during the year 2002. <br /> <br />Ordinance 518 passed on October 13, 1992 originally enacted the franchise <br />agreement. It provides that the City may impose a franchise fess of not more <br />than 4% of Xcel’s gross operating revenues at any time during the 20-year term <br />of the franchise. The 20-year term runs from 1993 through 2012 and the <br />franchise fee was first collected in 1993. A sunset provision in the ordinance <br />requires it to be re-enacted each year. <br /> <br />Franchise fees of $200,000 for the General Fund and $200,000 for the Street <br />Improvement Fund are included in the draft 2002 budget. Enactment of the <br />ordinance is essential to preserving this revenue source and balancing the 2002 <br />budget. <br /> <br />The ordinance will be published in the November 1, 2001 edition of the Focus <br />News and will be brought back to the City Council for second reading and <br />adoption at the first meeting in November. <br /> <br /> <br />Respectfully Submitted, <br /> <br /> <br /> <br /> <br />Charles Hansen <br />