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Item No. 7E Type of Business: CB WK: Work Session; PH: Public Hearing; CA: Consent Agenda; CB: Council Business City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Public Hearing for the Second Reading and Adoption of Ordinance 687 Implementing a Franchise Fee on Xcel Energy Electric and Natural Gas Operations within the City of Mounds View for the Year 2002 Date of Report: November 5, 2001 Attached is an ordinance to receive its second reading on Tuesday, November 13, 2001. First Reading of the ordinance was on October 22, 2001 and a notice of the public hearing for the second reading was published in the November 1, 2001 issue of Focus News. This ordinance continues the agreement with Xcel Energy under which Xcel Energy will collect a franchise fee in the amount of 4% of Xcel’s electric and natural gas gross operating revenues for services within the City of Mounds View during the year 2002. Ordinance 518 passed on October 13, 1992 originally enacted the franchise agreement. It provides that the City may impose a franchise fee of not more than 4% of Xcel’s gross operating revenues at any time during the 20-year term of the franchise. The 20-year term runs from 1993 through 2012 and the franchise fee was first collected in 1993. A sunset provision in the ordinance requires it to be re-enacted each year. Franchise fees of $200,000 for the General Fund and $200,000 for the Street Improvement Fund are included in the draft 2002 budget. Enactment of the ordinance is essential to preserving this revenue source and balancing the 2002 budget. If approved by the City Council, the ordinance will be published in the Focus News and will be take effect 30 days after publication. Respectfully Submitted, Charles Hansen