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Mounds View City .Council ~;egular Meeting Page Five August 24, 1992 Franchise Agreement with Northern States Power Company. Orduno stated that the purpose of this franchise is to grant NSP a new 20 year franchise to construct, operate, repair and maintain facilities and equipment for the transportation, distribution, manufacture and sale of gas energy in the City of Mounds View. This franchise agreement is modeled after the existing gas franchise but also incorporates stipulations currently used in the metro area. The franchise further provides for a monthly payment schedule for payment of franchise fees in the event such fees are imposed. Diane Wuori, Councilmember stated that on page 2, Section 3.2 the document states electric and it should be gas. There was also a change on page 5 from electric to gas. MOTIONLSECOND: Quick/Wuori to waive the actual reading, introduce Ordinance No. 518 Approving a Gas Energy Franchise Agreement with Northern States Power and approve the date for consideration of approval as September 14, 1992 with changes made to pages 2 and 5. Mayor closed the public hearing at 7:39 p.m. VOTE: 5 ayes 0 nays Motion Carried ~ayor Linke opened the public hearing to consider the implementation of a as and electric franchise fee at 7:40 p.m. Samantha Orduno, Gity Administrator, reviewed Staff Report No. 92-353 regarding the implementation of a gas and electric franchise fee. Orduno went through the rationale for the fees including the history of why the street light utility and gas and electric franchise fee revenue programs via transparencies. The street light program was implemented last November and will automatically terminate on December 31, 1993 unless reenacted by the Council after the required public hearing. Orduno further stated that franchise fees represent an alternative taxation method which constitutes a broadening of the tax base to include all users of City services and does not place additional tax burdens on the one taxation method over which residents have little control, property valuation and subsequent property tax calculation. These fees would be paid by all users and would be less out-of-pocket expense than a property tax would be. Rich Wollins, Pioneer Schwinn, 2661 County Road I, who is on the Board of Directors for the Mounds View Business Association. Mr. Wollins stated that in his opinion this is a business tax. Imposition of a further tax on businesses which could cause the City to loose these businesses, especially those who depend on large amounts of electricity. By imposing this tax it makes this City uncompetitive. If the businesses leave the residents will pick up the taxes for the vacant properties. Rich Wollins complemented the City on its staff and stated that the Council has done an outstanding job. Mr. Wollins stated that he felt the tax increment financing that has been one in the City was a good move. When the dividends come on line it will ~eatly help the City.