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<br /> STAFF REPORT <br />DATE: March 4, 2025 <br /> REGULAR <br /> <br />TO: Mayor and Council <br />FROM: Clarissa Hadler, Finance Director <br />AGENDA ITEM: Utility Franchise Fees <br />REVIEWED BY: Nicole Miller, City Administrator <br /> <br />CORE STRATEGIES: <br /> <br />☐ Vibrant, inclusive, connected community ☐ Efficient, reliable, innovative services <br />☐ Responsive, transparent, adaptive governance ☒ Balanced Finances now and future <br />☐ Managed Growth ☒ Resilient Infrastructure <br /> <br />BACKGROUND: <br /> <br />In 2024, the City Council discussed moving forward with the Utility Franchise Fees and directed <br />staff to negotiate franchise agreements with the two gas & electric utility providers; Centerpoint <br />and Xcel (Northern States Power). <br /> <br />Working with staff, Attorney Robert Vose, Kennedy & Graven, negotiated the terms of the <br />attached franchise agreements. These agreements are very similar to other cities’ franchise <br />agreements in terms and Mr. Vose will be available to discuss and answer questions. The fees <br />were discussed at the October Council meeting and set to generate a goal of approximately <br />$500,000 in revenue each year. <br /> <br />The packet also includes a resolution that sets where these funds will be allocated. Council had <br />expressed interest in the fees going toward a specific type of project rather than the General Fund. <br />At this time, staff recommends allocating it to Fund 409 – Infrastructure Reserve, to assist with <br />paying for future street improvement projects. This allocation may be changed, or the funds may <br />be transferred, at any time by resolution of the City Council. <br /> <br />RECOMMENDATION: <br />1. Motion to Adopt Ordinances 2025-03, 2025-04, and 2025-05 Granting Northern States Power <br />and Centerpoint Energy Permission To Construct, Operate, Repair And Maintain In The City <br />Of Lake Elmo, Minnesota, Electric and/or Gas Distribution Systems And Transmission Lines, <br />Including Necessary Poles, Lines, Fixtures And Appurtenances, For The Furnishing Of <br />Electric and/or Gas Energy To The City, Its Inhabitants, And Others, And To Use The Public <br />Grounds And Public Ways Of The City For Such Purposes. <br />2. Motion to Adopt Ordinances 2025-06, 2025-07, and 2025-08 Implementing Franchise Fees <br />On Northern States Power Company and Centerpoint Energy For Providing Electric and/or <br />Gas Service Within The City Of Lake Elmo <br />3. Motion to Adopt Resolutions 2025 – 21 through 2025 - 26 Authorizing Publication of <br />Franchise and Franchise Fee Ordinances by Title and Summary