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Home My WebLink AboutCity Council Packet 02-13-2007 SpecialAgenda City of Plymouth Special City Council Meeting Tuesday, February 13, 2007 5:30 p.m. Medicine Lake Room 1. Call to Order 2. Discuss 2007-2011 Capital Improvement Plan 3. Set Future Study Sessions 4. Adj ourn Agenda Number: CITY OF PLYMOUTH CITY COUNCIL AGENDA REPORT TO: Laurie Ahrens, City Manager FROM: Mike Ko ulm'`r ial Analyst through Jean McGann, Administrative Services Director SUBJECT: Draft 2007-2011 CIP DATE: February 7, 2007 for Council Study Session on February 13, 2007 1. ACTION REQUESTED: Consider draft 2007-2011 CIP and provide staff with direction on the 2007-2011 CIP. 2. BACKGROUND: On January 16, 2007 the City Council met to discuss the proposed 2007- 2011 CIP. Due to thedepth of discussion, and amount of material to cover, the Council was not able to complete its review. A follow-up meeting was scheduled for February 13` x' to complete the CIP review prior to sending the docurnent to the Planning Commission for public hearing. After approval.by the Planning Commission the CIP can come to the Council for formal adoption on March 27, 2007. The tentative calendar of events is as follows: February 13th City Council Study Session February 28`x' Legal Notice Due March l st Final CIP Draft Available For Public Inspection March 21 st Planning Commission — Public Hearing March 27`x' Council Adoption of CIP. 3. DISCUSSION: At the January 16 meeting the Council was able to review information in the categories of Street Projects, Water Quality & Drainage, and Water and Sewer. As part of the discussion Council asked for additional information on several items. They are as follows: Why are Water Fund expenditures so high for 2006? (A copy of the staff report regarding amendment of the 2006 Water Fund Budget is attached — Attachment 1. Additional information regarding final figures and issues with the treatment plants will be forthcoming in the next few weeks) The adopted Water Fund budget and Water CIP differ by $166,000. How can the Water Fund live within its adopted budget? (Memo will be available on 2/13) What is the amount of special assessment prepayments? (Memo attached — Attachment 11) What options are there for benchmarking special assessment interest rates? Memo attached — Attachment 111) Table of internal borrowing possibilities. (Memo will be available on 2/13) The adopted Water Resources budget and Water Resources CIP differ by 250,000. How can the Water Resources Fund live within its adopted budget? Memo available on 2/13) Other financing sources that could possibly pay for streets. (Memo attached — Attachment TV Information regarding Wood Creek and Conor Meadows. (Staff is prepared to discuss) Memo from Doran Cote regarding potential assessments on major street projects. Memo attached — Attachment V) Once these items are addressed there are five remaining categories in need of review. The following is a summary of each of the unreviewed categories of the CIP and any major issues or highlights: Building/Facility Projects Expenditures for Building/Facility projects are as follows: 2007 2008 2009 2010 2011 TOTAL 277,000 $56,000 $436,000 $215,000 $795,000 $1,779,000 Major items of note include (totals in thousands): Roof Replacement - Fire Station 3 Recarpet - Council Chambers Recarpet/Repaint - City Hall Roof Replacement - Public Works 2007 2008 2009 2010 2011 105 35 300 750 All funding for Building/Facility projects is from the Facilities Management Fund. Despite some of the large projects, the Facilities Management Fund will increase cash reserves over the next five-year period from approximately $2,600,000 to $2,900,000. Issues: Facilities Management is in the process of beginning a comprehensive needs analysis. This will include a detailed inventory of all structures to identify and prioritize needs. Once the needs have been determined, an evaluation of funding sources will be undertaken. Currently, Facilities Management pays for replacement of major building components such as boilers, HVAC equipment, carpet, roofs, fiirnishings, etc. However, at some point a determination needs to be made as to how the City plans on financing building replacements and expansions. Should they be from new funds or accumulation of reserves? Information Technoloy Expenditures for Information Technology initiatives are as follows: 2007 2008 2009 2010 2011 TOTAL 1,342,200 $1,235,000 $815,000 $605,000 $215,000 $4,212,000 Major items of note include (totals in thousands): 2007 2008 2009 2010 2011 Telephone System Replaceument 300 Web Streaming of Council Meetings * 18.2 Complaint Tracking Software * 24 Replace — Finance/Payroll/HR Software 1,000 $1,000 Records Management System 205 Fiber Connection to Outside 200 Replace Police MDC's 115 $105 Replace Land Management Software 500 $500 Replace Network Infrastructure 120 All filnding for Information Technology initiatives comes from the Information Technology Fund. Included in CIP and adopted budget. Items will need separate Council action to proceed. Issues: Information Technology is in the midst of a restructuring which may result in changes to the recently adopted budget and the proposed CIP. Staff may be bringing an amended budget proposal to Council at a later date. The current financial/payroll system has been identified as a significant risk going forward due to reliability and support issues. It also appears that new software integrating financials, payroll, human resources and budget would offer significant _ functional and operational advantages. Staff is in the begimiing stages of selecting . riew software, with implementation beginning in the later part of 2007. Other software also needs to be evaluated. Packages such as land management, permits, utility billing, special assessments, and police records may also need to be replaced if increased functionality and productivity can be demonstrated. These items will be evaluated for future CIP's. Any changes in software will likely have hardware/ infrastructure implications. This may result in increased costs for hardware/infrastructure replacement. Funding appears sufficient to cover items contained in the proposed CIP with some safety factor. The model shows cash balance staying above $2,000,000. Park Proiects Expenditures for Park projects are as follows: 2007 2008 2009 2010 2011 TOTAL 6,235,000 $5,635,000 $5,015,000 $660,000 $420,000 $17,965,000 The $17,965,000 of funding is from the following sources: Bonds 9,000,000 Capital Improvement Fund 475,000 Community Improvement Fluid 2,250,000 Donations 200,000 Insurance 40,000 Park Dedication 3,475,000 Park Replacement Fund 1,705,000 State/County/Federal 820,000 Major items of note include (totals in thousands): 2007 2008 2009 2010 Land Acquisition 5,000 $4,000 $3,750 $250 Greenwood Park Building 230 Seven Greens Neighborhood Park 300 Trail Crossing - 494 or Vicksburg 1,000 Taryn Hills Neighborhood Park 150 Trail Crossing — Cheshire Lane 250 East Side Skate Park 350 Repair/Replace Zachary Tennis Courts 140 Issues: 2011 All funding sources for the park projects appear adequate given current expenditures and revenue estimates for Park Dedication fees. If park dedication fees fail to reach projections some projects may have to be deferred. This is monitored on an annual basis. The single biggest park initiative is the acquisition of land for the NW Greenway and l Ota' Playfield. Expenditure of fiends and timing of bonding depends' on the willingness of sellers. The City must decide how aggressive it wants to be in pursuing acquisition of land. Council member Willis has forwarded some proposed changes in Park project funding. A memo outlining these proposed changes is attached for your review Attachment VI. Transit Projects Expenditures for Transit items are as follows: 2007 2008 2009 2010 2011 TOTAL 177,000 $436,000 $3,700,000 $17,200,000 $5,200,000 $26,713,000 The $26,713,000 of funding is from the following sources: Federal Transit Funding $5,000,000 National Transit Data Base $800,000 Regional Transit Capital Bonds $20,913,000 Major items of note include (totals in thousands): 2007 Purchase Of Buses $177 Construction - 169 Transit Facility Construction - NW Transit Bus Garage 2008 2009 2010 2011 236 $3,500 2,000 $5,000 15,000 All Transit projects are funded by outside sources. No capital items contained in the 2007- 2011 CIP are anticipated to be paid from Transit Fund reserves. Issues: The City must decide whether it wishes to pursue the transit facility and bus garage projects. Vehicles/Equipment Expenditures for vehicles/equipment are as follows: 2007 2008 2009 2010 2011 TOTAL 1,541,600 $1,095,400 $1,054,100 $1,508,800 $1,849,300 $7,049,200 All vehicle/equipment items are funded by the Central Equipment Fund. Major items of note include (totals in thousands): 2007 2008 2009 2010 2011 Refurbishment of Ladder 31 $475 Replacement of Pumper/Engine $284 $296 Replacement of Aerial Telesquint $342 Issues: While the Central Equipment Fund remains solvent for the next five-year period, it does show a significant decline from $4,000,000 to about $2,600,000. This fund needs to be modeled on a longer term basis to determine rate sufficiency. Agenda Number: TO: Laurie Ahrens, City Manager FROM: Mike IC6-27n tial Analyst through Jean McGann, Administrative Services Director and Doran Cote, Public Works Director SUBJECT: 2006 Water Fteid Budget DATE: October 3, 2006 for City Council Meeting of October 10, 2006 1. ACTION REQUESTED: Adopt the attached resolution amending the 2006 Water Fund Budget. 2. BACKGROUND: The Water Fund has experienced significant change regarding both revenues and expenditures in 2006. These changes have resulted in an increase in both revenues and expenditures which will cause them to exceed the adopted 2006 Water Fund Budget. In accordance with the City Charter, staff may not authorize expenditures that exceed the amount appropriated in the budget. In order to exceed the originally adopted budget staff must ask the City Council. to amend the original budget appropriation. 3. DISCUSSION: Expenditures The projected overage in expenditures is a result of three primary factors. They are as follows: Need to pull and repair wells 7 and 1.2. The 2006 Budget included fielding in the amount of $90,000 for routine maintenance of Wells 4 and 7. However, Well 12 failed and required major repairs. As a result, plans for maintenari.ce on Well 4 were abandoned and costs for Well 12 rose dramatically. In the City Council Agenda Report awarding the contract for the well maintenance proi ect (see attached) staff commented thatt a. budget amendment .may be required if saving in other areas could not be a.ccornplished. A. change order approved at tate September 12"' Council meeting raised project costs even further to approximately $220,000. Unknown budget related to operation of new water treatment plants. When the 2006 Budget was being put together the City had no experience operating the new water treatment plants. Start-up of the plants has proven complex and more troublesome than anticipated, resulting in excessive wasted treated water, and the plants have not proved to be as efficient as expected. This has resulted in additional operating costs in areas such as overtime, fuel, maintenance contracts for new equipment and generators, and sanitary sewer charges related to backwashing filters. Staff has been working diligently to overcome the start-up difficulties and has begun to streamline processes and get the plants to run more efficiently. This will pay off in the future with reduced operating costs in areas such as chemicals, energy, and sanitary sewer charges related to backwashing filters. However, the initial year of operations has involved. significant learning. Dry year resulting in greater water production than anticipated. The summer of 2006 was much drier than typical which caused an increase in. the demand for water. While the mid-day sprinkling ban has buffered this demand, the City has still pumped over 6% more water than the average of the previous 4 years. When more water must be delivered this directly increases the expenditures for chemicals and electricity. Both of these items are expected to exceed budget. In total it is projected that expenditures will exceed the original 2006 Water Fund Budget by 430,000. Revenues As a result of greater demand and rising interest rates, revenues are also projected to exceed. the 2006 Budget._W._ater_eonsumption charges have exceeded projections in response to the increased demand. Interest earnings have exceeded. projections as interest rates have continued to rise and fund balance has remained strong. It appears that revenues are on track to exceed the amount budgeted by the same $430,000 amount as expenditures. Summary Since the increase in revenues and expenditures beyond the amounts budgeted are equal, the City Council may increase the appropriation of the 2006 Water Fund budget by a majority vote_ This should take care of the Water Ruld's budget issues for 2006. It should. also be noted that many of the operations changesoutlined will have to be carried forward into 2007, This will necessitate changes in. the proposed 2007 Water Fund Budget. 4, .RECOMMENDATION: I recommend that the City Council adopt the attached resolution amending the. 2006 Water Fund Budget by increasing the budgeted revenues and expenditures by $430,000. This will allow the Water Utility to continue to function while facing, the realities of the new water treatment plants and reservoir that could not be specifically determined when the budget. was adopted nearly one year ago. CITY -0F PL'"1VLO'UT,II CITY 1COUNCIL 4GEIVDA REPORT DATE: Februar,/ 14, 2006 for the City CourlciJ Nleetng o.f February 2E, 2006 1'U: Lau1 ie Ahrens, City Manager through Doran Cote, Director of.fublic Works FR0Ad: Daniel K. Campbell, Sr. Engineering Technician SUBJECT: AWARD CONTRACT f WELL N0.1S 7 and 12 N1AIN'PENANCE PROJECT CITY PROTECT NO. 513; ACTION REQUESTED: Make a motion to aclopt the: attaclled resolution m.vard111g a contract for the construction of the above improvements. BACKGROUND: Bids were received for the `v'ti%ell No.'s 7 and 12 MaillLenance I'rc.lect on Thurciay, February 2, 2006. Attached is a letter from the City's consultant engfineer. Bonestroo, Rosene, Anderlik and Assoc., Inc. (BRUT), recommending that the contract be awarded to the low bidder Bergcrson-Caswell, Inc. for the base- bid anloullt of' Si121,157.50. A respdn.sible bidder evaluation was conl.pleted by the contractor and . they are deemed a responsible bidder. The low bid is $15.,162.50 or l I% under the elluilleers estimate of S136,350. T-%vo alternates to the Base Bid were a:l.so Laken. Alternate 1, is in case additional sandstone is needed to be removed 1l-0111 the well cavities. Alternate 2 is if the bowrl assemblies need to be replaced or 1I•llle motor FOX, Well No. 7 needs to be replaced. All this Lilternate work call rloL be determined until the well pumps are removed and the bottom of the wells measured. The IoN-v bidder's bits for both Alternates is $81,700, Nvhich wllen combined with their base bid would still qualify Chem as the bidder. This work is scheduled to begin as soon as possible its order bl' the bUel1S to be functioning at 11111 capacity by May wrhen Nwater demand begins to increase:. BUDGET 11\11I'AC'I': As indicated previously nulinLenance costs for 'Vcll No's. 4 Lmd 7 were anticipaLed to be frons the -Water Fund and were included as a budgeted item in the approved 2006 Budgel under Water I'l-OCILICLIoll (1720. Item 7522 "I'Llll W(-_,lls" - budgeted at 590,000). The 'total project cost for the proposed NA10 No's. 7 and 12 Maintenance ProjecL. using, the base bid received.. is estimated to be $151,500, Nyhich includes 25'%, fen, engitlecritic, admimAI'atioil, Iegal and eon LingencieS. Doc to the unexpected additional costs for these essential repairs. SaVings Xwill be attempted Ill other- areas to fllnd -this pro)ect. A bud(,et alllendillent r11ay be required at a :ILlture Crate to fully Lld thiS project ' I duqu Ite savillgs are not realised. IZECOlV MENDATIONS ,AND CONCLUSIONS: I recommend Lllat the City CULIl1CII adopt the attached I-eSOILltloll Ztwardillg the contract for the Well No.'s 7 and 12 IMaintenance Project to the low bidder Ber<gerson- Caswvell. Inc. Ill the bast= bid allloLlnt of S 1 21 ,157.50. attachments: Letter 1A1 ',Ip Resolution Bonestroo Rosene Anderlik & Associates Engineers & /Architects hebruar)i 15, 2006 Mr. Dan Campbell City of,phrmouth 3400 Plymoudh Boulevard Plymouth, MN 55447-1448 2335 \Y/es( Highway 36 w 5r Palul MN 55113 Office: 651-636-1600 - Fax: 651-636-1311 A'WV11b0nesir00 com Re: Well No.'s 7 and 12 Maintenance Project City Project No. 5133 Pile No. 000070-05139-0 Lid Results Bids were opened for the Project stated above on Thursday, February 2, 2006.. Transmitted herewith is a copy of the Bid Tabulation for your information and file. Copies will also be distributed to each Bidder. There were a total of four Bids.. The following summarizes the results of the Bids received: Contractor Birt Amount Alt, Nu. I Alt No. 2 Low Bergerson-Caswell, Inc. 9121,187..50 19,000,00 62,700.00 2 Mark J.. T-aut Wells, Inc. 9145,02150 917,975..00 531350..00 3 Keys Well Drilling, Company 9145,855.00 920,100.00 52,000..00 94 E.. H. Renner & Sons, Inc. 9154,549.,50 933,000.00 60,100.00 The low Bidder on the Project was Bergerson-Caswell, Inc.. urith a Base Bid of 9121,187.50. This compares to the Engineer's Estimate of 9136,350,00.. These Bids have been reviewed and found to be in order.. If. the City Council ,nshes to award the Pr01eCt to the low Biddei then Der"gersoii—Caswell, Inc,. should be awarded the Project on the Bast: Bid Amount of 9121,187.50. Alternate No. 1 provides for removing loosened sandstone from the well cavity. The need for this work; cannot be detern-iined.until the well pump is removed and tyre bottom of the well measured. If sandstone removal is necessary, the work will be added to the contract by Change Order. Alternate No_ 2 provides unit prices for new pump bowls and electric motor. These items would be used if a pump bow] or meter could not be repaired or if the cost o1 repair would exceed the cost of a new unit. If a new unil. would be required that item would be added to the project by Change Order. Should you have any questions, please feel free to contact me at (65 1) 604-4840, Sincerely, 130NESTR.00, R.OSEI NDERLIK & ASSOCIATES, INC. tirchard W. Foster, I'.E Enclosure I haul 51 Cloud f oChE'SLC1. fvll\J ^ Milwaukee,. V11 ° Chicago. IL AIllnnoUvc Ac;lon/Equal Opportunity Employer and empluyce 0—erl WELLS""' J pl 35TH HVE 2O G Q JN Q O p c 32ND AVE ` mm w U IVV/F 31ST AVE L o a 1 z AH c' J I 2 27TH AVE z rl Dj WELL 7 i25TH E A 25TH A E D J n j A o.A/v O rrr, I/E ` na 10 0 4 co CLV ` ylh tl • L/ S f 36TA AVE Q 35TH AV£ 23RD AVE J O 23RD AVJ U' A N Q c U 13TH AV _ zo: mo I w L c E 70 n 13TH AVE y 12 HAVE J 21STl.VE 24TH A 21ST A j Ir 0 r rr1 ' L v) ED J = c 4= A J Z 34TH AVI 33RD AVE P. Y w Q\' ' 7) HAVEJ ¢ J y 1g I AV' J = U rn p U r 1 - NHTEFTJWE . CI QV O 8T W <r 18TH AVE z wZ _? _ . LLJJ lm 19 H P` Q c7 z 17TH AVE a., II Eo 6TV QVC o` O 2 C N w v G m -r 5TH AV z a NAVE n N/UAl U' A N Q c U 13TH AV _ Z , 0O I Z'Ty c 2GTH E 70 n 13TH AVE y 12 HAVE H CO 24TH A z^ 1fJ 4= A J O i 1Gs tJ 114DUSTRIAL PA O O J mmz a x Z CG c, ai P. Y w Q\' ' 7) HAVEJ ¢ J y 1g I AV' J = U rn p U r 1 - NHTEFTJWE . CI QV O 8T W <r 18TH AVE z wZ _? _ . LLJJ lm 19 H P` Q c7 z 17TH AVE a., II Eo 6TV QVC o` O 2 C N w v G m -r 5TH AV z a NAVE L A-%, O -q-, A lJ 4TH AVE Parkers Lake 13TH PL tLL 1 J a 13TH AV _ Z , ui m n 13TH AVE y 12 HAVE H 12TH A 12Tiq •VE p a: U 4= A J i 1Gs qJv D r O0Y O U co a 00 yA V E -o m g E z w y v OG 9TH J ° 4 10TH AVE AVEC Q Q v) 7G Q O L A-%, O -q-, A lJ CITY OF PLYMOUTH RESOLUTION NO. 2006 - RESOLUTION AWARDING BID WELL NO.'s 7 and IZ MAINTENANCE PROJECT CITY .PROJECT NO. 5133 iIIEREP.S pursuant to an advertisement for bids for Well No.'s 7 and 12 Maintenance Prolet and all necessary cippurtcnances, bids were received, opened and tabulated according to IMAI, and the following bids were received eomplying with the advertisement: Ci MI'AJVY Bergerson-CasNvell, Inc mark .l. Traut Wells, Inc. Keys Well Drilling Company E. H. Renner & Sons, Inc. BASE BID Alt. No. 1 Alt. No. 2 St 121,187.50 5119,000 5;62,700 145,022.50 S17,975 53,350 145,855.00 20,100 5152,000 154,549.50 33,0()0 5160,100 WHEREAS, it appears that Bergerson-Caswell, Inc. of Mahle Plaits, MN is the lowest responsible bidder, complying with the minimum specifications: NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH, .MINNESOTA: 1. The Mayor and City Manager are hereby authorized and directed to enter into the contract with Bergerson-Caswell, Inc. of Maple Plain, MN in the name of the City of Plymouth for Well No.'s 7 and 12 Maintenance 1?ro. eel according to the phins and specifications therefore approved by the City Council and on fill; in the office ole the City Engineer in the Base Bid amount oi' 5,121.187.50, 2. The City Clerk is hereby authorized and directed to return forthwith to all bidders the deposits made with their bids, except that the deposits of the SLtecessful bidder and the next lowest bidder shall be retained until a contract has been signed. 3. hunchng milli be from the Water FLlnd In the amount of',%151.500. Adopted by the City Council on February 28. 2006. CITY OF PLYMOUTH RESOLUTION NO. 2006 - AMENDING 2006 WATER FUND BUDGET WHEREAS, the Water Fund has experienced a number of unusual and/or unanticipated circumstances, not accounted for in the 2006 Budget, that have resulted, in increased revenues and expenditures; and WHEREAS, it will not be practicable to enforce the existing 2006 Water Fund Budget without significantly impacting water service delivery to the residents of Plymouth; and WHEREAS, the City Charter does not allow staff to exceed. the amounts appropriated by the City Council; and WHEREAS, the City Charter does allow the City Council to amend budgets if revenues will exceed budget estimates; NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF PLYMOUTH, MINNESOTA: That the 2006 Water Fund operating budget is hereby amended from $4,685,353 to 5,115,353. Adopted by the City Council on. October 10, 2006. 0:/FinaocelAccoumioZlResolutions/MItOk1N/Itecycling Fee Demme — 2000.doc MEMO CITY OF PLYMOUTH 3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447 I DATE: February 8, 2007 TO: Laurie Ahrens, City Manager FROM: Mike Kohn, Financial Analyst through Jean McGann, Administrative Services Director SUBJECT: Special Assessment Prepayments At the CIP study session held on January 16, 2007 a question was raised regarding the amount of special assessment prepayments. In order to answer this question the City's Accountant (Connie Ecker) sampled several special assessments levied for street reconstruction projects. The following is a summary of the findings. It appears that typically between 35 and 50 percent of each levy is prepaid in the first year. Additional, although much smaller, prepayment amounts are often received in succeeding years. The amount of prepayments is likely determined to some extent by the interest rate, size of payment, and mix of commercial vs. residential parcels that are assessed. These variables, have not been evaluated in this analysis. A c•w s.,.T MEMO CITY OF PLYMOUTH 3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447 DATE: February 7, 2007 TO: Laurie- Ahrens, City Manager FROM: Mike lftrff inancial Analyst SUBJECT: Possible Alternatives For Special Assessment Interest Rate Benchmarks The following are four possible benchmarks for special assessment interest rates. February 7, 2007 Prime Rate 8.25% Prime Rate (Tax Free Equivalent — 28%) 5.94% Agency Bond ( 5 year — N/C 1) Plus l % Admin 6.6% Special Assessment Bond (5 year) Plus 1.5% Admin 5.27% A spreadsheet showing the historical rate for each of these benchmarks will be available at the meeting. The prime rate represents the rate that banks charge to their most creditworthy customers. It is often used as a benchmark for home equity loans. The tax free equivalent prime rate is the special assessment equivalent of a home equity loan benchmarked to the prime rate. Hoene equity loan interest is deductible to those who itemize on their income tax while special assessments are not. The agency bond rate for a 5 year/non-call 1 year bond the equivalent investment to the City financing special assessments. That is because special assessment payers have the option to pay the balance each year of the 5 year tern of the loan. Most cities charge over their investment return to cover the cost of administration. The special assessment bond rate is what the City could borrow at to finance special assessments. Most cities charge over and above that rate by 1 % to 2% to cover the cost of issuance and administration. Any of these alternatives could be utilized as a reasonable basis for special assessment interest rates. MEMO CITY OF PLYMOUTH 3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 5544.7 DATE: February 9, 2007 TO: Laurie Ahrens, City Manager FROM: Mike F/i-nlan cial Analyst through Jean McGann, Administrative Services Director SUBJECT: Other Funding Sources — Streets? The City of Plymouth exercises most of the typical funding sources such as the property tax, special assessments, and fees for licenses and permits. There are a few other revenues sources available that the City could utilize if it so chose. These sources are as follows: Hotel/Motel Tax Utility Franchise Fees (Gas & Electric) Wheelage Tax Special Sales Tax Hotel/Motel Tax — A city may pass an ordinance to impose up to a 3 percent tax on gross receipts of lodging at a hotel, motel, rooming house, etc. However, the law requires that 95 percent of the gross proceeds from the tax be used to fund a local convention or tourism bureau. This would not benefit the City of Plymouth which has no such bureau. Utility Franchise Fees — Utility franchise fees are available to municipalities as authorized by state statute. Several cities throughout the state have utility franchise fees in place and raise significant sums of money. However, imposition of utility franchise fees is typically strongly opposed by the utilities and becomes politically messy. A more detailed, although dated, analysis of utility franchise fees is attached. Wheelage Tax — A wheelage tax is currently authorized by state statute, but only cities of the first class are allowed to collect it. Therefore, this is not a viable option for Plymouth. There are currently proposals at the legislature that would authorize a wheelage tax for cities such as Plymouth. Special Sales Tax — A growing number of cities have gone to the legislature and received specific legislative authority to impose a local sales tax for purchases made in the city. Only Duluth has a sales tax for general use. All other local city sales taxes are dedicated for specific purposes or projects. In order to impose a local sales tax, a city must obtain special legislation and approval from local voters at the ballot box. MEMO CITY OF PLYMOUTH 3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447 DATE: . May 20, 1996 TO: Dale Hahn, Finance Director FROM: Michael A. Kohn, Financial Analyst SUBJECT: Utility Franchise Fees BACKGROUND In today's environment where the growth in property values has or will eventually slow, and state aid is declining, it is necessary for communities to look at sources of revenue other than the property tax. One such source of revenue that some state communities are utilizing is a utility franchise fee. A utility franchise fee is a fee which is levied by a community in exchange for a utility company's use of streets, alleys and public grounds for its utility distribution system. It is typically levied as a percentage of gross revenues earned within the community. The legal right for a municipality to charge such fees is vested in State Statute (Section 2169.36) which states that a "...utility may be obligated by any municipality to pay to the municipality fees to raise revenue or defray increased municipal costs accruing as a result of utility operations or both. The fee may include but is not limited to a sum of money based upon gross operating revenues or gross earnings from its operations in the municipality...." As stated above, several state community's have taken advantage of this right and have utility franchise fees in place. A listing of some of these communities follows: Municipality Minneapolis (Gas & Electric) St. Paul (Gas & Electric) South St. Paul (Gas & Electric) St. Cloud (Gas & Electric) Lake City (Gas) Rate Revenue 5%* $16,595,000 8%* $14,280,000 3% $405,000 1.5% $1,200,000. 2% $32,939 West St. Paul (Gas & Electric) 5% 489,500 Coon Rapids (Gas & Electric) 4% 1,363,137 East Grand Forks (Gas) 3% 90,754 White Bear Lake (Electric) 1.5% 150,000 Winona (Electric) 4% 615,000 Mounds View (Gas & Electric) 3% 235,937 Tiered rate structure. Based upon the revenues received by these communities it would seem fairly reasonable to expect that the City of Plymouth could raise about $500,000 for each 1 % of a fee imposed on both gas and electricity. Accurate figures could be obtained if the utility companies were asked to supply their gross revenues. However, such a request might start an undesirable and unnecessary battle at this time. ANALYSIS While other communities have used a utility franchise fee to raise substantial sums of money the question remains as to whether it would be feasible or reasonable for the City of Plymouth to follow suit. Feasibility The City of Plymouth has franchise agreements with .Northern States Power. (NSP), Wright -Hennepin Cooperative Electrical Association (W -H) and Minnegasco (see attached). All contracts are for a period of twenty years with the electric franchises ` expiring in 2007 and the gas franchise expiring in 2003. All of these contracts do contain a provision for the collection of a franchise fee of .up to 5% of gross revenues. The contracts of the electric utilities require that the imposition of fees must be by separate ordinance which may not be adopted until at least 60 days have expired after a written notice enclosing such a proposed ordinance has been served upon the utility by certified mail. The contracts for the electrical utilities also impose the additional condition that an equal percentage fee must be levied on all other public utility energy providers in the City. What this means is that the process of adopting a utility franchise fee would be as follows: 1. Provide a written notice, including a copy of the proposed ordinance adopting a franchise' fee, to each effected utility by certified letter. 2. Forward the proposed ordinance through the typical legislative process. 3. Adopt the franchise fee ordinance no earlier than 60 days from the date of service of the written notification to each effected utility. 4. Impose fee effective at least 60 days after written notice enclosing such adopted ordinance has been served upon the effected utilities by certified mail. 2 Reasonableness A utility franchise fee is technically very simple to adopt and could potentially bring the City a significant amount of revenue. However, the question remains; is it a good idea? Positive Attributes Utility franchise fees like all new revenue sources have positive qualities. The following list describes several of them: 1. A utility franchise fee could be a significant source of non -property tax revenue. 2. The revenue stream from a utility franchise fee would be a stable source of revenue. 3. Utilization of a utility franchise fee would achieve a wider distribution of the local tax burden among those who benefit from public services. The franchise fee would, be paid by tax-exempt institutions as well as apartment dwellers who are not directly affected by the property tax. As of 1992 there were approximately 55 non-governmental parcels in the City of Plymouth with a estimated valuation of $50,000,000 that were exempt from the property tax. 4. Imposition of a utility franchise fee would have low administrative costs. The only significant costs could be for an optional audit on a periodic basis to ensure that the fees were being properly remitted by each of the utilities. 5. A utility franchise fee would be a reasonable alternative source of revenue if the property tax is limited by legislative action such as a rate freeze. All of these attributes make the utility franchise fee an attractive source of revenue from an internal (city government) perspective. Ne.gative Attributes A utility franchise fee also has some negative attributes: 1. A utility franchise fee, which is effectively an excise tax on energy consumption, is more regressive than the property tax. According to figures compiled by the U.S. Department of Labor for the year 1984 (see table below) the consumption, as a percentage of income, falls at a faster rate as income increases for utilities than it does for housing. What this means is that those with the least ability to pay are hit hardest by this type of tax. Consequently, on an equity basis, traditional economic theory would regard the franchise fee as a poorer choice than the property tax. 3 Income Class Utilities & Fuel Housing 5,000-9,999 17.1% 29.8% 10,000-14,999 11.0% 21.0% 15,000-19,999 8.9% 17.8% 20,000-29,999 7.1% 15.3% 30,000-39,999 5.6% 12.9% 40,000 & Over 4.1% 11.1% Percent Difference (5,000 to 40,000) 317.07% 168.47% 2. Utility franchise fee payments would not be deductible from state and federal personal income tax. Property tax payments are currently deductible from personal income tax for persons who itemize. This enables the community to "export" a portion of its tax payments to the other citizens of the country. Consequently, revenues from a utility franchise fee would cost City residents more than an equal amount of revenues from the property tax. 3. A utility franchise fee negatively affects market efficiency. While the incidence of the fee will fall almost entirely on the consumer the higher price will also effect the producer. It is estimated by (Kohler, 1982) that the price elasticity of residential electricity is -.13. What this means is that for each 1 % rise in price, consumption will be reduced by ,13 %. More important than corporate profits is the fact that users of gas and electricity may choose to locate elsewhere to avoid higher prices for those services. This may marginally affect Plymouth's ability to attract business, especially from industries which are high energy users. 4. Adoption of a utility franchise fee is politically difficult to accomplish. All of the communities with utility franchise fees have had them in place for 10 or more years with the exception of Mounds View which adopted their fee with a 3 year "sunset clause" which expires in 1997. Other communities such as Prior Lake, Mankato and Bloomington (see attached news clipping) have attempted to put franchise fees in place but have been thwarted by very intense media and political campaigns mounted by the utility companies. The utility companies intent to take such action in Plymouth if the need arises is evidenced by a February 5, 1987 letter from NSP to a law firm representing the City. This letter (see attached) states: NSP, as you have been informed, is firmly opposed to franchise fees. NSP primarily objects to the fees because they represent a regressive form of taxation on our customers and result in an increase in the cost of NSP's electric service as compared to the costs imposed on the same service in a neighboring community or on other direct or indirect competitors of the Company in the sale of energy. 4 At the same time, in recognition of the concerns of the cities which you have expressed, NSP changed its position in regard to no new franchise fee agreements, but only if certain conditions are met. One of these conditions was the recognition that NSP plans to oppose the imposition of a franchise fee even if it agrees to a franchise which authorizes the imposition of the franchise fee. The separate ordinance and notice provisions required by Section 9.1 give NSP a short, but reasonable, opportunity to do so. Consequently, I believe that it is safe to assume that any attempt to impose a utility franchise fee would be difficult and messy at best. RECOMMENDATION I would recommend that no effort be made to adopt a utility franchise fee ordinance at this time. I believe that the fee has too many economic flaws and political liabilities to make sense at this time. However, due to its significant revenue raising potential and other attributes it shduld be considered when and if legislative initiatives affect the City's ability to control its own property tax levy or rates. It may also make some sense when other sources of revenue dry up such as state aid and development fees. At that time a political decision would have to be made regarding. an increase in property taxes as opposed to the imposition of a utility franchise fee. FISCAL IMPACT At this time there would be no fiscal impact of the recommendation. FRAN FEE.DOC 5 SRA UNIFORM ELECTRIC FRANCHISE ORDINANCE NO. 87-13 CITY OF PLYMOUTH, HENNEPIN COUNTY MINNESOTA AN 'ORDINANCE GRANTING TO NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS, PERMISSION TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN IN THE CITY OF PLYMOUTH, MINNESOTA AN ELECTRIC DISTRIBUTION SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY POLES, LINES, FIXTURES AND APPURTENANCES, FOR THE FURNISHING OF ELECTRIC ENERGY TO THE CITY, ITS INHABITANTS, AND OTHERS, AND TO.USE PUBLIC WAYS AND PUBLIC GROUNDS OF THE CITY FOR SUCH PURPOSES. The City Council of the City of Plymouth does ordain: SECTION 1. DEFINITIONS 1.1 "City" In this Ordinance, "City" means the City of Plymouth, County of Hennepin, State of Minnesota. 1.2 "City Utility System" means the facilities used for. providing sewer, water, or any other public utility service owned or operated by City or agency thereof. 1.3 "Company" means Northern States Power Company, a Minnesota corporation, its successors and assigns. 1.4 "Notice" means a writing served by any party or parties on any other party or parties. Notice to Company shall be mailed to the Division. General Manager thereof at 414 Nicollet Mall, Minneapolis, MN 55401. Notice to City shall be mailed to the City Clerk, 3400 Plymouth Boulevard, Plymouth, MN 55447. 1.5 "Public Way" means any street, alley, or other public right-of-way within the City. 1.6 "Public Ground" means land owned by the City for park, open space or similar purpose, which is held for use in common by the public. 1.7 "Electric Facilities" means electric transmission and distribution towers, poles, lines, guys, anchors, ducts, fixtures, and necessary appurtenances owned or operated by the Company for the purpose of providing electric energy for public use. SECTION 2. FRANCHISE 2.1 Grant of Franchise. City hereby grants Company, for a period of twenty years from April 1, 1987, the right to transmit and furnish electric energy for light, heat, power and other purposes for public and private use within and through the limits of the City as its boundaries now exist or as they may be extend- ed in the future. For these purposes, Company may construct, operate, repair and maintain Electric Facilities in, on, over, under and across the Public Ways and Public Grounds of City subject to the provisions of -this ordinance. Company may do all reasonable things necessary or customary to accomplish these purposes, subject, however, to zoning ordinances, other applica- ble ordinances, permit procedures, and to the further provisions of this franchise. 2.2 Effective Date; Written Acceptance. This franchise shall be in force and effect from and after its passage and its acceptance by the Company, and its publication as required by law. An acceptance by the Company must be filed with the City Clerk within 90 days after publication. 2.3 Service Rates and Area. The service to be provided and the rates to be charged by Company for electric service in City currently are subject to the jurisdiction of the Minnesota Public Utilities Commission. The area within the City in which the Company may provide electric -service currently is subject to the provisions of Minnesota Statutes, Section 216B.40. 2.4 Publication Expense. The expense of publication of this ordinance shall be paid by the Company. 2.5 Default. If either party asserts that the other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default and the desired remedy. The notification shall be written. If the dispute is not resolved within 30 days of the written notice, either party may commence an action in District Court to inter- pret and enforce this franchise or for such other relief as may be permitted by law or equity for breach of contract, or either party may take any other action permitted by law. SECTION 3. LOCATION, OTHER REGULATIONS 3.1 Location of Facilities. Electric Facilities shall 'be located and constructed so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and they shall be located on Public Grounds as determined by the City. The Company's construction, reconstruction, operation, repair, maintenance and location of Electric Facilities shall be subject to other reasonable regulations of the City. 3.2 Field Locations. The Company shall provide field locations for any of its underground Electric Facilities within a 1) reasonable period of time on request by the City. The period of time will be considered reasonable if it compares favorably with the average time required by the cities in the same county to locate municipal underground facilities for the Company. 3.3 Street Openings. The Company shall not open or disturb the paved surface of any Public Way or Public Ground for any purpose without first having obtained permission from the City, for which the City may impose a reasonable fee. Permit condi- tions imposed on the Company shall not be more burdensome than those imposed on other utilities for similar facilities or work. The Company may, however, open and disturb the paved surface of any Public Way or Public Ground without permission from the City where an 'emergency exists requiring the immediate repair of Electric Facilities. In such event the Company shall notify the City by telephone to the office designated by the City before opening or distributing a paved surface of a Public Way or Public': Ground. Not later than the second working day thereafter, the Company shall obtain any required permits and pay any required fees. 3.4Restoration. After undertaking any work requiring the opening of any Public Way or Public Ground, the Company shall restore the same, including paving and its foundation, to as good condition as formerly existed, and shall maintain the same in good condition for two years thereafter. The work shall be completed as promptly as weather permits, and if the Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Way or Public Ground in the said condition, the City shall have, after demand to the Company to cure and the passage of a reasonable period of time following the demand, but not to exceed five days, the right to make the' restoration at the expense of the Company. The Company shall pay to the City the cost of such work done for or performed by the City, including its administrative expense and overhead, plus ten percent additional as liquidated damages. This remedy shall be in addition to any other remedy available to the City. 3.5 Shared Use of Poles. The Company shall make space available on its poles or towers for City fire, water utility, police or other City facilities whenever such use will not interfere with the use of such poles or towers by the Company, by another electric utility, by a telephone utility, or by any cable television company or other form of communication company. In addition, the City shall pay for any added cost incurred by the Company because of such use by City. SECTION 4. RELOCATIONS 4.1 Relocation of Electric Facilities in Public Ways. Except as provided in Section 4.3, if the City determines to vacate for a City improvement project, or to grade, regrade, or change the line of any Public Way, or construct or reconstruct any City Utility System in any Public Way, it may order the Company to relocate its Electric Facilities located therein. The Company shall relocate its Electric Facilities at its own- ex- pense. The City shall give the' Company reasonable notice of plans to vacate for a City improvement project, or to grade, regrade, or change the line of any Public Way or to construct or reconstruct any City Utility System. If a relocation is ordered within five years of a prior relocation of the same Electrical Facilities, which was made at Company expense, the City shall reimburse Company for non -betterment expenses on a time and material basis, provided that if a subsequent relocation is required- because of the extension of a City Utility System to a previously unserved area, Company may be required to make the subsequent relocation at its expense. Nothing in this Ordinance requires Company to relocate, remove, replace or reconnect at its own expense its facilities where such relocation, removal, replacement or reconstruction is solely for the convenience of .: the City and is not reasonably necessary for the construction or reconstruction of a Public Way or City Utility System or other City improvement. 4.2 Relocation of Electric Facilities in Public Ground. Except as may be provided in Section 4.3, City may require the Company to relocate or remove its Electric Facilities from Public Ground upon a finding by City that the Electric Facilities have become or will become a substantial impairment of the public use to which the Public Ground is or will be put. The relocation or removal shall be at the. Company's expense. The provisions of 4.2 apply only to Electric Facilities constructed in reliance on a franchise and the Company does not waive its rights under an easement or prescriptive right. 4.3 Projects with State or Federal Funding. Relocation, removal, or rearrangement of any Company facilities made neces- sary because of the extension into or through City of a federally -aided highway project shall be governed by the provi- sions of Minnesota Statutes, Section 161.46 as supplemented or amended. It is understood that the right herein granted to Company is a valuable right. City shall not order Company to remove, or relocate its facilities when a Public Way is vacated, improved or realigned because of a renewal or a redevelopment plan which is financially subsidized in whole or in part by the Federal Government or any agency thereof, unless the reasonable. non -betterment costs of such relocation and the loss and expense resulting therefrom are first paid to Company, but the City need not pay those portions of such for which reimbursement to it is not available. 4.4 Liabilit . Nothing in the Ordinance relieves any person from iability arising out of the failure to exercise reasonable care to avoid damaging Electric Facilities while performing any activity. I SECTION 5. TREE TRIMMING The C-Dmpany may trim all trees and shrubs in the Public Ways and Public Grounds of City interfering with the proper construc- tion, operation, repair and maintenance of any Electric Facili- ties installed hereunder, provided that the Company shall save the City harmless from any liability arising therefrom, and subject to permit or other reasonable regulation by the City. SECTION 6. INDEMNIFICATION 6.1. The Company shall indemnify, keep and hold the City free and harmless from any and all liability on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the Electric Facilities located in the City. The City shall not be indemnified for losses or claims occasioned through its. own negligence except for .losses or claims arising' out of or alleging the City's negligence as to the issuance of permits for, or inspection of, the Company's plans or work. The City shall not be indemnified if the injury or damage results from the performance in a proper manner of acts reasonably deemed hazardous by Company,. and such performance is nevertheless ordered or directed by City after notice of Company's determina- tion. 6.2 In the event a suit is 'brought against the City under circumstances where this agreement to indemnify applies, the Company at its sole cost and expense shall defend the City in such suit if written notice thereof is promptly given to the Company within a period wherein the Company is not prejudiced by lack of such notice. If the Company.is required to indemnify and defend, it will thereafter have control of such litigation, but the Company may not settle such litigation without the consent of the City, which consent shall not be unreasonably withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City; and the Company, in defending any action on behalf of the City shall be entitled to assert in any action every defense or immunity that the City could assert in its own behalf. SECTION 7. VACATION OF PUBLIC WAYS The City shall give the Company at least two weeks' prior written notice' of a proposed vacation of a Public Way. Except where required for a City street or other improvement project, the vacation of any Public Way, after the installation of Electric Facilities, shall not operate to deprive Company of its rights to operate and maintain such Electrical Facilities, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company. In no case, however, shall City be liable to the Company for failure to specifically preserve a right-of-way, under Minnesota Statutes, Section 160.29. SECTION 8. CHANGE IN FORM OF GOVERNMENT Any change in the form of government of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of the Company, succeed to all of.the rights and obligations of the City provided in this Ordinance. SECTION 9. FRANCHISE FEE 9.1 Separate Ordinance. During the term of the franchise hereby granted, and in lieu of any permit or other fees being imposed on the Company, the City may impose on the Company a franchise fee of not more than five percent of the Company's gross revenues as hereinafter defined. The franchise fee shall be imposed by a separate ordinance duly adopted by the City Council, which ordinance shall not be adopted until at least 60:, days after written notice enclosing such proposed ordinance has been served upon the Company by certified mail. The fee shall not become effective until at least 60 days after written notice enclosing such adopted ordinance has been served upon the Company by certified mail. 9.2 Terms Defined. The term "gross revenues" means all sums, excluding any surcharge or similar addition to the Company's charges to customers for the purpose of reimbursing the Company for the cost resulting from the franchise fee, received by the Company from the sale of electricity to its retail custom- ers within the corporate limits of the City. 9.3 Collection of the Fee. The franchise fee shall be payable not less often than quarterly, and shall be based on the gross revenues of the Company during complete billing months during the period for which payment is to be made. The percent fee may be changed by ordinance from time to time; however, each change shall meet the same notice requirements and the percentage may not be changed more often than annually. Such fee shall not exceed any amount which the Company may legally charge to its customers prior to payment to the City by imposing a surcharge equivalent to such fee in its rates for electric service. The Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to account for uncollectibles or customer refunds. The time and manner of collecting the fran- chise fee is subject to the approval of the Public Utilities Commission, which the Company agrees to use best efforts to obtain. The Company agrees to make its gross revenues records available for inspection by the City at reasonable times. 9.4 Conditions on the Fee. The separate ordinance imposing the dee shall not be effective against the Company unless it lawfully imposes and the City quarterly or more often collects a fee or tax of the same or greater percentage on the receipts from_ sales of energy within the City by any other energy supplier, provided that, as to such a supplier, the City has the authority to reuuire a franchise fee or to impose a tax. The franchise fee or tax shall be applicable to energy sales for any energy use related to heating, cooling, or lighting, as well as to the supply of energy needed to run machinery and a liances on remises located within or adjacent to the City, but shall not app v to energv sales for the purpose of providing fuel or venicies. SECTION 10. SEVERABILITY If any portion of this franchise is found to be invalid for any reason whatsoever, the validity of the remainder shall not be affected. SECTION 11. AMENDMENT This ordinance may be amended at any time -by the City passing a subsequent ordinance declaring the provisions of the amendment, which amendatory ordinance shall become effective upon the filing of the Company's written consent thereto with the City Clerk within 90, days after the effective date of the amendatory ordinance. SECTION 12. PREVIOUS FRANCHISES SUPERSEDED This franchise supersedes any previous electric franchise granted to the Company or its predecessor. Passed and approved N C,y 1E, I<<S) Mayor-'of the City of Plymouth Minnesota ATTEST: Cle'rk of the City of Plymouth, Minnesota 0060RE02.B18 7 SRA UNIFORM ELECTRIC FRANCHISE ORDINANCE NO. 89-40 CITY OF PLYMOUTH, HENNEPIN COUNTY MINNESOTA AN ORDINANCE// GFAN5-ING T0; WRIGHT-HENNEPIN(;COOP ERATIu_ 9- ELECTRliC"ASSOCIATION,'i4 MINNE3DTA'C:ORPORATION, ITS SUCCESSORS AND ASSIGNS, PERMISSION TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN IN THE CITY OF PLYMOUTH, MINNESOTA AN ELECTRIC DISTRIBUTION SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY POLES, LINES,. FIXTURES AND APPURTENANCES, FOR THE FURNISHING OF ELECTRIC ENERGY TO THE'CITY, ITS INHABITANTS, AND OTHERS, AND TO USE PUBLIC WAYS AND PUBLIC GROUNDS OF THE CITY FOR SUCH PURPOSES. The City Council of the City of Plymouth does ordain: SECTION 1. DEFINITIONS 1.1 "City" In this Ordinance, "City" means the City of Plymouth, County of.Hennepin, State of Minnesota. 1.2 "City Utility. System" means the facilities used for providing sewer, water, or any other public utility service owned or operated by City or agency thereof. 1.3 "Company" means Tiright-Hennepin Cooperative Electric Association, a Minnesota corporation, its successors and assigns. 1.4 "Notice" means a writing served by any party or parties on any other party or parties. Notice to Company shall be mailed to the Division General Manager thereof at P.O: Box 330, Maple Lake, Minnesota 55358. Notice to City shall be mailed to the City Clerk, 3400 Plymouth Boulevard, Plymouth, MN 55447. 1.5 "Public Way" means any street, alley, or other public right-of-way within the City. 1.6 "Public Ground" means land owned by the City, for park, open space or similar purpose, which is held for use in common by the public. 1.7 "Electric Facilities" means electric transmission and distribution towers, poles, lines, guys, anchors, ducts, fixtures, and necessary appurtenances owned or operated by the Company for the purpose of providing electric energy for public use. SECTION 2. FRANCHISE 2.1 Grant of Franchise. City hereby grants Company, for a period of twenty years from April 1, 1990 , the right to transmit and furnish electric energy for, light, heat, power and other purposes for public and private use within and through the limits of the City as its boundaries now exist or as they may be extend- ed in the future. For these purposes, Company may construct, operate, repair and maintain Electric Facilities in, on, overdo under and across the Public Ways and Public Grounds of City subject to the provisions of this ordinance. Company may do all reasonable things necessary or customary to accomplish these purposes, subject, however, to zoning ordinances, other applica- ble ordinances, permit procedures, and to the further provisions of this franchise. 2.2 Effective Date; Written Acceptance. This franchise shall be in force and effect from and after its passage and its.. acceptance by the Company, and its publication as required by law. An acceptance by the Company must be filed with the City Clerk within 90 days after publication. 2.3 Service Rates and Area. The service to be provided and the rates to be charged by Company for electric service in City currently are subject to the jurisdiction of the Minnesota Public Utilities Commission. The area within the City in which the Company may provide electric service currently is subject to the provisions of Minnesota Statutes, Section 216B.40. 2.4 Publication Expense. The expense of publication of this ordinance shall be paid by the Company. 2.5 Default. If either party asserts that- the -other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default and the desired remedy. The notification shall be written. If the dispute is not resolved within 30 days of the written notice, either party may commence an action in District Court to inter- pret and enforce this franchise or for such other relief as may be permitted"by law or equity -for breach of contract, or either party may take any other action permitted by law. SECTION 3. LOCATION, OTHER REGULATIONS 3.1 Location of Facilities. Electric Facilities shall - be located and constructed so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and they shall be located on Public Grounds as determined by the City. The Company's construction, reconstruction, operation, repair, maintenance and location of Electric Facilities shall be subject to other reasonable regulations of the City. 3.2 Field Locations. The Company shall provide field locations for any of its underground Electric Facilities within a 2 reasonable period of time on request by the City. The period of time will be considered reasonable if it compares favorably with the average time required by the cities in the same county to locate municipal underground facilities for the Company. 3.3 Street Openings. The Company shall not open or disturb the paved surface of any Public Way or Public Ground for any purpose without first having obtained permission from the City,, for which .the City may impose a reasonable fee. Permit condi- tions imposed on the Company shall not be more burdensome than those imposed on other utilities for similar facilities or work. The Company may, "however, open and disturb the paved surface of any Public Way or Public Ground without permission from the City where an emergency exists requiring the immediate repair of Electric Facilities. In such event the Company shall notify the City by telephone to the office designated by the City before opening or distributing a paved surface of a Public Way or Public Ground. Not later than the second working day thereafter, the Company shall obtain any required permits and pay any required fees. 3.4 Restoration. After undertaking any work requiring the opening of any Public Way or Public Ground, the Company shall restore the same, including paving and its foundation, to as good condition as formerly existed, and shall maintain the same in good condition for two years thereafter. The work shall be completed as promptly as weather permits, and if the Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Way or Public Ground in the said condition, the City shall have, after demand to the Company to cure and the passage of a reasonable period of time following the demand, but not to exceed five days, the right to make the restoration at the expense of the Company. The Company shall pay to the City the cost of such work done for or performed by the City, including its administrative expense and overhead, plus ten percent additional as liquidated damages. This remedy shall be in jaddition to any other remedy available to the City. 3.5 Shared Use of Poles. The Company shall make space available on its poles or towers for City fire, water utility, police or other City facilities whenever such use will not interfere with the use of such poles or towers by the Company, by another electric utility, by a telephone utility, or by any cable television company or other form of communication company. In addition, the City shall pay for any added cost incurred by the Company because of such use by City. SECTION 4. RELOCATIONS 4.1 Relocation of Electric Facilities in Public Ways. Except as provided in Section 4. 3, if the City determines to vacate for a City improvement project, or to grade, regrade, or change the line of any Public Way, or construct or reconstruct t I any City Utility System in any Public Way, it may order the Company to relocate its Electric Facilities located therein. The Company shall relocate its Electric Facilities at its own ex- pense. The City shall give the Company reasonable notice of plans to vacate for a City -improvement project, or to grade, regrade, or change the line of any Public Way or to construct or reconstruct any City Utility System. If a relocation is ordered within five years of a prior relocation of the same Electrical Facilities, which was made at Company expense, the City shall' s reimburse Company for non -betterment expenses on a time and material basis, provided that if a subsequent relocation is required because of the extension of a City Utility System to a previously unserved area, Company may be required to make the subsequent relocation at its expense. Nothing in this Ordinance requires Company to relocate, remove, replace or reconnect at its own expense its facilities where such relocation, removal, replacement or reconstruction is solely for the convenience of the City and is not reasonably necessary for the construction or; reconstruction of a Public Way or City Utility System or other City improvement. 4.2 Relocation of Electric Facilities in Public Ground. Except as may be provided in Section 4.3, City may require the Company to relocate or remove its Electric. Facilities from Public Ground upon a finding by City that the Electric Facilities have become or will become a substantial impairment of =the public use to which the Public Ground is or will be put. The relocation or removal shall be at the Company's expense.. The provisions of 4.2 apply only to Electric Facilities constructed in. reliance on a franchise and the Company does not waive its rights under an easement or prescriptive right. 4.3 Projects with State or Federal Funding. Relocation, removal, or rearrangement of any Company facilities made neces- sary because of the extension into or through City of a federally -aided highway project shall be governed by the provi- sions of Minnesota Statutes, Section 161.46 as supplemented or amended. It is understood that the right herein granted to Company is a valuable right. City shall not order Company to. remove, or relocate its facilities when a Public Way is vacated, improved or realigned because of a renewal or a redevelopment plan which is financially subsidized in whole or in part by the Federal Government or any agency thereof, unless the reasonable non -betterment costs of such relocation and the loss and expense resulting therefrom are first paid to Company, but the City need not pay those portions of such for which reimbursement to it is not available. 4.4 Liability. Nothing in the Ordinance relieves any person from liability arising out of the failure to exercise reasonable care to avoid damaging Electric Facilities while performing any activity. 4 SECTION 5. TREE TRIMMING The Company may trim all trees and shrubs in the Public Ways and Public Grounds of City interfering with the proper construc- tion, operation, repair and maintenance of any Electric Facili- ties installed hereunder, provided that the Company shall save the City harmless from any liability arising therefrom, and subject to permit,or other reasonable regulation by the City. 1r SECTION 6. INDEMNIFICATION The Company shall indemnify, keep and hold the City free and harmless from any and all -liability on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the Electric Facilities located in the City. The City shall not be indemnified for losses or claims occasioned through its own negligence except for losses or claims arising out of or alleging the City's negligence as to the issuance of permits for, or inspection of, the Company's plans or work. The City shall not be indemnified if the injury or damage results from the performance in a proper manner of acts reasonably deemed hazardous by Company, and such performance is nevertheless ordered or directed by City.after notice of Company's. determina- tion. 6.2 In the event a suit is brought against the City under circumstances where this agreement to indemnify applies, the Company at its sole cost and expense shall defend the City in such suit if written notice thereof is promptly given to the Company within a period wherein the Company is not prejudiced by lack of such notice. If the Company is required to indemnify and defend, it. will thereafter have control of such litigation, but the Company may not settle such litigation without the consent of the City, which consent shall not be unreasonably withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City; and the Company, in defending any action on behalf of the City shall be entitled to assert in any action every defense or immunity that the City could assert in its own behalf. SECTION 7. VACATION OF PUBLIC WAYS The City shall give the Company at least two weeks' prior written notice of a proposed vacation of a Public Way. Except where required for a City street or other improvement project, the vacation of any Public Way, after the., installation of Electric Facilities, shall not operate to deprive Company of its rights to operate and maintain such Electrical Facilities, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company. In no case, however, shall City be liable to the Company for failure to specifically preserve a right-of-way, under Minnesota Statutes, Section 160.29. 5 SECTION 8. CHANGE IN FORM OF GOVERNMENT Any change in,the form of government of the City shall not affect the validity of this Ordinance. Any governmental unit succeeding the City shall, without the consent of the Company, succeed to all of the rights and obligations of the City provided in this Ordinance, SECTION 9. FRANCHISE FEE s+ 9.1 Separate Ordinance. During the term of the franchise hereby granted, and in lieu of any permit or other fees being imposed on the Company, the City may impose on the Company a franchise fee of not more than five percent of the Company's gross revenues as hereinafter defined. The franchise fee shall be imposed by a separate ordinance duly adopted by the City Council, which ordinance shall not be adopted until at least 6.0 days after written notice enclosing such proposed ordinance has been served upon the Company by certified mail. The fee shall not become effective until at least 60 days after written notice enclosing such adopted ordinance has been served upon the Company by certified mail. 9.2 Terms Defined. The term "gross revenues" means all sums, excluding any surcharge or similar addition to the Company's charges to customers for the purpose of reimbursing the Company for the cost resulting from the franchise fee, received by the Company from the sale of electricity to its retail custom- ers within the corporate limits of the City. 9.3 Collection of the Fee. The franchise fee shall be payable not less often than quarterly, and shall be based on the gross revenues of the Company during complete billing months* during the period for which payment is to be made. The percent fee may be changed by ordinance from time to time; however, each change shall meet the same notice requirements and the percentage may not be changed more often than annually. Such fee shall not. exceed any amount which the Company may legally charge to its customers prior to payment to the City by imposing a surcharge equivalent to such fee in its -rates for electric service. The Company may pay the City the fee based upon the surcharge billed subject to subsequent reductions to account for uncollectibles or customer refunds. The time and manner of collecting the fran- chise fee is subject to the approval of the Public Utilities Commission, which the Company agrees to use best efforts to obtain. The Company agrees to make its gross revenues records available for inspection by the City at reasonable times. 9.4 Conditions on the Fee. The separate ordinance imposing the fee shall not be effective against the Company unless it lawfully imposes and the City quarterly or more often collects a fee or tax of the same or greater percentage on the receipts from sales of energy within the City by any other energy supplier, provided that, as to such a supplier, the City has the authority 1.1 9.4 Conditions on the Fee. The separate ordinance imposing the fee shall not be effective against the Company unless it lawfully imposes and the City quarterlyor more often collects a fee or tax of the same or greater percentage on the receipts from sales of. energy within the City by any other energy supplier, provided t -at, as to such a supplierr the City has the authority to require a franchise fee on to im ose a tax. The franchise zee or tax shall be applicable to energy sales for any energy use related to heating, cooling, or__lighting, as well as to the supply of energy needed to run machinery and _applIances on premises located within or adjacent to the City, but shall not apply to energy sales for the purpose of providing fuel for vehicles. SECTION 10. SEVERABILITY If any portion of this franchise is found to be invalid for any reason whatsoever, the validity of the remainder shall not be affected. SECTION 11. AMENDMENT This ordinance may be amended at any time by the' City passing a subsequent ordinance declaring the provisions of the amendment, which amendatory ordinance shall become effective upon the filing of the Company's written consent thereto with the City Clerk within 90 days after the effective date of the amendatory ordinance. SECTION 12. PREVIOUS FRANCHISES SUPERSEDED This franchise supersedes any previous electric franchise granted to the Company or its predecessor. Passed and approved December 18, 1989 Mayof of the City of Plymouth Minnesota ATTEST: erk of the City of Plymouth , Minnesota 0060RE02.C18 7 El 0 SRA UNIFORM GAS FRANCHISE (MINI1nGA5CO) Approved by SRA Board of Directors April 20, 1983 ORDINANCE N0. 83-03 CITY OF PLYMOUTH HENNUIN COUNTY, MINNESOTA An ordinance granting Minnegasco, I,!.., a Minnesota corporation, its successors and assigns, a nonexclusive franchise: to con- struct, operate, repair and maintain facilities and equipment for the transportation, distribution, manufacture and sale of gas energy for public and private use and to use tr-a public ground of the City of , Minnesota for such purposes; and pre,criY,ing certain terms and conditions thereof. THE CITY COUNCIL OF PLYMOUTH ORDAINS: SECTION 1. DEFINITIONS. The following terms shall mea.. 1.1. Company. Minnegasco, Irc., a Minnesota corporation, its successors acid assigns. 1.2. Gas. Natural gas, manuiac..ured gas, mixture of natural gas and manufactured gas or other forms of gas energy. 1.3. municipality, Municipal Council Municipal Clerk. These terms mean respectively, the City of the Council of the City of __ and the C er of the City of 1.4. Public Ground. All streets, alleys, public ways, utility easements and public grounds of the Municipality as to which it has the right to grant the use to the Company. SECTION 2. FRANCHISE GENERALLY. 2.1. Grant of Franchise. There is herby granted ::o the Company, from the effective date hereof through ,lune 30, 2003, the right to import, manufacture, transport, distribute and sell gas for public and private use in the Municipality, and for these purposes to construct, operate, repair and maintain in, on, over, under and across the Public Ground of the Municipality, all facilities and equipment used in connection therewith, and to do all things which are necessary or customary in the accomplishment of these objectives, subject to zoning ordinances, other appli- cable ordinances, permit procedures, customary practices, and the provisions of this franchise. 0 2.2. Effective Date; Written Acceptance. This franchise shall be in force and effect from and after its passage and publication as required by law, and its acceptance by the Company in writing filed with the Municipal Clerk within 60 days after publication. 2.3. Nonexclusive Franchise. This is not an exclusive franchise. 2.4. Franchise Fee. The Company may be required to pay to the Municipality, i—'n the manner and at a rate prescribed by a separate ordinance, a fee determined by collections from sales of Gas, but not to exceed 5% of the Compa.ny's gross revenues from the sale of Gas within the Municipality. Such ordinance may be adopted, amended, repealed or readopted at any time during the term of this franchise. The fee, if required, shall be effective 90 days after written notice of the ordinance to the Company. No such fee shall be effective as to sales made before January 1, 1984. The fee shall be separately staked on gas bills rendered to customers within .the Municipality. 2.5. Publication Expense. The expense of publication of this ordinance shall be paid by the Company. 2.6. Default. If the Company is in default in the perfor- mance of any material part of this franchise for more than 90 days after receiving written notice from the Municipality of such default, the Municipal Council may, by ordi:zance, terminate all right. • grariced hereunder to the Company. The notice of default shall be in writing and shall specify the provisions of this franchise under which the default is claimed and state the bases therefor. Such notice shall be served on the Company by per- sonally delivering it to an officer thereof at its principal place of business in Minnesota. If the Company is in default as to any part of this fran- chise, the Municipality may, after reasonable notice to the Company and the failure of the Company to cure the de`.Ault within a reasonable time, take such action as may be reasonably neces- sary to abate the condition caused by the default, and the Com- pany agrees to reimburse the Municipality for all its reasonable costs and for its costs of collection, including attorney fees. Nothing in this section shall bar the Company from chal- lenging the Municipality's claim that a default has occurred. In the *tvent of disagreement over the existence of a default, the bury n of proving the default shall be on the Municipality. SECTION 3. CONDITIONS OF USE. 3.1. Use of Public C_ound. All utility facilities and equipment of the Company shall be located, constructed, installed and maintained so as not to endanger or unnecessarily interfere A.6- UNION", - 0 0 with the usual and customary traffic, travel,' and use of public ground, and shall be subject to permit conditions of the Munici- pality. The permit conditions may provide for the right of inspection by the Municipality, and the Company agrees to make its facilities and equipment available for inspection at all reasonable times and places. 3.2. Permit required. The Company shall not open or dis- turb the surface of any public ground for any purpose without first having obtained a permit from the Municipality, for which the Municipality may impose a reasonable fee to be paid by the Company. The permit conditions imposed on the Company shall not be more burdensome than those imposed on 'other utilities for simillr facilities or work. The.mains, services and other prop- erty t,iaced pursuant to such permit shall be located as shall be designated by the Municipality. The Company may, however, open and disturb the surface of any public ground without a permit where an emergency exists requiring the immediate repair of its facilities. The Company in such event shail request a permit not later tnan the second working day thereafter.. 3.3. Restoration. Upon completion of any work requiring the opening of any Public Ground, the Company shall restore the same, including paving and its foundations, to a % s good condition as formerly, and shall exercise reasonable care to maintain the same for two years thereafter in good condition. Said work shall be completed as promptly as weather permits, and if the Company shall not promptly perform anal complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground in good condition, the Municipality shall have the right to put it in good condition at the expense of the Company; and the Company shall, upon demand, pay to the Municipality the cost of such work done for or performed by the Municipality, including its administrative expense and overhead, together with ten per- cent additional as liquidated damages. This remedy shall be in addition to any other remedy available to the Municipality. 3.4. Relocation of Utilitv Facilities. The Company shall promptly, with due regard for seasonal. working conditions, per- manently relocate its facilities or er uipment whenever the Muni- cipality orders such relocation. If the relocation is a result of the proper exercise of the police power in grading, regrading, changing the location or shape of or otherwise improving any Public Ground c:r constructing or reconstructing any sewer or water system therein, the relocation shall be at the expense of the Company. If the relocation is not a result of the proper exercise of ti --e police power, the relocation shall be at the expense of the Municipality. If such relocation is done without an agreement first being made as to who shall pay the relocation cost, such relocation of the facilities by the Company shall not be construed as a waiver of its right to be reimbursed for the 3 relocation cost. If the Company claims that it should be reim- bursed for such relocation costs, it shall notify the Munici- pality within thirty days after receipt of such order. The Municipality shall give the Company reasonable notice of plans requiring such relocation. Nothing contained in this subsection shall require the Company to remove and replace its i..sins or to cut and reconnect its service pipe running from the main to a customer's premises at ids own expense where the removal and replacement or cutting and reconnecting is made for the purpose of a more expeditious operation for the construction or reconstruction of underground facilities; nor shall anything contained herein relieve any person from liability arising out of the failure to exercise reasonable care to avoid damaging the Company's facilities while performing anv.work in any Public Ground. 3.5. Rt location When Public Ground Vacated. The vacation of any Public Ground shall not operate to deprive the Company of the right to operate and maintain its facilities therein. Unless ordered under Section 3.4, the Company need not relocate until the 'reasonable cost of relocating and the loss and expense resulting from such relocation are first paid to the Company. When the vacation is for the benefit of the Municipality in the furtherance of a pu;,lic purpose, the Company shall relocate at its own expense. 3.6. Street Improvements, Paving or Resurfacing. The Municipality shall give the Company reasonable written notice of plans for street improvements where paving or resurfacing of a permanent nature is involved. The notice shall contain the nature and character of the improvements, the streets upon which the improvements are to be made, the extent of the improvements and the time when the Municipality will start the work, and, if more than one street is involved, the order in which this work is to proceed. The notice shall be given to the Company a suffi- cient length of time, considering seasonable working conditions, in advance of the actual commencement of the work to permit the Company to make any additions, alterations or repairs to its facilities the Company deems necessary. In cases where streets are at final width and grade, and the Municipality has installed underground sewer and water mains and service connections to the property line abutting the streets prior to a permanent paving or resurfacing of such streets, and the Company's main is located under such street, the Company may be required to install gas service connections prior to such paving.or resurfacing, whenever it is apparent that gas service will be required during the five years following the paving or resurfacing. SECTION 4. INDEMNIFICATION. The Company shall indemnify, keep and hold the Municipality, its elected officials, officers, 4 employees, and agents free and harmless from any and all claims and actions on account of injury or death of persons or damage.to property occasioned by the construction, maintenance, repair, removal, or operation of the Company's property located in, on, over, under, or across the public ground of the Municipality, unless such injury or damage is the result of the negligence of the Municipality, its elect,:d officials, employees, officers, or Agents. The Municipality shall not be entitled to reimbursement for its costs incurred prior to notification to the Company of claims or actions and a reasonable opportunity for thu Company to accept and undertake the defense. If a claim or action shall be brought against the Municipal- ity under circumstances where indemnification applies, the Com- pany, at its sole cost and expense, shall defend the Municipality if written notice of the claim or action is r'-omptly given to the Company within a period wherein the. Company Iis not prejudiced by lack of -such notice. The Company shall have complete control of such claim or action, but it may not settle without the consent of the Municipality, which shall not be unreasonably withheld. Thi's section is not, as to third parties, a waiver of any defense or immunity otherwise available to the Municipality, and the Company in defending any action on behalf of the Municipality shall be entitled to assert every defense or immunity that the Municipality could assert in its.own behalf. SECTION 5. ASSIGNMENT. The Company, upon notice to the Munici- pality, shall have the right and authority to assign all rights conferred upon it by this franchise to any person. The assignee of such rights, by accepting such assignment, shall become subject to the terms and provisions of this franchise. SECTION 6. CHANGE IN FORM OF GOVERNMENT. Any change in the form of government of the Municipality shall not affect the validity of this franchise. Any governmental unit succeeding the Munici- pality shall, without the consent of .he Company, automatically succeed to all of the -rights and obligations of the Municipality provided in this franchise.. SECTIO14 7. SEVERABILITY. If any portion of this franchise is found to be invalid for any reason whatsoever, the validity of the rest of this franchise shall not be affected. SECTION 8. NOTICES. Any notice required by this franchiE-e shall be sufficient if, in the case of notice to the Company, it is delivered to Minnegasco, Inc., attention vice President, Minnesota Operations, 201 South Seventh Street, Minneapolis, Minneso::a 55402, and, in the case of the Municipality, it is delivered to: SECTION 9. PREVIOUS FRANCHISES SUPERCEDED. This franchise supercedes all previous franchises granted to the Company or its predecessors. Passed and approved ATTEST: June 6, 1983 IV Cl-drk of the tity of Plymouth Minnesota 2 INFORMATION SERVICE League of Minnesota Cities 183 University Ave E. St. Paul, MN 55101 DOT 31*1990 I Council franchi.s Measure w6u: By Eric Eoloff Bloomington residents and usinesses will see higher gas ind electric bills if the .City ouncil approves a proposed 2 ercent franchise fee ..on the ity's two main utilities. Council members will con- ider whether to collect the ass-revenue tax from Min- iegasco and Northern States Power at two public hearings Nov. 5 and Dec. 17. Contracts with both utility ompanies allow the city to col- lect as much as 5 percent of heir annual gross revenues. Spokesmen ' for both utilities 2onfirmed that any franchise fee would be immediately passed along to utility customers. Both utilities oppose the fee and are expected to speak , against it at the public hearings:-: This is an unfair taX ynpased tpon a necessity such as elec- ricity," said Stuart Fraser, an JSP spokesman. • "It . doesn't braider people's ability to'pay t. For example, there are some ow -income people who, because f the size of their families, may . ise a lot of energy." Council members looked to a ranchise fee last year in a move o balance the city's budget, but ity officials say they opted in- tead to cut several city -funded rograms.- This year's call to collect -la ranchise fee comes at .a fime Nhen city officials are searching or ways to deal with .a pillion budget shortfall. nsiders fee" negate e .21 . the .city 'mild collect about 41 X million* 7911. if' it un, pos- ed a 2::pere . franchise fee on the utWties,.is_,y e.Olsoti, the SS city's. ;airninis e r .. director.. That's enough to make up the current deficit without cutting existing programs and petton- nel, said City -Manager John Pidgeon. Council membeis 'also have been asked to consider increas- ing building and inspection fees by 25 percent. Such an incr ve , would -raise revenges by about 250,000• °- F': IThecouncil's other option i tio, pick from a list of proposedts in city services and personn L to make up the $1.5 million. IIF' But the cuts, recommenUed-. by the city manager, 'ire j widespread. -' For example, Pidgeon m= mends eliminating five -posit ons in the Police Department, ne planner, one fire -inspector,.''one housing inspector, .one ;en- vironmental inspector,, two engineers, one traffic engineer and the assistant citymanager position., Additionally, he proposes cut- ting $100,000 from each„.,of the following departments:: ad- ministrative services, mom- anuni-ty services, •.Ai eet mai;ptenance,.'prk s-•maintenancebuitding maintenance, and sibo,000 from l Classification # 2-4s Muni ci pal i ty p')[Oo rn - n Date — Subject Q the Bloomington Convention ar. Visitors Bureau. In a September memo I council .members and the cit manager, Olson said city sta: 51 1 recommends the count i - ....seriously consider a franchis fee to raise revenue. Obviously, the alternative t this:1s cutting program ar propriations and, therefore, set vices . in those. areas,” Olsoi wrote. Y. But City Attorney David Orns tein said he's uncertain whethe: council members will opt ti assess a franchise fee or •ap prove the list of budget cuts. f... "It's speculative at this poin what• the council will.do," hE said, . adding council member: may choose to 'do both tc balance the budget.. According to figures compiled bY- administrative 'services, i.- utility customers paying $1,200 i= annually in'gas and electric bills can expect a $24 increase each year, if the council imposes a 2 1. percent .franchise fee. Con- sumers paying $3,000 annuallyfor' utilities Can expect .'a $60 Increase., Bloomington Chamber bf Commerce President Don Groen said he opposes a fran- c o t a-) -4-3 U r b r- a r r In U .. N r iC C r :3 Ip U X: C1 NOV 21'1990 Counc l d s,:.-. franchise f In a surprise move at 11 p.m..- !stewardship on the part of the ci- and commercial. Monday, the Bloomington City` :' sty to spend the rest of aur time 'MeCouncilunanimouslyrejecteda .on our budget hearings Y at an earlier g gs...figur- public hearing that a utilities.tax- proposed 2 percent franchise fee .. ing out how we can meet our hurts low-income residents andonthecity's two -main utilities. budget by making the ap- is bad for business. Then, within seconds, council ., :propriate cuts," Peterson said. That was apparently enoughmemberscanceledascheduled : ;..City staff had recommended to persuade council members topublichearingonthematter : imN Posing a franchise fee on both dump -the proposed fee. \ prompting sighs of relief from a ;,Minnegasc.o and. Northern -Pointing to a recent 11 -percenthandfulofutilityandbusiness ;States Power to make-up a prtax hike. in Hennepino- property. r e s p r e s e n t a t i v e s in .. the. jetted ;1.5 million budget short- County, Peterson argued thataudience. ,fall. The' city would have col' local home and business owners .'. This ordinance, at this time, lected about $1.6 million annual- • ar ' would be very anti -productive,". .` ly with a 2 percent fee. uig :pinched enough as it said Mayor Neil -Peterson, who But spokesman for both I'm very concerned aboutapparently "lobbied council- utilities- said. such, a ..gross.. the perception that this kind ofmembers'against•the proposed revenue tax would . be im an increase brings -about," tax prior to their meeting: mediately Passed along to ultili Peterson _added. I think i 'st a matter . of ty customers,' both •residential: _ a 'U U00 c0 GL% . O GAO h .O' F O,0 p , O ^ G. 4. rz c Cn w M >, ° , S ani W a cv 8-4ba 0¢ PC n 'zcz j o W 0 0 o v b.`! y... cs. o.3 o uv$;'p+ w c`n . a $, v b ` 0' ui 3y °°$ •- .. 1~ c y . CC e CC r- Z s. > .0 Q . tp 0 cG . ^ C Z! O "-' N Gni rte, GCUas . tr «, >~ 3 > •vCU caolo- o W C)r- v- a a uovGs or bo;Y gc` r n$ . vHO •> j ..+ O O V F-. . S E -d, a A . 4. " Ri •> V] — 9 z .0 j..` W VI a c n u cu '=,a CU $c !'. v v.G u°A3w a> a »a C1 m U- M M 2 G1 Co + i Northern States Power'Company 414 Nicollet Mall Minneapolis, Minnesota 55401 Telephone (612) 330.5500 February 5, 1987 Mr. Glenn E. Purdue LeFEVERE, LEFLER, KENNEDY, O'BRIEN & DRAWZ 2000 First Bank Place West Minneapolis, MN 55402 Re: Proposed SRA Uniform Electric Franchise Dear Mr. Purdue: I have discussed with Harold Bagley the status of negotiations on an agreement with the Suburban Rate Authority for an SRA uniform electric franchise. He informs me that after his meeting with you on February 4, 1987, the two of you reached full accord on the language of the proposed franchise ordinance except for Section 9.4, which section you believed was beyond your authority to agree to because it was rejected by your client. This letter is to encourage you to seek a change in the position of your client because NSP will not .enter into a franchise agreement without Section 9.4 and, further, as modified in your discussions with Mr. Bagley, Section 9.4 should be acceptable to your client. NSP, as you have been informed, is firmly opposed tofranchisefees. NSP primarily objects to the fees because they represent a regressive form of taxation on our custo- mers and result in an increase in the cost of NSP's electric service as compared to the costs imposed on the same service in a neighboring community or on other direct or indirect competitors of the Company in the sale of energy. At the same time, in recognition of the concerns of the cities which you have expressed, NSP changed its position in regard to no new franchise fee agreements, but only if cer- tain conditions are met. One of these conditions was the recognition that NSP plans to oppose the imposition of a franchise fee even if it agrees to a franchise which authorizes the imposition of the franchise fee. The separate ordinance and notice provisions required bySection9.1 give NSP a short, but reasonable, opportunity todoso. Mr. Glenn E. Purdue February 5, 1987 Page Two In regard to Section 9.4, NSP withdrew its request that the collection of the fee never result in a reduction in the real property tax assessments made by the city. However, NSP insists upon the provisions requiring a city, to the best of its legal authority, to collect the same franchise fee or tax percentage from all other energy suppliers in the city. This is because, like your member cities, NSP is not certain what the financial.realities will be in the future. Changes in technology, or changes in regulation, or deregulation, could easily place the Company in an even more competitive market for energy sales. This is particularly true in the case of large energy customers, for whom the Company has made huge and irreversible investments in order to meet their energy demands. However, these same customers will quickly desert NSP if it can not deliver energy at a competitive price. (This would likely result in a greater amount of overall costs having to be borne by NSP's remaining customers.) NSP is already aware that the cost of energy is a factor in the decision of a new customer as to both choice of location and choice of energy supply. NSP insists, and sees no reason for a city to object, upon a city imposing as uniform a "tax" burden as possible on all energy suppliers within its jurisdiction. NSP has experienced numerous changes in the energy field in the last twenty years; NSP will not enter a contract assuming that there will be no significant changes in the next twenty years. In conclusion, NSP has made several concessions during negotiations in a good faith attempt to reach an accord with the SRA, but NSP must refuse to enter any future agreements which allow a city to impose a "tax" solely on NSP customers. If you have any questions, please refer them through Mr. Bagley. Thank you for your attention and concern. very truly yours, CRAI J. BLAIR vice President Electric Utility cc: E. J. McIntyre D. G. McGannon H. J. Bagley P. R. Carney 4 6., C h l4, G -, 4— DATE: February 6, 2007 TO: Mike Kohn, Financial Analyst FROM: -an Cote, P.E., Director of Public Works SUBJECT: 2007-2011 CAPITAL IMPROVEMENT PROGRAM (CIP) As we discussed, I have reviewed the draft 2007-2011 CIP to determine if there are street projects in the CIP for which we had not contemplated assessments, but which, by the City's Street. Reconstruction Assessment Policy, may benefit abutting properties which could therefore potentially be assessed. Based on my preliminary analysis, the following projects could potentially benefit abutting properties in the amount shown: cc 06 -ST -001 (Fernbrook Lane) 07 -ST -004 (CR 101) 07 -ST -005 (CR 24) 09 -ST -005 (Vicksburg Lane) 11 -ST -005 (Vicksburg Lane) Bob Moberg 350,000 to $600,000 650,000 115,000 200,000 1,160,000 O:\Engineeri ng%GENERAL\MEMOS\DORAN\2007\Koh n_StreetRecon_Assessment.dot A(ftiG w.ewTy MEMO CITY OF PLYMOUTH 3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447 DATE: February 7, 2007 TO: Laurie Ahrens, City Manager G Ah --- FROM: Mike Kohn, Financial Analyst SUBJECT: Proposed Changes in Park Project Funding — Proposed By Council Member Willis Through Park & Recreation Director Blank The following proposed changes to the Park Project finding contained in the CIP were forwarded to me by Park & Recreation Director Blank based on an email and discussion he had with Council member Willis. 2007 2008 2009 . Total Land Acquisition (page 43) Capital Improvement Fund -250,000 -250,000 Community Improvement Fund -500,000 -500,000 -250,000 -1,250,000 Park Dedication Fund +750,000 +500,000 +250,000 +1,500,000 Trail Crossing (page 49) Capital Improvement Fund -200,000 -200,000 Park Dedication Fund +200,000 +200,000 Electric Sign (page 51) Capital Improvement Fund -25,000 -25,000 Park Dedication Fund +25,000 +25,000 Totals Capital Improvement Fund -475,000 -475,000 Community Improvement Fund -500,000 -500,000 -250,000 -1,250,000 Park Dedication Fund +975,000 +500,000 +250,000 +1,725,000 Agenda Number: TO: Mayor and City Council FROM: Laurie Ahrens, City Manager SUBJECT: Set Future Study Sessions DATE: February 6, 2007, for Council study session of February 13, 2007 1. ACTION REQUESTED: Review the pending study session topics list and set study sessions or amend the topics list if desired. 2. BACKGROUND: Attached is the list of pending study session topics, as well as calendars to assist in scheduling. Pending Study Session Topics at least 3 Council members have approved the following study items on the list) Discuss Metro Transit Planning (GB, BS, JJ) Street sweeping — purpose and service levels (Council) Other requests for study session topics: Possible ordinance on feeding of wildlife (Black) Consider garbage collection changes (Stein) Work session on land use plan for entire City Dominium request for feedback on reguiding/rezoning of property at 1035 Nathan Lane (formerly Minter Weisman) Consider referendum result and plan for future (Willis) Discuss sign enforcement (Slavik) OFFICIAL CITY MEETINGS February 2007 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 Jan 2007 Mar2007 6:00 PM POLICE S M T W T F S S M T W T F S DEPARTMENT 1 2 3 RECOGNITION EVENT, 1 2 3 4 5 6 Plymouth Creek Center 7 8 9 10 11 12 13 4 5 6 7 8 9 10 14 15 16 17 18 19 20 11 12 13 14 15 16 17 7:ooHUMAN 21 22 23 24 25 26 27 18 19 20 21 22 23 24 RIGGHTS 28 29 30 31 25 26 27 28 29 30 31 COMMISSION, Parkers Lake Room 4 S. 6 7 8 9 10 7:00 PM PLANNING 6:00 PM SPECIAL COMMISSION, Council COUNCIL MEETING' Chambers DISCUSS COMPREHENSNE PLAN LAND USE PLAN), Plym-U, Creek Canter 7:00 PM PARK 8 REC ADVISORY COMMISSION PRAC I, Council Chambers 11 12 13 14 IS 16 17 6:30 PM YOUTH10:00 ADVISORY COUNCIL, Parkers Lake Room AM vicicsaURG CROSSING GRAND OPENING, 3155 Vi,ksb,re Lae, 7:00 PM HOUSING & REDEVELOPMENT AUTHORITY (HRA), 5:30 PM SPECIAL CITY COUNCIL MEETING: DISCUSS 30073011 CAPITAL IMPROVEMENTS PLAN, Mvdi,m Lek, R„ma A B e 7:00 PM REGULAR COUNCIL MEETING, co—H GM1,mbeR Medicine Lake Room A 18 19 20 21 22 23 24 PRESIDENTS DAY- 7:00 PM PLANNING City Offices Closed COMMISSION, Council Chambers ASH WEDNESDAY Firs[ Day of Lent) 25 26 27 28 11:30AMTWIN WEST STATE OF THE CITY- 7:00 PM PLYMOUTHADVISORY Plymouth Croak Center COMMITTEE ON 7:00 PM REGULAR TRANSIT (PACT) , Medicine Lake Room A COUNCIL MEETING, Council Chambers modified on 2/9/2007 OFFICIAL CITE'" MEETINGS March 2007 Sunday Monday Tuesday I Wednesday Thursday Friday Saturday Apr 2007 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1 7:0o IG HUMAN RIGHTS COMMISSION, Parkers Lake Room 2 3 Feb 2007 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 15 16 17 18.19 20 21 18 19 20 21 22 23 24 22 23 24 25 26 27 28 25 26 27 28 29 30 4 S 6 7 8 9 10 6:00 PM SPECIAL COUNCIL MEETING: LISTENING SESSION ON HOLLYDALE GOLF COURSE, Council Chambers 7:00 PM PLANNING COMMISSION, Council Chambers E 11 12 13 14 1S 16 17 9O""`"-'--' il i i_.. Ys...:....::..z.....__. 6:30 PM YOUTH ADVISORY COUNCIL, PARKERS LAKE 7:00 PM REGULAR COUNCIL MEETING, Council Chambers 7:00 PM ENVIRONMENTAL QUALITY COMMITTEE EQC), Council Chambers 6:00 PM BOARD 8 COMMISSION RECOGNITION EVENT Plymouth Creek Center 18 19 20 21 22 23 24 7:00 PM PLANNING L7:OOPMHOUSING& ENTRA), om A 25 26 27 28 29 30 31 y 8 djP " Ele e a 7:00 PM PLYMOUTH ADVISORY COMMITTEE ON TRANSIT (PACT) , Medicine Lake Room A 7:00 PM REGULAR COUNCIL MEETING, Council Chambers modified on 2/9/2007 OFFICIAL CITY MEETINGS Anrzl 2007 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 PASSOVER BEGINS AT SUNSET 3 4 7:00 PM PLANNING COMMISSION, Council Chambers S. 7:00 PM HUMAN RIGHTS OMMISSION, kers Lake Room 6 GOODFRIDAY 7 8 EASTER SUNDAY 9 10 5:30 PM BOARD OF EQUALIZATION. Council Chambers 7:00 PM REGULAR COUNCIL MEETING, Council Chambers 11 7:00 PM Charley Commission Mlg Medicine Lk Rm 7;00 PM ENVIRONMENTAL QUALITY COMMITTEE EQC), Council Chambers 12 7:00 PM PARK 8 REC ADVISORY COMMISSION (PRAC), Council Chambers 13 PRIMAVERAPLYMOUTHARTS COUNCIL SHOW, Plymouth Creek Center 14 PRIMAVERA PLYMOUTH FINE ARTS COUNCIL SHOW Plymouth Creek Center 15' 16 PRIMAVERA PLYMOUTH FINE ARTS COUNCIL SHOW PI Doth Creekym Center 17 PRIMAVERAPLYMOUTHFINE ARTS COUNCIL mout CreekSHOWPIhyCenter 18. 7:00 PM PLANNING COMMISSION, Council Chambers 19 D7:00 PMH USING & REDEVELOPMENT AUTHORITY (HRA), LakeMedicineLae Room A 20 2.1 e'tE'E`.-=.__' z_iire=ei 4tRE e"o-:s'z:°'°_i—'. .pis—.._ y......: ..r: a =_-__-____--=:E",r;;is;== 22 23 24 5:30 PM BOARD OF EQUALI7ATIONRECONVENED), s Council Chamber 7:00 PM REGULAR COUNCIL MEETING, Council Chambers 25 7:00 PM PLYMOUTH ADVISORY COMMITTEE ON TRANSIT (PACT) , Medicine Lake Room A 26 27 28 29 30 May 2007 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Mar 2007 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 modified on 2!9!2007 OFFICIAL CITY MEETINGS A/fav 2007 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 7:00 PM PLANNING COMMISSION, Council1Chambers 3 L7:OOPMAN N, oom 4 Apr 2007 S M T 2 T F S 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 6 7 8 7:00 PM REGULAR COUNCIL MEETING, Council Chambers 9 7:00 PM ENVIRONMENTAL QUALITY COMMITTEE EQC), Council Chambers 10 7:00 PM PARK 8. REC ADVISORY COMMISSION (PRAC), Council Chambers 11 12 10:30 AM PLYMOUTH HISTORY FEST, Parkers Lake Park 13 14 15 16 7:00 PM PLANNING COMMISSION, Council Chambers 17 7:00 PM HOUSING 8 REDEVELOPMENT AUTHORITY (HRA), Medicine Lake Room A 18 19 20 21 6:30 PM YOUTH ADVISORY COUNCIL, Parkers Lake Room 22 7:00 PM REGULAR COUNCIL MEETING, Council Chambers 23 7:00 PM PLYMOUTH ADVISORY COMMITTEE ON TRANSIT (PACT). Medicine Lake Room A 24 25 26 27 28 MEMORIAL DAY Observed) - City Offices Closed 29 30 31 Jun 2007 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 modified on 2/7/2007