The URL can be used to link to this page

8.4. SR 04-15-2013City 4�� L E River REQUEST FOR ACTION TO ITEM NUMBER Mayor and City Council 8.4 AGENDA SECTION MEETING DATE PREPARED BY General Business Aril 15, 2013 Justin Fe rite, P.E., City Engineer ITEM DESCRIPTION REVIEWED By Implementation of a Franchise Fee to Fund the City Pavement Suzanne Fischer, Community Management Program Operations and Development Director REVIEWED BY Cal Portner, City Administrator, Tim Simon Finance Director ACTION REQUESTED Authorize the collection of a franchise fee to fund the Pavement Management Program through adoption and approval of the following items: Adopt Connexus Energy Franchise Ordinance. 2. Adopt ERMU Franchise Ordinance. 3. Adopt Electric Fee Ordinance. 4. Adopt CenterPoint Energy Fee Ordinance. 5. Approve Franchise Fee rebate form for previously assessed properties. 6. Approve transfer resolution from the Street Improvement Reserve Fund to the Pavement Management Fund. BACKGROUND /DISCUSSION With direction from the January 22, 2013, City Council meeting, staff assembled the attached franchise fee documents for final consideration and approval. Council approval of the above listed items will implement the collection of franchise fees from gas and electric service providers in the city to fund the City Pavement Management Program. The fee, as specifically detailed in the fee ordinances, will be dedicated to pay for the maintenance of existing city streets and would eliminate the need for special assessments and sale of reconstruction improvement bonds to fund the program. Franchise fee revenues, combined with current state aid allocations, are projected to fully fund the Pavement Management Program for the existing paved, city - owned street system. Staff has communicated the idea of the Franchise Fee with estimated costs with the community through use of direct mailings, inserts in the Chamber of Commerce newsletter, Elk River Star News Articles, a press release, an open house, and the city website. The public returned comments via phone calls, blog entries, and hand written notes. A copy of all written notes and blog entries are attached for your consideration. Phone call comments largely reflect the same comments received on the blog. Final Fee Amounts The proposed monthly fees to be collected on from different property classifications are as follows: P Q w E H E D A T UREJ The fees are estimated to generate approximately $1.40 to $1.45 million annually. The resulting impacts to the proposed Pavement Management and Street Improvement Reserve Funds are shown on the attached CIP analysis pages. Previously Assessed Properties This new funding mechanism would give funding consideration property owners who were recently charged a street assessment. All properties with gas and electric service in the city would be charged a franchise fee on their bills starting in July of 2013. Property owners still paying a street assessment would receive an annual rebate of the franchise fees paid that year. Rebates would apply whether assessments were prepaid or paid annually, and would be offered through the end of the adopted assessment term. Rental properties, which also qualify for rebates, would need to be in the name of the property owner, not a tenant. To qualify for the rebate, the property owner would present the attached rebate form and copies of their gas and electric bills, and be refunded the amount paid toward the franchise fee for the year. This policy and rebate form will be mailed to all property owners who would qualify for the rebate. FINANCIAL IMPACT An analysis of both the proposed Pavement Management Fund and existing Street Improvements Reserve Fund are attached. Program start -up will require a transfer from the Street Improvement fund to seed the Pavement Management Program Fund and complete the 2013 Street Improvement project. The Street Improvement Fund will remain in place to serve for new construction, boulevards, planned intersection enhancements projects, and the outstanding debt service on previous projects. The Pavement Management Program Fund and will only be used for street reconstruction and overlays. ATTACHMENTS ■ Communication Brochures — Residential and Commercial • Blob responses and written comments • Connexus Energy Franchise Ordinance • ERMU Franchise Ordinance • Electric Fee Ordinance • Centerpoint Fee Ordinance • Street Improvement Reserve Fund CIP Analysis • Pavement Management Fund Fee Analysis • Fund Transfer Resolution paw IRLa 0 NAT- URA Monthly Fees Yearly Fee Residential Properties $9.00 $108.00 Small C /I, Volume A (Gas) $29.00 $348.00 Small C /I, Volume B (Gas) $41.00 $492.00 General Commercial, Volume C (Gas) $120.00 $1,440.00 General Commercial, Dual Fuel (Gas) $140.00 $1,680.00 Large C /I, Dual Fuel (Gas) $170.00 $2,040.00 The fees are estimated to generate approximately $1.40 to $1.45 million annually. The resulting impacts to the proposed Pavement Management and Street Improvement Reserve Funds are shown on the attached CIP analysis pages. Previously Assessed Properties This new funding mechanism would give funding consideration property owners who were recently charged a street assessment. All properties with gas and electric service in the city would be charged a franchise fee on their bills starting in July of 2013. Property owners still paying a street assessment would receive an annual rebate of the franchise fees paid that year. Rebates would apply whether assessments were prepaid or paid annually, and would be offered through the end of the adopted assessment term. Rental properties, which also qualify for rebates, would need to be in the name of the property owner, not a tenant. To qualify for the rebate, the property owner would present the attached rebate form and copies of their gas and electric bills, and be refunded the amount paid toward the franchise fee for the year. This policy and rebate form will be mailed to all property owners who would qualify for the rebate. FINANCIAL IMPACT An analysis of both the proposed Pavement Management Fund and existing Street Improvements Reserve Fund are attached. Program start -up will require a transfer from the Street Improvement fund to seed the Pavement Management Program Fund and complete the 2013 Street Improvement project. The Street Improvement Fund will remain in place to serve for new construction, boulevards, planned intersection enhancements projects, and the outstanding debt service on previous projects. The Pavement Management Program Fund and will only be used for street reconstruction and overlays. ATTACHMENTS ■ Communication Brochures — Residential and Commercial • Blob responses and written comments • Connexus Energy Franchise Ordinance • ERMU Franchise Ordinance • Electric Fee Ordinance • Centerpoint Fee Ordinance • Street Improvement Reserve Fund CIP Analysis • Pavement Management Fund Fee Analysis • Fund Transfer Resolution paw IRLa 0 NAT- URA • Elk River maintains nearly 150 miles of paved city streets • The city spends $272,000 per year in general tax dollars to maintain city streets • Home and business owners are assessed to pay 33% of the cost to replace existing streets, which occurs approximately every 60 years; they are assessed 100% of the cost to overlay the streets about every 20 years • The city raises general property taxes to pay for the remaining costs of street replacement For Comments and More Information Go to our website blog at -,vww E1kRiverMN.gov Or call 763.635.1000 �z o bp W Lno � M W �W City of Elk River City Street Pavement Management Program J� J aty or www.ElkRiverMN.gov Elk March 2013 River The City Council is evaluating the option t;, fund the pavement management program through the collection of a franchise fee in lieu of assessments and property taxes. What is a Franchise Fee? Each city has a franchise agreement with each utility company (gas, electric) for their use of city - owned right -of -way for their business purposes. • Right -of -way is the city property located adjacent to roadways for utilities, construction access, and snow storage. • By law, cities may charge utilities a fee for the use of city -owned right -of -way. How will it be used? The city would fund regular maintenance projects with the fee, including overlays and reconstruction, to prolong the lifecycle of streets to 50 -60 years. The average life expectancy of local streets is approximately 25 -30 years with out ongoing maintenance. Reliance on state funds, property taxes and increasingly expensive materials make the pavement management program vulnerable to cuts and delays, thus decreasing street life. The - " -- ---- `- . -'1 -- 1 -- -- - - -- -- -' - - -- '1- '- - - - -1- 1 -- 17' -- Why Now? With proper care, streets in Elk River should last 60 years. At this point in time, over 80% of all city streets have been constructed or reconstructed within the last 20 years. We have a growing number of streets requiring costly maintenance in the near future. Scheduled assessments in 2013 are as high as $8,000 for some homeowners and $20,000 for the average business. w What are the benefits? • More equitable funding plan than assessments based on lot size and property taxes based on property value. • Eliminates the need for bonding and associated financing costs • Smaller monthly fees instead of large tax statement or assessment • Also collects money from renters who pay utilities, the actual street users, not just the property owners • Current and future property owners pay a similar fee • Keeps maintenance and reconstruction on a proactive and timely schedule Is this a New Tax? &_ By definition, the planned franchise fee is a rental fee or reimbursement with proceeds dedicated to finance the costs of the city street system. To manage the larger street network and fully implement an adequate pavement management plan, the city will need to more than double the property tax levy to $600,000 without an alternative funding source. The fee will replace the general property tax levy used to pay for: 1. Some current street improvements; 2. Property tax assessments directly to property owners; and 3. General Obligation bond payments, administrative fees and bond interest What if I am still paying for a street reconstruction or overlay ,_assessment? A rebate plan will be put in place to offset a portion of the costs associated with the past street maintenance projects. For Comments and More Information City of Elk River City Street Pavement Management Program The City Council is evaluating the option to fund the pavement management program throe � -? the collection of a fr:�,- Ichic- F -- _ -= lieu of assessments and property taxes. What is a Franchise Fee? Every city has a franchise agreement with each utility company (gas, electric, etc.) for their use /rent of city - owned right -of -way for their business purposes. • Right -of -way is city property located adjacent to roadways for utilities, construction access, and snow storage. • By law, cities may charge utilities a fee for use of City-owned right -of -way. Utility providers will likely pass this fee onto their customers How will it be used? The city would fund regular maintenance projects with the money collected from the fee, including overlays and reconstruction, to prolong the lifecycle of streets to 50- 60 years. The average life expectancy of local streets is approximately 25 -30 years without ongoing maintenance. Reliance on state funds, property taxes, assessments, and increasingly expensive materials make the pavement management program vulnerable to cuts and delays, thus decreasing street life. The city is currently bonding for new projects which inflates street assessment costs by the added interest costs. Why Now? With proper care, streets in Elk River should last 60 years. Elk River has a growing number of streets requiring costly _ maintenance in the near future. Scheduled assessments in 2013 are as high as $8,000 for some homeowners and $20,000 for the average business. To manage the larger street network and fully implement an adequate pavement management plan, the city will need to increase assessments and more than double the property tax levy to $600,000 without an alternative funding source. What are the benefits to Businesses? • More equitable funding plan than assessments based on lot size and property taxes based on property value. • Eliminates the need for bonding and associated financing costs. • Smaller monthly fees instead of large tax statements and assessments. • Collects money from renters who pay utility bills and also use the streets, not just the property owners. • Keeps maintenance and reconstruction on a proactive and timely schedule. Is this a New Tax? By definition, the planned franchise fee is a rental fee or reimbursement with proceeds dedicated to finance the costs of the city street system. Revenue collected from the fee, which will likely be passed on to customers of the utilities, will replace the protion of the property tax levy used to pay for street improvements. How Much will this Cost? Preliminary estimates show the impact to business and industrial accounts as follows: Small Commercial /Industrial - $36 /month (based on utility classifications) Large Commercial /Industrial - $126 /month (based on utility classifications) E r Comments and More Information to our website blog at wwwElkRiverMN.gov to "Elk River Listens" Or call 763.635.1000 March 2013 Elk's, River Elk River, MN - Official Website Page 1 of 13 You are here: Home I Community Voice Community Voice Search mm `I' I Idea, Initiative, Tag..., All Initiatives View all initiatives View all ideas in City Street Pavement Management Program City Street Pavement Management Program RaeAnn Gardner 127 points Mar 7. 2013 Did you know that the City of Elk River maintains nearly 150 miles of paved city streets? Residents should of received a flyer in the mail the week of March 4th to explain the program and the collection of a franchise fee in lieu of assessments and property taxes. An average monthly franchise fee of the proposed $9 /per renter or property owner would be less than the average cost of one meal out. The city invites your feedback on the Pavement Management Program. Amendments Mar 14, 2013 Did you know that the City of Elk River maintains nearly 150 miles of paved city streets? Residents should have received a flyer in the mail the week of March 4 to explain the program and the collection of a franchise fee in lieu of assessments and property taxes. An average monthly franchise fee of the proposed $9 /per renter or property owner would be less than the average cost of one meal out. The city invites your feedback on the Pavement Management Vote 2 4 IF 377 Views Follow via Email Subscribe via RSS Share f t 10 Flag as Inappropriate http:// mn- elkriver. civicplus .comICommunityVoicelldeal City- Street - Pavement - Managem... 04/11/2013 Elk River, MN - Official Website Program. Discussion F1 Linda Lee 2 points I am 100% for this management program. Other cities use this method with success. I do not like the assessment to property owners. It is difficult on many residents and creates stress. A nominal monthly charge can be absorbed. Please go forward with this new city street pavement management program. I'm so glad, someone had the initiative to do something different! Mar 11, 2013 9:14 PM Flap as Inappropriate Reply F1 Matt Spaniol 2 points I agree with this method of funding the city streets. I also believe the city needs to pay closer attention to semi / garbage truck traffic and its impact on the streets. Where the flow of traffic demands that garbage trucks and snow plows turn, the burden on the street can significantly reduce its anticipated life cycle. Please move forward with the funding method to employ a monthly franchise fee. Mar 12, 2013 9:19 AM r Flap as Inappropriate Reply Justin, Elk River City Engineer 37 points Truck traffic, among other factors does directly affect the life of a pavement. This was one of the reasons the City of Elk River implemented organized garbage collection service. This reduces the amount of garbage trucks on a given street to one per week. Mar 13, 2013 11:32 AM Page 2 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City- Street - Pavement - Managem... 04/11/2013 Elk River, MN - Official Website is Flaa as Inappropriate 91 Jim 7 points when any business is charged another fee what do they do ?? pass it on to the consumer!!! so now that nominal monthly fee will double or triple ... think about what your doing!!!!! Mar 12, 2013 9:24 AM Flag as Inappropriate Reply Justin, Elk River City Engineer 37 points A business does operate to make a profit and when they are taxed for whatever reason, they pass along that cost to their customers. The proposed fee is not expected to be in addition to the current portion recovered through taxing, but rather a more equitable alternative. Mar 13, 2013 11:34 AM I r Flaa as Inappropriate F1 Jim 7 points Again you can deduct a tax not a fee-this will get way out of hand!!! Bad Idea Mar 12, 2013 9:26 AM Flag as Inappropriate Reply Justin, Elk River City Engineer 37 points Your tax advisor would be able to clarify which portion of a property tax, special assessment, or fee may be deductible for your specific property type. Mar 13, 2013 11:44 AM 1% Flaa as Inappropriate Page 3 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City - Street- Pavement - Managem... 04/11/2013 Elk River, MN - Official Website Ray Miller 5 points In the brochure under "Is this a new tax ?" it says that the fee will replace the general property tax levy used for street improvements, etc. Does that mean that our property taxes will be reduced substantially or is this just another tool to raise overall revenue? This cities government does not have a good track record of fiscal responsiblity and often directs resources toward pet projects that if put too a vote in the community would never get approved. If you are serious about changing the tax structure (which this is) provide additional information, several public meetings, and allow the public to vote on it. Mar 12, 2013 2:56 PM r Flaa as Inappropriate Reply Justin, Elk River City Engineer 37 points The objective of the fee is to replace the current portion of the tax levy collected for street projects. The current amount being collected via tax levy and property assessments is not sufficient to fully fund the pavement management program. Without the franchise fee approach, the City Council would need to consider an increase to the tax levy and special assessments to cover the costs of needed street improvement projects. Because of this, the City Council researched options for future program funding and the franchise fee approach is being considered as the most equitable and sustainable. Mar 13, 2013 11:46 AM 116 Flaa as Inappropriate Bobby 5 points I would say NO for charging the tax payers as Page 4 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City - Street- Pavement - Managem... 04/11/2013 Elk River, MN - Official Website you can stop all the spending money on your special projects listed in your "certified annual financial report" Page 13 shows you have 48 Million dollars in the bank that's unrestricted net asset so why are you asking us for money? I agree the roads need to get done but not at our expense! We already pay too much in taxes and now your soliciting door to door looking for more? Back to drawing board.. Mar 14, 2013 2:27 PM is Flaa as Inappropriate Reply Justin, Elk River City Engineer 37 points The question is referring to the "Statement of Net Assets," which we are required to report by Governmental Accounting Standards Board, Statement 34, commonly called GASB -34. These statements utilize "Full Accrual Basis" accounting unlike governmental funds, which are reported as "Modified Accrual Basis" accounting. Full Accrual Basis accounting requires we record unavailable revenue, such as over $4 Million in Special Assessments that we will receive over the next several years, but are not in the "bank" right now. By state law, many of the city's funds have legal restrictions. "Business - Type Funds ", not received from taxes, like Sewer, Water, Electric, Garbage and Liquor Fund make up 40% of the net assets and account for daily operating expenses and future large capital replacement costs. Continued below... Mar 15, 2013 2:19 PM rFlaa as Inappropriate M Page 5 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City - Street- Pavement - Managem... 04/11/2013 Elk River, MN - Official Website Justin, Elk River City Engineer 37 points The Business -Type Fund is similar to your household budget, which includes groceries, cable bill, electric bill and heating bill (operating expenses), plus saved money for a new car (capital replacement) so you don't spend money on interest. Our Sewer Fund is planning for a multi- million dollar expansion needed to meet projected wastewater demand. 11 is a good financial practice to plan all capital replacements just as a homeowner plans the replacement for a worn roof, furnace or updated bathroom. The only "unrestricted net asset" which is unassigned is in the General Fund, the primary city operating fund. The city maintains, by policy, a minimum fund balance that is 40% of the annual budget. We only receive tax settlements twice a year (June & December) and need funds to cash flow our operations (police, fire, streets etc.). Mar 15, 2013 2:20 PM Ta Flaa as Inappropriate F1General Public Comment 18 points Has this topic been discussed at any public meetings? Mar 15, 2013 2:40 PM Flaa as Inappropriate Reply Justin, Elk River City Engineer 37 points Yes. The City Council has discussed the long term funding of the pavement management program at the following meetings: July 9, 2012, August 6, Page 6 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City - Street- Pavement - Managem... 04/11/2013 Elk River, MN - Official Website 2012, October 8, 2012, November 19, 2012, and January 22, 2013. To further detail the program and answer questions, staff has scheduled an open house to be held at City Hall on April 4, 2013 from 4:00pm to 7:00pm. Mar 15, 2013 2:51 PM rFlaa as Inappropriate F1General Public Comment 18 points What utilities would this fee be placed on? Mar 15, 2013 2:40 PM Flap as Inappropriate Reply Justin, Elk River City Engineer 37 points The fee would be split and charged through two utilities. It is proposed that $5.00 would be charged on a residential electric bill and $4.00 on a residential gas bill. Charges on commercial and industrial properties would be higher based on their larger usage. Mar 15, 2013 2:52 PM 116 Flaa as Inappropriate F1General Public Comment 18 points Will I be charged $9 per month for every person in my house? Mar 15, 2013 2:40 PM r Flaa as Inappropriate Reply Justin, Elk River City Engineer 37 points No. The fee would be distributed based on the utility account at the property not by the number of people. A typical property has one electric Page 7 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City- Street - Pavement - Managem... 04/11/2013 Elk River, MN - Official Website account and one gas account and thus would be charged a proposed $5 /month on their electric bill and $4 /month on their gas bill. Mar 15, 2013 2:52 PM rFlap as Inappropriate F1General Public Comment 18 points I live in a town home on a private street. Will the money we pay toward the franchise fee pay for the maintenance of our private streets? If not why would we pay it? Mar 15, 2013 2:41 PM Flap as Inappropriate Reply Justin, Elk River City Engineer 37 points No. The fee collected will be used to maintain the public city street system. The proposed franchise fee you would pay is expected to replace your current contribution to the maintenance of the city system through property taxes and any special assessment your townhome association may be charged for improvements to the public streets past your development. Mar 15, 2013 2:54 PM rFlap as Inappropriate F1General Public Comment 18 points Why don't you just charge a `Street Fee' to each property and bill it similar to a garbage bill? Why go through a third party for collection? Mar 15, 2013 2:41 PM `m Flap as Inappropriate Reply Page 8 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City - Street- Pavement - Managem... 04/11/2013 Elk River, MN - Official Website Justin, Elk River City Engineer 1 37 points State law does not allow a City to charge a direct street fee for maintenance of our system. State law does allow for the collection of a franchise fee from utility service providers for their use of the right -of- way. That is why we are proposing to charge this fee to the utility companies and then dedicate its use to maintain the city street system. Mar 15, 2013 3:06 PM To Flaa as Inappropriate F1General Public Comment 18 points I live on a County Road, why would I be charged a fee? Mar 15, 2013 2:57 PM Flaa as Inappropriate Reply Justin, Elk River City Engineer 37 points As a city resident that lives on a county road, you receive the benefit of the county not assessing for maintenance and reconstruction of their roadways. You do contribute to the costs of the city street improvement projects through a component of the property taxes you pay. The proposed franchise fee, would replace that property tax component. Mar 15, 2013 3:15 PM rFlag as Inappropriate F1 Jim 5 points This is one of the most ridiculous taxing counties Page 9 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City- Street - Pavement - Managem... 04/11/2013 Elk River, MN - Official Website in the state as it is, too cheap to even put on fireworks. I'm on the verge of leaving this area as it is, do this and that just might be the final straw. $3,000.00 + in taxes on a moderate home at best and now you want more. You're on the right track to drive everyone away and I just might be the first. Mar 19, 2013 8:27 AM Flag as Inappropriate Reply 91 Jim 2 points State law doesn't allow to charge this directly so do the honorable politician actions and ram it down our throats on a reverse end around play. Mar 23, 2013 8:13 AM +0 Flaa as Inappropriate Reply Justin, Elk River City Engineer 37 points Understanding the limitation of existing funding options available to Minnesota cities for their street maintenance programs, the State Legislature is currently working on a bill (SF 607 and HF 745) that would allow for the direct billing by a City for a Street Maintenance Fee. This same idea has been discussed at past legislative sessions but has yet to be passed and signed into law. As a city we are not trying to pull a "reverse end around" but rather be fully transparent and informative of the reason the franchise fee is being considered. The process that we are proposing has been, and continues to be, used by many other cities throughout Minnesota. Mar 29, 2013 11:02 AM in Flap as Inappropriate Page 10 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City- Street - Pavement - Managem... 04/11/2013 Elk River, MN - Official Website n General Public Comment 18 points We are excited at the prospect of a change in the way we pay for our roads! We live on the corner of 2 busy roads and would love to have smaller, spread -out payments. Carrie Mar 25, 2013 11:49 AM Is Flag as Inappropriate Reply Justin, Elk River City Engineer 37 points City staff will be hosting an Open House this Thursday, April 4, from 4:00pm to 7:00pm at City Hall to take comments and answer additional questions on the pavement management program and the proposed franchise fee. Apr 2, 2013 8:57 AM I is Flaa as Inappropriate Reply F1 Dan 4 points I already have been assessed thousands for the last Highland Rd curb and gutter and pavement. How can we continue to afford more taxes ( 9$ wk is actually $468 yr). This on top of past assessments and property tax ! Come on now , how can home owners continue this especially those on fixed incomes? Apr 2, 2013 1:18 PM 110 Flaa as Inappropriate Reply is Flaa as Inappropriate I Justin, Elk River City Engineer 37 points Those properties like yours that have been recently assessed for street improvements, would qualify to have the amount paid toward the franchise fee rebated through the duration of the assessment period. The proposed fee would be a total of $9 per month for an annual cost of $108 per residential property not $468. Page 11 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City- Street - Pavement - Managem... 04/11/2013 Elk River, MN - Official Website Apr 2, 2013 4:17 PM rFlag as Inappropriate F1 Dan 4 points Thanks for your quick response. The key here is "recently assessed" and I might add still paying and will for some time. Why in the world would I want to pay more on top of that? It is unreasonable and will tax some out of their homes eventually. By the way it is a TAX, your department is sounding like the current administration. Apr 3, 2013 6:09 PM I is Flaa as Inappropriate Reply Justin, Elk River City Engineer 37 points Two very good points. The planned rebate program will rebate franchise fee payments during the assessment period, minimizing a "double billing" situation. Total street reconstruction costs are currently shared, 1/3 assessed to property owners and 2/3 paid by the city, generally after borrowing money (bonding) and paid through the general tax levy. In effect, 2% of your annual city property tax pays the city share. To meet street upcoming improvement needs without a franchise fee, the city will need to increase the property tax component by 4% to an estimated 6% of your annual city tax bill. In addition, property owners could expect further assessments approximately every 20 years. Apr 5, 2013 8:37 AM 110 Flag as Inappropriate F1General Public Comment 18 points Page 12 of 13 http:// mn- elkriver. civicplus .comICommunityVoicelldeal City - Street- Pavement - Managem... 04/11/2013 Elk River, MN - Official Website I think it is a good idea! Randy During Apr 10, 2013 10:22 AM 119 Flag as Inappropriate Reply F1General Public Comment 18 points I support this program. It makes good sense for the future management and for the quality of the infrastructure. Jean Keely Apr 10, 2013 10:22 AM is Flap as Inappropriate Reply Sign In to Comment Page 13 of 13 http:// mn- elkriver .civicplus.comICommunityVoicel Idea / City - Street- Pavement - Managem... 04/11/2013 1 9, City of Elk River City Street Pavement Management Program We appreciate your Participation; please feel free to leave your comments and/or concerns in the space below. Optional, Name: Address: I-// - /0- Phone: 7z0---3 V4� 7 Email: lie Oyk toz C C c Optional, Name: Address: I-// - /0- Phone: 7z0---3 V4� 7 Email: of ver City of Elk River City Street Pavement Management Program We appreciate your participation; please feel free to leave your comments and/or concerns in the space below. Optional: Name: Address: Phone: qz-/ `— / 6, -) -->, Email: -C-e C_ir 7 Optional: Name: Address: Phone: qz-/ `— / 6, -) -->, Email: ORDINANCE NO. 13-_ CITY OF ELK RIVER, MINNESOTA AN ORDINANCE OF THE CITY OF ELK RIVER GRANTING TO CONNEXUS ENERGY, A MINNESOTA COOPERATIVE CORPORATION, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE FRANCHISE TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN IN THE CITY OF ELK RIVER, MINNESOTA, AN ELECTRIC DISTRIBUTION SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY POLES, LINES, FIXTURES AND APPURTENANCES, FOR THE FURNISHING OF ELECTRIC ENERGY TO A PORTION OF THE CITY, ITS INHABITANTS, AND OTHERS, AND TO USE THE PUBLIC WAYS AND PUBLIC GROUNDS OF THE CITY FOR SUCH PURPOSES; AND PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF. THE CITY COUNCIL OF THE CITY OF ELK RIVER, MINNESOTA, DOES FIND AND ORDAIN, AND THE CITY CODE OF ORDINANCES IS HEREBY REVISED TO INCLUDE, THE FOLLOWING: SECTION 1. DEFINITIONS. For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: City. The City of Elk River, County of Sherburne, State of Minnesota and the corporate limits thereof on the Effective Date and as they may be adjusted from to time to time hereafter. City Utility System. Facilities used for providing public utility service owned or operated by the City or agency thereof, including sewer, storm sewer, water service, street lighting and traffic signals. Company. Connexus Energy, a Minnesota Cooperative Corporation, its successors and assigns including all successors or assignees that own or operate any part or parts of the Electric Facilities subject to this Franchise. Company Service Area. Those areas within the City to which the Company has been assigned the right to provide electric service, as in effect on the Effective Date or as may be hereafter revised. Council. The City Council of the City of Elk River as from time to time constituted. Effective Date. The effective date of this Ordinance. Electric Facilities. Electric transmission and distribution substations, towers, poles, lines, guys, anchors, conduits, fixtures, and necessary appurtenances owned or operated by the Company for the purpose of providing electric energy for public or private use. Franchise. The grant of rights made by the City to the Company in this Ordinance, subject to its terms and conditions. Notice. A writing served by any party or parties on any other party or parties at the following addresses: If to the City: City Administrator City of Elk River 13065 Orono Parkway Elk River, MN 55330 If to the Company: Chief Executive Officer Connexus Energy 14601 Ramsey Boulevard NW Ramsey, NIN 55303 -6024 Any party may change its respective address for the purpose of this Ordinance by written notice to the other parties. Person. A natural person or any partnership, joint venture, corporation, cooperative, limited liability company or any public corporation, political subdivision or agency of the State or any other legal entity that may be created by law. Public Ground. All real property owned by or dedicated to the City with respect to which the City holds the legal right or title to grant or withhold easement, leasehold or occupancy rights or servitudes. Public Way. Any street, alley and other public rights -of -way within the City. Utility. Transmitting, furnishing, transporting, distributing, delivering, selling, receiving, importing, manufacturing, or causing to be produced, transmitted, furnished, transported, delivered, sold, received, imported, or manufactured, electric energy, natural gas, mixed gas, heat, light, power, and services provided through a cable communication system. Utility Service Provider. Any Person who performs any one or more of the activities of a Utility to or for the public or to or for any one or more persons within the corporate limits of the City. SECTION 2. THE FRANCHISE. 2.1. Grant of Franchise. The City hereby grants the Company, for a term of twenty (20) years from the effective date this Ordinance, the right to transmit and furnish electric energy for any public or private use within and through the Company Service Area. For these purposes, the Company may construct, operate, repair and maintain Electric Facilities in, on, over, under and across the Public Ways and Public Grounds within the Company Service Area, subject to the provisions of this Ordinance. The Company may do all reasonable things necessary or customary to accomplish these purposes, subject however, to all applicable design and safety codes, the provisions of this Ordinance, zoning ordinances, other applicable ordinances and permit procedures of the City. This Franchise shall terminate with respect to Company Service Areas that are duly acquired by the City or ERMU. 2.2 Not Exclusive. This Franchise is not exclusive. 2.3. Effective Date. This Franchise shall be in force and effect from and after the adoption of this Ordinance and publication as required by law and upon the Company's duly authorized acceptance as provided in Section 12 below. SECTION 3. LOCATIONS; CONSTRUCTION; OTHER REGULATIONS. 3.1. General. Electric Facilities shall be located, constructed and maintained by the Company: (i) in as safe and secure a condition or manner as reasonably possible, (ii) so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways, and (iii) so as not to disrupt or interfere with the normal use or operation of any Public Ways, Public Ground or the City Utility System. Electric Facilities may only be located on Public Ground as determined by the City in its sole discretion. The Company's construction, reconstruction, operation, repair, maintenance, location and relocation of Electric Facilities shall be subject to the terms of this Ordinance and such other regulations of the City consistent with authority granted the City to manage its Public Ways and Public Grounds under state law, to the extent not inconsistent with a specific term of this Ordinance. 3.2. Construction; Maintenance; Repairs. Whenever the Company desires to open or disturb any Public Way or Public Ground for the purpose of constructing, maintaining, or repairing Electric Facilities, it shall give the City reasonable advance Notice, but not less than ten (10) business days, by filing a written Notice with the City Clerk. In any case, the Company shall not commence such work before obtaining a permit pursuant to Article 66 of the Elk River City Code, for which the City may impose a reasonable fee. The Company shall not, during the progress of the work, endanger or unnecessarily obstruct the passage of traffic or the normal and customary use of the Public Ways and Public Ground. During the progress of such work, the Company shall keep the affected Public Ways or Public Ground guarded in order to avoid accidents to persons or property. All work performed by the Company shall comply with all applicable federal, state, and local laws, rules, and regulations. 3.3. Emergencies. The requirements for obtaining permits from the City pursuant to Section 5.2 shall not apply if (i) an emergency exists requiring the immediate repair of Electric Facilities and (ii) the Company gives telephone notice to the City before, if reasonably possible, commencement of the emergency repair. Within two (2) business days after commencing the repair, the Company shall apply for any required permits and pay any required fees. 3.4. Restoration. Following the completion of any work, the Company shall promptly and diligently restore the affected Public Ways and/or Public Ground to as good a condition as before the work commenced. If the Company fails to promptly restore such Public Ways and/or Public Ground within ten (10) days of Notice by the City, the City may engage an independent contractor at the expense of the Company to perform the restoration of the Public Ways and/or Public Ground as required under this Section. The Company shall pay to the City upon demand the cost to the City of affecting such restoration including the City's administrative expenses and overhead. 3.5. Avoidance of Damage. The Company must take reasonable measures to prevent the Electric Facilities from causing damage to persons or property. The Company must take reasonable measures to protect the Electric Facilities from damage that could be inflicted on the Electric Facilities by persons, property, or the elements. The Company must take protective measures when the City performs work near the Electric Facilities, if given reasonable Notice by the City of such work prior to its commencement. 3.6. Field Locations. The Company shall provide field locations to the City for all its underground Electric Facilities within the City consistent with the requirements of Minnesota Statutes, chapter 216D. 3.7. Shared Use of Poles; Street Lights. 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 or the existing facilities, if any, of another Utility Service Provider. The installation and placement of any of the foregoing shall comply with the National Electric Safety Code, subject to a mutually agreeable pole attachment agreement. 3.8. Tree Trimming. Subject to such reasonable regulations as the City may establish, the Company may, at its cost, trim all trees and shrubs in the Public Ways located within the Company Service Area to the extent the Company finds it necessary to avoid interference with the proper construction, operation, repair and maintenance of any of the Company's Electric Facilities installed or maintained hereunder. 3.9. Notice of City Improvements. The City will give the Company reasonable advance Notice of plans for improvements to Public Ways and Public Ground in the Company Service Area where the City has reason to believe that the Company's Electric Facilities may affect or be affected by such improvements. The Notice will contain: (i) the nature and character of the improvements, (ii) the Public Ways and/or Public Ground upon which the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City will start the work, and (v) if more than one Public Way or parcel of Public Ground is involved, the order in which the work is to proceed. 3.10. Acquisition. Notwithstanding any language in this Agreement, to the contrary, the City and /or Elk River Municipal Utilities (ERMU) shall have the right to purchase or otherwise acquire the Company's Electric Facilities or the Company Service Area, or portion(s) thereof, at any time by way of negotiations or eminent domain as provided by law in effect on the date the City or ERMU commences such purchase or acquisition. The Company shall continue to operate the Electric Facilities only until such acquisition is completed. The expiration or termination of this Franchise as hereinbefore provided shall not, by itself, be an independent basis of any claim by the Company against the City or ERMU. SECTION 4. ELECTRIC FACILITIES RELOCATION. 4.1. Relocation. In the event the City reasonably determines that it is necessary for the Company to move any part of its Electric Facilities because the City has determined to change, move or improve its Public Ways or that the Electric Facilities have become or will become a substantial impairment to the existing or imminent public use of Public Ground, upon reasonable Notice by the City to the Company, then the Company will move its Electric Facilities at its sole cost, except as provided in Section 4.2. The City shall consider reasonable alternatives in designing its public works projects so as not to arbitrarily cause the Company unreasonable additional expense in exercising its authority under this Section 4.1. If a relocation is ordered within five (5) years of a prior relocation of the same Electric Facilities, which was made at Company expense, the City shall reimburse the Company for the non - betterment costs on a time and material basis. This Section 4.1 shall not constitute a taking by the City nor be construed as a waiver or modification of any easement or prescriptive rights acquired by the Company independent of and without reliance by the Company on this Franchise. 4.2. Projects with Federal Funding. City shall not order Company to remove or relocate its Electric Facilities when a Public Way is vacated, improved or realigned for a right -of -way project or any other project 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 are first paid to Company. The City is obligated to pay Company only for those portions of its relocation costs for which City has received federal funding specifically allocated for relocation costs in the amount requested by the Company, which allocated funding the City shall specifically requests. Relocation, removal or rearrangement of any Company Electric Facilities made necessary because of a federally -aided highway project shall be governed by the provisions of Minnesota Statutes, Section 161.46, as supplemented or amended. It is understood that the rights herein granted to Company are valuable rights. 4.3. No Release of Liability. Nothing contained herein shall relieve any third party from liability arising out of their failure to exercise reasonable care to avoid injuring the Company's Electric Facilities while performing any work connected with grading, regarding or changing the line of any Public Way or with any construction on or adjacent to any Public Way; provided, however, this Section 6.2 shall not limit the City's rights to indemnification under Section 5.1 nor shall the City in any way be liable to the Company for claims arising from the negligence of any third party. SECTION 5. INDEMNIFICATION. 5.1. Indemnification. If at any time any claim of any kind is made against the City for injury to persons or property arising from the acts or failure to act by the Company, its agents, servants, or employees in connection with the operations of the Company under and pursuant to this Franchise, the Company shall fully indemnify, defend and hold harmless the City, its agents, servants or employees from any and all such claims, including, but not limited to, reimbursement of any reasonable attorneys' fees and costs and expenses the City may incur in handling, denying, or defending such claims. The Company's obligation to indemnify the City shall not extend to any injury to persons or property caused by the negligent act or failure to act by the City or any actions taken by the Company pursuant to directions of the City if performed within the scope of the City's directions without negligence by the Company. The City shall determine who will defend any such claims arising under this Section 5.1 and the Company will thereafter have complete control of such litigation; provided, however, the Company may not settle any such claims without the prior approval of the City, which approval will 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 shall be entitled to assert every defense or immunity that the City could itself assert in its own behalf. The Company's obligations under this Section shall survive the expiration, amendment, or termination of this Ordinance. 5.2. Insurance. Before the Effective Date, the Company shall furnish the City a summary of insurance, if any, carried by the Company, or of its self - insured status, in either case demonstrating adequate protection to the City from any and all obligations, liabilities, or claims of any nature whatsoever, growing out of the operation, construction, and maintenance of its Electric Facilities within the City. The Company shall maintain such insurance coverage at all times during this Franchise. 5.3. Compliance with Laws; Hazardous Substances. In its operation under this Ordinance, the Company shall observe all federal, state and local laws, rules, regulations and orders with respect to the transmission, distribution, transformation or furnishing of electric energy and the handling of materials, substances and wastes deemed toxic or hazardous to health, natural resources or the environment (collectively, "Hazardous Substances "). The Company shall remove or remediate any Hazardous Substances located on, in or surrounding its Electric Facilities or caused to be located on, in or surrounding the Public Ways and Public Grounds or elsewhere in the City in compliance with all applicable laws, regulations and lawful government orders, and pay or cause to be paid all costs associated therewith. The indemnification terms and conditions of Section 5.1 shall apply to all claims made against the City by any Person, including any governmental agency, who or which asserts any right to costs, damages or other relief based upon the terms and conditions imposed upon the Company under this Section 5.3 or which arise from or are related to the Company's acts or failure to act in compliance with any law, rule, regulation or lawful order governing Hazardous Substances. SECTION 6. VACATION OF PUBLIC WAYS. The City will consult with the Company at least four (4) weeks prior to its action on any proposed vacation of a Public Way. Except where ordered pursuant to Section 4. 1, the vacation of any Public Way after the installation of Electric Facilities shall not operate to deprive the Company of its rights to operate and maintain such Electric Facilities until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to the Company. However, in no case shall the City be liable to the Company for failure to specifically preserve a Public Way in the exercise of its authority under Minnesota Statutes, Section 160.29. SECTION 7. ABANDONED FACILITIES. The Company shall comply with City ordinances and Minnesota Statutes, Section 216D.01 et seq., as they may be amended from time to time. The Company shall maintain records describing the location of all abandoned and retired Facilities within the City, produce such records at the City's request and comply with the location requirements of Section 21613.04 with respect to all Electric Facilities, including abandoned and retired Electric Facilities. SECTION 8. FRANCHISE FEE. 8.1. Authority. The City reserves all rights under Minnesota Statutes, Sections 216B.36 and 301B.01 or other law to require a franchise fee at any time during the term of, and in consideration for, this Franchise. The franchise fee may be expressed (i) as a specified charge per measurable unit of electricity being provided, transported, transmitted, sold, furnished, delivered, or received within the City, or (ii) as a percentage of the gross revenues received by the Company for its operations within the City, or (iii) a flat fee per customer based on service to retail customers within the City or (iv) on some reasonable combination of these factors. 8.2. Separate Ordinance. A franchise fee shall be imposed by a separate ordinance duly adopted by the Council after 60 days' notice to company of the proposed fee. 8.3. Equivalent Fee Requirement. A separate ordinance imposing the franchise fee shall not be effective against the Company, unless the separate ordinance imposes the same fee on the same class of properties by all electrical suppliers within the City. SECTION 9. DEFAULTS. If the Company shall be in default in the performance of any of the material terms and conditions of this Ordinance, and shall continue in default for more than thirty (30) days (or fails to initiate the cure of the default within said period and diligently pursue said cure, if the cure of the default cannot reasonably be accomplished within said thirty (30) days) after receiving Notice from the City of such default, the City may elect to cure such default and charge the Company for the costs thereof. SECTION 10. AMENDMENT PROCEDURE. The Company's rights hereunder are subject to the police power of the City to adopt and enforce ordinances necessary to the health, safety, and welfare of the public, and this Franchise may be amended or repealed by the City as deemed necessary or appropriate in the exercise of such power. If this Franchise is repealed, any franchise fee imposed on the Company by the City shall terminate immediately. SECTION 11. GENERAL PROVISIONS OF ORDINANCE. 11.1. Governing Law. This Franchise is granted and is intended to be performed in the State of Minnesota and shall be construed and enforced in accordance with the laws of the State of Minnesota. The Company shall be subject to personal jurisdiction in the State of Minnesota. All actions related to this Ordinance or its enforcement shall be venued in Sherburne County District Court. 11.2. Limitation on Applicability. This Ordinance constitutes a franchise between the City and the Company as the only parties and no provision of this Franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of the agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. 11.3. Assignment. The Company may assign this Franchise without the prior approval of, but upon not less than thirty (30) days' prior Notice to, the City. Such Notice shall include the identity of and contact information for, the assignee and the statement of the assignee's plans and intentions for the operation of the Electric Facilities under this Franchise. SECTION 12. ACCEPTANCE BY THE COMPANY. 12.1. Acceptance by the Company. The City shall provide written notice by certified mail to Company of the adoption of this Ordinance or any proposed amendment. The Company shall, within thirty (30) days after adoption of this Ordinance or any amendment thereto, file with the City Clerk in writing its acceptance or rejection as provided in Section 12.2. If such acceptance is not filed or if a rejection is filed within said period, the Company, by its continuing operations, shall be deemed to have accepted the terms and conditions of this Franchise, except with respect to such particulars as it may successfully challenge under the procedures specified in Section 12.2. 12.2. Rejection Procedures. A rejection of this Franchise or any amendment hereto may be made by the Company only upon the grounds that the terms and conditions hereof or of such amendment exceed the lawful authority of the City under the Constitutions or Laws of the United States or the State of Minnesota or are otherwise unlawful. Any rejection shall be submitted in writing to the City, stating with particularity the points and authorities of law upon which the Company relies. If the City fails to amend this Franchise or otherwise satisfy the Company's objections as stated within thirty (30) days of its receipt of the Company's rejection, the Company shall have the right thereafter to seek appropriate judicial or administrative relief based solely upon those provisions it has alleged are unlawful in its rejection notice- If the Company fails to initiate such legal action within thirty (30) days from the expiration of the aforementioned thirty (30) day period provided for the City's amendment or cure, the Company shall be deemed to have waived its objections and to have accepted the terms of this Franchise. Adopted by the City Council of the City of Elk River this day of 2013. John J. Dietz, Mayor ATTEST: Tina Allard, City Clerk Published on the day of , 2013, in the Elk River Star News, a paper of general circulation within the City of Elk River, Minnesota. The provisions of the foregoing Ordinance are hereby accepted: DATED 52013. By: Its By: Its ORDINANCE NO. 13- CITY OF ELK RIVER, MINNESOTA AN ORDINANCE OF THE CITY OF ELK RIVER GRANTING TO ELK RIVER MUNICIPAL UTILITIES, A MINNESOTA MUNICIPAL UTILITY, ITS SUCCESSORS AND ASSIGNS, A NONEXCLUSIVE FRANCHISE TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN IN THE CITY OF ELK RIVER, MINNESOTA, AN ELECTRIC DISTRIBUTION SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY POLES, LINES, FIXTURES AND APPURTENANCES, FOR THE FURNISHING OF ELECTRIC ENERGY TO A PORTION OF THE CITY, ITS INHABITANTS, AND OTHERS, AND TO USE THE PUBLIC WAYS AND PUBLIC GROUNDS OF THE CITY FOR SUCH PURPOSES; AND PRESCRIBING CERTAIN TERMS AND CONDITIONS THEREOF. THE CITY COUNCIL OF THE CITY OF ELK RIVER, MINNESOTA, DOES FIND AND ORDAIN, AND THE CITY CODE OF ORDINANCES IS HEREBY REVISED TO INCLUDE, THE FOLLOWING: SECTION 1. DEFINITIONS. For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: City. The City of Elk River, County of Sherburne, State of Minnesota and the corporate limits thereof on the Effective Date and as they may be adjusted from to time to time hereafter. City Utility System. Facilities used for providing public utility service owned or operated by the City or agency thereof, including sewer, storm sewer, water service, street lighting and traffic signals. Company. Elk River Municipal Utilities (ERMU), a Minnesota Municipal Utility, its successors and assigns including all successors or assignees that own or operate any part or parts of the Electric Facilities subject to this Franchise. Company Service Area. Those areas within the City to which the Company has been assigned the right to provide electric service, as in effect on the Effective Date or as may be hereafter revised. Council. The City Council of the City of Elk River as from time to time constituted. Effective Date. The effective date of this Ordinance. Electric Facilities. Electric transmission and distribution substations, towers, poles, lines, guys, anchors, conduits, fixtures, and necessary appurtenances owned or operated by the Company for the purpose of providing electric energy for public or private use. Franchise. The grant of rights made by the City to the Company in this Ordinance, subject to its terms and conditions. Notice. A writing served by any party or parties on any other party or parties at the following addresses: If to the City: City Administrator City of Elk River 13065 Orono Parkway Elk River, MN 55330 If to the Company: General Manager Elk River Municipal Utilities 13069 Orono Parkway Elk River, MN 55330 Any party may change its respective address for the purpose of this Ordinance by written notice to the other parties. Person. A natural person or any partnership, joint venture, corporation, cooperative, limited liability company or any public corporation, political subdivision or agency of the State or any other legal entity that may be created by law. Public Ground. All real property owned by or dedicated to the City with respect to which the City holds the legal right or title to grant or withhold easement, leasehold or occupancy rights or servitudes. Public Way. Any street, alley and other public rights -of -way within the City. Utility. Transmitting, furnishing, transporting, distributing, delivering, selling, receiving, importing, manufacturing, or causing to be produced, transmitted, furnished, transported, delivered, sold, received, imported, or manufactured, electric energy, natural gas, mixed gas, heat, light, power, and services provided through a cable communication system. Utility Service Provider. Any Person who performs any one or more of the activities of a Utility to or for the public or to or for any one or more persons within the corporate limits of the City. SECTION 2. THE FRANCHISE. 2.1. Grant of Franchise. The City hereby grants the Company, for a term of twenty (20) years from the effective date of this Ordinance, the right to transmit and furnish electric energy for any public or private use within and through the Company Service Area. For these purposes, the Company may construct, operate, repair and maintain Electric Facilities in, on, over, under and across the Public Ways and Public Grounds within the Company Service Area, subject to the provisions of this Ordinance. The Company may do all reasonable things necessary or customary to accomplish these purposes, subject however, to all applicable design and safety codes, the provisions of this Ordinance, zoning ordinances, other applicable ordinances, permit procedures and the customary and necessary practices of the City. 2.2 Not Exclusive. This Franchise is not exclusive. 2 2.3. Effective Date. This Franchise shall be in force and effect from and after the adoption of this Ordinance and publication as required by law and upon the Company's duly authorized acceptance as provided in Section 12 below. SECTION 3. LOCATIONS; CONSTRUCTION; OTHER REGULATIONS. 3.1. General. Electric Facilities shall be located, constructed and maintained by the Company: (i) in as safe and secure a condition or manner as reasonably possible, (ii) so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways, and (iii) so as not to disrupt or interfere with the normal use or operation of any Public Ways, Public Ground or the City Utility System. Electric Facilities may only be located on Public Ground as determined by the City in its sole discretion. The Company's construction, reconstruction, operation, repair, maintenance, location and relocation of Electric Facilities shall be subject to the terms of this Ordinance and such other regulations of the City consistent with authority granted the City to manage its Public Ways and Public Grounds under state law, to the extent not inconsistent with a specific term of this Ordinance. 3.2. Construction; Maintenance; Repairs. Whenever the Company desires to open or disturb any Public Way or Public Ground for the purpose of constructing, maintaining, or repairing Electric Facilities, it shall give the City reasonable advance Notice, but not less than ten (10) business days, by filing a written Notice with the City Clerk. In any case, the Company shall not commence such work before obtaining a permit pursuant to Article 66 of the Elk River City Code, for which the City may impose a reasonable fee. The Company shall not, during the progress of the work, endanger or unnecessarily obstruct the passage of traffic or the normal and customary use of the Public Ways and Public Ground. During the progress of such work, the Company shall keep the affected Public Ways or Public Ground guarded in order to avoid accidents to persons or property. All work performed by the Company shall comply with all applicable federal, state, and local laws, rules, and regulations. 3.3 Emergencies. The requirements for obtaining permits from the City pursuant to Section 5.2 shall not apply if (1) an emergency exists requiring the immediate repair of Electric Facilities and (ii) the Company gives telephone notice to the City before, if reasonably possible, commencement of the emergency repair. Within two (2) business days after commencing the repair, the Company shall apply for any required permits and pay any required fees. 3.4. Restoration. Following the completion of any work, the Company shall promptly and diligently restore the affected Public Ways and /or Public Ground to as good a condition as before the work commenced. If the Company fails to promptly restore such Public Ways and /or Public Ground within ten (10) days of Notice by the City, the City may engage an independent contractor at the expense of the Company to perform the restoration of the Public Ways and /or Public Ground as required under this Section. The Company shall pay to the City upon demand the cost to the City of affecting such restoration including the City's administrative expenses and overhead. 3.5. Avoidance of Damage. The Company must take reasonable measures to prevent the Electric Facilities from causing damage to persons or property. The Company must take reasonable measures to protect the Electric Facilities from damage that could be inflicted on the Electric Facilities by persons, property, or the elements. The Company must take protective measures when the City performs work near the Electric Facilities, if given reasonable Notice by the City of such work prior to its commencement. 3.6. Field Locations. The Company shall provide field locations for all its underground Electric Facilities within the city consistent with the requirements of Minnesota Statutes, chapter 216D (commonly known as of the Effective Date as the "Gopher State One Call" system). 3.7. Shared Use of Poles; Street Lights. 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 or the existing facilities, if any, of another Utility Service Provider. Street name signs, "no parking" signs and other traffic control signs, as requested and provided by the City, may be installed on the electric and street light poles within the Company Service Area. No rental fee or other charge shall be payable by the City for this use; provided, however, that the City will reimburse the Company its actual and reasonable costs incurred by the Company in accommodating such use. The installation and placement of any of the foregoing shall comply with the National Electric Safety Code. 3.8. Tree Trimming. Subject to such procedures, regulation and supervision as the Council may establish, the Company may, at its cost, trim all trees and shrubs in the Public Ways located within the Company Service Area to the extent the Company finds it necessary to avoid interference with the proper construction, operation, repair and maintenance of any of the Company's Electric Facilities installed or maintained hereunder. 3.9. Notice of City Improvements. The City will give the Company reasonable advance Notice of plans for improvements to Public Ways and Public Ground in the Company Service Area where the City has reason to believe that the Company's Electric Facilities may affect or be affected by such improvements. The Notice will contain: (i) the nature and character of the improvements, (ii) the Public Ways and /or Public Ground upon which the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City will start the work, and (v) if more than one Public Way or parcel of Public Ground is involved, the order in which the work is to proceed. SECTION 4. ELECTRIC FACILITIES RELOCATION. 4.1. Relocation. In the event the City reasonably determines that it is necessary for the Company to move any part of its Electric Facilities because the City has determined to change, move or improve its Public Ways or that the Electric Facilities have become or will become a substantial impairment to the existing or imminent public use of Public Ground, upon reasonable Notice by the City to the Company, then the Company will move its Electric Facilities at its sole cost. The City shall consider reasonable alternatives in designing its public works projects so as not to arbitrarily cause the Company unreasonable additional expense in exercising its authority under this Section 6.1. This Section 6.1 shall not constitute a taking by the City nor be construed as a waiver or modification of any easement or prescriptive rights acquired by the Company independent of and without reliance by the Company on this Franchise. 4.2. No Release of Liability. Nothing contained herein shall relieve any third party from liability arising out of their failure to exercise reasonable care to avoid injuring the Company's Electric Facilities while performing any work connected with grading, regarding or changing the line of any Public Way or with any construction on or adjacent to any Public Way; provided, however, this Section 6.2 shall not limit the City's rights to indemnification under Section 7.1 nor shall the City in any way be liable to the Company for claims arising from the negligence of any third party. 4 SECTION 5. INDEMNIFICATION. 5.1. Indemnification. If at any time any claim of any kind is made against the City for injury to persons or property arising from the acts or failure to act by the Company, its agents, servants, or employees in connection with the operations of the Company under and pursuant to this Franchise, the Company shall fully indemnify, defend and hold harmless the City, its agents, servants or employees from any and all such claims, including, but not limited to, reimbursement of any reasonable attorneys' fees and costs and expenses the City may incur in handling, denying, or defending such claims. The Company's obligation to indemnify the City shall not extend to any injury to persons or property caused by the negligent act or failure to act by the City or any actions taken by the Company pursuant to directions of the City if performed within the scope of the City's directions without negligence by the Company. The City shall determine who will defend any such claims arising under this Section 6.1 and the Company will thereafter have complete control of such litigation; provided, however, the Company may not settle any such claims without the prior approval of the City, which approval will 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 shall be entitled to assert every defense or immunity that the City could itself assert in its own behalf. The Company's obligations under this Section shall survive the expiration, amendment, or termination of this Ordinance. 5.2. Insurance. Before the Effective Date, the Company shall furnish the City a summary of insurance, if any, carried by the Company, or of its self - insured status, in either case demonstrating adequate protection to the City from any and all obligations, liabilities, or claims of any nature whatsoever, growing out of the operation, construction, and maintenance of its Electric Facilities within the City. The Company shall maintain such insurance coverage at all times during this Franchise. 5.3. Compliance with Laws; Hazardous Substances. In its operation under this Ordinance, the Company shall observe all federal, state and local laws, rules, regulations and orders with respect to the transmission, distribution, transformation or furnishing of electric energy and the handling of materials, substances and wastes deemed toxic or hazardous to health, natural resources or the environment (collectively, "Hazardous Substances "). The Company shall remove or remediate any Hazardous Substances located on, in or surrounding its Electric Facilities or caused to be located on, in or surrounding the Public Ways and Public Grounds or elsewhere in the City in compliance with all applicable laws, regulations and lawful government orders, and pay or cause to be paid all costs associated therewith. The indemnification terms and conditions of Section 6.1 shall apply to all claims made against the City by any Person, including any governmental agency, who or which asserts any right to costs, damages or other relief based upon the terms and conditions imposed upon the Company under this Section 6.3 or which arise from or are related to the Company's acts or failure to act in compliance with any law, rule, regulation or lawful order governing Hazardous Substances. SECTION 6. VACATION OF PUBLIC WAYS. The City will consult with the Company at least four (4) weeks prior to its action on any proposed vacation of a Public Way. Except where ordered pursuant to Section 6.1, the vacation of any Public Way after the installation of Electric Facilities shall not operate to deprive the Company of its rights to operate and maintain such Electric Facilities until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to the Company. However, in no case shall the City be liable to the Company for failure to specifically preserve a Public Way in the exercise of its authority under Minnesota Statutes, Section 160.29. 5 SECTION 7. ABANDONED FACILITIES. The Company shall comply with City ordinances and Minnesota Statutes, Section 216D.01 et seq., as they may be amended from time to time. The Company shall maintain records describing the exact location of all abandoned and retired Facilities within the City, produce such records at the City's request and comply with the location requirements of Section 216D.04 with respect to all Electric Facilities, including abandoned and retired Electric Facilities. SECTION 8. FRANCHISE FEE. 8.1. Authority. The City reserves all rights under Minnesota Statutes, Sections 21613.36 and 30113.01 or other law to require a franchise fee at any time during the term of, and in consideration for, this Franchise. The franchise fee may be expressed (i) as a specified charge per measurable unit of electricity being provided, transported, transmitted, sold, furnished, delivered, or received within the City, or (ii) as a percentage of the gross revenues received by the Company for its operations within the City, or (iii) a flat fee per customer based on service to retail customers within the City or on some other similar basis, or (iv) in such other manner or fashion as the City may determine. The method of imposing the franchise fee may differ by customer class, by type of Utility, by particular circumstances of a Utility Service Provider, or by other relevant factor, and may combine the methods described in (i) through (iv) above. 8.2. Separate Ordinance. A franchise fee shall be imposed by a separate ordinance duly adopted by the Council after 60 days' notice to company of the proposed fee. SECTION 9. DEFAULTS. If the Company shall be in default in the performance of any of the material terms and conditions of this Ordinance, and shall continue in default for more than thirty (30) days (or fails to initiate the cure of the default within said period and diligently pursue said cure, if the cure of the default cannot reasonably be accomplished within said 30 days) after receiving Notice from the City of such default, the City may elect to cure such default and charge the Company for the costs thereof SECTION 10. AMENDMENT PROCEDURE. The Company's rights hereunder are subject to the police power of the City to adopt and enforce ordinances necessary to the health, safety, and welfare of the public, and this Franchise may be amended or repealed by the City as deemed necessary or appropriate in the exercise of such power. SECTION 11. GENERAL PROVISIONS OF ORDINANCE. 11.1. Governing Law. This Franchise is granted and is intended to be performed in the State of Minnesota and shall be construed and enforced in accordance with the laws of the State of Minnesota. The Company shall be subject to personal jurisdiction in the State of Minnesota. All actions related to this Ordinance or its enforcement shall be venued in Sherburne County District Court. 11.2. Limitation on Applicability. This Ordinance constitutes a franchise between the City and the Company as the only parties and no provision of this Franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of the agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. 11.3. Assignment. The Company may assign this Franchise without the prior approval of, but upon not less than thirty (30) days' prior Notice to, the City. Such Notice shall include the identity of and contact information for, the assignee and the statement of the assignee's plans and intentions for the operation of the Electric Facilities under this Franchise. SECTION 12. ACCEPTANCE BY THE COMPANY. 12.1. Acceptance by the Company. The Company shall, within thirty (30) days after adoption of this Ordinance or any amendment thereto, file with the City Clerk in writing its acceptance or rejection as provided in Section 12.2. If such acceptance is not filed or if a rejection is filed within said period, the Company, by its continuing operations, shall be deemed to have accepted the terms and conditions of this Franchise or any amendment hereto, except with respect to such particulars as it may successfully challenge under the procedures specified in Section 12.2. 12.2. Rejection Procedures. A rejection of this Franchise or any amendment hereto may be made by the Company only upon the grounds that the terms and conditions hereof or of such amendment exceed the lawful authority of the City under the Constitutions or Laws of the United States or the State of Minnesota or are otherwise unlawful. Any rejection shall be submitted in writing to the City, stating with particularity the points and authorities of law upon which the Company relies. If the City fails to amend this Franchise or otherwise satisfy the Company's objections as stated within thirty (30) days of its receipt of the Company's rejection, the Company shall have the right thereafter to seek appropriate judicial or administrative relief based solely upon those provisions it has alleged are unlawful in its rejection notice. If the Company fails to initiate such legal action within thirty (30) days from the expiration of the aforementioned thirty (30) day period provided for the City's amendment or cure, the Company shall be deemed to have waived its objections and to have accepted the terms of this Franchise or any amendment hereto. 7 Adopted by the City Council of the City of Elk River this day of 2013. John J. Dietz, Mayor ATTEST: Tina Allard, City Clerk Published on the day of , 2013, in the Elk River Star News, a paper of general circulation within the City of Elk River, Minnesota. The provisions of the foregoing Ordinance are hereby accepted: DATED .2013. By: Its By: Its ORDINANCE NO. 13-_ CITY OF ELK RIVER AN ORDINANCE OF THE CITY OF ELK RIVER IMPLEMENTING AN ELECTRIC SERVICE FRANCHISE FEE FOR PROVIDING ELECTRIC SERVICE WITHIN THE CITY OF ELK RIVER, SHERBURNE COUNTY, MINNESOTA The City Council of the City of Elk River hereby ordains as follows: Section 1. Purpose. The Elk River City Council has determined that is in the best interest of the City to impose franchise fees on those utility companies that provide natural gas and electric services within the City. Pursuant to Minnesota Statutes, Section 216B.36 and the Franchise Ordinances, the City has the authority and right to impose franchise fees on the Companies. The purpose of this ordinance is to establish such franchise fees to be paid to the City by the Companies. The franchise fees will be used to partially fund the Cities cost to maintain the city street system. Section 2. Definitions. For the purposes of this Ordinance, the following capitalized terms shall have the following meanings: 2.1 City. The City of Elk River, County of Sherburne, State of Minnesota. 2.2 Companies. Connexus Energy, a Minnesota Cooperative Corporation, its successors and assigns; and Elk River Municipal Utilities, a Minnesota Municipal Utility, its successors and assigns. 2.3 Franchise Ordinances. The franchise ordinances adopted by the City on April 15, 2013 — City Ordinance No. 13- and City Ordinance No. 13- 2.4 Notice. "Notice" means a writing served by any party or parties on any other party or parties. Notice to Companies shall be mailed to: Chief Executive Officer, Connexus Energy, 14601 Ramsey Boulevard NW, Ramsey, MN 55030 and; General Manager, Elk River Municipal Utilities, 10369 Orono Parkway, Elk River, MN 55330. Notice to City shall be mailed to the City Administrator, City of Elk River, 13065 Orono Parkway, Elk River, MN 55330. Section 3. Electric Franchise Fee. 3.1 Franchise Fee Statement and Schedule. A franchise fee is hereby imposed on the Companies after sixty (60) days' written notice from the City, and in accordance with the following fee schedule: Customer Classification Amount per Account per Month ($) Residential $5.00 Small Commercial /Industrial (Non Demand) $25.00 General Commercial /Industrial (Demand) $70.00 Large Commercial /Industrial (> 1 MW Demand) $100.00 3.2 Account Fee. This fee is an account -based fee and not a meter -based fee. In the event that an entity covered by this ordinance has more than one meter, but only one account, only one fee shall be assessed to that account. In the event any entities covered by this ordinance have more than one account, each account shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any account, the highest possible fee amount shall apply. 3.3 Pam After the initial notice period as provided in Section 3. 1, franchise fees are to be collected by the Companies and submitted to the City in accordance with the following schedule: January — March collections due by April 30. April — June collections due by July 31. July — September collections due by October 31. October — December collections due by January 31. 3.4 Record Support for Pam The Companies shall make each payment when due and, if requested by the City, shall provide a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total made to account for any non - collectible accounts, refunds or error corrections. The Companies shall permit the City, and its representatives, access to the Company records for the purpose of verifying such statements. 3.5 Payment Adjustments. Payment to the City will be adjusted where the Companies are unable to collect the franchise fee. This includes non - collectible accounts. 3.6 Relation to Franchise Ordinances. This ordinance is enacted in compliance with the Franchise Ordinances and shall be interpreted as such. 3.7 Periodic Review. The City Council shall review this ordinance every two years in whatever manner the City Administrator then determines to be appropriate. Failure to review this ordinance shall not in any way invalidate or limit it. The franchise fee imposed by this ordinance shall remain in effect unless and until amended or revoked by adoption of an amendment of this ordinance. Section 4. That this Ordinance shall be published and take effect as provided by law. Adopted this 15 day of _April 2013 by the City Council of the City of Elk River. John J. Dietz Mayor Tina Allard City Clerk ORDINANCE NO. 13-- CITY OF ELK RIVER AN ORDINANCE OF THE CITY OF ELK RIVER IMPLEMENTING A GAS ENERGY FRANCHISE FEE ON CENTERPOINT ENERGY MINNEGASCO, A NATURAL GAS UTILITY, A DIVISION OF CENTERPOINT ENERGY RESOURCES CORPORATION, A DELAWARE CORPORATION ( "CENTERPOINT ENERGY ") FOR PROVIDING GAS ENERGY SERVICE WITHIN THE CITY OF ELK RIVER, MINNESOTA The City Council of the City of Elk River hereby ordains as follows: Section 1. Purpose. The Elk River City Council has determined that is in the best interest of the City to impose a franchise fee on those utility companies that provide natural gas and electric services within the City. Pursuant to Minnesota Statutes, Section 21613.36 and Section 6.1 of the Franchise Ordinance, the City has the authority and right to impose a franchise fee on Company. The purpose of this ordinance is to establish such franchise fees to be paid to the City by the Company. The franchise fees will be used to partially fund the Cities cost to maintain the city street system. Section 2. Definitions. For the purposes of this Ordinance, the following capitalized terms shall have the following meanings: 2.1 City. The City of Elk River, County of Sherburne, State of Minnesota. 2.2 Company. CenterPoint Energy Minnegasco ( "CenterPoint Energy"), its successors and assigns. 2.3 Franchise Ordinance. The franchise ordinance adopted by the City on February 24, 2003, City Ordinance No. 03 -005 2.4 Notice. "Notice" means a writing served by any party or parties on any other party or parties. Notice to Company shall be mailed to CenterPoint Energy, Minnesota Division, Vice President, 800 LaSalle Avenue, Minneapolis, MN 55402. Notice to City shall be mailed to the City Administrator, City of Elk River, 13065 Orono Parkway, Elk River, MN 55330. Section 3. Gas Franchise Fee. 3.1 Franchise Fee Statement and Schedule. A franchise fee is hereby imposed on Company commencing with the July 2013 billing month, and in accordance with the following fee schedule: Customer Classification Amount per Account per Month ($) Residential $4.00 Commercial /Industrial, Small Volume A $4.00 Commercial /Industrial, Small Volume B $16.00 Commercial /Industrial, Small Volume C $50.00 Commercial /Industrial, Dual Fuel A and B $70.00 3.2 Account Fee. This fee is an account -based fee and not a meter -based fee. In the event that an entity covered by this ordinance has more than one meter, but only one account, only one fee shall be assessed to that account. In the event any entities covered by this ordinance have more than one account, each account shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any account, the highest possible fee amount shall apply. 3.3 Payment. Franchise fees are to be collected by the Company and submitted to the City as follows: January — March collections due by April 30. April — June collections due by July 31. July — September collections due by October 31. October — December collections due by January 31. 3.4 Record Support for Payment. The Company shall make each payment when due and, if requested by the City, shall provide a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total made to account for any non - collectible accounts, refunds or error corrections. The Company shall permit the City, and its representatives, access to the Company's records for the purpose of verifying such statements. 3.5 Payment Adjustments. Payment to the City will be adjusted where the Company is unable to collect the franchise fee. This includes non - collectible accounts. 3.6 Relation to Franchise Ordinance. This ordinance is enacted in compliance with the Franchise Ordinance and shall be interpreted as such. 3.7 Periodic Review. The City Council shall review this ordinance every two years in whatever manner the City Administrator then determines to be appropriate. Failure to review this ordinance shall not in any way invalidate or limit it. The franchise fee imposed by this ordinance shall remain in effect unless and until amended or revoked by adoption of an amendment of this ordinance. Section 4. That this Ordinance shall be published and take effect as provided by law. Adopted this day of 52013 by the City Council of the City of Elk River. John J. Dietz Mayor Tina Allard City Clerk 04/10/2013 CITY OF ELK RIVER Street/Capital Improvement Budget Expenditures Remaining street bond levies - - 270,848 264,233 173,222 Transfer out - 2013 street project (pavement management fund) 3,000,000 - - - - Franchise Fee Rebate 98,388 60,588 60,588 50,760 50,760 Intcrccrtinn FnhnnPamPntc 19 81n 43 nn4 - 150.000 - 100.000 - Intersection Improvements (landscaping) Boulevard Improvements Monument Signage Comp plan update (Streets portion) Improvement Projects (7 -10 year payback) Signal light/signal painting 193rd avenue median planting Orono Dam inspection Twin Lakes detached trail Transportation plan study Natures Edge Business Park GNT solar lighting project Miscellaneous Sealcoat reserves Sealcoat city parking lots Total Street/Capital Improvement Uses of Funds Ending Cash Balance - 31,398 30,000 Budget Estimate Estimate Estimate Estimate - 2011 2012 2013 2014 2015 2016 2017 Beginning Cash Balance 5,138,796 4,881,025 4,649,679 2,092,577 1,870,443 1,527,776 1,194,779 Sources of Funds - - - 1,171,842 169,714 - - Special Assessments (pre -paids 10 %) 114,340 - - 34,000 - - - Special Assessments (outstanding) 332,864 319,951 191,264 106,603 102,656 62,885 47,471 Special Assessments (2013, 2015, 2017 projects) - - - - - - - Other Revenues 425,539 157,956 - 320,000 - - - Muncipal State Aid - 43,737 - - - - 250;000 State grants - 308,929 - - - - - Bond Proceeds - - - - - - - Transfer In 29,068 450,000 459,128 - - - - Interest 77,624 70,630 92,994 41,852 56,113 61,111 47,791 Total Sources of Funds 979,435 1,351,203 743,386 468,455 158,769 123,996 345,262 Expenditures Remaining street bond levies - - 270,848 264,233 173,222 Transfer out - 2013 street project (pavement management fund) 3,000,000 - - - - Franchise Fee Rebate 98,388 60,588 60,588 50,760 50,760 Intcrccrtinn FnhnnPamPntc 19 81n 43 nn4 - 150.000 - 100.000 - Intersection Improvements (landscaping) Boulevard Improvements Monument Signage Comp plan update (Streets portion) Improvement Projects (7 -10 year payback) Signal light/signal painting 193rd avenue median planting Orono Dam inspection Twin Lakes detached trail Transportation plan study Natures Edge Business Park GNT solar lighting project Miscellaneous Sealcoat reserves Sealcoat city parking lots Total Street/Capital Improvement Uses of Funds Ending Cash Balance - 31,398 30,000 30,000 30,000 30,000 30,000 - 80,000 - 100,000 - 80,000 - - 40,000 - 40,000 - 40,000 - - 8,000 - - - - 1,171,842 169,714 - - - - - 26,952 34,000 30,000 - - 12,000 - 3,537 - - - - - - - 11,900 - - - - 250,000 - - - 400,000 - - - - - 50,000 - - - - 1,159,128 - - - - - - 78,505 - - - - - - 9,950 - - - - - 20,550 44,950 14,100 - - - - 2,015 - - - - - - - 1,237,206 1,582,549 3,300,488 690,588 501,436 456,993 623,982 4,881,025 4,649,679 2,092,577 1,870,443 1,527,776 1,194,779 916,060 „.. �, : P�uemext €' fan � Cllr 2013 2014 2015 2016 2017 Estimate Estimate Estimate Estimate Estimate 2018 2019 Estimate Estimate Revenues Charges for Services Franchise Fee 700,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 Other Revenue Interest - 9,251 30,390 23,528 51,998 14,438 42,727 Municipal State Aid (MSA) - - 1,720,000 - 1,000,000 - 1,000,000 Transers In Street Improvement Reserve 3,000,000 - - - - - - Sanitary Sewer 63,250 - - - - - - ERMU/Trunk Utility (Water) 539,307 - - - - - - Total Revenue . - 4,302,557 1,409,251 3,150,390 1,423,528 2,451,998 1,414,438 2,442,727 Expenditures Capital Outlay 3,685,805 - 4,000,000 - 4,330,000 - 4,500,000 Total Expenditures 3,685,805 - 4,000,000 - 4,330,000 - 4,500,000 Revenues less Expenditures 616,752 1,409,251 (849,610) 1,423,528 (1,878,002) 1,414,438 (2,057,273) Cash Balance -Beginning 616;7,x2 2,026,003 9;176,393 2,599;921 7 1;20 2,136,358 Cash Balance - ;Eriding 616,752 2,626,063 1,176,393 2,59,% 1 7.21 92b 2,136;358 79,08,5 Notes * = assumption is that Fee would be collected for 1/2 the first year. RESOLUTION 13 - A RESOLUTION OF THE CITY OF ELK RIVER A RESOLUTION AUTHORIZING A TRANSFER FROM THE STREET IMPROVEMENT RESERVE FUND TO THE PAVEMENT MANAGEMENT FUND WHEREAS, The City Council considered the creation of a franchise fee for funding street reconstruction on April 15, 2013; and WHEREAS, The City Council has reviewed the request and determined it to be a sound financial practice; and WHEREAS, It has been determined that an amount of $3,000,000 will be transferred out of the Street Improvement Reserve Fund to provide funding for the 2013 street project and startup funding of the pavement management fund. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Elk River makes the following transfer of funds from the Street Improvement Reserve Fund: 2013 Pavement Management Fund $3,000,000 Passed and adopted this 15`h day of April 2013 John J Dietz, Mayor ATTEST: Tina Allard, City Clerk N: \Public Bodies \City Council \Council RCA \Agenda Packet \04 -15- 2013 \Pavement Management Fund Resolution.doc out q - s 2� 3 . ORDINANCES I TO INCLUDE, THE FOLLOWING: SECTION 1. DEFINITIONS. For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings: City. The City of Elk River, County of Sherburne, State of Minnesota and the corporate limits thereof on the Effective Date and as they may be adjusted from to time to time hereafter. City Utility System. Facilities used for providing public utility service owned or operated by the City or agency thereof, including sewer, storm sewer, water service, street lighting and traffic signals. Company. Connexus Energy, a Minnesota Cooperative Corporation, its successors and assigns including all successors or assignees that own or operate any part or parts of the Electric Facilities subject to this Franchise. Company Service area. Those areas within the City to which the Company has been assigned the right to provide electric service, as in effect on the Effective Date or as may be hereafter revised. Council. The City Council of the City of Elk River as from time to time constituted. Effective Date. The effective date of this Ordinance. Electric Facilities. Electric transmission and distribution substations, towers, poles, lines, guys, anchors, conduits, fixtures, and necessary appurtenances owned or operated by the Company for the purpose of providing electric energy for public or private use. Franchise. The grant of rights made by the City to the Company in this Ordinance, subject to its terns and conditions. Notice. A writing served by any party or parties on any other party or parties at the following addresses: If to the City: City Administrator City of Elk River 13065 Orono Parkway Elk River, MN 55330 If to the Company: Chief Executive Officer Connexus Energy 14601 Ramsey Boulevard NW Ramsey, MN 55303 -6024 Any party may change its respective address for the purpose of this Ordinance by written notice to the other parties. Person. A natural person or any partnership, joint venture, corporation, cooperative, limited liability company or any public corporation, political subdivision or agency of the State or any other legal entity that may be created by law. Public Ground. All real property owned by or dedicated to the City with respect to which the City holds the legal right or title to grant or withhold easement, leasehold or occupancy rights or servitudes. Public Way. Any street, alley and other public rights -of -way within the City. Utility. Transmitting, furnishing, transporting, distributing, delivering, selling, receiving, importing, manufacturing, or causing to be produced, transmitted, furnished, transported, delivered, sold, received, imported, or manufactured, electric energy, natural gas, mixed gas, heat, light, power, and services provided through a cable communication system. Utility Service Provider. Any Person who perforins any one or more of the activities of a Utility to or for the public or to or for any one or more persons within the corporate limits of the City. 2.1. Grant of Franchise. The City hereby grants the Company, for a term of twenty (20) years from the effective date this Ordinance, the right to transmit and furnish electric energy for any public or private use within and through the Company Service Area. For these purposes, the Company may construct, operate, repair and maintain Electric Facilities in, on, over, under and across the Public Ways and Public Grounds within the Company Service Area, subject to the provisions of this Ordinance. The Company may do all reasonable things necessary or customary to accomplish these purposes, subject however, to all applicable design and safety codes, the provisions of this Ordinance, zoning ordinances, other applicable ordinances and permit procedures of the City. This Franchise shall terminate with respect to Company Service Areas that are duly acquired by the City or ERMU. 2.2 Not Exclusive. This Franchise is not exclusive. 2.3. Effective Date. This Franchise shall be in force and effect from and after the adoption of this Ordinance and publication as required by law and upon the Company's duly authorized acceptance as provided in Section 12 below. 3.1. General. Electric Facilities shall be located, constructed and maintained by the Company: (i) in as safe and secure a condition or manner as reasonably possible, (ii) so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways, and (iii) so as not to disrupt or interfere with the normal use or operation of any Public Ways, Public Ground or the City Utility System. Electric Facilities may only be located on Public Ground as determined by the City in its sole discretion. The Company's construction, reconstruction, operation, repair, maintenance, location and relocation of Electric Facilities shall be subject to the terms of this Ordinance and such other regulations of the City consistent with authority granted the City to manage its Public Ways and Public Grounds under state law, to the extent not inconsistent with a specific term of this Ordinance. 3.2. Construction; Maintenance; Repairs. Whenever the Company desires to open or disturb any Public Way or Public Ground for the purpose of constructing, maintaining, or repairing Electric Facilities, it shall give the City reasonable advance Notice, but not less than ten (10) business days, by filing a written Notice with the City Clerk. In any case, the Company shall not commence such work, before obtaining a permit pursuant to Article 66 of the Elk River City Code, for which the Citymay impose a reasonable fee. The Company shall not, during the progress of the work, endanger or unnecessarily obstruct the passage of traffic or the normal and customary use of the Public Ways and Public Ground. During the progress of such work, the Company shall keep the affected Public Ways or Public Ground guarded in order to avoid accidents to persons or property. All work, performed by the Company shall comply with all applicable federal, state, and local laws, rules, and regulations. 3.3. Emergencies. The requirements for obtaining permits from the City pursuant to Section 5.2 shall not apply if (i) an emergency exists requiring the immediate repair of Electric Facilities and (ii) the Company gives telephone notice to the City before, if reasonably possible, commencement of the emergency repair. Within two (2) business days after commencing the repair, the Company shall apply for any required permits and pay any required fees. 3.4. Restoration. Following the completion of any work, the Company shall promptly and diligently restore the affected Public Ways and /or Public Ground to as good a condition as before the work commenced. If the Company fails to promptly restore such Public Ways and /or Public Ground within ten (10) days of Notice by the City, the City may engage an independent contractor at the expense of the Company to perform the restoration of the Public Ways and /or Public Ground as required under this Section. The Company shall pay to the City upon demand the cost to the City of affecting such restoration including the City's administrative expenses and overhead. 3.5. Avoidance of Damage. The Company must take reasonable measures to prevent the Electric Facilities from causing damage to persons or property. The Company must take reasonable measures to protect the Electric Facilities from damage that could be inflicted on the Electric Facilities by persons, property, or the elements. The Company must take protective measures when the City performs work near the Electric Facilities, if given reasonable Notice by the City of such work prior to its commencement. 3.6. Field Locations. The Company shall provide field locations to the City for all its underground Electric Facilities within the City consistent with the requirements of Minnesota Statutes, chapter 2161). 3.7. Shared Use of Poles; Street Lights. 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 or the existing facilities, if any, of another Utility Service Provider. The installation and placement of any of the foregoing shall comply with the National Electric Safety Code, subject to a mutually agreeable pole attachment agreement. 3.8. Tree Trimming. Subject to such reasonable regulations as the City may establish, the Company may, at its cost, trim all trees and shrubs in the Public Ways located within the Company Service Area to the extent the Company finds it necessary to avoid interference with the proper construction, operation, repair and maintenance of any of the Company's Electric Facilities installed or maintained hereunder. 3.9. Notice of City Improvements. The City will give the Company reasonable advance Notice of plans for improvements to Public Ways and Public Ground in the Company Service Area where the City has reason to believe that the Company's Electric Facilities may affect or be affected by such improvements. The Notice will contain: (i) the nature and character of the improvements, (ii) the Public Ways and /or Public Ground upon which the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City will start the work, and (v) if more than one Public Way or parcel of Public Ground is involved, the order in which the work is to proceed. 3.10. Acquisition. Notwithstanding any language in this Agreement, to the contrary, the City and /or Elk River Municipal Utilities (ERMU) shall have the right to purchase or otherwise acquire the Company's Electric Facilities or the Company Service Area, or portion(s) thereof, at any time as provided by law in effect on the date the City or ERMU conunences such purchase or acquisition. The expiration or termination of this Franchise as hereinbefore provided shall not, by itself, be an independent basis of any claim by the Company against the City or ERMU, nor any claim by the City or ERMU against tl company. 1 �. 4.1. Relocation. hi the event the City reasonably determines that it is necessary for the Company to move any part of its Electric Facilities because the City has determined to change, move or improve its Public Ways or that the Electric Facilities have become or will become a substantial impairment to the existing or unminent public use of Public Ground, upon reasonable Notice by the City to the Company, then the Company will move its Electric Facilities at its sole cost, except as provided in Section 4.2. The City shall consider reasonable alternatives in designing its public works projects so as not to arbitrarily cause the Company unreasonable additional expense in exercising its authority under this Section 4.1. If a relocation is ordered within five (5) years of a prior relocation of the same Electric Facilities, which was made at Company expense, the City shall reimburse the Company for the non - betterment costs on a time and material basis. This Section 4.1 shall not constitute a taking by the City nor be construed as a waiver or modification of any easement or prescriptive rights acquired by the Company independent of and without reliance by the Company on this Franchise. 4.2. Projects with Federal Funding. City shall not order Company to remove or relocate its Electric Facilities when a Public Way is vacated, improved or realigned for a right -of -way project or any other project 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 are first paid to Company. The City is obligated to pay Company only for those portions of its relocation costs for which City has received federal funding specifically allocated for relocation costs in the amount requested by the Company, which allocated funding the City shall specifically requests. Relocation, removal or rearrangement of any Company Electric Facilities made necessary because of a federally -aided highway project shall be governed by the provisions of Minnesota Statutes, Section 161.46, as supplemented or amended. It is understood that the rights herein granted to Company are valuable rights. 4.3. No Release of Liability. Nothing contained herein shall relieve any third party from liability arising out of their failure to exercise reasonable care to avoid injuring the Company's Electric Facilities while performing any work connected with grading, regarding or changing the line of any Public Way or with any construction on or adjacent to any Public Way; provided, however, this Section 6.2 shall not limit the City's rights to indemnification under Section 5.1 nor shall the City in any way be liable to the Company for claims arising from the negligence of any third party. 5.1. Indemnification. If at any time any claim of any kind is made against the City for injury to persons or property arising from the acts or failure to act by the Company, its agents, servants, or employees in connection with the operations of the Company under and pursuant to this Franchise, the Company shall fully indemnify, defend and hold harmless the City, its agents, servants or employees from any and all such claims, including, but not limited to, reimbursement of any reasonable attorneys' fees and costs and expenses the City may incur in handling, denying, or defending such claims. The Company's obligation to indemnify the City shall not extend to any injury to persons or property caused by the negligent act or failure to act by the City or any actions taken by the Company pursuant to directions of the City if performed within the scope of the City's directions without negligence by the Company. The City shall determine who will defend any such claims arising under this Section 5.1 and the Company will thereafter have complete control of such litigation; provided, however, the Company may not settle any such claims without the prior approval of the City, which approval will 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 shall be entitled to assert every defense or immunity that the City could itself assert in its own behalf-. The Company's obligations under this Section shall survive the expiration, amendment, or termination of this Ordinance. 5.2. Insurance. Before the Effective Date, the Company shall furnish the City a summary of insurance, if any, carried by the Company, or of its self - insured status, in either case demonstrating adequate protection to the City from any and all obligations, liabilities, or claims of any nature whatsoever, growing out of the operation, construction, and maintenance of its Electric Facilities within the City. The Company shall maintain such insurance coverage at all times during this Franchise. 5.3. Compliance with Laws; hazardous Substances. In its operation under this Ordinance, the Company shall observe all federal, state and local laws, rules, regulations and orders with respect to the transmission, distribution, transformation or furnishing of electric energy and the handling of materials, substances and wastes deemed toxic or hazardous to health, natural resources or the environment (collectively, "Hazardous Substances "). The Company shall remove or remediate any Hazardous Substances located on, in or surrounding its Electric Facilities or caused to be located on, in or surrounding the Public Ways and Public Grounds or elsewhere in the City in compliance with all applicable laws, regulations and lawful government orders, and pay or cause to be paid all costs associated therewith. The indermnifrcation terms and conditions of Section 5.1 shall apply to all claims made against the City by any Person, including any governmental agency, who or which asserts any right to costs, damages or other relief based upon the terms and conditions imposed upon the Company under this Section 5.3 or which arise from or are related to the Company's acts or failure to act in compliance with any law, rule, regulation or lawful order governing Hazardous Substances. SECTION 6. VACATION OF PUBLIC WAD'S. The City will consult with the Company at least four (4) weeks prior to its action on any proposed vacation of a Public Way. Except where ordered pursuant to Section 4.1, the vacation of any Public Way after the installation of Electric Facilities shall not operate to deprive the Company of its rights to operate and maintain such Electric Facilities until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to the Company. However, in no case shall the City be liable to the Company for failure to specifically preserve a Public Way in the exercise of its authority under Minnesota Statutes, Section 160.29. SECTION 7. ABANDONED FACILITIES. The Company shall comply with City ordinances and Minnesota Statutes, Section 216D.01 et seq., as they may be amended from time to time. The Company shall maintain records describing the location of all abandoned and retired Facilities. within the City, produce such records at the City's request and comply with the location requirements of Section 216D.04 with respect to all Electric Facilities, including abandoned and retired Electric Facilities. 8.1. Authority. The City reserves all rights under Mimlesota Statutes, Sections 216B.36 and 30113.01 or other law to require a franchise fee at any time during the term of, and in consideration for, this Franchise. The franchise fee may be expressed (i) as a specified charge per measurable unit of electricity being provided, transported, transmitted, sold, furnished, delivered, or received within the City, or (ii) as a percentage of the gross revenues received by the Company for its operations within the City, or (iii) a flat fee per customer based on service to retail customers within the City or (iv) on some reasonable combination of these factors. 8.2. Separate Ordinance. A franchise fee shall be imposed by a separate ordinance duly adopted by the Council after 60 days' notice to company of the proposed fee. 8.3. Equivalent Fee Requirement. A separate ordinance imposing the franchise fee shall not be effective against the Company, unless the separate ordinance imposes the same fee on the same class of properties by all electrical suppliers within the City. SECTION 9. DEFAULTS. If the Company shall be in default in the performance of any of the material terms and conditions of this Ordinance, and shall continue in default for more than thirty (30) days (or fails to initiate the cure of the default within said period and diligently pursue said cure, if the cure of the default cannot reasonably be accomplished within said thirty (30) days) after receiving Notice from the City of such default, the City may elect to cure such default and charge the Company for the costs thereof. SECTION 10. AMENDMENT PROCEDURE. The Company's rights hereunder are subject to the police power of the City to adopt and enforce ordinances necessary to the health, safety, and welfare of the public, and this Franchise may be amended or repealed by the City as deemed necessary or appropriate in the exercise of such power. If this Franchise is repealed, any franchise fee imposed on the Company by the City shall terminate immediately. 11. 1. Governing Law. This Franchise is granted and is intended to be performed in the State of Minnesota and shall be construed and enforced in accordance with the laws of the State of Minnesota. The Company shall be subject to personal jurisdiction in the State of Minnesota. All actions related to this Ordinance or its enforcement shall be venued in Sherburne County District Court. 11.2. Limitation on Applicability. `Phis Ordinance constitutes a franchise between the City and the Company as the only parties and no provision of this Franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of the agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto. 11.3. Assignment. The Company may assign this Franchise without the prior approval of, but upon not less than thirty (30) days' prior Notice to, the City. Such Notice shall include the identity of and contact information for, the assignee and the statement of the assignee's plans and intentions for the operation of the Electric Facilities under this Franchise. r 12.1. acceptance by the Company. The City shall provide written notice by certifieail'to Company of the adoption of this Ordinance or any proposed amendment. The Company shall, within thirty (30) days after adoption of this Ordinance or any amendment thereto, file with the City Clerk in writing its acceptance or rejection as provided in Section 12.2. If such acceptance is not filed within said period, the Company shall be deemed to have accepted the terms and conditions of this Franchise. If the Company rejects the Franchiie, it shall proceed in accordance with Section 12.2. 12.2. ejection Procedures. A rejection of this Franchise or any amendment hereto maybe made by the Company only upon the grounds that the terns and conditions hereof or of such amendment exceed the lawful authority of the City under the Constitutions or Laws of the United States or the State of Minnesota or are otherwise unlawful. Any rejection shall be submitted in writing to the City, stating with particularity the points and authorities of law upon which the Company relies. If the City fails to amend this Franchise or otherwise satisfy the Company's objections as stated within thirty (30) days of its receipt of the Company's rejection, the Company shall have the right thereafter to seek appropriate judicial or administrative relief. If the Company fails to initiate such legal action within thirty (30) days from the expiration of the aforementioned thirty (30) day period provided for the City's amendment or cure, the Company shall be deemed to have waived its objections and to have accepted the terms of this Franchise. Adopted by the City Council of the City of Elk River this day of 2013. John J. Dietz, Mayor ATTEST: Tina Allard, City Clerk Published on the day of , 2013, in the Elk River Star News, a paper of general circulation within the City of Elk River, Minnesota. The provisions of the foregoing Ordinance are hereby accepted: DATED , 2013. By: Its By: Its