4.8. SR 09-03-2013 City of
Elk=' Request for Action
River
To Item Number
Mayor and City Council 4.8
Agenda Section Meeting Date Prepared by
Consent September 3, 2013 Justin Femrite, P.E.
City Engineer
Item Description Reviewed by
Franchise Fee Ordinance Amendment Cal Portner, City Administrator
Reviewed by
Action Requested
1. Approve by motion an ordinance amendment relating to electric franchise fee.
2. Authorize staff to issue refunds to affected customers for any overpayment they have made toward
the franchise fee based on the clarifications provided in the amended ordinance and changes reflected
in subsequent utility bills.
Background/Discussion
Based on direction received at the August 19, 2013, meeting, staff has crafted the attached franchise fee
ordinance amendment. The amendment incorporates changes to better define account and add
additional customer classifications to the electric fee ordinance.
Upon adoption the amendment,it will be distributed to the electric utility companies for implementation.
An unknown number of customer accounts will be affected by these changes. In all of these cases the
changes will reduce the amount certain customers are paying towards the franchise fee by either
combining multiple meters into singe accounts or reducing the amount assigned to the classification.
Staff will work with those customers to issue a refund of any overpaid fees for the last three months.
Financial Impact
None
Attachments
■ Ordinance Amendment
P a w E A E U s r
NaA f RE]
/j
City of
Elk
River
Ordinance No. 13-
An Ordinance of the City of Elk River Amending Appendix A Ordinance 13-
08 Implementing an Electric Service Franchise Fee for Providing Electric
Service Within the City of Elk River
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. 13-06 and City Ordinance No. 13-07.
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 13069 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
Outdoor Advertising (Billboards),Non-Metered CableTV/Phone $10.00
Irrigation services,Lift Station services, Siren services $0.00
3.2 Account Fee.
a) This fee is an account based fee and not a meter based fee. An account includes all
electric meters located on a single property or premises that have the same address
and property owner.
b) Properties with a single address and owner shall pay the largest fee that applies to
any one of their meters.
d) Separately metered space rented to tenants other than the owner shall pay a fee
for each tenant meter.
e) The City Administrator, or his designee,is authorized to determine the
appropriate implementation of this Section 3.2. Appeals from decisions of the staff
may be taken to the City Council.
This fee is aft accottfit based fee and not a meter based fee. in the event that an eti-Ly
covered by this ordinance has more than one meter,but ovAy ofte accottfit, otily ofte fee sh
be assessed to that accoutit. in the event affy en6ftes covered by this ordinance ha-ve more
thati ofle accoutit, each account sha4l be subject to the --rV V fee. in the evew a-
the proper fee amottfit for atiy account, the highest possible fee amount
3.3 Payment. 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 Payment. 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 3rd day of September, 2013 by the City Council of the City of Elk
River.
John J. Dietz
Mayor
ATTEST:
Tina Allard, City Clerk