My WebLink
|
Help
|
About
|
Sign Out
Home
Browse
Search
09-18-23-WS
ArdenHills
>
Administration
>
City Council
>
City Council Packets
>
2020-2029
>
2023
>
09-18-23-WS
Metadata
Thumbnails
Annotations
Entry Properties
Last modified
9/13/2023 4:08:21 PM
Creation date
9/13/2023 4:06:01 PM
Metadata
Fields
Template:
General
There are no annotations on this page.
Document management portal powered by Laserfiche WebLink 9 © 1998-2015
Laserfiche.
All rights reserved.
/
70
PDF
Print
Pages to print
Enter page numbers and/or page ranges separated by commas. For example, 1,3,5-12.
After downloading, print the document using a PDF reader (e.g. Adobe Reader).
View images
View plain text
Attachment A <br />ZEHLERS <br />PUBLIC FINANCE ADVISORS <br />MEMORANDUM <br />TO: Dave Perrault, City Administrator <br />FROM: Stacie Kvilvang and Dan Tienter, Ehlers <br />DATE: August 21, 2023 <br />SUBJECT: Preliminary Franchise Fee Analysis for Electric and Gas Utilities <br />Recently, the City Council and staff expressed an interest in exploring a Franchise Fee (the "Fee") <br />to support capital projects and similar needs for the City of Arden Hills (the "City"). Based on recent <br />City Council discussions and additional direction from City staff, Ehlers developed three preliminary <br />Fee structures (Attachment A) designed to meet predetermined, annual, revenue targets: 1) <br />$350,000; 2) $400,000; and 3) $450,000. Generally, these revenue targets support projected <br />capital expenditures and allow the City to maintain appropriate fund balances. <br />Pursuant to Minnesota Statutes, Section 216B.36, a municipality may require a public utility to obtain <br />a license, permit or franchise to operate on public property. Under this statutory authority, the City <br />may also require public utilities to operate under certain regulations or terms, including the payment <br />of a Fee. Most often, municipalities craft these arrangements as contracts, which the City Council <br />then adopts as an ordinance. <br />Generally, these franchises apply to electric and gas utility providers. The Fee itself may take <br />different forms, most notably as 1) a percentage of revenues, 2) an amount per production unit (e.g., <br />therm, kilowatt hour), or, most commonly, 3) a flat monthly account fee. Often municipalities prefer <br />the flat fee as both the most transparent option for the account holder and the most predictable <br />revenue source for City. Generally, the Fee applies to all public utility users, including tax-exempt <br />properties, and the City may use the revenues for any public purpose. The public utility will pass <br />the Fee along to ratepayers directly, usually labeled on their bill as "City Fee." <br />Each scenario relies on a series of assumptions to support their respective revenue targets, most <br />notably: <br />• Uses a flat monthly account Fee based on ratepayer class; <br />• Structures Fee amounts for about 3% to 5% more than the revenue target as coverage; <br />• Maintains same or similar Fees based on ratepayer class between the two utility types; <br />• Excludes any Fees for street lighting and municipal pumping; and <br />• Provides for Fees in amount similar to other metropolitan municipalities (Attachment B). <br />Additionally, the preliminary analysis relies upon ratepayer counts from 2014. If the City Council <br />decides to continue the discussion, Ehlers and City staff will contact the utility provider for current <br />ratepayer counts, update the analysis, including any direction from the City Council, and present <br />revised estimates at a future City Council meeting or work session. <br />BUILDING COMMUNITIES. IT'S WHAT WE DO. E] info@ehlers-inc.com �, 1 (800) 552-1171 ® www.ehiers-inc.com <br />
The URL can be used to link to this page
Your browser does not support the video tag.