2015-12-16 Special CC & Closed Exec. - Approved

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City of Centerville Council Meeting Minutes December 16, 2015 Council Member Paar asked are the franchise fees going to be based on the size of each business or are all businesses going to pay the same rate fee and is the fee going to be base from a percentage or a flat rate fee. Ms. Colette Jurek, Manager, Community Relations & Economic Development for Xcel Energy explained that the rates should be a flat rate verses a percentage. With a flat rate the city will be able to calculate the amount of funds they will receive from the franchise fees much easier than with a percentage rate. She stated that a flat rate fee would be collected monthly so the city could reach its goal and this also takes out the weather implications (ie: hot summer or cold winter where there are spikes in usage of electricity or gas). Ms. Paulseth stated that the suggested fee for residential properties would be $4 per household and for commercial properties $8, equating to 3.75% gross revenue for the City. The goal is to diversify the City revenue sources and not to solely rely on property taxes. Council discussed the impact of fees to the churches and schools who are currently tax exempt and how this would help. Collecting a franchise fee is another way to collect taxes for those businesses that are tax exempt. Mayor Wilharber stated he felt that tax exempt businesses should pay their fair share when it comes to maintaining the roads that they use. They also discussed the 20 year term of the franchise agreement and if there can be modification to the contract during those 20 years and will this new revenue source be used strictly for street maintenance and not for other projects. Ms. Jurek stated that the contract can be modified on an annual basis. She also stated that it is required by state law to negotiate both parties a fair rate to the property owners. Council also discussed a fair rate with the franchise fees so they would not have to assess the residents of Centerville for street maintenance. They discussed different scenarios regarding franchise fees. If a resident has a business on their property and how these charges would impact them (ie: resident who has a business in the back of their property, if they have 2 addresses they would get charged for a residential home and a commercial business, if they had 1 address they would be charged as if they were a commercial business - if they have 2 meters on their home, ie: one on a shed or garage and one on the house they would be charged for only residential home). Mayor Wilharber, Council Members Paar, Love and Fehrenbacher were in agreement with the $4 per household per month for residents and $8 charge per business. Council Member King did not agree with franchise fees. Council also discussed if $8 was going to be enough to charge businesses. They stated could you capture more of a fee for a large commercial building verses a smaller commercial building. The Mayor stated that they do not want to scare off any new or existing commercial accounts. A discussion continued with how the contract should be drafted and the city ordinance. One of the questions was can there be a clause in the contract stating that if the City desires to revise the agreement at a later date it can be accomplished, (increase fees, cancel fees, etc.). Council Member Paar reassured Council Member King that these funds that are collected though franchise fees would be designated for street maintenance. Council Member King stated that these fees are a hidden tax and you cannot write them off on your taxes where as if you levied for it you could. Administrator Ericson stated that the city can add the language to our ordinance that states that these franchise fees are for road maintenance projects only. Mr. Statz had concerns as to easements, equipment that is abandoned, and who’s responsible. Page 2 of 3