The URL can be used to link to this page

Home My WebLink About2015-12-16 Special CC & Closed Exec. - Approved CITY OF CENTERVILLE SPECIAL CITY COUNCIL MEETING & CLOSED EXECUTIVE SESSION December 16, 2015 6:00 p.m. Pursuant to due call and notice thereof, the City of Centerville held their regularly scheduled meeting of December 16, 2015 at City Hall, 1880 Main Street. PRESENT: Mayor Tom Wilharber (arrived at 6:31 p.m.) Council Member Ben Fehrenbacher Council Member Steve King Council Member D. Love Council Member Jeff Paar ABSENT: None. STAFF: City Administrator Mike Ericson Attorney Kurt Glaser Engineer Mark Statz, Finance Director Ellen Paulseth I. CALL TO ORDER Acting Mayor Paar called the meeting to order at 6:12 p.m. II. PLEDGE OF ALLEGIANCE III. OLD BUSINESS 1. Discussion & Update on Proposed Franchise Fees (Connexus, CenterPoint & Xcel Energy) Administrator Ericson recapped the discussion from the December 9, 2015 City Council meeting in regards to the proposed franchise fees from Connexus, CenterPoint and Xcel Energy and the pros and cons that the franchise fees that would impact Centerville residents and commercial businesses. The goal of the franchise fee is to be an additional funding source for the maintenance of city streets. The amount of revenue generated from the franchise fees would be approximately $150,000 annually. Administrator Ericson stated that the city ordinances would have to be modified to allow franchise fees. He stated that there are approximately 1400 households which would generate approximately $134,000 based on an $8 per household. The commercial/industrial franchise fees would generate approximately $10,000 per month which is based on $16 per commercial business. Attorney Glaser stated that he has 3 of the 4 contracts in draft form and there is dedicated language that the City can add. He stated that these contracts are for a 20 year period. He stated that Council needs to set the rate for the franchise fees to be competitive for the utility companies. 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 City of Centerville Council Meeting Minutes December 16, 2015 Council Member Paar, King and Love stated there will be a public hearing on January 13, 2016 in regards to the agreements and ordinances for franchise fees. IV. NEW BUSINESS 1.Ordinance #75, Second Series – Franchise Agreement – Xcel Energy 2. Ordinance #76, Second Series – Franchise Fee – Xcel Energy a. Ordinance #75 & #76, Second Series Summaries 3. Ordinance #77, Second Series – Franchise Agreement – Connexus 4. Ordinance #78, Second Series – Franchise Fee – Connexus Energy (Pages 46-48) a. Ordinance #77 & #78, Second Series Summaries 5. Ordinance #79, Second Series – Franchise Agreement - CenterPoint Energy 6. Ordinance #80, Second Series – Franchise Fee – CenterPoint Energy a. Ordinance #79 & 80, Second Series Summaries No action was taken on items 1 through 6a. Recessed to Closed Executive Session at 7:25 p.m. for Performance Review of City Administrator Ericson. V. CLOSED EXECUTIVE SESSION (Unless Otherwise Noted) 1.Performance Review Administrator Ericson VI. ADJOURNMENT FROM CLOSED EXECUTIVE SESSION/RETURN TO SPECIAL COUNCIL MEETING Motion by Council Member Love, seconded by Council Member King to adjourn from the Closed Executive Session and to return to Special Council Meeting at 8:18 p.m. VII. PERFORMANCE APPRAISAL – CITY ADMINISTRATOR Mayor Wilharber stated that the Council completed the annual performance review of the City Administrator, Mike Ericson; however, the Council would meet at their next regularly scheduled meeting with a Closed Work Session to continue to discuss the item. VIII. ADJOURNMENT Motion by Council Member King, seconded by Council Member Love, to Adjourn the Council meeting of December 16, 2015 at 8:23 p.m. All in favor. Motion carried. Transcribed by Staff Member Kris Sweeney, Senior Account Clerk Page 3 of 3