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WORK SESSION AGENDA ITEM NO., 2-B Memorandum Date: April 163, 1998 To: Steve Sarkozy, City Manager From: Karl Keel, Public Works Director Right-of-Way Ordinance-NSP Concems For some time, the City has been considering the adoption of an ordinance, modeled after a League of Minnesota City's draft ordinance, that provides for the management of utilities within public right-of-ways. This ordinance was last considered by the Council at its March 23, 1998 City Council meeting. Final consideration of the ordinance was continued to the April 27, 1998 meeting to allow tirne to review a resent court ruling in favor of the City of Oakdale upholding its ordinance requiring NSP to construct new facilities underground. Attached is a letter from NSP objecting to the following sections of the ordinance. 1) Subdivision 1 Section 707.23—UndergLoundina ftuirernents The current ordinance requires that all new facilities be constructed underground. NSP feels that this requirement is exceptionally onerous and would result in undue cost to TSP. NSP has indicated that they would charge all undergrounding costs in Roseville directly to Roseville customers. Recently, this very issue was tested in a court case between the City of Oakdale and NSP. The judge in this case ruled that Oakdale's new ordinance requiring undergrounding is legal. while the court did not specifically address how the cost of undergrounding was to be recouped, one could infer from the judgies opinion that the undergrounding costs in Oakdale should be spread across the entire NSP customer base and not charged directly to Oakdale.NSP has indicated that they will appeals this decision. The City attorney has indicated that NSP's appeal has some validity and that NSP may prevail on appeal. Currently, Roseville's subdivision ordinance requires that all new utilities serving new residential developments be placed underground. The cost for undergrounding in this case is paid for by the residential developer and by a monthly utility bill surcharge against new homeowners. The question before the council is should all new developments, including commercial development, be wed by underground electric. Three undergrounding options are presented in the attached language.