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124 <br />125 <br />126 The fact that franchise fees are used by other cities is not intended to suggest that Roseville should <br />127 automatically follow suit simply because others have. Rather, it highlights that franchise fees are a <br />128 widely accepted and effective tool that many cities rely on to support both operational and capital needs. <br />129 As the City Council considers strategies to address rising costs and potential tax levy increases, <br />130 franchise fees represent a practical and commonly used option worth consideration. <br />131 <br />132 The City Council discussed the use of franchise fees at the August 25, November 10, and November 24 <br />133 meetings in relation to helping the 2026 budget to allow for additional capital spending and freeing up <br />134 existing levy going to capital funds to be used for operating costs and thus lowering the levy increase <br />135 needed for the 2026 budget. Under the proposed utility franchise fee ordinances, residential customers <br />136 will pay $3 per month for gas and electricity franchise fees. Below is the table showing the proposed <br />137 franchise fees: <br />138 <br />139 <br />140 <br />141 Under these proposed franchise fees, residential customers, which comprise 88% of the total electric <br />142 and gas accounts, will pay 40% of the fees. Non-residential customers, or 12% of the total accounts, will <br />143 pay 60% of the fees. <br />144 <br />145 According to the Minnesota Department of Revenue, in 2023, 56.5% of taxpayers in Roseville had a <br />146 residential (homestead and non-homestead, apartments) property tax classification and 43.2% of <br />147 taxpayers were classified as commercial/industrial taxpayers. In Roseville, residential properties pay <br />148 54% of the city property taxes while non-residential classifications pay 46%. Statewide, residential <br />Page 5 of 10 <br />Qbhf!9!pg!472 <br /> <br />