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MEMORANDUM <br /> <br />Item ~ 4.1. <br /> <br />TO: <br /> <br />FROM: <br /> <br />DATE: <br /> <br />Mayor and City Council <br /> <br />Pat Klaers, City Admi~at<n <br />September 23, 2002 ¥ <br /> <br />SUBJECT: Discuss Gas Franchise with Reliant Energy Representative Arne <br /> Hendrickson <br /> <br />The 25-year non-exclusive gas franchise agreement with Reliant Energy expires in April <br />2003. Earlier this year I met with Arne Hendrickson from Reliant Energy regarding renewal <br />of the gas franchise agreement. Mr. Hendrickson is the Reliant Energy Program Manager for <br />local government and economic development. <br /> <br />I have requested that Mr. Hendrickson attend this City Coundl meeting to answer general <br />questions regarding the franchise agreement renewal, service area, potential franchise fees, <br />etc. Attached for your information is the map of the Reliant Energy gas mains in Elk River. <br /> <br />The city has adopted the short version of the League of Minnesota Cities (LMC) model <br />right-of-way ordinance. The LMC also has a model gas franchise ordinance. This model gas <br />franchise ordinance goes "hand in hand" with the model right-of-way ordinance so there are <br />no conflicts between the two ordinances in terms of language consistency and enforcement <br />issues. Attached for your information is the model gas franchise ordinance from the LMC <br />along with some background material (from the LMC) on this model ordinance. <br /> <br />One of the big issues facing the City Council is the possible establishment of a franchise fee <br />that wood be charged to Reliant for its fight to operate within the city limits. This fee would <br />be passed on to the customers. For ease of administration, the suggested method by Reliant <br />for collecting franchise fees is to do it on a meter (customer) basis. Different rates could be <br />established between residential and non-residential users as well as between small non- <br />residential users and large non-residential users. <br /> <br />The gas mains are located in the public right-of-way adjacent to or under city streets. <br />Management of public street fight-of-way is a city obligation and responsibility and the city is <br />currently looking for funding sources to complete an ongoing street rehabilitation program. <br />One of the three revenue sources being considered for this street rehabilitation program is <br /> <br /> <br />