6.0. SR 08-26-2002 - Laserfiche WebLink

Home Browse Search

MEMORANDUM TO: Mayor and Council FROM: DATE: Pat Klaers, City Administra~~ V~ August 26, 2002 SUBJECT: Other Budget Gap Options If all of the recommended changes from the previous page are accepted by the City Council, then the updated draft 2003 budget will show revenues at $7,633,950 and expenditures at $7,762,600. This leaves the city with a budget gap of $128,600. Three key issues for the City Council to consider in closing this budget gap are the gas franchise fee, the police vehicle lockout fee, and a lower cost of living adjustment. Gas franchise fee - The 25 year non-exclusive franchise fee with Reliant Energy is up on April 13, 2003. While the franchise agreement is non-exclusive, it should be noted that the city rejected a request from NSP in 1999 to allow dual services in the community. Only a few municipalities (less than 10) collect a franchise fee but I know that other cities are exploring this option. If the City of Elk River is to collect a franchise fee, then it is recommended that these monies go towards the Street Pavement Management Program (PMP). This would allow the tax levy that goes for the PMP to be reduced and then these tax funds would be available for General Fund expenditures. In this manner the gas franchise fee will not result in a tax reduction, but it does provide for non-tax paying and tax paying entities to pay the same amount for the Street PMP program. If the city is to go forward with a franchise fee, Reliant has requested that the city go through a public process to establish this fee. The simplest method for managing a gas franchise fee is to do it on a meter basis. There are currently approximately 5000 residential gas meters and 500 commercial/industrial gas meters in the city. Please consider the following figures: 5000 residential at $1.50 per month = $90,000 5000 residential at $2.00 per month = $120,000 500 commercial/industrial at $3 per month = $18,000 500 commercial/industrial at $4 per month - $24,000 Lockout fees - Elk River is one of the few larger cities in the area that do not charge a fee for providing vehicle lockout services. Almost all of the metropolitan communities charge a fee.