5.1. - 5.5. SR 09-09-2002 - Laserfiche WebLink

Home Browse Search

P ver MEMORANDUM TO: FROM: DATE: SUBJECT: Mayor and Council Pat Klaers, City Ad ministra~.~~, V~5~ August 26, 2002 Other BUdget Gap Options If all of the recommended ckanges from the previous page are accepted by the Cit7 Council, then the updated draft 2003 budget wi_la show revenues at $7,633,950 and expenditures ac $7,762,600. This leaves the city. ~vith a budget gap of $I28,600. Three key issues for the Cit7 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. ~-t~i~1~e"~he 25 year non-exclusive franchise fee with Reliant Energ7 is up on Apdl 13, 2003. Wh51e 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 commumty.. Only a few municipalities (less dnan 10) collect a franchise gee but I 'know that other cities are exploring dzis option. If the City of Elk River is to collect a franckbe fee, then it is recommended that these monies go to~vards the Street Pavement Management Program (PM?). This would allow the tax Iew that goes for the PMP to be reduced and then these tax funds would be avanzble £or Gener,-41 Fund expenditures. In r_his 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 dxe city go thzough a public process to establish t_bSs fee. The simplest method for manag~g a gas franchise fee is to do it on a meter basis. There are currendy approximately 5000 residential gas meters and 500 commercial/industrial gas meters in the city. Please consider the £ollowmg figures: 5000 residential at $1.50 per month = $90,000 5000 residential at $2.00 per month = $120,000 500 commercml/industrial at $3 per month = $18,000 500 commercial/mdusr, rial at $4 per month = $24,000 ~~~lk River is one of the few larger cities in the area that do not charge a fee for providing vehicle lockout services. Ak-host all of the metropolitan communities charge a fee.