CR 05-127 Ordinance Amending Section 701 and 702
Council Report 2005-127
ORDINANCE AMENDING SECTIONS 701.17 AND 702.15
OF THE HOPKINS CITY CODE
Prouosed Action
Staff recommends that the Council approve the following motion: Move to approve Ordinance 2005-949 for
the second reading.
Approval of this motion will amend sections 701.17 and 702.15 of the Hopkins City Code to extend the
termination dates on the utility franchise fees. The first reading was held on August 16, 2005.
Overview
In 2003 the City of Hopkins was faced with the loss of $1.8 million in Local Govermnent Aid. In order to
produce a balanced budget for 2004 the Hopkins City Council was forced to reduce costs and increase other
forms of revenue. One of the additional forms of revenue that the Council adopted was to impose franchise
fees on the electric and gas utilities. These fees generate approximately $290,000 per year.
When the ordinances that imposed these fees were adopted in 2003 they contained a termination date of
December 31,2005. At the August 16,2005 council meeting the council stated that they would like to
review this ordinance every two years so chose to extend the sunset clause to December 31, 2007.
The amount of the franchise fee is currently $1 per customer account and can be modified (increased or
decreased) to reflect any future change in the economic conditions for the City of Hopkins. The franchise
fee laws allow for franchise fees of up to 5% of gross revenues on electric or gas utilities.
The Hopkins City Council has been given preliminary numbers for the 2006 budget. There is virtually no
chance of Hopkins ever receiving any additional state aid. To avoid a significant increase in property taxes or
a dramatic reduction in services, staff recommends continuing the utility franchise fees which brings in
approximately $290,000 for the General Fund budget.
Suuuortinl! Information
+ Ordinance 2005-949
~~
Christine M. Harkess
Finance Director
CITY OF HOPKINS
Hennepin County, Minnesota
ORDINANCE 2005-949
AN ORDINANCE AMENDING SECTIONS 701.17 AND 702.15
OF THE HOPKINS CITY CODE
EXTENDING THE TERMINATION DATES FOR
UTILITY FRANCHISE FEES
Whereas the Hopkins City Council adopted utility franchise fees
to help make up for the loss of Local Government Aid; and
Whereas the Hopkins City Council imposed a two year limit on
these fees to ensure that there would be a review of the effect
and need for these fees; and
Whereas the Hopkins City Council has determined that utility
franchise fees are a fair and equitable means to raise revenue;
and
Whereas the Hopkins City Council has determined that there is a
continued need for this revenue;
Now therefore, the City Council of the City of Hopkins does
hereby ordain:
Section 1. Hopkins City Code, Section 701.17 is hereby amended:
701.17. Termination of Ordinance. This ordinance and the
franchise fee imposed by it shall remain in effect until
December 31, ~ 2007, at which time they shall terminate
and be of no further effect, except that the Company shall
remain obligated after that date to pay the City all
franchise fees due with respect to any period of time prior
to December 31, ~ 2007, and collected after that date.
Section 2. Hopkins City Code, Section 702.15 is hereby amended:
702.15. Termination of Ordinance. This ordinance and the
franchise fee imposed by it shall remain in effect until
December 31,~ 2007, at which time they shall terminate
and be of no further effect, except that the Company shall
remain obligated after that date to pay the City all
franchise fees due with respect to any period of time prior
to December 31, ~ 2007, and collected after that date.
Section 3. The effective date of this ordinance shall be the date
of publication.
First Reading:
Second Reading:
Date of publication:
Date Ordinance Takes Effect:
Gene Maxwell, Mayor
ATTEST:
Terry Obermaier, City Clerk
APPROVED AS TO FORM AND LEGALITY:
City Attorney Signature
Date