CR 05-114 Ordinance Amending Sections 701.17 & 702.15 of the Hopkins City Code
Council Report 2005-114
ORDINANCE AMENDING SECTIONS 701.17 AND 702.15
OF THE HOPKINS CITY CODE
Proposed Action
Staff recommends that the Council approve the following motion: Move to approve Ordinance 2005-949 for
first reading.
Approval of this motion will begin the process of amending sections 701.17 and 702.15 of the Hopkins City
Code to extend the termination dates on the utility franchise fees.
Overview
In 2003 the City of Hopkins was faced with the loss of $1.8 million in Local Goverrunent 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. As stated in Council Report 2003-167 "The Council may wish to consider a sunset
provision which would terminate the franchise fees after a given number of years unless the Council were to
extend fees at that time. This would provide for either an automatic end to franchise fees if no action were
taken or a reconsideration of fees at the time of the sunset. At the end of the sunset, the Council could decide
whether to discontinue to the fees or extend them into the future. The amount of such fees could also be
modified (increased or decreased) to reflect future conditions should the Council decide to extend the fees at
the time of the sunset." Although the original ordinances contained "sunset" clauses it was pointed out in
Council Reports, minutes, and the Hopkins Highlights that the City Council could extend these fees.
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.
Supportinl! Information
. Ordinance 2005-949
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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