CR 11-106 Amending Fee'sA320-
November 15, 2011 Council Report 2011-106
City of Hopkins
ORDINANCE AMENDING SECTIONS 701.09, 701.13, 702.09 AND 702.11
OF THE HOPKINS CITY CODE
Proposed Action
Staff recommends that the Council approve the following motion: Move to approve Ordinance 2011-1039 for second
reading.
Approval of this motion will amend sections 701.09, 701.13, 702.09 and 702.11 of the Hopkins City Code to correct
date references for the effective date of the fees in the city code. The first reading was held on November 1, 2011.
Overview
Previously when Sections 701 and 702 were amended for the increase in franchise fees staff missed two date
references that should have been changed when the fees were increased.
Section 701.09 and 702.09 reference the effective date of the fees and when the fees were increased we neglected to
update the effective date of the fees. This section should read January 2012.
Sections 701.13 and 702.11 refer to the date of the first payment of franchise fees when the ordinance was established
and probably should have been changed once these ordinances were first extended. We are removing the sentence
"The first payment will be for the first quarter of 2004 and will be due April 30, 2004". This section will then read
The
fees shall be paid to the City quarterly, based on a calendar year, with payment due by the 30`h day after the
end of each quarter".
Primary Issues to Consider
• What are the changes in the proposed ordinance amendment since the first reading?
Supporting Information
• Ordinance 2011-1039
• Section 701 and 702 of the City Code
Christine M. Harkess, CPA, CGFM
Finance Director
Financial Impact: $ None Budgeted: Y/N N
• Source: Electric and gas utility customers
Related Documents (CIP, ERP, etc.): Notes:
CITY OF HOPKINS
Hennepin County, Minnesota
ORDINANCE 2011-1039
AN ORDINANCE AMENDING SECTIONS 701 AND 702
OF THE HOPKINS CITY CODE
AMENDING THE EFFECTIVE DATE OF THE FEES AND
AMENDING PAYMENT DUE DATES
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 approved an increase in franchise fees under Ordinance
2011-1036 in September 2011; and
Whereas date references in the ordinance were not updated; and
Whereas the Hopkins City Council has determined that the date references need to be updated to
reflect the intent of the ordinance;
• Now therefore, the City Council of the City of Hopkins does hereby ordain:
Section 1. Hopkins City Code, Section 701.09 is hereby amended:
701.09. Date Franchise Fee Takes Effect. The above utility franchise fees shall go into
effect in and be applicable to all of the Company's billings commencing with bills for the
month of Febtzuafy 2004 January 2012.
Section 2. Hopkins City Code, Section 701.13 is hereby amended:
701.13. Payment of Fee. Franchise fees shall be paid to the City quarterly, based on a
calendar year, with payment due by the 3001 day after the end of each quarter.T" he fi st
Section 3. Hopkins City Code, Section 702.09 is hereby amended:
702.09. Date Franchise Fee Takes Effect. The above utility franchise fees shall go into
effect in and be applicable to all of the Company's billings commencing with bills for the
month of Feb.fua- R, 2004 January 2012.
Section 4. Hopkins City Code, Section 702.11 is hereby amended:
702.11. Payment of Fee. Franchise fees shall be paid to the City quarterly, based on a
• calendar year, with payment due by the 30th day after the end of each quarter. Thefirst
0
Section 5. The effective date of this ordinance shall be the date of publication.
First Reading: November 1, 2011
Second Reading: November 15, 2011
Date of Publication: November 23, 2011
Date Ordinance Takes Effect: November 23, 2011
ATTEST:
• Kristine A. Luedke, City Clerk
APPROVED AS TO FORM AND LEGALITY:
City Attorney Signature
40
Gene Maxwell, Mayor
Date
Hopkins City Code (Rev Sept. & Nov. 2011) 701
•
Section 701 - Electric Utility Franchise Fee
701.01. DEFINITIONS. For purposes of this Ordinance, the following capitalized teens shall have the
following meanings:
Subd. 1. City. The City of Hopkins, County of Hennepin, State of Minnesota.
Subd. 2. Company. Xcel Energy, a Minnesota Corporation (formerly Northern States Power), its
successors and assigns.
701.03. Purpose. The Hopkins City Council has determined that franchise fees should be imposed on gas
and electric utilities in return for their use of City -owned rights-of-way. The purpose of this ordinance is
to establish such franchise fees to be paid to the City by the Company.
701.05. City Authority. Minnesota Statutes 21613.36 grants cities the authority to impose a franchise fee
on gas and electric utility services. Such fees are in return for basic right to operate within municipally -
owned rights-of-way and other public property as provided in utility franchise agreements/ordinances
between a city and the respective utilities operating within the municipal boundaries. In addition, City of
Hopkins Franchise Ordinance 87-5 78 authorizes the City to impose, by separate ordinance, a franchise
fee on the Company.
701.07. Franchise Fee Imposed. A franchise fee is hereby imposed on the Company, Xcel Energy,
pursuant to City of Hopkins Franchise Ordinance 87-578 and Minnesota Statutes 21613.36 and subject to
the fee schedule below.
• A franchise Fee is to be collected by the Company from each customer in the designated customer
classification for service at each and every customer premise, as indicated by the following schedule:
Fee Schedule
Customer Classification Monthly Fee Per Customer Premise
Residential $1.70
Small C & I— non demand $3.35
Small C & I—demand $15.00
Large C & I $105.00
This fee is an account -based fee on each premise and not a meter -based fee. In the event that a customer
of the company covered by this ordinance has more than one meter at a single premise, but only one
account, only one fee shall be assessed to that account. If a premise has two or more meters for a single
customer billed at different rates, the Company may have an account for each rate classification, which
will result in more than one franchise fee assessment for electric service to that premise. If the Company
combines the rate classifications into a single account, the franchise fee assessed to the account will be the
largest franchise fee applicable to a single rate classification for energy delivered to that premise. In the
event any customer of the Company covered by this ordinance has more than one premise, each premise
(address) shall be subject to the applicable fee. In the event a question arises as to the proper fee amount
for any premise, the Company's manner of billing for energy used at all similar premises in the city will
control. (Amended Ord. 2011-1036)
701.09. Date Franchise Fee Takes Effect. The above utility franchise fees shall go into effect in and be
applicable to all of the Company's billings commencing with bills for the month of January 2012.
• (Amended Ord. 2011-1039)
Section 701 Page 1
Hopkins City Code (Rev Sept. & Nov. 2011) 701
• 701.11. Limitation. Franchise Ordinance 87-578 limits the total amount of franchise fee which may be
collected to 5% of the Company's gross revenues within the City limits. So long as this limitation remains
in effect, in no event shall the total of the fees collected pursuant to Section 701.07 be greater than 5% of
the Company's gross revenues within the City of Hopkins as defined in the Franchise Ordinance.
•
is
701.13. Payment of Fee. Franchise fees shall be paid to the City quarterly, based on a calendar year, with
payment due by the 30th day after the end of each quarter. (Amended Ord. 2011-1039)
701.15. Dispute. Any disputes or other issues which arise will be subject to the terms of this Ordinance,
Franchise Ordinance 87-578, Minnesota Statutes 261B.36 as well as any other agreements entered into by
the City and the Company.
701.17. Termination of Ordinance. This ordinance and the franchise fee imposed by it shall remain in
effect until December 31, 2013, 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, 2013, and collected after that date. (Amended Ord. 2011-1036)
(This Section added through Ord. No. 2003-910)
Section 701 Page 2
Hopkins City Code (Rev Sept. & Nov. 2011) 702
•
Section 702 - Gas Utility Franchise Fee
702.01. DEFINITIONS. For purposes of this Ordinance, the following capitalized terms shall have the
following meanings:
Subd. 1. City. The City of Hopkins, County of Hennepin, State of Minnesota.
Subd. 2. Company. CenterPoint Energy Minnesota Gas, a division of CenterPoint Energy
Resources Corporation, a Delaware corporation, its successors and assigns.
702.03. Purpose. The Hopkins City Council has determined that franchise fees should be imposed on gas
and electric utilities in return for their use of City -owned rights-of-way. The purpose of this ordinance is
to establish such franchise fees to be paid to the City by the Company.
702.05. City Authority. Minnesota Statutes 21613.36 grants cities the authority to impose a franchise fee
on gas and electric utility services. Such fees are in return for basic right to operate within municipally -
owned rights-of-way and other public property as provided in utility franchise agreements/ordinances
between a city and the respective utilities operating within the municipal boundaries. In addition, City of
Hopkins Franchise Ordinance 2002-879 authorizes the City to impose, by separate ordinance, a franchise
fee on the Company.
702.07. Franchise Fee Imposed. A franchise fee is hereby imposed on the Company, CenterPoint Energy
Minnesota Gas, pursuant to City of Hopkins Franchise Ordinance 2002-879 and Minnesota Statutes
. 216B.36 and subject to the fee schedule below.
A franchise Fee is to be collected by the Company from each customer in the designated customer
classification for service at each and every customer premise, as indicated by the following schedule:
Fee Schedule
Customer Classification
Residential
Commercial A
Commercial/Industrial B
Commercial/Industrial C
Small Dual Fuel A
Small Dual Fuel B
Large Volume Dual Fuel
Monthly Fee Per Customer Premise
$1.70
$1.70
$5.00
$15.00
$30.00
$105.00
$105.00
This fee is an account -based fee on each premise and not a meter -based fee. In the event that a customer
of the company covered by this ordinance has more than one meter at a single premise, but only one
account, only one fee shall be assessed to that account. If a premise has two or more meters for a single
customer billed at different rates, the Company may have an account for each rate classification, which
will result in more than one franchise fee assessment for gas service to that premise. If the Company
combines the rate classifications into a single account, the franchise fee assessed to the account will be the
largest franchise fee applicable to a single rate classification for energy delivered to that premise.
In the event any customer of the Company covered by this ordinance has more than one premise, each
premise (address) shall be subject to the applicable fee. In the event a question arises as to the proper fee
• amount for any premise, the Company's manner of billing for energy used at all similar premises in the
city will control. (Amended Ord. 2011-1036)
Section 702 Page 1
is
•
Hopkins City Code
(Rev Sept. & Nov. 2011) 702
702.09. Date Franchise Fee Takes Effect. The above utility franchise fees shall go into effect in and be
applicable to all of the Company's billings commencing with bills for the month of January 2012.
(Amended Ord. 2011-1039)
702.11. Payment of Fee. Franchise fees shall be paid to the City quarterly, based on a calendar year, with
payment due by the 30th day after the end of each quarter. (Amended Ord. 2011-1039)
702.13. Dispute. Any disputes or other issues which arise will be subject to the terms of this Ordinance,
Franchise Ordinance 2002-879, Minnesota Statutes 26113.36 as well as any other agreements entered into
by the City and the Company.
702.15. Termination of Ordinance. This ordinance and the franchise fee imposed by it shall remain in
effect until December 31, 2013, 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, 2013, and collected after that date. (Amended Ord. 2011-1036)
(This Section added through Ord. No. 2003-911)
Section 702 Page 2