CR 2013-088 Second Reading Amending Sections of the Hopkins City Code (Harkess)A:U�
September 3, 2013 Council Report 2013-088
City of Hopkins
ORDINANCE AMENDING SECTIONS 701.07, 701.09, 701.179
702.07, 702.09 AND 702.15 OF THE HOPKINS CITY CODE
Proposed Action
Staff recommends that the Council approve the following motion: Move to approve Ordinance 2013-1066 for second
reading, approve the summary of Ordinance 2013-1066, and order the summary published and posted at the Hopkins
Library.
Approval of this motion will amend sections 701.07, 701.09, 701.17, 702.07, 702.09 and 702.15 of the Hopkins City
Code to increase the franchise fee rates and extend the termination dates on the utility franchise fees. The first reading
was held on August 20, 2013.
Overview
The city receives approximately $290,000 in franchise fees per year that support the operations of the General Fund
and approximately $200,000 to write down street improvement debt levies. Franchise fees were implemented in 2003
and have been renewed every two years since. This change in ordinance amends the fees at each level by $0.50 and
renews the ordinance for a five year period ending December 31, 2018.
Approval of the ordinance requires a four-fifths vote of the City Council to approve the publication of the summary
ordinance.
Primary Issues to Consider
• What are the changes in the proposed ordinance amendment since the first reading?
o There have been minor technical changes to the ordinance since the first reading. These changes are
to the title of the ordinance to comply with Subd. 6 of Section 3.03 of the Charter, which requires all
Ordinance amendments to "refer to the ordinance so amended—by title, and section number." The
other change is to add "as follows" after "is hereby amended" in each section that is amending the
ordinance (6 instances).
Supporting Information
• Ordinance 2013-1066
• Summary Ordinance 2013-1066
• Section 701 and 702 of the City Code — redlined and amended versions.
Christine M. Harkess, CPA, CGFM
Finance Director
Financial Impact: $ $85,000 Budgeted: Y/N X N
Source: Electric and gas utility customers
Related Documents (CIP, ERP, etc.): 2014 Budget Notes:
CITY OF HOPKINS
Hennepin County, Minnesota
ORDINANCE 2013-1066
AN ORDINANCE AMENDING SECTIONS 701 – ELECTRIC UTILITY FRANCHISE FEES
AND 702 –NATURAL GAS UTILITY FRANCHISE FEES
OF THE HOPKINS CITY CODE AMENDING FRANCHISE FEE RATES,
THE EFFECITVE DATE OF THE FEES AND 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 701.07 is hereby amended as follows:
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
Residential
Small C & I— non demand
Small C & 1—demand
Large C & I
Monthly Fee Per Customer Premise
$2.20
$3.85
$15.50
$105.50
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.
Section 2. Hopkins City Code, Section 701.09 is hereby arnended as follows:
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 2014.
Section 3. Hopkins City Code, Section 701.17 is hereby amended as follows:
701.17. Termination of Ordinance. This ordinance and the franchise fee imposed by it
shall remain in effect until December 31, 2018, 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,
2018 and collected after that date.
Section 4. Hopkins City Code, Section 702.07 is hereby amended as follows:
702.07. Franchise Fee Imposed. A franchise fee is hereby imposed on the Company,
CenterPoint Energy Minnegasco, pursuant to City of Hopkins Franchise Ordinance 2002-
879 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
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
$2.20
$2.20
$5.50
$15.50
$30.50
$105.50
$105.50
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.
Section 5. Hopkins City Code, Section 702.09 is hereby amended as follows:
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 2014.
Section 6. Hopkins City Code, Section 702.15 is hereby amended as follows:
702.15. Termination of Ordinance. This ordinance and the franchise fee imposed by it
shall remain in effect until December 31, 2018, 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,
2018, and collected after that date.
Section 7. The effective date of this ordinance shall be the date of publication.
First Reading: August 20, 2013
Second Reading: September 3, 2013
Date of Publication: September 12, 2013
Date Ordinance Takes Effect: September 12, 2013
ATTEST:
Kristine A. Luedke, City Clerk
APPROVED AS TO FORM AND LEGALITY:
City Attorney Signature
Gene Maxwell, Mayor
Date
CITY OF HOPKINS
Hennepin County, Minnesota
ORDINANCE 2013-1066
AN ORDINANCE AMENDING SECTIONS 701 – ELECTRIC UTILITY FRANCHISE FEES
AND 702 – NATURAL GAS UTILITY FRANCHISE FEES
OF THE HOPKINS CITY CODE AMENDING FRANCHISE FEE RATES,
THE EFFECITVE DATE OF THE FEES AND EXTENDING
THE TERMINATION DATES FOR UTILITY FRANCHISE FEES
The following is a summary of the major provisions of the new ordinance:
• Electric Franchise Fee
Customer Classification
Residential
Small C & I— non demand
Small C & 1—demand
Large C & I
• Natural Gas Franchise Fee
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
$2.20
$3.85
$15.50
$105.50
Monthly Fee per Customer Premise
$2.20
$2.20
$5.50
$15.50
$30.50
$105.50
$105.50
• The franchise fee will be effective commencing with bills for the month of January 2014.
• The ordinance shall remain in effect until December 31, 2018.
A printed copy of the entire ordinance is available from the City Clerk and at the Hopkins
Library.
First Reading: August 20, 2013
Second Reading: September 3, 2013
Date of Publication: September 12, 2013
Date Ordinance Takes Effect: September 12, 2013
Hopkins City Code
Section 701 - Electric Utility Franchise Fee
(Amended Sept 2013) 701
701.01. 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. 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 $2.20
Small C & I— non demand $3.85
Small C & I—demand $15.50
Large C & I $105.50
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 rata 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. 2013-1066)
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 2014.
(Amended Ord. 2013-1066)
Section 701 Page I
Hopkins City Code (Amended Sept 2013) 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.
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 26113.36 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, 2018, at which time they shall tenninate 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, 2018, and collected after that date. (Amended Ord. 2013-1066)
(This Section added through Ord. No. 2003-910)
Section 701 Page 2
Hopkins City Code
Section 702 - Gas Utility Franchise Fee
(Amended Sept 2013) 702
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
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
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
$2.20
$2.20
$5.50
$15.50
$30.50
$105.50
$105.50
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. 2013-1066)
Section 702 Page 1
Hopkins City Code
(Amended Sept 2013) 702
702.09. Date Franchise Fee Takes Effect. Tile 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 2014.
(Amended Ord. 2013-1066)
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 terns of this Ordinance,
Franchise Ordinance 2002-879, Minnesota Statutes 261 B.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, 2018, 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, 2018, and collected after that date. (Amended Ord. 2013-1066)
(This Section added through Ord. No. 2003-911)
Section 702 Page 2
Hopkins City Code
( September 2013) 701
Section 701 - Electric Utility Franchise Fee
701.01. 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. 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 $4-X82.20
Small C & I— non demand $3-.3-53.85
Small C & I—demand $4-5-.W 5.50
Large C & I $48-59105.50
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. 2414-48362013-1066)
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 X22014.
(Amended Ord. '^' -2013-1066)
Section 701 Page 1
Hopkins City Code
( September 2013) 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 \\ ithin 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.
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 teens of this Ordinance,
Franchise Ordinance 87-578, Minnesota Statutes 26113.36 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, 294-j2018, 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, -04-32018, and collected after that date. (Amended Ord.
'^'�3462013-1066)
(This Section added through Ord. No. 2003-910)
Section 701 Page 2
Hopkins City Code ( September 2013) 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 216B.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
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
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
$4442.20
$470 2.20
$3:90 5.50
$15.00 15.50
$30.00 30.50
$105.00105.50
$105.00105.50
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. 2^'--:0362013-1066)
Section 702 Page 1
Hopkins City Code
(Nov. _ September 2013) 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 Compam's billings commencing with bills for the month of January '1012 2014.
(Amended Ord. '�0392013-1066)
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 terns of this Ordinance,
Franchise Ordinance 2002-879, Minnesota Statutes 261 B.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 2018, at which time they shall tenninate and be of no further effect,
except that the Company shall remain obligated atter that date to pay the City all franchise fees due with
Irespect to any period of time prior to December 31. and collected after that date. (Amended
Ord. 2011 1036 2013-1066)
(This Section added through Ord. No. 2003-911)
Section 702 Page 2