HomeMy WebLinkAbout2016/07/18 - ADMIN - Minutes - City Council - Study SessionOfSt. Louis Park OFFICIAL MINUTES
MINNESOTA CITY COUNCIL SPECIAL STUDY SESSION
ST. LOUIS PARK, MINNESOTA
JULY 18, 2016
The meeting convened at 6:45 p.m.
Councilmembers present: Mayor Jake Spano, Tim Brausen, Steve Hallfin, Gregg Lindberg,
Anne Mavity, Thom Miller, and Susan Sanger.
Staff present: City Manager (Mr. Harmening), Engineering Director (Ms. Heiser), City Attorney
(Mr. Mattick), and Recording Secretary (Ms. Pappas).
Guest: None
1. Xcel and CenterPoint Franchise Agreement Renewal
Ms. Heiser explained that this discussion is to inform the City Council of the status of
discussions related to the renewal of the franchise agreements with CenterPoint Energy and Xcel
Energy. The city has been working on renewing the franchise agreements since 2013 and has
approved two extensions - one in 2012 and one in 2015. The latest extension is set to expire on
December 31, 2016. Staff has been in contact with both utilities regarding the upcoming
deadline, and there is mutual interest in working on the new agreement. The approval for these
agreements through the City Council and Public Utilities Commission takes approximately five
months.
The City Attorney has been involved in the renewal agreement discussions and has reviewed and
commented on the proposed agreement. The two companies have reviewed all comments on the
draft agreement. The permit fees issue has been resolved, as has the performance bond language.
The one outstanding issue is related to the franchise term. Xcel has proposed a franchise
agreement term of 20 years, but the city has asked for a 10 -year term. City staff states 10 years is
reasonable, given anticipated significant changes in technology and energy production methods
in the future. Xcel is not supportive of this position.
It was noted that budget considerations involve the city's pavement management program, which
is currently funded by franchise fee revenues collected from both Xcel and CenterPoint Energy.
Total franchise fees generate $2.3 million annually, and the city is not able to receive these
revenues without a franchise agreement with each utility.
Councilmember Brausen asked if the utilities do not agree to a franchise agreement, if the city
would force them to request a permit each time they had a project. Ms. Heiser noted with or
without the agreement, they are required to obtain a permit to do work in the city right-of-way.
Councilmember Sanger asked what the pros and cons were of a 10 -year versus a 20 -year
agreement. She questioned if there are consequences to not having the same number of years
with both utilities and if the city has any leverage to negotiate the franchise term.
Mr. Mattick stated the term agreements will be the same for both utilities. When negotiating, the
Xcel agreement is done first, as that is the most difficult, and then the rest of the agreements
usually fall into place. He added the city prefers the 10 -year agreement, with the option for two
5 -year renewals. Mr. Mattick added the city does not have any leverage on this issue.
Special Study Session Minutes -2- July 18, 2016
Councilmember Mavity asked what the parameters are related to raising city permit fees to allow
for a shorter term agreement. Mr. Mattick stated permits and fees cover costs, but do not
generate revenue like the franchise fees do.
Councilmember Lindberg asked if franchise agreements have any benefits other than the
collection of fees. Ms. Heiser stated the franchise agreements provide a revenue source for the
city, but also provide a process for addressing service reliability concerns. Mr. Mattick noted the
most important part of the agreement is the revenue that is generated.
Councilmember Lindberg asked if there is a way to utilize alternative energy sources, as it
becomes more prevalent, since the city has no leverage and no other options. Ms. Heiser
referenced the City's Partners in Energy efforts that the Environment and Sustainability
Commission is working on. This will result in a Memorandum of Understanding regarding the
city's climate action goals
Ms. Heiser stated staff will come back to the council with the new ordinance. The public hearing
will be held on September 6.
2. Assessment Policy
Ms. Heiser explained this report is a continuation in the process of updating the city's assessment
policies. She noted the city's assessment policy was last updated in 2000. Prior to that, the policy
was updated more frequently. She pointed out that a draft assessment policy has been reviewed
by the City Attorney and reflects the input received from council over the last eight months.
Mr. Harmening noted the policy will assess for parking lots and fire sprinkler requests. Ms.
Heiser added there has been a robust review of all policies, and there will be information coming
forth on city code updates also.
Councilmember Sanger asked Mr. Mattick if this assessment policy is a matter of state statute; if
it reflects how long a debt can be deferred; and if the deferrals are part of state statute. Mr.
Mattick stated it is up to the city how to handle this and that the city council can set up a
definition of a trigger mechanism for how to handle deferrals.
Councilmember Sanger added then that possibly the city doesn't need a deferral policy. Mr.
Mattick agreed.
Councilmember Mavity asked if there is specific language that can be removed and from what
section. Mr. Mattick stated Section V of the policy can be removed.
Councilmember Brausen stated if a deferral process is in place, it would allow someone in
hardship to defer fees that might be owed. Councilmember Sanger stated she does not want to be
in the business of deciding who is or is not in hardship.
Councilmember Mavity asked if there are other tools to help folks pay for assessments. Mr.
Harmening stated that other tools are available.
Mr. Mattick pointed out this is a city policy, so the council can deviate on this issue if they gain a
consensus.
Special Study Session Minutes -3- July 18, 2016
It was the consensus of the city council to remove Section V related to deferred assessments,
from the policy draft.
Councilmember Brausen said the council will need to do robust communication to citizens on the
assessment policy as it moves to finalization.
The meeting adjourned at 7:11 p.m.
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