Continuation of Introduction of Franchise Ordinances with Anoka Municipal Utility and Connexus Energy

The purpose of this case is the introduction of two draft franchise ordinances; Ordinance #13-19 with Anoka Municipal Utility, and Ordinance #13-20 with Connexus Energy.  If Council supports both draft franchise ordinances as introduced, a second reading of the franchise ordinances may be called for the November 12^th City Council meeting.  After the second reading, Council may adopt both ordinances if no further revisions are desired.
 
Both utilities were previously granted franchise rights through Ordinance #92-13 allowing them to install, operate and maintain their utilities within city right-of-ways.  However, Ordinance #92-13 expired at the beginning of this year so both utilities have since been installing, operating and/or maintaining their utility’s within city right-of-ways without a current franchise ordinance. 

The City's other utility operator, Centerpoint Energy, renewed their franchise agreement with the City in 2003.

 On October 8^th, two draft franchise ordinances were reviewed at a public hearing, however, the consideration of the introduction of the ordinances was continued to tonight’s meeting.  Adopting these ordinances will grant both utilities the right to continue to install, operate and maintain their utilities within city right-of-ways for another 20 years.
 
One of the provisions included in both draft franchise ordinances, which was also included in Ordinance #92-13, allows the City to impose franchise fees on the utilities, which would help fund our long-term street maintenance program.  As such, these draft franchise ordinances must be adopted prior to the adoption of any franchise fee ordinances.

Two draft ordinances are needed to replace expired ordinance 92-13 as each utility now has unique ordinance language requirements.  If Council requests minor revisions to either or both draft ordinances, a second reading of the ordinances can still be called for November 12^th, and staff can make the requested revisions prior to the second reading.  However, if major modifications are requested to either or both draft ordinances, another Public Hearing to introduce the revised ordinances is recommended before adoption of the ordinances is considered.

None required.

Draft ordinance language was provided to the City by both utility companies, which staff used to develop the attached draft ordinances.  Staff then discussed the draft ordinances with both utility companies to make sure they approved of the draft ordinances prior to tonight’s meeting so staff does not anticipate any objections by either utility company.

There has been an effort to keep the provisions of all three of our franchise agreement consistent with each other, so that all utilities are operating under similar rules. The Centerpoint Energy agreement that was passed by ordinance in 2003 is the only agreement currently in place.  Notably, the 2003 Centerpoint agreement does not include the franchise fee cap of "five per cent of the operator's gross revenues" which was in the previous ordinance that governed Connexus and the Anoka Municipal Utility.  Consequently, this has been removed from the current proposed Connexus and Anoka Municipal Utility agreements.

The Charter Commission Chair has asked for input in regard to related provisions of the Charter that the Council may want he Charter Commission to consider.  The Charter Commission's initial meeting on the topic is October 21, too late for full Council input, but staff will report on the Charter Commission meeting to allow the Council to consider the appropriate feedback and/or input into the process.
 
Both ordinances were clearly posted on the city’s web site in advance of tonight’s meeting as requested at the Public Hearing on October 8^th.
 
Alternatives –
 
Alternative #1 - Call for a second reading of franchise ordinances #13-19 and #13-20 on November 12, 2013 as drafted.
 
Alternative #2 - Call for a second reading of franchise ordinances #13-19 and #13-20 on November 12, 2013 following minor modifications as directed.
 
Alternative #3 - Direct staff to make major modifications to the franchise ordinances and call for a new Public Hearing on November 12, 2013 to introduce the revised franchise fee ordinances.

Preparation of the draft ordinances was completed by City staff as part of normal staff duties. The city attorney also reviewed the draft ordinances.

Staff recommends alternative #1 or #2 if Council generally supports the attached franchise ordinances as drafted with no, or only minor, revisions requested.
 
Staff recommends alternative #3 if Council directs substantial modifications to one or both of the franchise ordinances. 
 
Since these ordinances replace the expired Ordinance #92-13, and since these ordinances must be adopted before the franchise fee ordinances addressed in the following case can be adopted, staff recommends adopting these ordinances as soon as practical.

Call for a second reading of the ordinances on November 12, 2013.
 
-- OR --
 
Call for a Public Hearing on November 12, 2013 to introduce revised franchise ordinances with the following revisions:
 (to be determined)