Review Draft Ordinance Proposing an Amendment to the City's Charter

Purpose:  To review the proposed amendment to Chapter 7 of the City Charter and to send the proposal to the Charter Commission for review and comment.

Background:  Following Council discussion proposing implementation of a franchise fee to fund a long term road maintenance policy, the Charter Commission presented an amendment to the City Council relating to Chapter 10 (Franchises) of the City's Charter.  The amendment is as follows:  Section 10.4 Power of Regulation Reserved.  Subject to any applicable state statutes, the council may by ordinance regulate and control the exercise of any franchise, including the maximum rates, fares, or prices to be charged by the grantee, except that any franchise fees imposed under applicable state statutes must be limited to defraying increased municipal costs accruing as a result of utility operations and may not be used to raise general revenue.  No franchise value shall be included in the valuation of the grantee's property in regulating utility rates, fares, or prices under any applicable state or municipal law, or regulation, or in proceedings for municipal acquisition of the grantee's property by purchase or eminent domain.  The language proposed by the Charter Commission was to initiate discussion with the City Council relating to some limitations with regard to the charging of franchise fees. 

A joint meeting was held with the City Council and the Charter Commission to discuss pros and cons of funding options for long term street maintenance plan and road reconstruction.  A consensus was reached that there were three viable options for funding road reconstruction - one of them being franchise fees.  The discussion with regard to the franchise fees centered around the need for parameters - such as a sunset term, the money had to be specifically dedicated for long term road maintenance, etc.  

The "original" proposed amendment (recommended prior to the joint meeting)  from the Charter Commission was not approved by Council during the public hearing of December 10.  The City Attorney recommended "denial" because the term to limit franchise fees to "defraying increased municipal costs accruing as a result of utility operations' is ambiguous and leaves open the question to future Councils and the public, subject to potential challenge via lawsuit or other action by residents.  The City Attorney stated that this amendment does not have the transparency or ability to define the limits as the Charter Commission had indicated it desires.  Council directed that staff draft alternate and refined Charter amendment language and open dialog with the Charter Commission for their review and comment.  

That language was drafted by the City Attorney and discussed earlier this evening in work session.  Provided a consensus was met, the ordinance is now being discussed for possible transmission to the Charter Commission for their review.  It should be noted that the Charter Commission has scheduled a meeting for January 27, in anticipation of receiving alternative language from the City Council.

Staff is recommending review of the proposed Charter language and transmission to the Charter Commission for their review and comment.

Motion to send the proposed Charter language to the Charter Commission for review and comment.