HomeMy WebLinkAbout02.14.11 Work Session Packet
City of Farmington
430 Third Street
Farmington, MN 5502~
Mission Statement
Through teamwork and cooperation,
the City of Farmington provides quality
services that preserve our proud past and
foster a promisingfuture.
AGENDA
CITY COUNCIL WORKSHOP
FEBRUARY 14, 2011
6:30 P.M.
CITY COUNCIL CHAMBERS
1. CALL TO ORDER
2. APPROVE AGENDA
3. CITY STAFF COMMENTS
FRANcmSE FEES
5. PUBLIC INFORMATION DISCUSSION
6. ADJOURN
PUBliC INFORMATION STATEMENT
Council workshops are coruJucted as an iriformal work session, all discussions shall be consideredfact-ftnding, hypothetical and unofficial critical thinking exercises,
which do not reflect an official public position.
Council work session outcomes should not be construed by the attending public and/or reporting media as the articulation of aformal City policy position. Only
official Council action normally taken at a regularly scheduled Council meeting should be considered as aformal expression of the City's position on any given matter.
City of Farmington
430 Third Street
Farmington, Minnesota
651.280.6800 . Fax 651.280.6899
www.ci.farmington.mn.us
TO: Mayor and Councilmembers
FROM: Peter J. Herlofsky, Jr.
City Administrator
SUBJECT: Franchise Fees / Street Projects Overview
DATE: February 14,2011
For the February 14, workshop a variety of documents have been prepared for Council's review
to help set the stage for at least a consideration of the franchise fee option for seal coat
improvements. The biggest issue and I think the portion of the City finances that have made
Council uncomfortable is the plan to pay for all of the street improvement projects over the last
ten years.
At the beginning of the budget process there was a question regarding how the Vermillion River
Crossing project would be funded. Staff brought a few recommendations to Council, but
Council chose to increase the levy to manage the appropriate payments. Since that time, a great
deal of analysis has taken place regarding the plan for paying of City debt. For your information
for the February 14, meeting the following documents are provided:
1. A spreadsheet has been prepared that outlines the plan for the payment of all of our
current debt obligations for street improvements. This item will be presented at the
meeting because of its size.
2. A project fund summary spreadsheet showing the fund balance as of2011 - 2027. This
is a combination and simplification of the larger spreadsheet that will be presented. It
shows all of the debt the City has regarding its road projects will not require any
additional increase in the tax levy through 2027 and will show a decrease from 2022 on.
This will cover all bond debt and will create a plan for solutions.
3. An explanation provided by Teresa Walters.
To explain this further, the projects have all been placed in one fund and have used pooled cash
to pay the appropriate debt. This plan is consistent with the previous Finance Director's
objectives and will allow the City to meet all of its financial obligations without increasing the
levy for the projects. New projects will be handled differently and each one will be a fund by
itself and there will be no co-mingling or pooled cash method of paying debt. The reason for
bringing this information up is because it has been noted Council has been uncomfortable with
the fmancing of some of our projects and this has affected discussions regarding the seal coat
1
projects. The other item that is included in this packet is Kevin Schorzman's analysis of the seal
coating projects and the funding mechanisms available to us. They go from 100% assessments
to 100% franchise fee revenues and any option Council wishes to approve will work.
A great deal of time and effort has been used to make sure the Council is comfortable with the
fmancial solution for past projects. Mr. Schorzman has worked very hard in organizing the data
and I want to thank him and Teresa Walters for providing information to Council.
If you have additional questions, please let us know.
Respectfully submitted,
Peter J. Herlofsky, Jr.
City Administrator
2
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City of Farmington
430 Third Street
Farmington, Minnesota
651.280.6800 . Fax 651.280.6899
www.ci.farmington.mn.us
TO:
Mayor and Councilmembers
FROM:
Peter J. Herlofsky, Jr., City Administrator
Teresa Walters, Finance Director
Kevin Schorzman, City Engineer
SUBJECT:
Project Funds (A.K.A "The Road and Bridge Fund")
DATE:
February 14, 2010
GOVERNMENTAL ACCOUNTING BACKGROUND
When a project is initiated, the revenue source for the project goes directly into the capital project fund
for that project. Usually the revenue source is a bond. Since Special assessments are received over
time, they are not used to pay for the project initially. Many times, the bond proceeds cover the entire
project and the special assessments are used to pay a portion of the bond debt payment. Another
source of revenue is needed to pay the other portion of the bond debt. This is usually covered by a levy
or fee increase.
Once the project is completed, the capital project fund should be closed out. A debt service fund is set
up to pay the bond payments. The Levy (tax) revenue and Special assessment revenue should go
directly into the debt service fund. This is sufficient to provide no less than 105% of principal and
interest on the bonds as required by Minnesota Law. The levy in one year is used to pay the debt
payment in the following year, since tax revenue is received in December and debt principal payments
are generally due in February.
PROPOSED PLAN
Therefore, we are utilizing existing cash from various projects to cover the bond payments. The plan is
to maintain very little in the Debt Service fund balance. The proposed plan will transfer funds from the
Capital project funds to make the bond payments annually. The proposed plan shows "borrowing" from
one project to another in an effort to keep the levy the same, provided no new projects are initiated.
The proposed plan maintains 105% in levy and assessments within the Capital Project funds. In this
instance, the City is authorized to pay the bond with cash on hand, not pledged for any other purpose.
The plan allows us to utilize existing funds to pay the Walnut Street bond until 2015. Once the Pilot
knob bond ends in 2015, the levy will be used toward the Walnut Street bond. Once the Ash Street
bond ends in 2011, the levy will continue to fund other bonds and re-pay the project "borrowing". An
Explanation of the future of each project and bond fund is shown in this document. Any funds not
shown are closed out and do not have balances.
4
FUND BACKGROUND:
The "Road and Bridge" fund (Now called the "Project Fund") is set up as one fund with many projects.
This means that cash is pooled together into one fund. For auditing purposes this fund is audited at the
fund level and not the project level. This means cash can be transferred between projects because at
the end of the year, it is all reported as one lump sum.
The estimated cash balance as of December 31, 2010 is $2,254,424. This is made up of the following
projects (Also shown on the attached spreadsheet):
Project 12/31/10 explanation
Balance
4100 Street Construction (MSA) $(761,686) MSA funds have been "loaned" to the
195th Street, pilot knob, and other projects
in an effort to fund those projects prior to
the receipt of other funding sources that
were delayed for various reasons. The
explanations below show how and when
the deficit will be eliminated. Once the
funds are repaid by 2027, this will have a
$2.9 million balance. This balance can be
utilized for future projects.
4103 Sealcoating (853,238) The Source of funding for Sealcoating was
"excess" funds from various projects that
"borrowed" MSA funds. Since the projects
were not in any position to repay the MSA
funds, there were no "excess" funds. MSA
funds from the 195th Street project will be
repaid starting in 2017. Once enough
MSA funds have accumulated, the
sealcoating deficit will be eliminated (in
2020).
4106 Pilot Knob 754,012 This balance is needed to make the 2005A
bond payments. In 2012 the funds will be
used for the 1998 portion of the 2005A
bond (Fund 3080) payment only. [See
2005A below].
4110 Main Street Reconstruction (14,808) We anticipate approximately $200,000 in
additional expenditures in 2011. Once this
occurs, we will transfer funds from 4100 to
close this project.
5
Project 12/31/10 Explanation
Balance
4111195th Street Extension 2,338,312 The funds in this project is needed to make
the (approximately $720,000 annual)
2008B bond payments. This project will
continue to receive revenue from the
State, the County, the Developer (Deferred
Assessments) and transfers from the Utility
funds). MSA funds used for this project
will be transferred back to the 4100 MSA
fund starting in 2017. Once enough MSA
funds have accumulated, the sealcoating
deficit will be eliminated (in 2020).
4113 208th Street 234,910 This balance includes a $95,228 receivable.
Once received in 2011, the balance will be
transferred to 4100 and the project will be
closed out.
4119 Walnut Street 556,922 We anticipate approximately $300,000 in
remaining expenditures in 2011. Once this
occurs, we will transfer funds from 4119 to
the bond fund 3095. This, along with
approximately $300,000 in anticipated
assessments will allow us to make our
2012-2014 bond payments with no
increase to the Levy until 2014.
TOTAL $2,254,424
FUTURE OF THE BOND FUNDS
MAIN STREET (2003A) PLAN
The City sold $3,740,000 GO Improvement Bonds in 2003 to finance the two phase street and utility
reconstruction of Main Street. Debt service on the bonds came from special assessments levied against
benefitted properties in the project area and an annual tax levy which began in 2006.
ACTUAL
The current levy for this bond is $249,918.
FUTURE
This bond ends in 2019. Once the bond ends, the levy will be used to increase the levy for Spruce Street
(VRC) to repay the amounts borrowed in previous years. [See the Spruce Street bond below].
6
PILOT KNOB (200SA) PLAN
In 1998, the City bonded $2,325,000 in General Obligation Improvement bonds to pay for the Pilot Knob
project. The 1999 bond was issued for $1,775,000. Special assessments were levied for CR 72 in the
amount of $841,700 and Downtown Streetscape in the amount of $288,750 for a total of $1,130,450.
In 2005, the 1998 Bond was combined with the 1999 bond and refunded (refinanced) into the 2005A
bond totaling $2,595,000. Debt service for this new issue was to come from special assessments and
transfers from the "Road and Bridge fund" (although no specific revenue source from the Road and
Bridge fund was designated).
This bond was also estimated to be paid back over 20 years ending in 2018. The total bond payments,
with interest were to be paid as follows:
Total Principal and Interest $2,501,631.25
Assessments CR 72 841,700
Deferred Assessments 288.750
Municipal Funds (Project funds) $1,371,181.25
ACTUAL
When the Road and Bridge fund was combined, there was no revenue source for the 1999 bond except
assessments. This created a problem regarding where to obtain the money necessary to pay the bond.
The 4106 project continued to pay the payment needed for the 1998 bond, the balance was pulled from
the 4100 project (Street Construction).
FUTURE
The Pilot Knob project will transfer only enough to pay the 1998 portion of the 2005A bond. The
balance (the 1999 portion) will come from a levy increase. In order to cover this increase, the Ash Street
bond (2005B) and the Spruce Street Bond (2006A) will be reduced. There will be no increase to the
overall levy. [See explanations for Ash Street and Spruce Street below].
ASH STREET (200SB) PLAN
The City sold $3,740,000 GO Improvement Bonds in 2003 to finance the two Phase Street and utility
reconstruction of Main Street. Debt service on the bonds came from special assessments levied against
benefitted properties in the project area and an annual tax levy which began in 2006.
ACTUAL
The current levy for this bond is $200,000.
FUTURE
This is one of the few bonds that have 105% of the debt service in the fund balance. The plan is to
utilize this fund balance and reduce the levy for this bond in an effort to increase the levy for the 2005A
bond. This bond will be funded with active assessments and the reduced levy until 2014. In 2015 a
7
transfer from the 195th Street project will supplement the bond payments in this fund. From 2016-2019
Ash Street will repay the funds borrowed. The Ash Street bond ends in 2021.
SPRUCE STREET (VRC - 2006A) PLAN
The City sold $5,500,000 G.O. Improvement Bonds in 2006 to finance the construction of the Spruce
Street extension (Vermilion River Crossing) and bridge project (including the mill and overlay project)
and the reconstruction of the infrastructure and utilities in the Hill Dee area. Bond payments have been
paid from special assessments levied on the benefiting properties and a property tax levy.
ACTUAL
In 2010, the Council raised the levy to cover the increase in bond payment.
FUTURE
The Levy will be reduced and distributed to cover the bond payments for the 2005A and 2008A bonds.
Funds needed to cover the 2006A bond payments will come from money borrowed (transferred) from
the 195th Street project. Once the 2003A bond ends in 2019, the levy for this bond will go to the VRC
(2006A) bond fund to repay the funds borrowed in previous years. This will continue until the VRC bond
ends in 2023.
PLAN (2008A and 2008B)
2008A: The City sold $1,355,000 G.O. Improvement Bonds of 2008A to finance the reconstruction of
Elm Street. The majority of the Elm Street project was funded by Dakota County. The City portion which
was funded by the bonds included utility infrastructure and Streetscaping. Debt service on these bonds
was to come from special assessments levied on the benefiting properties and a levy increase.
20088: The City sold $8,545,000 G.O. Improvement Bonds of 2008B to finance construction of 19Sth
Street from Embers Avenue to Trunk Highway 3. This project is a cooperative venture of the City,
Dakota county and Astra Genstar, the developer of the 900 acre "FairhilJl' development just adjacent to
the roadway.
Debt service on these bonds will come from Dakota County funding and special assessments on the
properties in the Fairhill development.
ACTUAL
There was never a levy increase for the 2008A bond. The bond was paid for with transfers from the
19Sth Street Construction project as well as special assessments levied on benefiting properties.
FUTURE
201.1.: The revenue for the 2008A bond payments will come from a transfer from the 4100 Street
construction fund and from special assessments on the properties. If special assessments do not come
in as planned, the transfer will be adjusted to cover the bond payment. Revenue for the 2008B bond
payments will come from a transfer from the 19Sth Street Extension project (4111).
8
2012 and 2013: The revenue for the 2008A bond payments will come from a transfer from the Sanitary
Sewer fund, special assessments on the properties, and an increase in the Levy by $40,000. This levy
increase will not result in an overall increase in the levy since the Ash Street bonds and the Spruce Street
bonds will be reduced to cover this (and other increases). [See Ash Street and Spruce Street for other
funding sources] If special assessments do not come in as planned, the transfer will be adjusted to cover
the bond payment. Revenue for the 2008B bond payments will come from a transfer from the 195th
Street Extension project (4111).
2014 - 2024: The levy will continue to increase on the 2008A bond (resulting in reductions to the levy in
other bonds). Assessments will also contribute to the bond payments. The 2008A bond ends in 2024.
Revenue for the 2008B bond payments will continue to come from transfers from the 195th Street
Extension project (4111).
WALNUT STREET (2010C) PLAN
The City bonded for $2,455,000 General Obligation Street Reconstruction Bonds, Series 2010C. Revenue
for the bond payments was to come from special assessments levied on the benefiting properties and a
property tax levy.
FUTURE
We believe the project cost will be $256,922 lower than anticipated. These funds will be transferred to
the debt service fund to make the bond payments. This, along with assessment revenue will allow us to
make the bond payments with no increase to the levy until 2015. In 2014, the Walnut Street bond will
partially be funded from a transfer from the 195th Street project. In 2015, the levy to Spruce Street
(VRC) will be reduced resulting to allow for a $150,000 levy for Walnut Street. There will be no increase
to the overall levy since the transfer from the 195th Street project to the Spruce Street Bond will
increase.
9
/I~
City of Farmington
430 Third Street
. Farmin~on, Minnesota
651.280.6800 . Fax: 651.280.6899
www.ci.furmington.mn.us
Mayor, Councilmembers, City Administrator (j
Kevin Schorzman, P .E., City Engineer
TO:
FROM:
SUBJECT:
Seal Coating Franchise Fee Discussion
DATE:
December 6, 2010. -
INTRODUCTION
For the City's seal coat program to continue to be funded, Council needs to establish a source of
reVenue to fund the program' on an ongomg basis. Council was presented With the option of
implementing franchise fees for gas and electric utilities at the September 20, 2010 COWlcil
meeting. This item has been discussed at two Council workShops and at the November 15th
Council meeting. After discussion at the.November 15th meeting, this item was tabled to the
December 6,2010 Council,meeting.
DISCUSSION
The following information is attached pertaining to the franchise fee discussion:
. A spreadsheet showing a breakdown of historic expenditures related to the annual seal
coat proj ect.
. A spreadsheet showing the number of accounts for all three utilities as well as the
breakdown of the non-residential components (non-residential small ND was the group
that was put in the $2.00 rather than the $8.00 per month category based on discussions
with the utilities) ,
. A spr~adsheet showing 'historic contract price~ paid for seal coating as well as three
different ways to estimate future seal coat costs.
. A spreadsheet showing franchise fee options A-D CD is a combination of franchise fees
and assessments with seal coating beginning in 2012 not 2011)
. '
. A spreadsheet showing the cash flow for options A-C (100% franchise fe€s) and the
anticipated fund balance for each quarter beginning in 20 11 (cash flow based on the'
assumption that franchise fee collection will begin in March)
10
Seal Coat Franchise.Fees
December 6,2010
Page? of2
· A spreadsheet showing two cash flows for option D (50% franchise fees) and anticipated
fund balances for each quarter beginning in 20 11 (cash flow based on the assumption that
franchise fee collection will begin in March). The fIrst is bas~d on a variable RED cost
per year, the second is a normalized RED cost for the 7-year progr~.
Notes on the options:
o All options provide a reasonable cash flow to sustain the seal coat program
o Option D will delay, not eliminate the potential issues that have been pJ,'eviousl~
discussed ?-bout assessing for seal coat.
o Any option involvitig assessments requires "seed money" or the project will
continually run in a deficit (in Option D, this is provided by collecting. fees for
one year prior to hegirining the program).
o Option D will increase the cost of the 7-year pro&1'am by approximately $137,000
due to the one year delay_
o Options C and D use a '~flat rate per-meter" regardless of the type of service (np
difference between residential and non-residential)
o Option B uses a "modified flat rate per meter'~ (residential and 349 non-residential
small non-demand customers pay one rate and all other non-residential customer
pay another rate)
BUDGET IMPACT
Approval of this item will provide a consistent, long-term funding'source for the City's.ant;lual
seal coating program. For this prograln to continue, it is important that a funding. source be
identified to provide consistent cash flow to adequately fuiJ.d the project and protect. it from
uncertainties related to other funding ?ptions.
ACTION REQUESTED
'. .
Approve the attached fee ordinances with Minnesota Energy Respurces, Dakota. Electric'
Association and Xcel Energy, modified per Council's direction on the appropriate fee option.
;f:Re~;.. eC~~Iy. SUbmitted,.-:-..
. ,.of' A .
(44./
Kevin Schorzman, P.E.
City EJ?gineer
11
. )
Breakdown of Historic Expenditures Related to the Annual Seal Coat Project
Total Seal Coat Crack Seal
Year Expenditure Payment Payment ELA
2000 $ 84,546.60 $ 78,771.70 $ 5,774.90
2001 $ 48,184.24 $' 39,875.14 $ 8,309.10
2002 $ 63,935.77 $ 57,167.30 $ 6,768.47
2003 $ 68,410.85 $ 59,306.84 $ 9,104.01
2004 $ 124,778.55 $ 111,953.71 $ 12,824.84
2005 $ 180,322.87 $ 130,882.85 $ 34,142.15 $ 15,297.87
2006 $ 148,086.99 $ 114,711.35 $ 14,535.00 $ 18,840.64
2007 $ 184,415.40 $ 145,920.00 $ 14;943.46 $ 23,551.94
2008 $ 134,093.98 $ 81,680.64 $ 23,511.54 $ 28,901.80
2009 $ 283,883.44 $ 236,792.16 $ 29,583.04 $ 17,508.24
2010 $ 216,302.56 $ 175,541.49 $ 19,990.72 $ 20,770.35
~ ~ -- ~ . -- - ~ . -- . - ~ ~ ~
.Seal Coat Payment equals the actual payment to the seal coat contractor.
Crack Seal Payment equals the actual payment to the crack sealing
contractor.
ELA includes all other costs .associated including but not limited to:
Plan preparation costs
Inspection costs
Postage
Legal Notice costs
Administrative fee paid as part of JPA
Legal review costs
Assessment roll preparation costs
12
Account Information
General Overview
Gas OEA XCEL Total %
Residential 6924 4103 3177 14204 93.9%
Non-Residential 399 157 373 929 6.1%
Total 7323 4260 3550 15133
% ' 48.4% 28.2% 23.5%
Non-Residential Breakdown
Gas OEA . XCEL Total %
Non-Residential Small NO 0 114 235 349 37.(3%
Non-Residential Other 399 43 138 580 62.4%
Total 399 157 373 929
% 42.9% 16.9% 40.2%
2.3%1
Percent Small Non-Residential,Non-Oem~;ind comparedto totaE!
13
Actual Historic costs
(Price pcald to the contractor)
CONTRACT Prices per SQYD ' -
Cost per ' % Incr Over COl?t
Year SQYD Prevo Yr. :Incre~se
2002 $ 0.39
2003 $ 0.54 ' 39%
2004 $ 0.59 10% $ 0.05
2005 $ 0.56 -6% $, (0.03)
2006 $ 0.65 16% $ 0.09
2007 $ 0.76 17% $ 0.11
2008 $ 0.96 26% $ 0.20
2009 $ 1.08 13% $ 0.12
2010 $ 1.19 10% $ 0.11
7 -year increase: 100%
Estimated Costs based on historic percentage increases
(Price paid to the contractor)'
CONTRACT Prices er SQYD
Cost'per
Year SQYD SQYD Total
2011 $ 1.30 227194 $ 296,299.54
2012 $ 1.23 -6% 174390 $ 214,416.04
2013 $' 1.43 16% ' 198615 $ 283,447.79
2014 $ 1.67 17% 192610 $ 321,395.73
2015 $ 2.11 26% 159465 $ 336,112.21
2016 $ 2.37 13% 286156 $' 678,538.18
2017 $ 2.61 10% 189667 $ 495,548.78
$ 2,625,758.26
+5% contingency: $ 131,287.91
Total': $ 2,757,046.18
Per Year Total: $ 393,863.74
Estimated costs based on 5% increases Method used to estimate 1-year program cos~ for Franchise Fees
(Price paid to the contractor) , Total Costs (includes, contractor price 'and EtA)
T
CONTRACT Prices per SQYD ESTIMATI;D TOTAL Prices per SQYD
'Includes 5% annual increase and 27% ELA)
Cost per % Incr Over Cost per % Incr Over Cos~ per % Incr Over
Year SQYD Prevo Yr. SQYD Total' Year SQYD Prevo Yr. Year SQVD Prevo Yr. SQYD Total
2011 $ 1.25 227194 '$ 283,878.90 2011 $ 1.59, ' 2011 $ 1.59 227194 $ 360,526.21
2012 $ 1.31 5% 174390 $ 228,795.32 2012 $ 1.67 5% 2012 '$ 1.67 5% 174390 $ 290,570.06
2013 $ 1.38 5% 198615 $' 273,606.81 2013 $ 1.75 ' 5% 2013 $ '1.75, 5% 198615 $ 347,480.65
2014 $ 1.45 5% 192610 $ 278,601.20 2014 $ 1.84 5% 2014 $ 1.84 5% 192610 $ 353,823.53
2015 $ 1.52 5% 159465 $ 242,191.46 2015 $ 1.93 5% 2015 $ 1.93 5% 159465 $ 307,583.16
2016 $ 1.59 5% 286156 $ 456,336.93 2016 $' '2.03 5% 2016 $ 2.03 5% 286156 $ 579,547.90
2017 $ 1,67 5% 189667 $ '317,587.81 2017 $, 2.13 5% 2017 $ 2.13 5% 189667 $ 403,336.52
$ 2,080,998.44 $ 2,642,868.02
+5% contingency: $ 104,049.92 7 -year increase: 34% +5% contingency: $ 132,143.40
Total: $ 2,185,048.36 Total: $ 2,775,011.42
Per Year Total: $ 312,149.77 Per Year Total: $ 396,430.20
Estimated costs based on 10 cent annual increases Alternate method to estimate 7 -year program 'cost for Franchise Fees
, (Price paid to the contractor) Total Costs (includes, contractor price andEJ;.A)
CONTRACT Prices per SQYD 1
ESTIMATED TOTAL Prices per SQYD
I(lncludes 10 cent oer year contract crice increase and 13.6% ELA)
Cost per % Incr Over Cost per % 'Incr Over Cos't per % Incr Over
Year SQYD Prevo Yr. SQYD Total Year SQYD ' Prevo Yr. Year SQYD Prevo Yr. SQYD Total
2011 $ 1.29 227194 $ 293,080.26 2011 $ 1.47 2011 $ ,1.47 227194 $ 332,939.18
2012 $ 1.39 8%' 174390 $ 242,402.10 2012 $ 1.58 8% 2012 $ '1.58 8% 174390 $ 275,368.79
2013 $ 1.49 7% 198615 $ 295,936.35 2013 $ 1.69 7% 2013 $ i1.69 7% 198615 $ 336,183.69
2014 $ 1.59 7% 192610 $ 306,249.90 2014 $ 1.81 7% 2014 $ 1.81 7%, 192610 $ 347,899.89
2015 $ 1.69 6%' 159465 $ 269,495.85 2015 $ 1,92 6% '2015 $ 1.92 6% 159465 $ 306,147.29
2016 $ 1.79 6% 286156 $ 512,219.24 2016 ,$ 2.03 6% 2016 $ '2.03 6% 286156 $ 581,881.06
2017 $ 1.89 6% 189667 $ 358,470.63 2017 $ 2.15 6% 2017 $ 2.15 6% 189667 $ 407,222.64
$ 2,277,854.33 $ 2,587,'642.52
+5% contingency: $ 113,892.72 7 -year increase: 47% +5% contingency: $ ,129,382.13
Total: $ 2,391,747.05 Total: $ 2,717,024.64
Per Year Total: $ 341,678.1-5 Per Year Total: $ 388,146.38
Estimated costs based on historic cost increase Alternate method to estimate 1-year program 'cost for Franchise Fees
(Price paid to the contractor) , Total Costs (Includes, contractor price and ELA)
r ' ,
CONTRACT Prices per SQYD ESTIMATED TOTAL Price!? per SQYD
Includes historic contract price increase and 13.6% ELA)
Cost per % Incr Over Cost per , % Incr Over Cost per % Incr Over
Year SQYD Prevo Yr. SQYD Total Year SQYD Prevo Yr. Year SQYD Prevo Yr. SQYD Total
2011 $ 1.24 227194 $ 281, 7~0.56 2011 $ 1.41 2011 $ ,1.41 227194 $ 320,034.56
2012 $ 1.21 -3% 174390 $ 210,314.34 2012 $ 1.37 -3%, 2012 $ ,1.37 -3% 174390 $ 238,917.09
2013 $ 1.30 7% 198615 $ 257,405.04 2013 $ 1.47 7% 2013 $ , 1.47 7% 198615 $ 292,412.13
2014 $ 1.41 8% 192610 $ 270,809.66 2014 $' 1.60, 8% 2014 '$ :1.60 8% 192610 $ 307,639.77
2015 $ 1.61 14% 159465 $ 256,100.79 2015 $ , 1.82 14% 2015 $ ,1.82 14% 159465 $ 290,930.50
2016 $ 1.73 7% 286156 $ 493,905.26 2016 $ 1.96 7% 2016' $ .1.96 7% 286156 $ 561,076.37
2017 $ 1.84 6% 189667 $ 348,228.61 2017 $ 2.09 6% 2017 $ '2.09 6% 1,89667 $ 395,587.70
$ 2,118,484.26 $ 2,406,598.12
+,5% contingency: ;$ 105,924.21 7 -year increase: 48% +5% contingency: $ 120,329.91
Total: $ 2,224,408.47 Total: $ 2,526,928.02
Per Year Total: $ 317,772:64 Per Year Total: $ 360,989.72
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Seal Coating Fund Balance Estimate
(Based on 100% Revenue Collected through Franchise Fees)
No Contingency Contingency
Quarter Revenue Expenditure, Balance Expenditure Balance
2011 $ - $ -
March $ 33,333.33 $ 36,052,62 $ (2,719.29) $ 37,855,25 $ 74,521.92)
June $ 100,000.00 $ 36,052.62 $ 61,228.09 ,$ 37,855.25 $ 57,622.83
Sept!3mbeJ $100,000.00 $ 288,420.97 $ (127,192.88) $ 302,842.01 $ (145,219.19)
December $100,000.00 $ (27,192.88) $ (45,219.19)
2012 $ (27,192.88) $ (45,219.191
March $100,000.00 $ 29,057.01 $ 43,750.12 $ 30,509.86 ,$ 24,270.96
June $100;000.00 $ 29,Q57.01 $ 114,693.11 $ 30,509.86 $ 93,761.10,
September $100,000.00 $ 232,456.05 $ (17,762.93) $ 244,078.85 $ (50,317.75)
Decerni:ler .,$100,000.00 $ .fl2,237.07 $ 49,682'.25
2013 $ 82,237.07 $ 49,682.25
March $100,000.00 $ 34,748.06 $, 147,489.00 $ 36,485.47 $ 113,196.79
June $100;000.00 $ 34,748.06 $ 212,740.94 $ 36,485.47 $ 176,711.32
September $100,000.00 $ 277,984.52 $, 34,756.42' $ 291,883.75 $ (15,172.43)
December $100,000.00 $ 134,756.42 $ 84,827.57
2014 $ 134,756.42 $ 84,827.57
March $100,000.00 $ 35,382.35 $ 199,374.06' $ 37,151.47 $ 147,676.10'
June $100,000.00 $ 35,382.,35 $ 263,991.71 $ 37,15-1.47 $ 210,524.63
Septembe $ 100,000.00 $ 283,058.82 $ 80,Q32.89 $ 297,211.76 $ 13,312.87
December $ 100,000.00 $ 180,932.89 $ 113,312.87
2015 $ 180,932.89 $ 113,312.87
March $100,000.00 $ 30,758.32 $_ 250,174.57 $ 32,296.23 $ 181,016.63
June $ 100,000.00 $ 30,758.32 $' 319A16.26 $ 32,296,23 $ 248,720.40
September $100,000.00 $ 246,066.53 $ 173,349.73 $ 258,369.85 $ 90,350.55
December $100,000.00 $ 273,349.73 $ 190,350.55
,2016 $ 273,349.73 $ 190,350.55
March $100,000.00 $ 57,954.79 $ 315-,394.94 $ 60,852.53 $ 229,498.02
June $100,000.00 $ 57,'954.79 $ 357,440.15 $ 60,852.53 $ 268,645.49'
Septembel $100,000.00 $ 463,638.32 $ (6,198.17) $ 486,820.23 $ (118,174.74)
December $100,000.00 $ 93,801.83 $' (18,174.74)
2017 $ 93,801.83 $ (18,174.74)
March $ 100,000.00 $ 40,333.65 $ 153,468.18 $ 42,350.33 $ 39,474.92
June $100,000.00 $ 40,333.65 $ 213,134.53 $ 42,350.33 $' 97,124.59
Septembe $100,000.00 $ '_ 322,669.22 $ (9,534.69) $ 338,802.68 $ (141,678.09)
December $100,000.00 $ 90,465.31 $ (41,678.09)
$ 2,642,868.02
$ 2,775,011.42
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Ordinance No.
CITY OF FARMINGTON
DAKOTA COUNTY, MINNESOTA
ELECTRIC FRANCmSE FEE ORDINANCE
AN ORDINANCE ESTABLISmNG AN ELECTRIC SERVICE FRANCmSE FEE ON
DAKOTA ELECTRIC ASSOCIATION, A MINNESOTA CORPORATION, ITS
SUCCESSORS AND ASSIGNS, FOR PROVIDING ELECTRIC SERVICE WITmN THE
CITY PURSUANT TO ITS FRANCmSE.
THE CITY COUNCIL OF THE CITY OF FARMINGTON, DAKOTA COUNTY,
MINNESOTA ORDAINS:
SECTION 1. Franchise Fee. In exchange for the franchise granted herein, Grantee (Dakota
Electric Association) shall collect from its customers and pay to the Grantor an amount based on
the following fee schedule after adjustment for the net write-off of uncollectible accounts and
corrections of bills theretofore rendered, and according to the terms of Section 9 of the F!anchise
between City and Company:
Class
Fee Per Premise Per Month
Residential
Irrigation
Small General- Non-Dem
General- Demand
Public Street Lighting
C&I Interruptible
$1.60
$2.00
$2.25
$25.00
$6.00
$25.00
The amount paid by Grantee shall be in lieu of, and Grantee shall be exempt from, all other
occupation, license, excise or right-of-way permit fees or taxes which the City of Farmington
may impose for the rights and privileges herein granted or for the privilege of doing business
within the City of Farmington, and in the event any such fee, charge, license, tax or assessment
shall be imposed by the Grantor, the payment to be made in accordance with the provisions of
this section shall be reduced in an amount equal to the annual burden of such fee, charge, license,
tax or assessment imposed upon the Grantee. Ad valorem property taxes imposed generally upon
all real and personal property within the City of Farmington shall not be deemed to affect the
obligation of the Grantee under this section.
SECTION 2. Collection of the Fee: The fee is an account-based fee on each premise and not a
meter-based fee. In the event that an entity 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 being 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
1
18
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 entities covered by
the ordinance have more than one premise, each premise shall be subject to the appropriate 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.
Grantee shall list the local franchise fee collected from customers as a separate item on bills for
utility service issued to customers. If at any time the Minnesota Public Utilities Commission, or
other authority having proper jurisdiction, prohibits such recovery, then Grantee will no longer be
obligated to collect and pay the franchise fee herein contemplated. In addition, the Company
may discount or reduce the fee payable for electricity delivered to a specific customer of the
Company when it is required to reduce the franchise fee to retain the business of that customer.
Modification or reduction of the franchise fee should occur if the fee would cause the customer
to ce~e purchasing electricity from the Company by installing equipment to generate or purchase
electricity not subject to the City's franchise fee.
SECTION 3. Payment of the Fee. The franchise fee shall be payable by the Company
quarterly and shall be based on the amount collected by Company during complete billing
months during the period for. which payment is to be made by imposing a surcharge equal to the
designated franchise fee for the applicable customer classification in all customer billings for
electric service in each class. The payment shall be due the last business day ofthe month
following the period for which the payment is made. No franchise fee shall be payable by
Company if Company is legally unable to first collect an amount equal to the franchise fee from
its customers in each applicable class of customers by imposing a surcharge in Company's
applicable rates for electric service. Company may pay the City the fee based upon the surcharge
billed subject to subsequent reductions to account for uncollectibles, refunds and correction of
erroneous billings.
The Company shall provide at the time of each payment a statement summarizing how the
franchise fee payment was determined, including information showing any adjustments to the
total surcharge billed in the period for which the payment is being made to account for
uncollectibles, refunds or error corrections. Company shall make its records available for
inspection by the City at reasonable times provided that the City and its designated representative
agree in writing not to disclose any information which would indicate the amount paid by any
identifiable customer or customers or any other information regarding identified customers.
SECTION 4. Surcharge. The City recognizes that the Minnesota Public Utilities Commission
allows the utility company to add a surcharge to customer rates to reimburse such utility
company for the cost of the fee and that Company will surcharge its customers in the City the
amount of the fee.
SECTION 5. Enforcement. Any dispute, including enforcement of a default regarding this
ordinance will be resolved in accordance with the Franchise Agreement.
2
19
SECTION 6. Effective Date. The franchise fee shall become after publication and ninety (90)
days after written notice to the Company, and approval by the Minnesota Public Utilities
Commission, as provided in the Franchise, and thereupon collection of the fee for all Customer
Classes shall commence at the beginning of the Company's billing month.
ADOPTED this _day of
, 2010 by the City Council of the City of Farmington.
CITY OF FARMINGTON
By:
Todd Larson, Mayor
ATTEST:
By:
Peter J. Herlofsky, Jr., City Administrator
Passed and approved by the <<GovBody>> of the <<CityType>> of <<Name>>, <<State>> on this _ day
of
<<MayorChr>>
ATTEST:
<<CityType>> Clerk
3
20
ELECTRIC FRANCmSE ORDINANCE
ORDINANCE NO.
CITY OF FARMINGTON, DAKOTA COUNTY, MINNESOTA
AN ORDINANCE GRANTING TO DAKOTA ELECTRIC ASSOCIATION, A
MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS, PERMISSION TO
CONSTRUCT, OPERATE, REPAIR AND MAINTAIN IN THE CITY OF
FARMINGTON, MINNESOTA, AN ELECTRIC DISTRIBUTION SYSTEM AND
TRANSMISSION LINES, INCLUDING NECESSARY POLES, LINES, FIXTURES AND
APPURTENANCES, FOR THE FURNISIDNG OF ELECTRIC ENERGY TO THE
CITY, ITS INHABITANTS, AND OTHERS, AND TO USE THE PlUBLIC GROUNDS
AND PUBLIC WAYS OF THE CITY FOR SUCH PURPOSES.
THE CITY COUNCIL OF THE CITY OF FARMINGTON, DAKOTA COUNTY,
MINNESOTA, ORDAINS:
SECTION 1. DEFINITIONS.
For purposes of this Ordinance, the following capitalized terms listed in alphabetical
order shall have the following meanings:
1.1 City. The City of Farmington, County of Dakota, State of Minnesota.
1.2 City Utility System. Facilities used for providing non-energy related public
utility service owned or operated by City or agency thereof, including sewer and water service,
but excluding facilities for providing heating, lighting or other forms of energy.
1.3 Commission. The Minnesota Public Utilities Commission, or any successor
agency or agencies, including an agency of the federal government, which preempts all, or part of
the authority to regulate electric retail rates now vested in the Minnesota Public Utilities
Commission.
1.4 Company. Dakota Electric Association, a Minnesota corporation, its successors
and assigns.
1.5 Electric Facilities. Electric transmission and distribution towers, poles, lines,
guys, anchors, conduits, fixtures, and necessary appurtenances owned or operated by Company
for the purpose of providing electric energy for public use.
1.6 Notice. A written notice served by one party on the other party referencing one or
more provisions of this Ordinance. Notice to Company shall be mailed to Dakota Electric
Association, 4300 220th Street West, Farmington, MN 55024. Notice to the City shall be mailed
to the City Administrator, City Hall, 430 Third Street, Farmington, MN 55024. Either party may
22
change its respective address for the purpose of this Ordinance by written notice to the other
party.
1.7 Public Ground. Land owned by the City for park, open space or similar purpose,
which is held for use in common by the public.
1.8 Public Way. Any street, alley, walkway or other public right-of-way within the
City.
SECTION 2. ADOPTION OF FRANCmSE.
2.1 Grant of Franchise. City hereby grants Company, for a period of 20 years from
the date passed and approved by the City, the right to transmit and furnish electric energy for
light, heat, power and other purposes for public and private use within and through the limits of
the City as its boundaries now exist or as they may be extended in the future. For these purposes,
Company may construct, operate, repair and maintain Electric Facilities in, on, over, under and
across the Public Grounds and Public Ways of City, subj ect to the provisions of this Ordinance.
Company may do all reasonable things necessary or customary to accomplish these purposes,
subject, however, to such reasonable regulations as may be imposed by the City pursuant to
ordinance and to the further provisions of this franchise agreement.
2.2 Effective Date: Written Acceptance. This franchise agreement shall be in force
and effect from and after passage of this Ordinance, its acceptance by Company, and its
publication as required by law. The City, by Council resolution, may revoke this franchise
agreement if Company does not file a written acceptance with the City within 90 days after
publication.
2.3 Service and Rates. The service to be provided and the rates to be charged by
Company for electric service in City are subject to the jurisdiction of the Commission. The area
within the City in which Company may provide electric service is subject to the provisions of
Minnesota Statutes, Section 216B.40.
2.4 Publication Expense. The expense of publication of this Ordinance will be paid
by City and reimbursed to City by Company.
2.5 Dispute Resolution. If either party asserts that the other party is in default in the
performance of any obligation hereunder, the complaining party shall notify the other party of the
default and the desired remedy. The notification shall be written. Representatives of the parties
must promptly meet and attempt in good faith to negotiate a resolution of the dispute. If the
dispute is not resolved within 30 days of the written notice, the parties may jointly select a
mediator to facilitate further discussion. The parties will equally share the fees and expenses of
this mediator. If a mediator is not used, or if the parties are unable to resolve the dispute within
30 days after fIrst meeting with the selected mediator, either party may commence an action in
District Court to interpret and enforce this franchise or. for such other relief as may be permitted
by law or equity for breach of contract, or either party may take any other action permitted by
law.
23
SECTION 3. LOCATION. OTHER REGULATIONS.
3.1 Location of Facilities. Electric Facilities shall be located, constructed and
maintained so as not to interfere with the safety and convenience of ordinary travel along and
over Public Ways and so as not to disrupt normal operation of any City Utility System previously
installed therein. Electric Facilities shall be located on Public Grounds as determined by the
City. Company's construction, reconstruction, operation, repair, maintenance and location of
Electric Facilities shall be subject to permits if required by separate ordinance and to other
reasonable regulations of the City to the extent not inconsistent with the terms of this franchise
agreement. Company may abandon underground Electric Facilities in place, provided at the
City's request, Company will remove abandoned metal or concrete encased conduit interfering
with a City improvement project, but only to the extent such conduit is uncovered by excavation
as part of the City improvement project. Abandoned facilities shall be subject to the provision of
Minn. Rule 7819.3300.
3.2 Field Locations and Mapping Information. Company shall provide field locations
for its underground Electric Facilities within City consistent with the requirements of Minnesota
Statutes, Chapter 216D. Subject to the Homeland Security Act, or other confidentiality
protections under state or federal law, the Company shall provide current mapping information
for its Electric Facilities in accordance with the requirements of Minnesota Rules Parts
7819.4000 and 7819.4100. The Company shall provide this information electronically in a
format mutually acceptable to the City and Company.
3.3 Street Openings. Company shall not open or disturb any Public Ground or Public
Way for any purpose without first having obtained a permit from the City, if required by a
separate ordinance, for which the City may impose a reasonable fee. Permit conditions imposed
on Company shall not be more burdensome than those imposed on other utilities for similar
facilities or work. Company may, however, open and disturb any Public Ground or Public Way
without permission from the City where an emergency exists requiring the immediate repair of
Electric Facilities. In such event Company shall notify the City by telephone to the office
designated by the City as soon as practicable. Not later than the second working day thereafter,
Company shall obtain any required permits and pay any required fees.
3.4 Restoration. After undertaking any work requiring the opening of any Public
Ground or Public Way, Company shall restore the same, including paving and its foundation, in
accordance with Minnesota Rules Part 7819.1100, to as good a condition as formerly existed, and
shall maintain any paved surface in good condition for two years thereafter. The work shall be
completed as promptly as weather permits, and if Company shall not promptly perform and
complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground
or Public Way in the said condition, the City shall have, after demand to Company to cure and
the passage of a reasonable period of time following the demand, but not to exceed five days, the
right to make the restoration at the expense of Company. Company shall pay to the City the cost
of such work done for or performed by the City. This remedy shall be in addition to any other
remedy available to the City for noncompliance with this Section 3.4, but the City hereby waives
any requirement for Company to post a construction performance bond, certificate of insurance,
24
letter of credit or any other form of security or assurance that may be required, under a separate
existing or future ordinance of the City, of a person or entity obtaining the City's permission to
install, replace or maintain facilities in a Public Way.
3.5 Avoid Damage to Electric Facilities. Nothing in this Ordinance relieves any
person from liability arising out of the failure to exercise reasonable care to avoid damaging
Electric Facilities while performing any activity.
3.6 Notice of Improvements. The City must give Company reasonable notice of plans
for improvements to Public Grounds or Public Ways where the City has reason to believe that
Electric Facilities may affect or be affected by the improvement. The notice must contain: (i) the
nature and character of the improvements, (ii) the Public Grounds and Public Ways upon which
the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the
City will start the work, and (v) if more than one Public Ground or Public Way is involved, the
order in which the work is to proceed. The notice must be given to Company a sufficient length
of time in advance of the actual commencement of the work to permit Company to make any
necessary additions, alterations or repairs to its Electric Facilities.
3.7 Shared Use of Poles. Company shall make space available on its poles or towers
for City fire, water utility, police or other City facilities upon terms and conditions acceptable to
Company whenever such use will not interfere with the use of such poles or towers by Company,
by another electric utility, by a telephone utility, or by any cable television company or other
form of communication company. In addition, the City shall pay for any added cost incurred by
Company because of such use by City. Any City facilities shall be installed and maintained in
accordance with the National Electrical Safety Code (NESC).
SECTION 4. RELOCATIONS.
4.1 Relocation of Electric Facilities in Public Ways. Company shall comply with the
requirements of Minnesota Rules, Part 7819.3100 and applicable law relating to the relocation of
Electric Facilities in Public Ways. If the City determines to vacate a Public Way, the City shall
give Company reasonable notice of plans to vacate. If a relocation is ordered within five years of
a prior relocation of the same Electric Facilities, which was made at Company expense, the City
shall reimburse Company for non-betterment costs on a time and material basis, provided that if
a subsequent relocation is required because of the extension of a City Utility System to a
previously unserved area, Company may be required to make the subsequent relocation at its
expense.
4.2 Relocation of Electric Facilities in Public Ground. City may require Company", at
Company's expense, to relocate or remove its Electric Facilities from Public Ground upon a
fmding by City that the Electric Facilities have become or will become a substantial impairment
to the existing or proposed public use of the Public Ground.
4.3 Change to Underground. If required by the City, the Company shall change from
aerial to underground, at City expense based on the Company's time and material costs in any
area where: (1) the City requests underground lines and all other lines hereafter are changed
25
from aerial to underground, or (2) any aeria1line is changed to underground by the open trench
method and the City requests the Company to share the trench with telephone and/or cable
television, and the Company can share trench at a cost not to exceed the Company's pro rata
share of the cost of the trenching. The City may pay any costs incurred hereunder through a
surcharge on the Company's customers located within the City.
4.4 Projects with Federal Funding. Relocation, removal, or rearrangement of any
Company Electric Facilities made necessary because of the extension into or through City- of a
federally-aided highway project shall be governed by the provisions of Minnesota Statutes,
Section 161.46, as supplemented or amended. It is understood that the right herein granted to
Company is a valuable right. City shall not order Company to remove or relocate its Electric
Facilities when a Public Way is vacated, improved or realigned because of a renewal or a
redevelopment plan which is financially subsidized in whole or in part by the Federal
Government or any agency thereof, unless the reasonable non-betterment costs of such relocation
and the loss and expense resulting therefrom are first paid to Company, but the City need not pay
those portions of such for which reimbursement to it is not available.
4.5 No Waiver. The provisions of this franchise apply only to facilities constructed
in reliance on a franchise from the City and shall not be construed to waive or modify any rights
obtained by Company for installations within a Company right-of-way acquired by easement or
prescriptive right before the applicable Public Ground or Public Way was established, or
Company's rights under state or county permit.
SECTION 5. TREE TRIMMING.
Company may trim all trees and shrubs in the Public Grounds and Public Ways of City to
the extent Company finds necessary to avoid interference with the proper construction, operation,
repair and maintenance of any Electric Facilities installed hereunder, provided that Company
shall save the City harmless from any liability arising therefrom, and subject to permit or other
reasonable regulation by the City.
SECTION 6. INDEMNIFICATION.
6.1 Indemnity of City. Company shall indemnify, keep and hold the City free and
harmless from any and all liability on account of injury to persons or damage to property
occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the
operation of the Electric Facilities located in the Public Grounds and Public Ways. The City
shall not be indemnified for losses or claims occasioned through its own negligence except for
losses or claims arising out of or alleging the City's negligence as to the issuance of permits for,
or inspection of, Company's plans or work. The City shall not be indemnified if the injury or
damage results from the performance in a proper manner of acts reasonably deemed hazardous by
Company, and such performance is nevertheless ordered or directed by City after notice of
Company's determination.
6.2 Defense of City. In the event a suit is brought against the City under
circumstances where this agreement to indemnify applies, Company at its sole cost and expense
26
shall defend the City in such suit if written notice thereof is promptly given to Company within a
period wherein Company is not prejudiced by lack of such notice. If Company is required to
indemnify and defend, it will thereafter have control of such litigation, but Company may not
settle such litigation without the consent of the City, which consent shall not be unreasonably
withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise
available to the City and Company, in defending any action on behalf of the City, shall be
entitled to assert in any action every defense or immunity that the City could assert in its own
behalf.
SECTION 7. VACATION OF PUBLIC WAYS.
The City shall give Company at least two weeks prior written notice of a proposed
vacation of a Public Way. Except where required for a City improvement project, the vacation of
any Public Way, after the installation of Electrlc Facilities, shall not operate to deprive Company
of its rights to operate and maintain such Electric Facilities, until the reasonable cost of
relocating the same and the loss and expense resulting from such relocation are fIrst paid to
Company. In no case, however, shall City be liable to Company for failure to specifically
preserve a right-of-way under Minnesota Statutes, Section 160.29.
SECTION 8. CHANGE IN FORM OF GOVERNMENT.
Any change in the form of government of the City shall not affect the validity of this
Ordinance. Any governmental unit succeeding the City shall, without the consent of Company,
succeed to all of the rights and obligations ofthe City provided in this Ordinance.
SECTION 9. FRANCmSE FEE.
9.1 Fee Schedule. During the term of the franchise hereby granted, and in lieu of any
permit or other fees being imposed on Company, the City may impose on Company a franchise
fee by collecting the amounts indicated in a Fee Schedule set forth in a separate ordinance from
each customer in the designated Company Customer Class. The parties have agreed that the
franchise fee collected by the Company and paid to the City in accordance with this Section 9
shall not exceed the following amounts.
Class
Fee Per Premise Per Month
Residential
Irrigation
Small General- Non-Dem
General- Demand
Public Street Lighting
C&I Interruptible
$1.60
$2.00
$2.25
$25.00
$6.00
$25.00
9.2 Separate Ordinance. The franchise fee shall be imposed by a separate ordinance
duly adopted by the City Council, which ordinance shall not be adopted until at least 60 days
after written notice enclosing such proposed ordinance has been served upon Company by
27
certified mail. The fee shall not become effective until the beginning of a Company billing
month at least 90 days after written notice enclosing such adopted ordinance has been served
upon Company by certified mail, and Company has received any necessary approvals from the
Commission. Section 2.5 shall constitute the sole remedy for solving disputes between Company
and the City in regard to the interpretation of, or enforcement of, the separate ordinance. No
action by the City to implement a separate ordinance will commence until this Ordinance is
effective. A separate ordinance which imposes a lesser franchise fee on the residential class of
customers than the maximum amount set forth in Section 9.1 above shall not be effective against
Company unless the fee imposed on each other customer classification is reduced proportionately
in the same or greater amount per class as the reduction represented by the lesser fee on the
residential class.
9.3 Terms Defined For the purpose of this Section 9, the following definitions apply:
9.3.1 "Customer Class" shall refer to the classes listed on the Fee Schedule and as
defined or determined in Company's electric tariffs on file with the Commission.
9.3.2 "Fee Schedule" refers to the schedule in Section 9.1 setting forth the various
customer classes from which a franchise fee would be collected if a separate ordinance were
implemented immediately after the effective date of this franchise agreement. The Fee Schedule
in the separate ordinance may include new Customer Class added by Company to its electric
tariffs after the effective date of this franchise agreement.
9.4 Collection of the Fee. The franchise fee shall be payable quarterly and shall be
based on the amount collected by Company during complete billing months during the period for
which payment is to be made by imposing a surcharge equal to the designated franchise fee for the
applicable customer classification in all customer billings for electric service in each class. The
payment shall be due the last business day of the month following the period for which the payment
is made. The franchise fee may be changed by ordinance from time to time; however, each change
shall meet the same notice requirements and not occur more often than annually and no change
shall require a collection from any customer for electric service in excess of the amounts
specifically permitted by this Section 9. The time and manner of collecting the franchise fee is
subject to the approval of the Commission. No franchise fee shall be payable by Company if
Company is legally unable to first collect an amount equal to the franchise fee from its customers in
each applicable class of customers by imposing a surcharge in Company's applicable rates for
electric service. Company may pay the City the fee based upon the surcharge billed subject to
subsequent reductions to account for uncollectibles, refunds and correction of erroneous billings.
Company agrees to make its records available for inspection by the City at reasonable times
provided that the City and its designated representative agree in writing not to disclose any
information which would indicate the amount paid by any identifiable customer or customers or any
other information regarding identified customers. In addition, the Company agrees to provide at the
time of each payment a statement summarizing how the franchise fee payment was determined,
including information showing any adjustments to the total surcharge billed in the period for which
the payment is being made to account for any uncollectibles, refunds or error corrections.
28
9.5 Equivalent Fee Requirement. The separate ordinance imposing the fee shall not be
effective against Company unless it lawfully imposes and the City monthly or more often collects a
fee or tax of the same or greater equivalent amount on the receipts from sales of energy within the
City by any other energy supplier, provided that, as to such a supplier, the City has the authority to
require a franchise fee or to impose a tax. The "same or greater equivalent amount" shall be
measured, if practicable, by comparing amounts collected as a franchise fee from each similar
customer, or by comparing, as to similar customers the percentage of the annual bill represented by
the amount collected for franchise fee purposes. The franchise fee or tax shall be applicable to
energy sales for any energy use related to heating, cooling or lighting, or to run machinery and
appliances, but shall not apply to energy sales for the purpose of providing fuel for vehicles. If the
Company specifically consents in writing to a franchise or separate ordinance collecting or failing
to collect a fee from another energy supplier in contravention of this Section 9.5, the foregoing
conditions will be waived to the extent of such written consent.
SECTION 10. PROVISIONS OF ORDINANCE.
10.1 Severability. Every section, provision, or part of this Ordinance is declared
separate from every other section, provision, or part and if any section, provision, or part shall be
held invalid, it shall not affect any other section, provision, or part. Where a provision of any
other City ordinance conflicts with the provisions of this Ordinance, the provisions of this
Ordinance shall prevail.
W.2 Limitation on Applicability. This Ordinance constitutes a franchise agreement
between the City and Company as the only parties, and no provision of this franchise shall in any
way inure to the benefit of any third person (including the public at large) so as to constitute any
such person as a third party beneficiary of the agreement or of anyone or more of the terms
hereof, or otherwise give rise to any cause of action in any person not a party hereto.
SECTION 11. AMENDMENT PROCEDURE.
Either party to this franchise agreement may at any time propose that the agreement be
amended to address a subject of concern and the other party will consider whether it agrees that
the amendment is mutually appropriate. If an amendment is agreed upon, this Ordinance may be
amended at any time by the City passing a subsequent ordinance declaring the provisions of the
amendment, which amendatory ordinance shall become effective upon the filing of Company'spwritten consent thereto with the City Clerk within 90 days after the date of final passage by the
City of the amendatory ordinance.
SECTION 12. PREVIOUS FRANCmSES SUPERSEDED.
This franchise supersedes any previous electric franchise granted to Company or its
predecessor.
Passed and approved:
,2010.
29
Attest:
Date Published:
City Clerk
Mayor
30
Ordinance No.
CITY OF FARMINGTON
DAKOTA COUNTY, MINNESOTA
NATURAL GAS FRANCmSE FEE ORDINANCE
AN ORDINANCE ESTABLISlllNG A NATURAL GAS SERVICE FRANCmSE FEE ON
MINNESOTA ENERGY RESOURCES, A MINNESOTA CORPORATION, ITS
SUCCESSORS AND ASSIGNS, FOR PROVIDING NATURAL GAS SERVICE WITHIN
THE CITY PURSUANT TO ITS FRANCmSE.
THE CITY COUNCIL OF THE CITY OF FARMINGTON, DAKOTA COUNTY,
MINNESOTA ORDAINS:
SECTION 1. Franchise Fee. In exchange for the franchise granted herein, Grantee (Minnesota,
Energy Resources) shall collect from its customers and pay to the Grantor an amount based on
the following fee schedule after adjustment for the net write-off of uncollectible accounts and
corrections of bills theretofore rendered:
CUSTOMER CLASS
Residential
Commercial Firm
Commercial Interruptible
Industrial Firm
Industrial Interruptible
Transportation
FEE
/Month/Customer
/Month/Customer
/Month/Customer
/Month/Customer
/Month/Customer
/Month/Customer
$
$
$
$
$
$
The amount paid by Grantee shall be in lieu of, and Grantee shall be exempt from, all other
occupation, license, excise or right-of-way permit fees or taxes which the City of Farmington
may impose for the rights and privileges herein granted or for the privilege of doing business
within the City ofFarmington;-and in the event any such fee, charge, license, tax or assessment
shall be imposed by the Grantor, the payment to be made in accordance with the provisions of
this section shall be reduced in an amount equal to the annual burden of such fee, charge, license,
tax or assessment imposed upon the Grantee. Ad valorem property taxes imposed generally upon
all real and personal property within the City of Farmington shall not be deemed to affect the
obligation of the Grantee under this section.
SECTION 2. Collection of the Fee: The fee is an account-based fee on each"premise and not a
meter-based fee. In the event that an entity 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 being 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
natural 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
entities covered by the ordinance have more than one premise, each premise shall be subject to
1
32
the appropriate 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.
Grantee shall list the local franchise fee collected from customers as a separate item on bills for
utility service issued to customers. If at any time the Minnesota Public Utilities Commission, or
other authority having proper jurisdiction, prohibits such recovery, then Grantee will no longer be
obligated to collect and pay the franchise fee herein contemplated. In addition, the Company
may discount or reduce the fee payable for natural gas delivered to a specific customer of the
Company when it is required to reduce the franchise fee to retain the business of that customer.
Modification or reduction of the franchise fee should occur if the fee would cause the customer
to cease purchase or transportation deliveries of natural gas from the Company by installing
equipment to access the natural gas supply not subject to the City's franchise fee.
SECTION 3. Payment of the Fee. The franchise fee shall be payable by the Company
quarterly and shall be based on the amount collected by Company during complete billing
months during the period for which payment is to be made by imposing a surcharge equal to the
designated franchise fee for the applicable customer classification in all customer billings for
natural gas service in each class. The payment shall be due the last business day of the month
following the period for which the payment is made. No franchise fee shall be payable by
Company if Company is legally unable to first collect an amount equal to the franchise fee fi.-om
its customers in each applicable class of customers by imposing a surcharge in Company's
applicable rates for natural gas service. Company may pay the City the fee based upon the
surcharge billed subject to subsequent reductions to account for uncollectibl~s, refunds and
correction of erroneous billings.
The Company shall provide at the time of each payment a statement summarizing how the
franchise fee payment was determined. Including information showing any adjustments to the
total surcharge billed in the period for which the payment is being made to account for
uncollectibles, refunds or error corrections. Company shall make its records available for
inspection by the City at reasonable times.
SECTION 4. Surcharge. The City recognizes that the Minnesota Public Utilities Commission
allows the utility company to add a surcharge to customer rates to reimburse such utility
company for the cost of the fee and that Company will surcharge its customers in the City the
amount of the fee.
SECTION 5. Enforcement. Any dispute, including enforcement of a default regarding this
ordinance will be resolved in accordance with the Franchise Agreement.
SECTION 6. Effective Date. The franchise fee shall become after publication and ninety (90)
days after written notice to the Company as provided in the Franchise, and thereupon collection
of the fee for all Customer Classes shall commence at the beginning of the Company's
billing month.
ADOPTED this _day of
, 2010 by the City Council of the City of Farmington.
2
33
CITY OF FARMINGTON
By:
ATTEST:
By:
Todd Larson, Mayor
Passed and approved by the <<GovBody>> of the <<CityType>> of <<Name>>, <<State>> on this _ day
of
Peter 1. Herlofsky, Jr., City Administrator
ATTEST:
<<CityType>> Clerk
3
<<MayorChr>>
34
Ordinance No.
CITY OF FARMINGTON
DAKOTA COUNTY, MINNESOTA
NATURAL GAS FRANCmSE FEE ORDINANCE
AN ORDINANCE ESTABLISmNG A NATURAL GAS SERVICE FRANCmSE FEE ON
MINNESOTA ENERGY RESOURCES, A MINNESOTA CORPORATION, ITS
SUCCESSORS AND ASSIGNS, FOR PROVIDING NATURAL GAS SERVICE WITHIN
THE CITY PURSUANT TO ITS FRANCmSE.
THE CITY COUNCIL OF THE CITY OF FARMINGTON, DAKOTA COUNTY,
MINNESOTA ORDAINS:
SECTION 1. Franchise Fee. In exchange for the franchise granted herein, Grantee (Minnesota
Energy Resources) shall collect from its customers and pay to the Grantor an amount based on
the following fee schedule after adjustment for the net write-off of uncollectible accounts and
corrections of bills theretofore rendered and according to the terms of Section 9 of the Franchise
between City and Company:
CUSTOMER CLASS
Residential
Commercial Firm
Commercial Interruptible
FEE
$1.60/Month/Customer
$15.00 /Month/Customer
$25.00 /Month/Customer
The amount paid by Grantee shall be in lieu of, and Grantee shall be exempt from, all other
occupation, license, excise or right-of-way permit fees or taxes which the City of Farmington
may impose for the rights and privileges herein granted or for the privilege of doing business
within the City of Farmington, and in the event any such fee, charge, license, tax or assessment
shall be imposed by the Grantor, the payment to be made in accordance with the provisions of
this section shall be reduced in an amount equal to the annual burden of such fee, charge, license,
tax or assessment imposed upon the Grantee. Ad valorem property taxes imposed generally upon
all real and personal property within the City of Farmington shall not be deemed to affect the
obligation of the Grantee under this section.
SECTION 2. Collection of the Fee. The fee is an account-based fee on each premise and not a
meter-based fee. In the event that an entity 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 being billed at different rates, the Grantee may have an account
for each rate classification, which will result in more than one franchise fee assessment for
natural gas service to that premise,. If the Grantee 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 entities covered by
the ordinance have more than one premise, each premise shall be subject to the appropriate fee.
1
36
In the event a question arises as to the proper fee amount for any premise, the Grantee's manner
of billing for energy used at all similar premises in the city will control.
Grantee shall list the local franchise fee collected from customers as a separate item on bills for
utility service issued to customers. If at any time the Minnesota Public Utilities Commission, or
other authority having proper jurisdiction, prohibits such recovery, then Grantee will no longer be
obligated to collect and pay the franchise fee herein contemplated. In addition, the Grantee may
discount or reduce the fee payable for natural gas delivered to a specific customer of the
Company when it is required to reduce the franchise fee to retain the business of that customer.
Modification or reduction of the franchise fee should occur if the fee would cause the customer
to cease purchase or transportation deliveries of natural gas from the Company by installing
equipment to access the natural gas supply not subject to the City's franchise fee.
SECTION 3. Payment of the Fee. The franchise fee shall be payable by the Grantee quarterly
and shall be based on the amount collected by Grantee during complete billing months during the
period for which payment is to be made by imposing a surcharge equal to the designated
franchise fee for the applicable customer classification in all customer billings for natural gas
service in each class. The payment shall be due the last business day of the month following the
period for which the payment is made. No franchise fee shall be payable by the Grantee if the
Company is legally unable to first collect an amount equal to the franchise fee from its customers
in each applicable class of customers by imposing a surcharge in Grantee's applicable rates for
natural gas service. Grantee may pay the Grantor the fee based upon the surcharge billed subject
to subsequent reductions to account for uncollectibles, refunds and correction of erroneous
billings.
The Grantee shall provide at the time of each payment a statement summarizing how the
franchise fee payment was determined. Including information showing any adjustments to the
total surcharge billed in the period for which the payment is being made to account for
uncollectibles, refunds or error corrections. Grantee shall make its records available for
inspection by the Grantor at reasonable times provided that the City and its designated
representative agree in writing not to disclose any information which would indicate the amount
paid by any identifiable customer or customers or any other information regarding identified
customers
SECTION 4. Surchare:e. The Grantor recognizes that the Minnesota Public Utilities
Commission allows the utility company to add a surcharge to customer rates to reimburse such
utility company for the cost of the fee and that Grantee will surcharge its customers in the City
the amount of the fee.
SECTION 5. Enforcement. Any dispute, including enforcement of a default regarding this
ordinance will be resolved in accordance with the Franchise Agreement.
SECTION 6. Effective Date. The franchise fee shall become effective after publication and
ninety (90) days after written notice to the Company and approval from the Minnesota Public
Utilities Commission, as provided in the Franchise but not before.
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ADOPTED this _day of
ATTEST:
SEAL
Approved as to form the
, 2010 by the City Council of the City of Farmington.
CITY OF FARMINGTON
By:
day of
By:
Todd Larson, Mayor
Peter J. Herlofsky, Jr., City Administrator
2010.
By:
City Attorney
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Ordinance No.
CITY OF FARMINGTON
DAKOTA COUNTY, MINNESOTA
ELECTRIC FRANCHISE FEE ORDINANCE
AN ORDINANCE ESTABLISHING AN ELECTRIC SERVICE FRANCHISE FEE ON
NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION, DIBI A
XCEL ENERGY, ITS SUCCESSORS AND ASSIGNS, FOR PROVIDING ELECTRIC
SERVICE WITHIN THE CITY PURSUANT TO ITS FRANCHISE.
THE CITY COUNCIL OF THE CITY OF FARMINGTON, DAKOTA COUNTY,
MINNESOTA ORDAINS:
SECTION 1. Franchise Fee. In exchange for the franchise granted herein, Northern States
Power Company, a Minnesota corporation (NSP) and City of Farmington (City) shall collect from
its customers and pay to the City an amount based on the following fee schedule after adjustment
for the net write-off of uncollectible accounts and corrections of bills theretofore rendered~ and
according to the terms of Section 9 of the Franchise between City and Company:
Class
Fee Per Premise Per Month
Residential
Small General- Non-Demand
Small C&I Demand
Large C&I
Public Street Lighting
Municipal Pumping Non-Demand
Municipal Pumping
$ 1.60
$ 2.25
$ 25.00
$ 75.00
$ 6.00
$ .50
$ 10.00
The amount paid by NSP shall be in lieu of, and NSP shall be exempt from, all other occupation,
license, excise or right-of-way permit fees or taxes which the City of Farmington may impose for the
rights and privileges herein granted or for the privilege of doing business within the City of
Farmington, and in the event any such fee, charge, license, tax or assessment shall be imposed by the
City, the payment to be made in accordance with the provisions of this section shall be reduced in
an amount equal to the annual burden of such fee, charge, license, tax or assessment imposed upon
the NSP. Ad valorem property taxes imposed generally upon all real and personal property within
the City of Farmington shall not be deemed to affect the obligation of the NSP under this section.
SECTION 2. Collection oithe Fee: The fee is an account-based fee on each premise and not a
meter-based fee. In the event that an entity 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 being 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 entities covered by the ordinance have more than
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one pretnise, each pretnise shall be subject to the appropriate fee. In the event a question arises as
to the proper fee amount for any pretnise, the Company's manner of billing for energy used at all
sim.ilar pretnises in the city will control.
NSP shall list the local franchise fee collected from customers as a separate item on bills for utility
service issued to customers. If at any time the Minnesota Public Utilities Commission, or other
authority having proper jurisdiction, prohibits such recovery, then NSP will no longer be obligated
to collect and pay the franchise fee herein contemplated. In addition, the Company may discount or
reduce the fee payable for electricity delivered to a specific customer of the Company when it is
required to reduce the franchise fee to retain the business of that customer. Modification or
reduction of the franchise fee should occur if the fee would cause the customer to cease purchasing
electricity from the Company by installing equipment to generate or purchase electricity not subject
to the City's franchise fee.
SECTION 3. Payment of the Fee. The franchise fee shall be payable by the Company quarterly
and shall be based on the amount collected by Company during complete billing months during the
period for which payment is to be made by imposing a surcharge equal to the designated franchise
fee for the applicable customer classification in all customer billings for electric service in each class.
The payment shall be due the last business day of the month following the period for which the
payment is made. No franchise fee shall be payable by Company if Company is legally unable to
first collect an amount equal to the franchise fee from its customers in each applicable class of
customers by imposing a surcharge in Company's applicable rates for electric service. Company may
pay the City the fee based upon the surcharge billed subject to subsequent reductions to account for
uncollectibles, refunds and correction of erroneous billings.
The Company shall provide at the time of each payment a statement sutnmarizing how the franchise
fee payment was determined, including information showing any adjustments to the total surcharge
billed in the period for which the payment is being made to account for uncollectibles, refunds or
error corrections. Company shall tnake its records available for inspection by the City at reasonable
times provided that the City and its designated representative agree in writing not to disclose any
information which would indicate the amount paid by any identifiable customer or customers or any
other information regarding identified customers.
SECTION 4. Surcharge. The City recognizes that the Minnesota Public Utilities Comtnission
allows the utility company to add a surcharge to customer rates to reimburse such utility company
for the cost of the fee and that Company will surcharge its custotn:ers in the City the amount of the
fee.
SECTION 5. Enforcement. Any dispute, including enforcement of a default regarding this
ordinance will be resolved in accordance with the Franchise Agreement.
SECTION 6. Effective Date. The franchise fee shall become after publication and ninety (90)
days after written notice to the Company, and approval by the Minnesota Public Utilities
Comtnission, as provided in the Franchise, and thereupon collection of the fee for all Customer
Classes shall commence at the beginning of the Company's billing month.
ADOPTED this _day of
, 2010 by the City Council of the City of Farmington.
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CITY OF FARMINGTON
By:
Todd Larson, Mayor
ATTEST:
By:
Peter J. Herlofsky, Jr., City Administrator
Passed and approved by the City Council of the City of Fannington, State of Minnesota on
, 2010.
Mayor
Attest
City AdtnIDistrator
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ELECTRIC FRANCmSE ORDINANCE
ORDINANCE NO.
CITY OF FARMINGTON, DAKOTA COUNTY, MINNESOTA
AN ORDINANCE GRANTING TO NORTHERN STATES POWER COMPANY, A
MINNESOTA CORPORATION, D/B/A XCEL ENERGY, ITS SUCCESSORS
AND ASSIGNS, PERMISSION TO CONSTRUCT, OPERATE, REPAIR AND
MAINTAIN IN THE CITY OF FARMINGTON, MINNESOTA, AN ELECTRIC
DISTRIBUTION SYSTEM AND TRANSMISSION LINES, INCLUDING NECESSARY
POLES, LINES, FIXTURES AND APPURTENANCES, FOR THE FURNISHING OF
ELECTRIC ENERGY TO THE CITY, ITS INHABITANTS, AND OTHERS, AND TO
USE THE PUBLIC GROUNDS AND PUBLIC WAYS OF THE CITY FOR SUCH
PURPOSES.
THE CITY COUNCIL OF THE CITY OF FARMINGTON, DAKOTA COUNTY,
MINNESOTA, ORDAINS:
SECTION 1. DEFINITIONS.
For purposes of this Ordinance, the following capitalized terms listed in alphabetical
order shall have the following meanings:
1.1 City. The City of Farmington, County of Dakota, State of Minnesota.
1.2 . City Utility System. Facilities used for providing non-energy related public
utility service owned or operated by City or agency thereof, including sewer and water service,
but excluding facilities for providing heating, lighting or other forms of energy.
1.3 Commission. The Minnesota Public Utilities Commission, or any successor
agency or agencies, including an agency of the federal government, which preempts all, or part of
the authority to regulate electric retail rates now vested in the Minnesota Public Utilities
Commission.
1.4 Company. Northern States Power Company, a Minnesota corporation, d/b/a Xcel
Energy, a Minnesota corporation, its successors and assigns.
1.5 Electric Facilities. Electric transmission and distribution towers, poles, lines,
guys, anchors, conduits, fixtures, and necessary appurtenances owned or operated by Company
for the purpose of providing electric energy for public use.
1.6 Notice. A written notice served by one party on the other party referencing one or
more provisions of this Ordinance. Notice to Company shall be mailed to Xcel Energy, 414
Nicollet Mall, 5th Floor, Minneapolis, MN 55401. Notice to the City shall be mailed to the City
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Administrator, City Hall, 430 Third Street, Farmington, l\1N 55024. Either party may change its
respective address for the purpose of this Ordinance by written notice to the other party.
1.7 Public Ground. Land owned by the City for park, open space or similar purpose,
which is held for use in common by the public.
1.8 Public Way. Any street, alley, walkway or other public right-of-way within the
City.
SECTION 2. ADOPTION OF FRANCmSE.
2.1 Grant of Franchise. City hereby grants Company, for a period of 20 years from
the date passed and approved by the City, the right to transmit and furnish electric energy for
light, heat, power and other purposes for public and private use within and through the limits of
the City as its boundaries now exist or as they may be extended in the future. For these purposes,
Company may construct, operate, repair and maintain Electric Facilities in, on, over, under and
across the Public Grounds and Public Ways of City, subject to the provisions of this Ordinance.
Company may do all reasonable things necessary or customary to accomplish these purposes,
subject, however, to such reasonable regulations as may be imposed by the City pursuant to
ordinance and to the further provisions of this franchise agreement.
2.2 Effective Date; Written Acceptance. This franchise agreement shall be in force
and effect from and after passage of this Ordinance, its acceptance by Company, and its
publication as required by law. The CityA by Council resolutionA may revoke this franchise
agreement if Company does not file a written acceptance with the City within 90 days after
publication.
2.3 Service and Rates. The service to be provided and the rates to be charged by
Company for electric service in City are subject to the jurisdiction of the Commission. The area
within the City in which Company may provide electric service is subject to the provisions of
Minnesota Statutes, Section 216B.40.
2.4 Publication Expense. The expense of publication of this Ordinance will be paid
by City and reimbursed to City by Company.
2.5 Dispute Resolution. If either party asserts that the other party is in default in the
performance of any obligation hereunder, the complaining party shall notify the other party of the
default and the desired remedy. The notification shall be written. Representatives of the parties
must promptly meet and attempt in good faith to negotiate a .resolution of the dispute. If the
dispute is not resolved within 30 days of the written notice, the parties may jointly select a
mediator to facilitate further discussion. The parties will equally share the fees and expenses of
this mediator. If a mediator is not usedA or if the parties are unable to resolve the dispute within
30 days after fIrst meeting with the selected mediator, either party may commence an action in
District Court to interpret and enforce this franchise or for such other relief as may be permitted
by law or equity for breach of contract, or either party may take any other action permitted by
law.
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SECTION 3. LOCATION. OTHER REGULATIONS.
3.1 Location of Facilities. Electric Facilities shall be located, constructed and
maintained so as not to interfere with the safety and convenience of ordinary travel along and
over Public Ways and so as not to disrupt normal operation of any City Utility System previously
installed therein. Electric Facilities shall be located on Public Grounds as determined by the
City. Company's construction, reconstruction, operation, repair, maintenance and location of
Electric Facilities shall be subject to permits if required by separate ordinance and to other
reasonable regulations of the City to the extent not inconsistent with the terms of this franchise
agreement. Company may abandon underground Electric Facilities in place, provided at the
City's request, Company will remove abandoned metal or concrete encased conduit interfering
with a City improvement project, but only to the extent such conduit is uncovered by excavation
as part of the' City improvement project. Abandoned facilities shall be subject to the provision of
Minn. Rule 7819.
3.2 Field Locations and Mapping Information. Company shall provide field locations
for its underground Electric Facilities within City consistent with the requirements of Minnesota
Statutes, Chapter 216D. Subject to the Homeland Security Act, or other confidentiality
protections under state or federal law, the Company shall provide current mapping information
for its Electric Facilities in accordance with the requirements of Minnesota rules Part s7819.4000
and 7819.4100. The Company shall provide this information electronically in a format mutually
acceptable to the the City and Company.
3.3 Street Openings. Company shall not open or disturb any Public Ground or Public
Way for any purpose without first having obtained a permit from the City, if required by a
separate ordinance, for which the City may impose a reasonable fee. Permit conditions imposed
on Company shall not be more burdensome than those imposed on other utilities for similar
facilities or work. Company may, however, open and disturb any Public Ground or Public Way
without permission from the City where an emergency exists requiring the immediate repair of
Electric Facilities. In such event Company shall notify the City by telephone to the office
designated by the City as soon as practicable. Not later than the second working day thereafter,
Company shall obtain any required permits and pay any required fees.
3.4 Restoration. After undertaking any work requiring the opening of any Public
Ground or Public Way, Company shall restore the same, including paving and its foundation, in
accordance with Minnesota Rules Part 7819.1100, to as good a condition. as formerly existed, and
shall maintain any paved surface in good condition for two years thereafter. The work shall be
completed as promptly as weather permits, and if Company shall not promptly perform and
complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground
or Public Way in the said condition, the City shall have, after demand to Company to cure and
the passage of a reasonable period of time following the demand, but not to exceed five days, the
right to make the restoration at the expense of Company. Company shall pay to the City the cost
of such work done for or performed by the City. This remedy shall be in addition to any other
remedy available to the City for noncompliance with this Section 3.4, but the City hereby waives
any requirement for Company to post a construction performance bond, certificate of insurance,
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letter of credit or any other form of security or assurance that may be required, under a separate
existing or future ordinance of the City, of a person or entity obtaining the City's permission to
install, replace or maintain facilities in a Public Way.
3.5 Avoid Damage to Electric Facilities. Nothing in this Ordinance relieves any
person from liability arising out of the failure to exercise reasonable care to avoid damaging
Electric Facilities while performing any activity.
3.6 Notice of Improvements. The City must give Company reasonable notice of plans
for improvements to Public Grounds or Public Ways where the City has reason to believe that
Electric Facilities may affect or be affected by the improvement. The notice must contain: (i) the
nature and character of the improvements, (ii) the Public Grounds and Public Ways upon which
the improvements are to be made, (Hi) the extent of the improvements, (iv) the time when the
City will start the work, and (v) if more than one Public Ground or Public Way is involved, the
order in which the work is to proceed. The notice must be given to Company a sufficient length
of time in advance of the actual commencement of the work to permit Company to make any
necessary additions, alterations or repairs to its Electric Facilities.
3.7 Shared Use of Poles. Company shall make space available on its poles or towers
for City fIre, water utility, police or other City facilities upon terms and conditions acceptable to
Company whenever such use will not interfere with the use of such poles or towers by Company,
by another electric utility, by a telephone utility, or by any cable television company or other
form of communication company. In addition, the City shall pay for any added cost incurred by
Company because of such use by City. Any City facilities shall be installed and maintained in
accordance with the National Electrical Safety Code (NESC).
SECTION 4. RELOCATIONS.
4.1 Relocation of Electric Facilities in Public Ways. Company shall comply with the
requirements of Minnesota Rules, Part 7819.3100 and applicable law relating to the relocation of
Electric Facilities in Public Ways. If the City determines to vacate a Public Way, the City shall
give Company reasonable notice of plants to vacate. If a relocation is ordered within five years
or a prior relocation of the same Electric Facilities, which was made at Company expense, the
City shall reimburse Company for non-betterment costs on a time and material basis, provided
that if a subsequent relocation is required because of the extension of a City Utility System to a
previously unserved area, Company may be required to make the subsequent relocation at its
expense.
4.2 Relocation of Electric Facilities in Public Ground. City may require Company~ at
Company's expense, to relocate or remove its Electric Facilities from Public Ground upon a
fmding by City that the Electric Facilities have become or will become a substantial impairment
to the existing or proposed public use of the Public Ground.
4.3 Change to Underground. If required by the City, the Company shall change from
aerial to underground, at City expense based on the Company!:s time and material costs in any
area where: (1) the City requests underground lines and all other lines hereafter are changed
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from aerial to underground, or (2) any aerial line is changed to underground by the open trench
method and the City requests the Company to share the trench with telephone and/or cable
television, and the Company can share trench at a cost not to exceed the Company!) pro rata
share of the cost of the trenching. The City may pay any costs incurred hereunder through a
surcharge on the Company's customers located within the City.
4.4 Projects with Federal Funding. Relocation, removal, or rearrangement of any
Company Electric Facilities made necessary because of the extension into or through City of a
federally-aided highway project shall be governed by the provisions of Minnesota Statutes,
Section 161.46, as supplemented or amended. It is understood that the right herein granted to
Company is a valuable right. City shall not order Company to remove or relocate its Electric
Facilities when a Public Way is vacated, improved or realigned because of a renewal or a
redevelopment plan which is financially subsidized in whole or in part by the Federal
Government or any agency thereof, unless the reasonable non-betterment costs of such relocation
and the loss, and expense resulting therefrom are first paid to Company, but the City need not pay
those portions' of such for which reimbursement to it is not available.
4.5 No Waiver. The provisions of this franchise apply only to facilities constructed
in reliance on a franchise from the City and shall not be construed to waive or modify any rights
obtained by Company for installations within a Company right-of-way acquired by easement or
prescriptive right before the applicable Public Ground or Public Way was established, or
Company's rights under state or county permit.
SECTION 5. TREE TRIMMING.,
Company may trim all trees and shrubs in the Public Grounds and Public Ways of City to
the extent Company finds necessary to avoid interference with the proper construction, operation,
repair and maintenance of any Electric Facilities installed hereunder, provided that Company
shall save the City harmless from any liability arising therefrom, and subject to permit or other
reasonable regulation by the City.
SECTION 6. INDEMNIFICATION.
6.1 Indemnity of City. Company shall indemnify, keep and hold the City free and
harmless from any and all liability on account of injury to persons or damage to property
occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the
operation of the Electric Facilities located in the Public Grounds and Public Ways. The City
shall not be indemnified for losses or claims occasioned through its own negligence except for
losses or claims arising out of or alleging the City's negligence as to the issuance of permits for,
or inspection of, Company's plans or work. The City shall not be indemnified if the injury or
damage results from the performance in a proper manner,! of acts reasonably deemed hazardous
by Company, and such performance is nevertheless ordered or directed by City after notice of
Company's determination.
6.2 Defense of City. In the event a suit is brought against the City, under
circumstances where this agreement to indemnify applies, Company at its sole cost and expense
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shall defend the City in such suit if written notice thereof is promptly given to Company within a
period wherein Company is not prejudiced by lack of such notice. If Company is required to
indemnify and defend, it will thereafter have control of such litigation, but Company may not
settle such litigation without the consent of the City, which consent shall not be unreasonably
withheld. This section is not, as to third parties, a waiver of any defense or immunity otherwise
available to the City and Company, in defending any action on behalf of the City,2, shall be
entitled to assert in any action every defense or immunity that the City could assert in its own
behalf.
SECTION 7. VACATION OF PUBLIC WAYS.
The City shall give Company at least two weeks prior written notice of a proposed
vacation of a Public Way. Except where required for a City improvement project, the vacation of
any Public Way, after the installation of Electric Facilities, shall not operate to deprive Company
of its rights to operate and maintain such Electric Facilities, until the reasonable cost of
relocating the same and the loss and expense resulting from such relocation are fIrst paid to
Company. In no case, however, shall City be liable to Company for failure to specifically
preserve a right-of-way under Minnesota Statutes, Section 160.29.
SECTION 8. CHANGE IN FORM OF GOVERNMENT.
Any change in the form of government of the City shall not affect the validity of this
Ordinance. Any governmental unit succeeding the City shall, without the consent of Company,
succeed to all of the rights and obligations of the City provided in this Ordinance.
SECTION 9. FRANCmSE FEE.
9.1 Fee Schedule. During the term. of the franchise hereby granted, and ill lieu of any
permit or other fees beillg imposed on Company, the City may impose on Company a. franchise fee
by collecting the atnounts indicated in a Fee Schedule set forth in a separate ordinance from each
customer in the designated Company Customer Class. The parties have agreed that the franchise
fee collected by the Company and paid to the City in a.ccordance with this Section 9 shall not exceed
the following atnounts.
Class
Fee Per Premise Per Month
Residential
Sm C & 1- Non-Dero
Sro C & I - Demand
Large C & I
Public Street Ltg
Muni Pumping -N/D
MuniPumping - Dero
$1.60
$2.25
$25.00
$75.00
$6.00
$0.50
$10.00
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9.2 Separate Ordinance. The franchise fee shall be imposed by a separate ordinance
duly adopted by the City Council, which ordinance shall not be adopted until at least 60 days after
written notice enclosing such proposed ordinance has been served upon Company by celiifi.ed mail
The fee shall not become effective until the beginning of a Company billing month at least 90 days
after written notice enclosing such adopted ordinance has been served upon Company by certified
mail, and Company has received any necessary approvals from the Commission. Section 2.5 shall
constitute the sole remedy for solving disputes between Company and the City in regard to the
interpretation of, or enforcement of, the separate ordinance. No action by the City to implement a
separate ordinance will commence until this Ordinance is effective. A separate ordinance which
imposes a lesser franchise fee on the residential class of customers than the maximum. amount set
forth in Section 9.1 above shall not be effective against Company unless the fee imposed on each
other customer classification is reduced proportionately in the same or greater amount per class as
the reduction represented by the lesser fee on the residential class.
9.3 Terms Defined For the purpose of this Section 9, the following definitions apply:
9.3.1 "Customer Class" shall refer to the classes listed on the Fee Schedule and as
defined or determined in Company's electric tariffs on file with the Commission.
9.3.2 "Fee Schedule" refers to the schedule in Section 9.1 setting fOli:h the various
customer classes from which a franchise fee would be collected if a separate ordinance were
implemented immediately after the effective date of this franchise agreement. The Fee Schedule in
the separate ordinance may include new Customer Class added by Company to its electric tariffs
after the effective date of this franchise agreement.
9.4 Collection of the Fee. The franchise fee shall be payable quarterly and shall be based
on the amount collected by Company during complete billing months during the period for which
payment is to be made by imposing a surcharge equal to the designated franchise fee for the applicable
customer classification in all customer billings for electric service in each class. The payment shall be
due the last business day of the month following the period for which the payment is made. The
franchise fee may be changed by ordinance from time to time; however, each change shall meet the
same notice requirements and not occur more often than annually and no change shall require a
collection from any customer for electric service in excess of the amounts specifically permitted by this
Section 9. The time and manner of collecting the franchise fee is subject to the approval of the
Commission. No franchise fee shall be payable by Company if Company is legally unable to first
collect an amount equal to the franchise fee from its customers in each applicable class of customers by
imposing a surcharge in Company's applicable rates for electric service. Company may pay the City the
fee based upon the surcharge billed subject to subsequent reductions to account for uncollectibles,
refunds and correction of erroneous billings. Company agrees to make its records available for
inspection by the City at reasonable times provided that the City and its designated representative agree
in writing not to disclose any information which would indicate the amount paid by any identifiable
customer or customers or any other information regarding identified customers. In addition, the
Company agrees to provide at the time of each payment a statement summarizing how the franchise
fee payment was determined, including information showing any adjustments to the total surcharge
billed in the period for which the payment is being made to account for any uncollectibles, refunds or
error corrections. >
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9.5 Equivalent Fee Requirement The separate ordinance imposing the fee shall not be
effective against Company unless it lawfully imposes and the City monthly or more often collects a fee
or tax of the same or greater equivalent amount on the receipts from sales of energy within the City by
any other energy supplier, provided that, as to such a supplier, the City has the authority to require a
franchise fee or to impose a tax. The "same or greater equivalent amount" shall be measured, if
practicable, by comparing amounts collected as a franchise fee from each similar customer, or by
comparing, as to similar customers the percentage of the annual bill represented by the amount
collected for franchise fee pUlposes. The franchise fee or tax shall be applicable to energy sales for any
energy use related to heating, cooling or lighting, or to run mach1nelY and appliances, but shall not
apply to energy sales for the purpose of providing fuel for vehicles. If the Company specifically
consents in writing to a franchise or separate ordinance collecting or failing to collect a fee from
another energy supplier in contravention of this Section 9.5, the foregoing conditions will be waived to
the extent of such written consent
SECTION 10. PROVISIONS OF ORDINANCE.
10.1 Severability. Every section, provision, or part of this Ordinance is declared
separate from every other section, provision, or part and if any section, provision, or part shall be
held invalid, it shall not affect any other section, provision, or part. Where a provision of any
other City ordinance conflicts with the provisions of this Ordinance, the provisions of this
Ordinance shall prevail.
10.2 Limitation on Applicability. This Ordinance constitutes a franchise agreement
between the City and Company as the only parties~ and no provision of this franchise shall in any
way inure to the benefit of any third person (including the public at large) so as to constitute any
such person as a third party beneficiary of the agreement or of anyone or more of the terms
hereof, or otherwise give rise to any cause of action in any person not a party hereto.
SECTION 11. AMENDMENT PROCEDURE.
Either party to this franchise agreement may at any time propose that the agreement be
amended to address a subject of concern and the other party will consider whether it agrees that
the amendment is mutually appropriate. If an amendment is agreed upon, this Ordinance may be
amended at any time by the City passing a subsequent ordinance declaring the provisions of the
amendment, which amendatory ordinance shall become effective upon the filing of Company's
written consent thereto with the City Clerk within 90 days after the date of fmal passage by the
City of the amendatory ordinance.
SECTION 12. PREVIOUS FRANCmSES SUPERSEDED.
This franchise supersedes any previous electric franchise granted to Company or its
predecessor.
Passed and approved:
,2010.
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Attest:
City Clerk
Date Published:
Mayor
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CITY OF FARMINGTON
DAKOTA COUNTY, MINNESOTA
SUMMARY OF ORDINANCE NOS.
ORDINANCES RENEWING GAS AND ELECTRIC FRANCmSES WITH DAKOTA
ELECTRIC ASSOCIATION AND NORTHERN STATES POWER D/B/A XCEL
ENERGY, AND ESTABLISmNG FRANCmSE FEE SCHEDULES FOR THE
PROVISION OF GAS AND ELECTRIC SERVICES BY DAKOTA ELECTRIC
ASSOCIATION, MINNESOTA ENERGY RESOURCES CORPORATION, AND
NORTHERN STATES POWER D/B/A XCEL ENERGY
NOTICE IS HEREBY GIVEN that, on , Ordinance Nos.
were adopted by the City Council of the City of Farmington, Minnesota.
NOTICE IS FURTHER GIVEN that, because of the lengthy nature of Ordinance Nos.
, the following summary of the ordinances has been prepared for publication, and that
copies of the ordinances are available for inspection by the public at the City Clerk's office.
NOTICE IS FURTHER GIVEN that the City has renewed franchises with Dakota
Electric Association ("DEA") and Northern States Power d/b/a Xcel Energy ("Xcel"). The terms
of the two renewal franchises are essentially the same and grant each company a 20 year
franchise to transmit and furnish gas or electric energy for public and private use within or
through the City. The renewal franchises provide for the orderly location and relocation of
facilities within public rights of way and public grounds, relocation and restoration of facilities
and rights of way, and abandonment and subsequent removal of abandoned facilities in
accordance with Minnesota Rule 7819.3300. The renewal franchises require the provision of
field location and mapping information by the companies. Other provisions provide for street
openings for repair or other purposes with prior permit of the City or without prior permit in
exigent circumstances, tree trimming, company indemnification of the City, and notice
procedures for the City's vacation of public ways. Each of the franchises is accompanied by a
franchise fee ordinance, and another, separate ordinance extends the fee to Minnesota Energy
Resources Corporation, whose franchise to operate in the City is still current.
153818vl
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The franchise fee ordinances impose fees related to gas and electric services as follows:
DEA fee schedule:
Class
Fee Per Premise Per Month
Residential
Irrigation
Small General- Non-Dem
General-: Demand
Public Street Lighting
C&I Interruptible
$1.60
$2.00
$2.25
$25.00
$6.00
$25.00
MERC fee schedule:
Residential
Commercial Firm
Commercial Interruptible
$1.60/Month/Customer
$15.00 /Month/Customer
$25.00 /Month/Customer
Xcel fee schedule:
Class
Fee Per Premise Per Month
Residential
Small General- Non-Demand
Small C&I Demand
Large C&I
Public Street Lighting
Municipal Pumping Non-Demand
Municipal Pumping
$1.60
$2.25
$25.00
$75.00
$6.00
$0.50
$10.00
APPROVED for publication by the City Council of the City of Farmington this 20th
day of September, 2010.
CITY OF FARMINGTON
By:
Todd Larson, Mayor
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By:
Approved as to form this _ day of
Peter J. Herlofsky, Jr., City Administrator
,2010.
By:
Joel J. Jamnik, City Attorney
,2010.
Published in the Farmington Independent the _ day of
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