05-13-03 Worksession
CITY COUNCIL MINUTES
Richfield, Minnesota
Special Worksession
May 13, 2003
The meeting was called to order by Mayor Kirsch at 5:30 p.m.
Members Present:
Martin Kirsch, Mayor; Susan Rosenberg; Gertrude Ulrich; John Enger; and
Sue Sandahl.
Staff Present:
Samantha Orduno, City Manager; Steven Devich, Administrative Services
Director; Mike Eastling, Public Works Director; Bruce Nordquist, Acting
Community Development Director; Randy Hughes, Operations
Superintendent; Jim Olson, Project Engineer; and Cheryl Krumholz,
Recording Secretary.
Item #1
Public Works Director Eastling stated that the Public Works Engineering staff has been
researching how user fees can be applied to help fund expenses associated with streetlights and
boulevard tree maintenance. The 2002 expenditures on streetlight operation and maintenance costs
were $305,330 and boulevard tree maintenance costs were $300,960. State Statute and City
Ordinance allow the City to charge user fees on certain services.
Mr. Eastling made a Power Point presentation regarding the street light user fee and
boulevard tree maintenance service fee (Clerk's File No. C-390).
Council Member Sandahl stated support for the service fee versus user fee for tree
maintenance. She suggested an increase in the tree service fee to cover the planting and
maintenance of trees along County roads.
Mayor Kirsch said boulevard trees make Richfield a unique community, as well as an energy
saver by providing shade to homes. He suggested a consistent fee structure.
Council Member Ulrich asked for clarification of the service charges for the development
projects on 66th Street.
Public Works Director Eastling explained that commercial but not residential is charged in
these development areas.
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May 13, 2003
Council Member Ulrich asked if the proposed service fee would include residential in these
areas.
Public Works Director Eastling stated this would be a City Council policy decision. He said it
would need to be determined if the area is receiving a benefit of the service.
Council Member Ulrich asked what the planned unit development ordinance allows for user
fees.
Public Works Director Eastling explained the fee is determined by area size.
Council Member Sandahl said the boulevard trees and streetlights are part of the City's
infrastructure that need to be preserved and funding sources found. She added that this service is
better than in other communities and Richfield residents need to be educated on this asset.
Council Member Ulrich stated everyone should pay the fees with no exemptions.
Council Member Enger asked about the status of reducing the main thoroughfares in Richfield
to three lanes.
City Manager Orduno explained that dialogue with Hennepin County indicates they are not in
a position to discuss these changes until after the budget crisis. She added that if these changes
occurred, it may result in the City performing some of the maintenance and charging the County. She
suggested the Transportation Committee review this matter.
Council Member Enger asked how much right-of-way was on the residential side of the
sidewalk next to some streets.
Public Works Director Eastling said approximately one foot.
Council Member Enger asked about the likelihood of residents along these streets paying for
trees. He also asked about the tree maintenance responsibility if a tree is planted on the resident's
property.
Council Member Sandahl said that a service fee would mean the City provides the tree.
Public Works Director Eastling said tree maintenance on these properties could be negotiable.
Council Member Enger asked about the proposed amount of the tree maintenance service
fee.
Public Works Director Eastling said $6 - $7 a quarter.
Council Member Ulrich asked about legal complications of justifying the charging across the
district if there is no proven benefit.
Public Works Director Eastling said an increase in property value is a benefit. He added the
property must benefit but not the same as for a capital assessment.
Council Member Ulrich said those properties along thoroughfares may not benefit so it may be
an issue to charge them a service fee.
The City Council consensus was to proceed with the process to implement the street light
user fee and boulevard tree maintenance service fee, including communication to the public.
City Manager Orduno reported that staff met with representatives of Xcel and CenterPoint
Energy to discuss their perspectives on franchise fees. Both representatives noted that several cities
are now in the process of establishing franchise fees. While both companies' preference is no
franchise fees, their representatives were understanding of the financial stresses cities are under and
stated they would not oppose the establishment of the franchise fees. Moreover, they both
expressed a desire to work with the City in the event that franchise fees would be under consideration
beyond this research phase. If franchise fees were to be implemented, the City has the option of
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May 13, 2003
charging a percentage of gross revenues or charging a per meter fee. The City also has the option of
charging the same fee across users or reduced fees for specific users.
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Ms. Orduno stated both representatives requested that, if franchise fees are implemented, the
City discontinue charging street opening fees and also present the franchise fee as a tax on users.
Council Member Ulrich asked for clarification regarding the street opening fees.
City Manager Orduno said some cities don't charge this fee.
Public Works Director Eastling said the City revenue on street opening fees is less than
$20,000.
Council Member Ulrich asked if the City charged construction companies at development sites
when they blocked City streets.
City Manager Orduno said the City does charge the construction companies.
Ms. Orduno explained that it needs to be determined to what extent large and small business
should be charged a franchise fee. She said businesses could connect into a grid to not be charged
a fee.
Ms. Orduno recommended the City wait on proceeding with the franchise fee process until the
legislative session has ended and the updated City's' fee schedule has been completed.
The City Council consensus was to wait on the energy franchise fee implementation, have
staff conduct more research and return to the City Council when the 2004 budget is prepared.
Council Member Enger suggested that if the street light user fee and boulevard tree
maintenance service fee are implemented, it would be better to have it charged to property taxes.
City Manager Orduno said that is a City Council decision, but if payment is on taxes, it is
received two times per year versus quarterly when billed on the City's utility statement.
Public Works Director Eastling said it is administratively more costly to special assess for the
fees. He added the user and service fees would be a line item on the quarterly utility bill.
The meeting was adjourned by unanimous consent at 6:26 p.m.
~~~
Recording Secretary
Date Approved: May 27, 2003