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4.1 Franchise Agreements - Fee Ordinances Request for City Council Action DEPARTMENT INFORMATION ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE: Administration City Administrator/Finance Director Flaherty May 23, 2022 PRESENTER(s) REVIEWED BY: ITEM #: Administration City Attorney Kendall 4.1 – Franchise Fees STRATEGIC VISION MEETS: THE CITY OF OTSEGO: Is a strong organization that is committed to leading the community through innovative communication. X Has proactively expanded infrastructure to responsibly provide core services. Is committed to delivery of quality emergency service responsive to community needs and expectations in a cost-effective manner. Is a social community with diverse housing, service options, and employment opportunities. Is a distinctive, connected community known for its beauty and natural surroundings. AGENDA ITEM DETAILS RECOMMENDATION: City staff recommends the City Council adopt ordinances establishing franchise fees for electric and gas utility companies providing service within the City. ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED? No No BACKGROUND/JUSTIFICATION: Many cities in Minnesota establish a franchise for utilities and charge franchise fees to those utilities who operate within the city. Utilizing franchise fees is a way for cities to obtain the necessary funding for infrastructure or services without increasing the city’s property tax levy. Cities have broad gas and electric franchise rights under Minnesota Statute § 216B.36. Throughout 2021, the City Attorney negotiated franchise agreements with the three electric utilities providing service within the City. The City Council adopted the Franchise ordinances on October 25, 2021 establishing the Franchise for each of these utilities. The gas utility franchise agreement had been previously adopted by the City Council in 2002. Upon adoption of the Franchises, City staff notified each utility service provider in writing and provided them copies of the agreements. In February 2022, City staff provided the required formal notice of intent of adopting a second, separate ordinance imposing a franchise fee. This notification was required at least 90 days in advance of the City Council considering the adoption of the fee ordinance. The City Attorney has drafted four ordinances, one for each electric and gas utility provider. The ordinance establishes the fees, which were negotiated with the utility providers as part of the Franchise agreements. If approved by the City Council, City staff would again notify each of the utility service providers with an official notification. This notice then puts in motion a 90-day implementation period, with fees to begin with the October 2022 billing periods. Each utility service provider will then be required to remit the franchise fees to the City on a quarterly basis. Given that the franchise fees will be implemented for fourth quarter 2022, the City would receive the first remittance no later than the end of April 2023. The revenues generated from the franchise fees will support the City’s Pavement Management Program and will be receipted into the respective fund (#201) in the City’s financial system. City staff is recommending the City Council adopt each of the four ordinances establishing franchise fees for electric and gas utility companies providing service within the City. SUPPORTING DOCUMENTS ATTACHED: • Ordinance 2022-07 Northern States Power Company • Ordinance 2022-08 Elk River Municipal Utilities • Ordinance 2022-09 Wright-Hennepin Cooperative • Ordinance 2022-10 CenterPoint Energy POSSIBLE MOTION PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES: Motion to adopt Ordinances 2022-07, 2022-08, and 2022-09 implementing electric service franchise fees on Northern States Power Company, Elk River Municipal Utilities, and Wright-Hennepin Cooperative; to adopt Ordinance 2022-10 implementing gas service franchise fees on CenterPoint Energy; and to authorize staff to publish the summary ordinances. BUDGET INFORMATION FUNDING: BUDGETED: Fund 201 – Pavement Management Yes 209422v6 1 ORDINANCE NO. 2022-07 CITY OF OTSEGO WRIGHT COUNTY, MINNESOTA AN ORDINANCE IMPLEMENTING AN ELECTRIC SERVICE FRANCHISE FEE ON NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS, FOR PROVIDING ELECTRIC SERVICE WITHIN THE CITY OF OTSEGO, MINNESOTA THE CITY COUNCIL OF THE CITY OF OTSEGO DOES ORDAIN: SECTION 1. The City of Otsego City Code is hereby amended to include reference to the following Special Ordinance. Subdivision 1. Purpose. The Otsego City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide electric services within the City of Otsego. Pursuant to City Ordinance 2021-20, (adopted October 25, 2021), a Franchise Agreement between the City of Otsego and Northern States Power Company, a Mi nnesota corporation, its successors and assigns, the City has the right to impose a franchise fee on Northern States Power Company, a Minnesota corporation, its successors and assigns, in an amount and fee design as set forth in the fee schedule attached hereto as Schedule A. Subdivision 2. Terms. A franchise fee is hereby imposed on Northern States Power Company, a Minnesota Corporation, its successors and assigns, under its electric franchise in accordance with the schedule attached here to and made a part of this Ordinance, commencing with the Xcel Energy October 2022 billing month. The fee shall be in lieu of any permit or other fees being imposed on Company under the City Code. This 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 this ordinance have more than one premise, each premise (address) 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. Subdivision 3. Payment. The said franchise fee shall be payable to the City in accordance with the terms set forth in Section 9 of the Franchise. Subdivision 4. Surcharge. The City recognizes that the Minnesota Public Utilities Commission may allow the Company to add a surcharge to customer rates for the cost of the fee. 209422v6 2 Subdivision 5. Equivalent Fee Requirement. This ordinance 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 pursuant to Minnesota Statutes, Section 216B.36. 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, the foregoing conditions will be waived to the extent of such written consent. Subdivision 6. Enforcement. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with Section 2.5 of the Franchise Agreement. Subdivision 7. Effective Date of Franchise Fee. The effective date of this Ordinance shall be after its publication and ninety (90) days after the sending of written notice enclosing a copy of this adopted Ordinance to Xcel Energy by certified mail. Collection of the fee shall commence as provided above. ADOPTED by the City Council of the City of Otsego, Minnesota this 23rd day of May, 2022. CITY OF OTSEGO SEAL ______________________________________ Jessica Stockamp, Mayor ATTEST: ________________________________ Bethany Benting, Deputy Clerk 209422v6 3 SCHEDULE A Franchise Fee Rates: Electric Utility The franchise fee shall be in an amount determined by applying the following schedule per customer premise/per month based on metered service to retail customers within the City: Class Amount per month Residential $ 4.00 Sm C & I – Non-Dem $ 5.00 Sm C & I – Demand $ 40.00 Large C & I $ 95.00 Franchise fees are to be collected by the Utility at the rate listed below, and submitted to the City on a quarterly basis as follows: January – March collections due by April 30. April – June collections due by July 31. July – September collections due by October 31. October – December collections due by January 31. 209422v6 PUBLICATION SUMMARY OF ORDINANCE NO. 2022-07 CITY OF OTSEGO WRIGHT COUNTY, MINNESOTA OFFICIAL SUMMMARY FOR PUBLICATION ORDINANCE ESTABLISHING A FRANCHISE FEE FOR NORTHERN STATES POWER COMPANY Ordinance Number 2022-07 was recently adopted by the City Council. Because of the lengthy nature of the ordinance, the following summary of the ordinance has been prepared for publication as authorized by law. The Ordinance imposes a franchise fee on Northern States Power Company, a Minnesota corporation, its successors and assigns as part of the franchise previously granted the company by ordinance number 2021- 20. Ordinance 2022-07 provides for the imposition, collection, quarterly payment, and periodic auditing of a franchise fee at the following rates: Class Amount per month Residential $ 4.00 Sm C & I – Non-Dem $ 5.00 Sm C & I – Demand $ 40.00 Large C & I $ 95.00 Printed copies of both ordinances are available for inspection by any person during the City Hall regular office hours. Approved for publication by the City Council of the City of Otsego, Minnesota this 23rd day of May, 2022. CITY OF OTSEGO SEAL _____________________________ Jessica Stockamp, Mayor ATTEST: ________________________________ Bethany Benting, Deputy Clerk Date Published:____________________ 1 ORDINANCE NO. 2022-08 CITY OF OTSEGO WRIGHT COUNTY, MINNESOTA ELECTRIC FRANCHISE ORDINANCE AN ORDINANCE IMPLEMENTING AN ELECTRIC SERVICE FRANCHISE FEE ON ELK RIVER MUNICIPAL UTILITIES, A MINNESOTA MUNICIPAL UTILITY OPERATING PURSUANT TO MINNESOTA STATUTES, SECTIONS 412.321 TO 412.391, ITS SUCCESSORS AND ASSIGNS, FOR PROVIDING ELECTRIC SERVICE WITHIN THE CITY OF OTSEGO, MINNESOTA THE CITY COUNCIL OF THE CITY OF OTSEGO ORDAINS: SECTION 1. The City of Otsego City Code is hereby amended to include reference to the following Special Ordinance. Subdivision 1. Purpose. The Otsego City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide electric services within the City of Otsego. Pursuant to City Ordinance 2021-21, (adopted October 25, 2021), a Franchise Agreement between the City of Otsego and Elk River Municipal Utility (“ERMU”), a Minnesota municipal utility, its successors and assigns, the City has the right to impose a franchise fee on Elk River Municipal Utility, its successors and assigns, in an amount and fee design as set forth in the fee schedule attached hereto as Schedule A. Subdivision 2. Terms. A franchise fee is hereby imposed on Elk River Municipal Utility, a Minnesota municipal utility, its successors and assigns, under its electric franchise in accordance with the schedule attached here to and made a part of this Ordinance, commencing with ERMU’s October 2022 billing month. The fee shall be in lieu of any permit or other fees being imposed on ERMU under the City Code. This 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 ERMU 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 ERMU 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 this ordinance have more than one premise, each premise (address) shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any premise, the ERMU’s manner of billing for energy used at all similar premises in the city will control. 2 Subdivision 3. Payment. The said franchise fee shall be payable to the City in accordance with the terms set forth in Section 9 of the Franchise. Subdivision 4. Surcharge. The City recognizes that ERMU may add a surcharge to customer rates for the cost of the fee. Subdivision 5. Equivalent Fee Requirement. This ordinance shall not be effective against ERMU 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 pursuant to Minnesota Statutes, Section 216B.36. 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 ERMU 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, the foregoing conditions will be waived to the extent of such written consent. Subdivision 6. Enforcement. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with Section 2.5 of the Franchise Agreement. Subdivision 7. Effective Date of Franchise Fee. The effective date of this Ordinance shall be after its publication and ninety (90) days after the sending of written notice enclosing a copy of this adopted Ordinance to ERMU by certified mail. Collection of the fee shall commence as provided above. ADOPTED this 23rd day of May, 2022 by the City Council of the City of Otsego, Minnesota. ______________________________________ Jessica Stockamp, Mayor Attest: ________________________________ Bethany Benting, Deputy Clerk Date Published:____________________ 3 SCHEDULE A Franchise Fee Rates: Electric Utility The franchise fee shall be in an amount determined by applying the following schedule per customer premise/per month based on metered service to retail customers within the City: Class Amount per month Residential $ 4.00 Sm C & I – Non-Dem $ 5.00 Sm C & I – Demand $ 40.00 Large C & I $ 95.00 Public Street Ltg $ 0 Muni Pumping –N/D $ 0 Muni Pumping – Dem $ 0 Franchise fees are to be collected by the Utility at the rate listed below, and submitted to the City on a quarterly basis as follows: January – March collections due by April 30. April – June collections due by July 31. July – September collections due by October 31. October – December collections due by January 31. SUMMARY ORDINANCE NO. 2022-08 CITY OF OTSEGO WRIGHT COUNTY, MINNESOTA AN ORDINANCE ESTABLISHING A FRANCHISE FEE FOR ELK RIVER MUNICIPAL UTILITY Ordinance Number 2022-08 was recently adopted by the City Council. Because of the lengthy nature of the ordinance, the following summary of the ordinance has been prepared for publication as authorized by law. The Ordinance imposes a franchise fee on Elk River Municipal Utility, a Minnesota municipal utility, its successors and assigns as part of the franchise previously granted the ERMU by ordinance number 2021-21. Ordinance 2022-08 provides for the imposition, collection, quarterly payment, and periodic auditing of a franchise fee at the following rates: Class Amount per month Residential $ 4.00 Sm C & I – Non-Dem $ 5.00 Sm C & I – Demand $ 40.00 Large C & I $ 95.00 Printed copies of both ordinances are available for inspection by any person during the City Hall regular office hours. Approved for publication by the City Council of the City of Otsego, Minnesota this 23rd day of May, 2022. CITY OF OTSEGO ______________________ Jessica Stockamp, Mayor ATTEST: ________________________________ Bethany Benting, Deputy Clerk Date Published:____________________ 209423v8 1 ORDINANCE NO. 2022-09 CITY OF OTSEGO WRIGHT COUNTY, MINNESOTA AN ORDINANCE IMPLEMENTING AN ELECTRIC SERVICE FRANCHISE FEE ON WRIGHT-HENNEPIN COOPERATIVE ELECTRIC ASSOCIATION, A MINNESOTA COOPERATIVE FORMED UNDER MINNESOTA STATUTE CHAPTER 308A, ITS SUCCESSORS AND ASSIGNS, FOR PROVIDING ELECTRIC SERVICE WITHIN THE CITY OF OTSEGO, MINNESOTA THE CITY COUNCIL OF THE CITY OF OTSEGO DOES ORDAIN: SECTION 1. The City of Otsego City Code is hereby amended to include reference to the following Special Ordinance. Subdivision 1. Purpose. The Otsego City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide electric services within the City of Otsego. Pursuant to City Ordinance 2021-22, (adopted October 25, 2021), a Franchise Agreement between the City of Otsego and Wright-Hennepin Cooperative Electric Association, a Minnesota Cooperative, its successors and assigns (the “Company”), the City has the right to impose a franchise fee on the Company in an amount and fee design as set forth in the fee schedule attached hereto as Schedule A. Subdivision 2. Terms. A franchise fee is hereby imposed on the Company, its successors and assigns, under its electric franchise in accordance with the schedule attached hereto and made a part of this Ordinance, commencing with the Company’s October 2022 billing month. The fee shall be in addition to any permit or other fees being imposed on Company under the City Code. This 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 this ordinance have more than one premise, each premise (address) 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. Subdivision 3. Payment. 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 the attached fee schedule. The time and manner of collecting 209423v8 2 the franchise fee may be 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 disclose to the City (1) the total number of members in the City limits; (2) the rate classification totals; and (3) the total amount collected. The Company shall not be required to disclose identifiable customer or customer information or any other information regarding identified customers. Subdivision 4. Surcharge. The City recognizes that the Company will surcharge its members located in the City and subject to this Ordinance the amount of the fee. Subdivision 5. Equivalent Fee Requirement. This ordinance 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 pursuant to Minnesota Statutes, Section 216B.36. 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, the foregoing conditions will be waived to the extent of such written consent. Subdivision 6. Enforcement. This ordinance is enacted in accordance with the Franchise Agreement and shall be interpreted as such. Any dispute, including enforcement of a default regarding this ordinance will be resolved in accordance with Section 2.5 of the Franchise Agreement. Provisions of the Franchise Agreement, including notice of future proposed ordinance amendments, requests for amendments, and other provisions shall apply to this ordinance. Subdivision 7. Effective Date of Franchise Fee. The effective date of this Ordinance shall be after its publication and ninety (90) days after the sending of written notice enclosing a copy of this adopted Ordinance to the Company by certified mail. Collection of the fee shall commence as provided above. ADOPTED by the City Council of the City of Otsego, Minnesota this 23rd day of May, 2022. CITY OF OTSEGO SEAL ______________________________________ Jessica Stockamp, Mayor ATTEST: ________________________________ Bethany Benting, Deputy Clerk 209423v8 3 SCHEDULE A Franchise Fee Rates: Electric Utility The franchise fee shall be in an amount determined by applying the following schedule per customer premise/per month based on metered service to retail customers within the City: Class Amount per month Residential $ 4.00 Sm C & I – Non-Dem $ 5.00 Sm C & I – Demand $ 40.00 Large C & I $ 95.00 Franchise fees are to be collected by the Utility at the rate listed below, and submitted to the City on a quarterly basis as follows: January – March collections due by April 30. April – June collections due by July 31. July – September collections due by October 31. October – December collections due by January 31. 209423v8 PUBLICATION SUMMARY OF ORDINANCE NO. 2022-09 CITY OF OTSEGO WRIGHT COUNTY, MINNESOTA OFFICIAL SUMMMARY FOR PUBLICATION ORDINANCE ESTABLISHING A FRANCHISE FEE FOR WRIGHT-HENNEPIN COOPERATIVE ELECTRIC ASSOCIATION Ordinance Number 2022-09 was recently adopted by the City Council. Because of the lengthy nature of the ordinance, the following summary of the ordinance has been prepared for publication as authorized by law. The Ordinance imposes a franchise fee on Wright-Hennepin Cooperative Electric Association, its successors and assigns as part of the franchise previously granted the company by ordinance number 2021- 22. Ordinance 2022-09 provides for the imposition, collection, quarterly payment, and periodic auditing of a franchise fee at the following rates: Class Amount per month Residential $ 4.00 Sm C & I – Non-Dem $ 5.00 Sm C & I – Demand $ 40.00 Large C & I $ 95.00 Printed copies of both ordinances are available for inspection by any person during the City Hall regular office hours. Approved for publication by the City Council of the City of Otsego, Minnesota this 23rd day of May 2022. SEAL CITY OF OTSEGO _______________________________ Jessica Stockamp, Mayor ATTEST: ________________________________ Bethany Benting, Deputy Clerk Date Published:____________________ 1 209421v5 ORDINANCE NO. 2022-10 CITY OF OTSEGO WRIGHT COUNTY, MINNESOTA AN ORDINANCE IMPLEMENTING A GAS ENERGY FRANCHISE FEE ON CENTERPOINT ENERGY MINNESOTA GAS (“CENTERPOINT ENERGY”) FOR PROVIDING GAS ENERGY SERVICE WITHIN THE CITY OF OTSEGO. THE CITY OF OTSEGO DOES ORDAIN: Gas Franchise Fee (a)Definitions. For the purposes of this Ordinance, the following terms shall have the following meanings: (1)City. The City of Otsego, County of Wright, State of Minnesota. (2)Company. CenterPoint Energy Minnesota Gas (“CenterPoint Energy”), its successors and assigns. (3)Franchise Agreement. The franchise agreement between the City and Company pursuant to City Ordinance 336. (4)Notice. “Notice” means a writing served by any party or parties on any other party or parties. Notice to Company shall be mailed to CenterPoint Energy, Vice President Regional Operations, 505 Nicollet Mall, Minneapolis, MN 55402. Notice to City shall be mailed to the City Clerk at: 13400 90th Street NE Otsego, MN 55330 (b)Purpose. The Otsego City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide natural gas and electric services within the City. Pursuant to the Franchise Agreement the City has the right to impose a franchise fee on Company. (c)Franchise Fee Statement and Schedule. A franchise fee is hereby imposed on Company commencing with the October 2022 billing month, and in accordance with the following fee schedule: 2 209421v5 Customer Classification Amount per Account per Month ($) Residential $4.00 Firm A $5.00 Firm B $20.00 Firm C $60.00 Sm Vol, Dual Fuel A (SVDF A) $80.00 Sm Vol, Dual Fuel B (SVDF B) $80.00 Lg Vol, Dual Fuel (LVDF) $100.00 (d)Account Fee. This fee is an account based fee and not a meter-based fee. In the event that an entity covered by this ordinance has more than one meter, but only one account, only one fee shall be assessed to that account. In the event any entities covered by this ordinance have more than one account, each account shall be subject to the appropriate fee. In the event a question arises as to the proper fee amount for any account, the highest possible fee amount shall apply. (e)Payment. Franchise fees are to be collected by the Company, consistent with the Minnesota Public Utility Commission’s March 23, 2011, Order establishing franchise fee filing requirements in Docket No. E,G999/CI- 09-970, and submitted to the City as follows: January – March collections due by April 30. April – June collections due by July 31. July – September collections due by October 31. October – December collections due by January 31. (f)Record Support for Payment. The Company shall make each payment when due and, if requested by the City, shall provide a statement summarizing how the franchise fee payment was determined, including information showing any adjustments to the total made to account for any non-collectible accounts, refunds or error corrections. The Company shall permit the City, and its representatives, access to the Company’s records for the purpose of verifying such statements. (g)Payment Adjustments. Payment to the City will be adjusted where the Company is unable to collect the franchise fee. This includes non-collectible accounts. (h)Surcharge. The City recognizes that the Minnesota Public Utilities Commission may allow the Company to add a surcharge to customer rates of city residents to reimburse the Company for the cost of the fee, consistent with the Minnesota Public Utility Commission’s March 23, 2011 Order establishing franchise fee filing requirements in Docket No. E,G999/CI-09-970. (i)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 ordinance or for such other relief permitted by law. 3 209421v5 (j)Effective Date of Franchise Fee. The effective date of this Ordinance shall be after its publication and ninety (90) days or more after sending written notice enclosing a copy of this adopted Ordinance to Company by certified mail. Collection of the fee shall commence as provided above. (k)Relation to Franchise Agreement. This ordinance is enacted in compliance with the Franchise Agreement and shall be interpreted as such. (l)Periodic Review. The City Council shall review this ordinance every two years in whatever manner the City Administrator determines to be appropriate, including, but not limited to, review by the City Council in either a work session or a regular session. Failure to review this ordinance shall not in any way invalidate or limit it. (m)Permit Fees. The Company will administer the collection and payment of franchise fees to the City in lieu of permit fees, or other fees that may otherwise be imposed on the Company in relation to its operations as a public utility in the City so long as the following requirements are met: (1)The Company applies for any and all permits, licenses and similar documentation as though this provision did not exist. (2)The Company requests the fee to be waived at the time of application. Section 2: Effective Date. This ordinance takes effect as provided herein. PASSED AND ADOPTED BY THE CITY COUNCIL THIS 23RD DAY OF MAY 2022. SEAL _________________________________ Jessica Stockamp, Mayor ATTEST: _________________________________ Bethany Benting, Deputy Clerk (Published in the ______________________ the ______ day of ______________, 2022. 209421v5 PUBLICATION SUMMARY OF ORDINANCE NO. 2022-10 CITY OF OTSEGO WRIGHT COUNTY, MINNESOTA OFFICIAL SUMMMARY FOR PUBLICATION ORDINANCE ESTABLISHING A FRANCHISE FEE FOR CENTERPOINT ENERGY MINNESOTA GAS Ordinance Number 2022-10 was recently adopted by the City Council. Because of the lengthy nature of the ordinance, the following summary of the ordinance has been prepared for publication as authorized by law. The Ordinance imposes a franchise fee on CenterPoint Energy Minnesota Gas, its successors and assigns as part of the franchise previously granted the company by ordinance number 2002-20. Ordinance 2022-10 provides for the imposition, collection, quarterly payment, and periodic auditing of a franchise fee at the following rates: Class Amount per month Residential $4.00 Firm A $5.00 Firm B $20.00 Firm C $60.00 Sm Vol, Dual Fuel A (SVDF A) $80.00 Sm Vol, Dual Fuel B (SVDF B) $80.00 Lg Vol, Dual Fuel (LVDF) $100.00 Printed copies of both ordinances are available for inspection by any person during the City Hall regular office hours. Approved for publication by the City Council of the City of Otsego, Minnesota this 23rd day of May 2022. SEAL CITY OF OTSEGO _______________________________ Jessica Stockamp, Mayor ATTEST: ________________________________ Bethany Benting, Deputy Clerk Date Published:____________________