Moose Lake Star Gazette - Serving Carlton and Pine Counties Since 1895

By Lois E. Johnson
Moose Lake Star-Gazette 

Moose Lake considers new franchise fee

Gas mains franchise fee seeks to introduce new revenue stream for city

 

April 19, 2018



The Moose Lake City Council is considering adopting a franchise fee on gas mains in the city, it was reported at the council's meeting on Wednesday, April 11.

In a memorandum, City Administrator Tim Peterson listed the reasons for imposing the fee: The city is over 70 percent tax exempt, and roads and utilities within Moose Lake are in urgent need of improvement.

He went on to state, “I would like to introduce a new revenue stream that will spread the community’s burden over the entire population, businesses, non-profits and government entities.”

The city already has franchise fees for electric and cable utilities but not on gas, he stated in the memorandum. The benefits of the fee are that it would be spread over 100 percent of the community, instead of the 30 percent that is taxable property. The council could restrict the fee proceeds to roads and related utility improvements.

The fee can be based on a flat rate, by percentage or by usage. Peterson suggested that the fee be based on usage.

Peterson said that the fee could amount to $1.50 per month per meter, $0.013 per month per therm, which is directed towards larger users, and some customers would pay $2 to $3 a month.

“We would keep the impact on residents as low as possible,” said Peterson during the meeting. “Part of this is finding a way for larger customers to pay, too. It’s another fee but if we’re going to move forward on road projects and utility improvements, the money has to come from somewhere.”

Councilor Kris Huso suggested waiting a year because of the increase in electrical rates by the Moose Lake Water and Light Commission.

“It might not be popular,” said Councilor Doug Juntunen. “But I don’t want to drive down the streets and have a rim on a wheel break. Could we do it in stages? But we also need to look at the long-term benefits and long-term needs.”

Councilor Greg Sarvela said he agreed to move in that direction because the city needs to.

In the memorandum, the fee is expected to generate $50,000 a year in revenue. If the property tax were increased to raise that amount, it would be equal to an 8.7 percent levy increase, which amounts to $90 on a $150,000 property. This fee would amount to $30 on that property.

The memorandum stated: “In order to enact this franchise fee, the City of Moose Lake would need to pass a city ordinance laying out the terms and fee structure, hold a public hearing, and wait the required 90 days for Minnesota Energy to start the billing.”

Peterson also informed the council of a bill that has been introduced in the House of Representatives which would reduce the amount of Local Government Aid to cities that have a sales tax.

“We fought for the sales tax,” he said. “It is a local issue. With the revenue from the sales tax, we can deal with this locally instead of going to the legislature to ask for funding. We will do anything to make sure that this does not pass.”

The council also passed a resolution to place the initiative on the ballot for the General Election in November about Sunday retail liquor sales in the city. Residents would vote yes to allow the Sunday liquor sales or no to not allow Sunday liquor sales.

In other business, the council agreed to sell surplus equipment of a 1966 grader and a 1976 grain truck; accepted the estimate from Great Lakes Pipe Service, Inc. in the amount of $4,600 for cleaning and checking the pumps at the seven lift stations; approved the low bid of $5,200 from Gobel Excavating and Aggregate, Inc. for replacing a storm sewer manhole on Fourth and Birch; approved the request from Library and Technology Director Steve Devine-Jelenski to attend a library conference in Springfield, Illinois, in September; and approved declaring Friday, April 27, as Arbor Day in Moose Lake.

The council also met with Police Chief Bryce Bogenholm in a closed session to discuss his contract, and then accepted the contract after the council meeting had been called back to order.

The meeting was then recessed until the public hearing about the study regarding the city annexing all of Moose Lake Township.

See "No annexation without due remonstration" on page one for a report about the hearing and the decision made by the council.

 

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