Gas Franchise Fee

Implementation of Gas Franchise Fee

The City Council held a public hearing on Tuesday, May 26, 2015 to review the first reading of the revised Gas Franchise Ordinance and the new Gas Franchise Fee Ordinance. The City Council was given a written report on the Gas Franchise Ordinance (PDF) and a Gas Franchise Ordinance presentation (PDF) by Michael Thompson. The council voted to approve the first reading of the ordinances. The second reading of the ordinances was held on June 8, 2015 and approved by the full council. This fee will help fund the repairs to local streets beginning in 2016 and forward.

The collection of the monthly franchise fee through your Xcel Energy gas utility bill starts in October of 2015. Please refer to the table below for rates.

Gas Franchise Fee to Help Fund Street Repairs

Staff shared information on proposing a Gas Franchise Fee to the City Council during 2 workshop sessions. The first presentation was at the November 10, 2014 council workshop followed by further information at the February 9, 2015 workshop. The basic idea of a gas franchise fee to help fund local street repairs. The November workshop presentation (PDF) and the February workshop presentation (PDF) included information on the pros and cons of a franchise fee and how the revenue would greatly improve the overall condition of Maplewood's streets, in addition to a likely estimate of what a typical customer would pay per month.

Estimated Monthly Fees

ClassMonthly Fee
Residential$2.50
Commercial Non-Demand$6.00
Commercial Demand$75.00
Small Interruptible$50.00
Medium and Large Interruptible$100.00

Estimated Annual Revenue: $467,262

Comparative Data Overview

The City Attorney coordinated with the Xcel Energy representation to gather the comparative data regarding similar suburban cities and associated franchise fee structure on the gas utility. The comparative data results (PDF) show a number of cities collect a franchise fee to help pay for city related programs and costs. Cities in this area that have already implemented what Maplewood is now considering are:

  • Afton
  • Bayport
  • Cottage Grove
  • Forest Lake
  • Newport
  • North St. Paul
  • Oakdale
  • South St. Paul
  • St. Paul

Check out a League of Minnesota Cities magazine article (PDF) about franchise fees.

To solicit additional feedback, a notice was posted in the December newsletter regarding the potential fee, how to contact the city to provide feedback, and also to notify of a neighborhood meeting scheduled for December 16, 2014 at the Maplewood Community Center.

Open House Summary

Nine residents attended the open house meeting on December 16 to provide input and to ask questions. An Open House Meeting summary (PDF) of that interaction has been compiled. Of the 9 attendees, 7 took a position on the proposed fee with 4 opposed (PDF) and 3 in favor (PDF), as shown on the 2 city maps.

Feedback

Additionally staff received feedback via email or phone call from 6 additional residents with varying views/comments:

  • Can the franchise be on Cable TV and not the gas utility bill?
  • Supports the idea because all pay including those who don't pay regular property taxes. Everyone needs to pay. Asked if it could be paid once per year instead of monthly on the utility bill.
  • Does not like the fee on the utility bill.
  • Agrees with it and asked if it would replace assessments.
  • Does not want the fee and the City must live within its means.
  • This proposal is headed in the right direction and is a no-brainer.