City Council Agenda Packet 04-28-2025 Special1. Agenda Documents
Documents:
CLOSED MTG AND SPECIAL MEETING AGENDA - 4-28-25.PDF
1.1. Agenda Documents
Documents:
ADDITIONAL INFORMATION - FRANCHISE FEE WORK SESSION.PDF
AGENDA
MONTICELLO CITY COUNCIL
Monday, April 28, 2025 — 5:00 p.m.
Monticello Community Center
Call to Order
2. 5:00 — 5:30 p.m. CLOSED MEETING — Consideration of sale of property
PID:155164000030
Authorized by MN Statute 13D.05, Subd. 3
3. 5:30 — 6:15 p.m. Franchise Fee/Assessment Policy Discussion
4. Adjournment
CITY rtOF Franchise Fees
Montice o
April 28, 2025
• Assessment Policy last major updated in 2017
• Currently assessments apply to:
o New Construction — If petitioned by property owners
o Roadway Reconstruction
• Replacing existing roadway section and existing curb and gutter
• Rural to urban conversion projects.
• Mill and overlay
• New sidewalks and trails
• Replacement sidewalks
• Many cities across the state are using franchise fee revenue
versus assessments for pavement maintenance type projects.
City of Monticello
04/28/2025 2
• City charges a fee to utilize the city right-of-way.
• Utility providers pay the fee.
• Utility providers typically pass this fee onto their customers.
o Fee is distributed amongst customers based on meter size.
o Customers will see a fee on their monthly bill —typically, identified as "franchise fee" or
"city fee"
City of Monticello
04/28/2025 3
• Minnesota state statue 216B.36 allows municipalities to
require electric and natural gas utility providers to obtain a
license, permit, right, or franchise agreement.
• Under these agreements the utility may be obligated to pay
municipalities fees to defray increased municipal costs
accruing as a result of utility operations.
City of Monticello
04/28/2025 4
• Currently the City has electric franchise agreements
with Xcel Energy and Wright Hennepin Electric.
o Current Franchise Fee Monthly Amounts are as follows:
■ Residential - $1.95
■ Small Commercial and Industrial - $5.50
■ Large Commercial and Industrial - $190
o Total 2024 electric franchise fee revenue - $409,068
City of Monticello
04/28/2025 5
• Additionally, the City has cable franchise agreements
with Charter, TDS, and Fibernet.
o Current cable franchise fee is 5% of gross revenues.
o These amounts are remitted to the Sherburne -Wright Cable Commission;
however, the Cable Commission has periodically approved the return of one
or more quarters' worth of cable franchise fees to be allocated to the
cities. When this occurs, it is deposited into the Fiber Optics Fund.
City of Monticello
04/28/2025 6
• The City had a has franchise agreement with
CenterPoint Energy; however, it has since expired.
o No fee was ever established under the expired agreement.
City of Monticello
04/28/2025 7
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
To fund the City's transportation system and to be able to
perform timely roadway maintenance.
Maintenance Strategies
for Life Cycle Extension
x
80
c
C
_O
00
70
C
O
U
C 40
a)
E
a)
20
0
0
Lxahzed Maintenance
and Saa
(_-%-100)
Reconstruction
(035)
20 '.'D 60
Pavement Age (Years)
Maintenance Stratecoie5
G-Routine Maintenance Only-Sealcoa: and Over ay
City of Monticello 04/28/2025 8
• Pavement Management Report completed in 2018 provided
three scenario's
o Maintain 85 PCI - $2.4 million per year.
o Maintain 80 PCI - $2.1 million per year.
o Maintain 75 PCI - $2 million per year.
a PCI = 90 (In"Mm to no dranaKs )
, . 'R
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.L!197��w
b PCI = 75 Iblook bnpRuolnal and
transverse aacho%)
-9 .
C. PCI - 40(amigalw aacAm)
City of Monticello
04/28/2025 9
2025 Pavement Management
{ ■
1
f
'l28;2025
Monticc IoRoadSegments2022 Shapefile Satisfactory (50.69)
Poor(0-39) — Good(70-89)
Fair (40 49) — Fxcellent (90-100)
City of Monticello
1-45.000
0
035
0.7 14m
0
05
1 2km'
En Cs .
iv UEW Gs...n NCRENEN7 ? USGS 11*4
S. FN\
U"
04/28/2025 10
• Current funding:
o Capital Projects Fund
• Tax Levy
• Intergovernmental Grants
• Interfund Transfers
• State -Aid Funding
o Maintenance Allotment— $235,481
o Construction Allotment - $706,444
o Total - $941,925
• Assessments
o Overlays - 50% assessed
o Reconstruction — Approximately 30% of project costs assessed
City of Monticello 04/28/2025 11
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Residential
Commercial
Large Commercial/Industrial
OverlayAssessment
$1.950
OverlayAssessment
$12.500
OverlayAssessment
$172,004
Full Depth Reclamation Assessment
$4.000
Full Depth Reclamation Assessment
$25.122
Full Depth Reclamation Assessment
$344.008
Typical Roadway Section
Typical Roadway Section
Typical Roadway Section
Year 20-overlay
$1.950
Year20-overlay
$12.500
Year 20-overlay
$172.004
Year 40-overlay
$1.950
Year40-overlay
$12.500
Year40-overlay
$172.004
year60-fulldepth reclamation
$4.000
year60- full depth reclamation
$25.122
Year60- Full Depth Reclamation
$344.008
peryearcost
$132
per year cost
$835
peryearcost
$11.467
per month cost
$11
per month cost
$70
per month cost
$956
Annual Estimated Franchise Fee Funding
Type # Units Per Month
Residential 5500 $11 $724.167
C ommerciat 430 $70 $359.208
Large Commercia[Andustrial 64 $956 $733,883
Total $1,817.257
City of Monticello
04/28/2025 12
• Dedicated funding source would allow for better
planning through development of a multi -year roadway
project schedule.
• Funding could be leveraged as matching funds for future
grant applications for roadway improvements.
• Franchise fee would replace assessments for pavement
management projects.
• It is
proposed
that
assessments would continue to apply for
the
following
type
of projects:
o Rural to Urban section conversion projects where curb and gutter and
sidewalk/pathway is added for the first time.
o Utility service line improvements.
City of Monticello
04/28/2025 13
• Re-establish franchise agreement with CenterPoint Energy.
• Update the assessment policy, if franchise fees are imposed.
• Develop a communications plan.
• Adopt franchise fees in 2025 for payments in 2026.
o Forego levying assessments on any 2025 projects.
City of Monticello
01/27/2025 14
Questions?