Roseville adopts 20-year gas and electric franchise ordinances; council defers decision on franchise fees to Dec. 8

The Roseville City Council on Nov. 24 adopted new 20-year franchise ordinances to permit a utility (identified in staff materials as Xcel/"Excel" in the packet) to construct, operate, repair and maintain gas and electric facilities in city right-of-way, and authorized publication of ordinance summaries. The vote to adopt the ordinances and to approve the summary publications passed with the supermajority required.

City Manager Pat Trojgen walked councilors through the ordinances and a linked policy decision: whether to impose municipal franchise fees. Trojgen said a sample fee structure (staff proposal) would charge residential customers $3 per month for electric and $3 per month for gas and various commercial/industrial tiers; staff estimated the structure would raise roughly $2.4 million annually. He noted that, if the council adopts franchise fees, permit fees paid previously by the utility would typically be waived (about $50,000 annually), and staff proposed reimbursing the engineering services fund with franchise revenues to cover that lost permit revenue.

Staff presented three budget scenarios: (1) no franchise fees (status quo), which would imply an 11.54% levy increase; (2) adopt franchise fees and reallocate some levy support into operations and capital funds, which staff modeled as reducing the levy impact (7.59% in staff scenarios) and funding right-of-way capital needs; (3) adopt franchise fees but repurpose more levy into operations (a different mix) with different levy/fee tradeoffs. Councilors debated timing: some favored adopting the ordinances now and deferring fee adoption until the upcoming budget hearings (Dec. 1 and Dec. 8) to allow public input; others advocated for deciding sooner to provide staff with clarity.

Council ultimately voted to adopt the franchise ordinances and to authorize publication of ordinance summaries tonight while deferring any decision on franchise-fee rates to the Dec. 8 meeting, allowing public hearings and additional budget deliberation.

Next steps: Staff will publish summaries and prepare fee-resolution options for council consideration during the budget/levy hearings in early December and provide more detailed revenue/reallocation figures as requested by councilors.