Franchise Fee Update Spring 2023

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Consultation has concluded

Background

In 2016, the Bloomington City Council implemented the use of Franchise Fees to preserve and expand its Pavement Management Program (PMP). City Council is committed to maintaining a sustainable and consistent funding source for PMP Street Overlays, Seal Coating, Park Trail and Right of Way (ROW) Trail Construction and Maintenance, which are the components of the PMP Program that franchise fees currently fund.

What is a Franchise Fee?

Minnesota State Statutes allow for the city to impose a fee on a utility company for its use of publicly owned right-of-way. These funds are collected from all commercial and industrial businesses, tax exempt properties and residents in Bloomington and are used to fund the street and trail systems.

What have Franchise Fees been used for since implementation in 2016?

Refer to the maps below that show the street sealcoats, overlays and trail reconstruction that have been completed since 2016, utilizing franchise fee revenue to cost effectively keep the city’s infrastructure in good working condition as part of the PMP program.

Click Images to Enlarge


Current Status

When Bloomington City Council initiated the collection of these fees in early 2016 it was anticipated that an increase in fees would occur in 2020 to be implemented in January 1, 2021 and would be reviewed every two years starting in 2020. Due to the financial impact of COVID 19 a one-year delay was imposed. City Council approved a rate increase in July 2021. This rate increase was implemented on January 1, 2022, and was the first rate increase since the program began. City staff is currently reviewing the funding rates and project needs and will be bringing forward to City Council for approval.

The minimum increase at this time would be $1.35 per month for residential properties. The proposed increase would result in a monthly charge of $5.95 on residents’ electric bill and $5.95 on the gas bill..

 Next Steps

  • April 13, 2023, 5:00-6:00pm
    • Open House at Bloomington Civic Plaza, outside of the City Council Chambers
  • May 1, 2023, 6:30pm
    • City Council to hold Public Hearing
  • May–July 2023
    • 90-day period for utilities and Public Utilities Commission to process the request and prepare for collection of fees
  • January 1, 2024
    • New franchise fee rates go into effect

Background

In 2016, the Bloomington City Council implemented the use of Franchise Fees to preserve and expand its Pavement Management Program (PMP). City Council is committed to maintaining a sustainable and consistent funding source for PMP Street Overlays, Seal Coating, Park Trail and Right of Way (ROW) Trail Construction and Maintenance, which are the components of the PMP Program that franchise fees currently fund.

What is a Franchise Fee?

Minnesota State Statutes allow for the city to impose a fee on a utility company for its use of publicly owned right-of-way. These funds are collected from all commercial and industrial businesses, tax exempt properties and residents in Bloomington and are used to fund the street and trail systems.

What have Franchise Fees been used for since implementation in 2016?

Refer to the maps below that show the street sealcoats, overlays and trail reconstruction that have been completed since 2016, utilizing franchise fee revenue to cost effectively keep the city’s infrastructure in good working condition as part of the PMP program.

Click Images to Enlarge


Current Status

When Bloomington City Council initiated the collection of these fees in early 2016 it was anticipated that an increase in fees would occur in 2020 to be implemented in January 1, 2021 and would be reviewed every two years starting in 2020. Due to the financial impact of COVID 19 a one-year delay was imposed. City Council approved a rate increase in July 2021. This rate increase was implemented on January 1, 2022, and was the first rate increase since the program began. City staff is currently reviewing the funding rates and project needs and will be bringing forward to City Council for approval.

The minimum increase at this time would be $1.35 per month for residential properties. The proposed increase would result in a monthly charge of $5.95 on residents’ electric bill and $5.95 on the gas bill..

 Next Steps

  • April 13, 2023, 5:00-6:00pm
    • Open House at Bloomington Civic Plaza, outside of the City Council Chambers
  • May 1, 2023, 6:30pm
    • City Council to hold Public Hearing
  • May–July 2023
    • 90-day period for utilities and Public Utilities Commission to process the request and prepare for collection of fees
  • January 1, 2024
    • New franchise fee rates go into effect
Consultation has concluded

Ask a question to City staff or check out the FAQ section of this project.