ORDINANCE NO. 175 Electric Utility Franc

ORDINANCE NO. 175 Electric Utility Franchise Fee AN ORDINANCE IMPLEMENTING AN ELECTRIC SERVICE FRANCHISE FEE ON OTTERTAIL POWER COMPANY, A MINNESOTA CORPORATION, ITS SUCCESSORS AND ASSIGNS, FOR PROVIDING ELECTRIC SERVICE WITHIN THE CITY OF AUDUBON. THE CITY COUNCIL OF THE CITY OF AUDUBON, MINNESOTA, ORDAINS: Section 1. Purpose. The Audubon City Council has determined that it is in the best interest of the City to impose a franchise fee on those public utility companies that provide electric services within the City of Audubon. Pursuant to City Ordinance No. 2003-02, a Franchise Agreement between the City of Audubon and Otter Tail Power Company, a Minnesota corporation, its successors and assigns (“Company”), the City has the right to impose a franchise fee on the Company. Section 2. Terms. A franchise fee is hereby imposed on the Company under its electric franchise in accordance with the amount and fee design set forth in the fee schedule attached as Exhibit A to this Ordinance commencing with the Company’s May 2022 billing month. Section 3. Payment and Fee Modification. The Franchise fee shall be payable monthly and shall be based on the amount collected by the Company during complete billing months during the period for which payment is to be made. The payment shall be due within the first fifteen calendar days at the start of each month, following the period for which the payment is made. Such fee shall not exceed any amount that the Company may legally charge to its customers prior to payment to the City by imposing a surcharge equivalent to such fee in its rates for electric service. The franchise fee may be increased or decreased by ordinance from time to time, however any such change may not occur more often than annually. No franchise fee shall be payable by the Company if the Company is unable to first collect an amount equal to the franchise fee from its customers in each applicable class of customers by imposing a surcharge in the Company’s applicable rates for electric service. The Company may pay the uncollectibles, refunds and correction of erroneous billings. Section 4. Surcharge. The City recognized that the Minnesota Public Utilities Commission may allow the Company to add a surcharge to customer rates of city residents to reimburse the Company for the cost of the fee. The company agrees that it is prohibited from adding an administrative fee of any kind on the franchise fee. Section 5. Record Support for Payment. Company agrees to make its records available for inspection by the City at reasonable times provided that the City and its designated representative agree in writing not to disclose any information which would indicate the amount paid by any identifiable customer or customers or any other information regarding identified customers that is non-public by law. Section 6. Enforcement. Any dispute, including enforcement of this ordinance, will be resolved in accordance with and applicable laws in the State of Minnesota. Section 7. Effective Date of Franchise Fee. Notwithstanding the effective date of this ordinance and notwithstanding any contrary provisions in the Electric Franchise Ordinance No. 2003-02, the effective date of the fee imposed and collected under Section 2 of this ordinance is at least one hundred twenty (120) days after written notice including such proposed ordinance has been served upon the Company. The fee shall become effective with bills rendered on and after May 16, 2022. Section 8. Fee Review If, at any time, the Council deems it to be in the City’s best interest to terminate or modify the fee, the Council shall give the Company at least one hundred twenty (120) days written notice prior to the proposed change. Adopted in regular session of the City Council of the City of Audubon, Minnesota held this 10 day of January, 2022. CITY OF AUDUBON __________________________ Tony Gordon, Mayor ATTEST: __________________________ Stephanie Poegel, City Clerk/Treasurer EXHIBIT A OTTER TAIL POWER FRANCHISE FEE SCHEDULE Class All Customer Classes Monthly Fee per Customer 2.00 percent of gross revenue Franchise fees are to be collected monthly by the Company in the amounts set forth in the above schedule, and remitted to the City on a monthly basis as follows: January collections due by February 15th February collections due by March 15th March collections due by April 15th April collections due by May 15th May collections due by June 15th June collections due by July 15th July collections due by August 15th August collections due by September 15th September collections due by October 15th October collections due by November 15th November collections due by December 15th December collections due by January 15th Passed by the City Council of Audubon, Minnesota this 10 day of January, 2022. _____________________ Tony Gordon, Mayor Attested: _____________________ Stephanie Pegel, City Clerk/Treasurer (Jan. 16, 2022) 23203