Minnesota Franchise Fees
Franchise fees are a straightforward method for cities to generate revenue for infrastructure projects. These fees are imposed on utility and cable providers operating in the public right-of-way. The process involves analyzing the revenue impact on local properties and passing two ordinances: a franchise fee agreement and a fee ordinance. A 90-day filing period with the Minnesota Public Utilities Commission is required.
Benefits of Franchise Fees:
- Fund municipal improvement projects without relying on state funding, city bonding, or assessments.
- Provide a continuous revenue source for infrastructure projects.
- Collect funding from all property owners, including tax-exempt organizations.
Implementation and Success: Over 100 cities in Minnesota have successfully implemented franchise fees, tailoring Statute 216B.36 to meet their unique needs. Typically, this involves enacting ordinances related to the franchise fee, though some municipalities have specific agreements with gas and electric companies. This approach ensures that cities can maintain and improve their infrastructure without placing a heavy financial burden on residents.
Fee Structure: A typical residential customer pays less than $100 per year for both electric and gas charges. The monthly charges are as follows:
- Residential: $3 (electric), $4 (gas)
- Small Commercial: $9 (electric), $12 (gas)
- Large Commercial: $18 (electric), $24 (gas)
Additional Services by Bolton & Menk: Bolton & Menk offers a range of services including water and wastewater engineering, civil/municipal planning, bridge and structural services, transportation planning, environmental planning, aviation services, construction services, urban planning, water resources engineering, GIS, land surveying, engagement services, project funding support, UAV services, and landscape architecture. These services are designed to support municipalities in their efforts to develop and maintain essential infrastructure, ensuring sustainable growth and community well-being for all residents.
For more information, contact Ryan Goodman, PE, Principal Engineer at Bolton & Menk.
To learn more about our other project funding support services, learn more by clicking here.
