Franchise Fee

Updated 6/22/20

The City wishes to make an amendment to the long-term street repair funding solution, franchise fee, which is used exclusively to fund annual street repair projects. A franchise fee was implemented in January 2018 on our gas and utility companies as a long-term funding solution to cover annual costs related to city street maintenance and improvements.The fee is used exclusively to fund annual street repair projects and to invest in our street infrastructure. 

Over the past year, City Council has had significant discussions about our street repair program and the desire to do more. With our current funding levels, we’ve quickly found that we are unable to “catch up” with our street repair needs and meet the demands of our property owners. This led to a discussion about how to do more and it quickly became a financial discussion. The amendment to the franchise fee would double the amount collected and effectively double the amount of street repair completed each year.  

Franchise Fee Fact Sheet (PDF)
Letter to Resident (PDF)

  1. What is a Franchise Fee?
  2. Why Franchise Fees?
  3. Benefits of Franchise Fees
  4. Other Like Cities
Under Minnesota Statute (216B.36), cities can impose a fee on utility companies that use the public rights-of-way to deliver service. The city can determine the amount, structure, and use of franchise fees. Generally, they are structured in two ways: a flat rate per utility account OR a percentage of consumption used by each utility account.

City Street Program & Costs

Street repair repair needs and costs continue to rise. Vadnais Heights has 36 miles of streets with a majority of them constructed in the 1980’s and 1990’s. With expected street life of 30 years, the City should be repairing about 1.2 miles per year AT A MINIMUM.  Current repair rate is 75% of the ideal rate of repair, or a little less than 1 mile/year.  The proposed fee increase would double the street repair capacity.  

YearAssessed CostCity CostTotal Project CostLength Improved
3,100 feet = 0.59 miles
4,330 feet = 0.82 miles
5,117 feet = 0.97 miles
2019$277,000$491,000$768,0004,500 feet = 0.86 miles
2020$553,000$1,677,000$2,230,0001.70 miles

Fee Breakdown

*Reminder Connexus only provides electric to Vadnais Heights. Xcel provides both electric and gas within city limits. Please check the state's online map to confirm your service area.

Classification:  Electric
Current Monthly Fee
(Adopted 2018)
2021 Monthly Fee
(Proposed 2020)
Small Commercial & Industrial (C&I): Non-Demand
Small C&I: Demand
Large C&I
Annual Total Fee Collection
for Xcel Energy Electric
Annual total Fee Collection
for Connexus Energy
Classification:  Gas
Current Monthly Fee
(Adopted 2018)
2021 Monthly Fee
(Proposed 2020)
Commercial Firm: Non-Demand
Commercial Firm: Demand
Small Interruptible
Medium & Large Interruptible
Firm Transportation
Interruptible Transportation
Annual Total Fee Collection for Xcel Energy
Grand Total
Existing Collection
2021 Fee
Electric and Gas

Before Street Project

Before 2017 street project

After Street Project

After 2017 street project