Charles City considers utility franchise fee

By Travis Fischer, tkfischer@charlescitypress.com

The Charles City Council discussed implementing a new franchise fee during a workshop meeting on Wednesday, Aug. 30.

Franchise agreements are made with utility companies, allowing them long-term access to city rights-of-way to work on services without requiring additional permitting each time work is done. The city is currently nearing the end of a 15-year franchise agreement with MidAmerican Energy for both gas and electric utilities.

With the upcoming renewal, the city has the option of implementing a franchise fee to MidAmerican Energy, which can be anywhere from 1% to 5% of the utility’s fees. This expense is paid by the utility company, but often passed directly to the consumer.

The city currently has a franchise fee agreement with MediaCom, collecting 5% of the revenue from cable television service.

Implementing a franchise fee on gas and electricity would serve as an additional revenue stream for the city, which has faced challenging budget shortfalls due to two years of declining property tax revenues.

With the council currently in the midst of developing a five-year Capital Improvement Plan, the decision of whether or not to implement a franchise fee will determine the city’s ability to move forward on a range of projects.

“I don’t know how else to fund some of these things that we want to do,” said council member DeLaine Freeseman. “I want to make sure we are giving all the taxpayers in our town, or anybody in town, the best city that we can.”

At the same time, the council was also cognizant about the impact that even a small increase in utility expenses can have on a household and emphasized the importance on making sure that projects initiated by the city are done thoughtfully to ensure residents receive the most out of their dollar.

No consensus was made about whether or not to instill a franchise fee or how much it would be and the council will look at the issue again this month.

Also concerning MidAmerican Energy, the council heard from Water & Street Superintendent Cory Spieker and Nick Kent of ROI Energy, who discussed moving forward with an LED light replacement program.

The city has long considered replacing street lights along Main Street with more energy efficient LEDs. With the price of LEDs dropping and MidAmerican Energy offering rebates for replacements, the city has gotten a quote from ROI for a citywide replacement.

The total cost of the project would be $62,193, brought down to $39,760 after applying incentive rebates. With a projected savings of $9,808 per year, the replacements would effectively pay for themselves in just over four years.

“It seems to be pretty cut and dry,” said City Administrator Steve Diers.

After discussing street lights, Spieker also spoke with the council about the Shaw Avenue Compost Site, which is struggling to keep up with an influx of illegal dumping from people outside the city and county.

“It’s getting to the point where we can’t stack it any higher,” said Spieker.

Spieker is recommending the city install gating at the south end of the site to better control access, restricting entry by requiring contractors or citizens to contact the city for access.

On the subject of trees, the council reviewed the preliminary plans for phase two of the city’s own tree removal project, which will target another 200 ash trees for removal by next July.

Bid letting for the project will take place on Sept. 28, with a public hearing scheduled for the following meeting on Oct. 2.

In other business, the council heard from Foster Grandparent Program Director Jennifer Lantz, who presented a review of the updated policy handbook for the program.

“Everything is pretty much the same,” said Lantz.

The new handbook adds sections about Foster Grandparent of the Year and other awards and recognitions, but is otherwise largely based on policies written by the national AmeriCorps Seniors organization.