Oskaloosa City Council Passes Second Reading Of Franchise Fee Increase

A recent Oskaloosa City Council meeting in which sidewalks and a proposed increase in franchise fees were discussed.

Oskaloosa, Iowa – This week the Oskaloosa City Council passed the second reading of a proposed 2% increase to the franchise fee. The franchise fee is based upon electric and gas usage by consumers in the City of Oskaloosa, and is added to the utility bill and collected by MidAmerican Energy on behalf of the city.

The updated revenue purpose statement will allow the use of funds collected with the franchise fee to cover items such as police and fire protection.

The city has been seeking additional revenue, it says, to help offset a projected loss in revenue due to property tax relief that was passed by the Iowa Legislature this past year.

Van Zetten again expressed his concern that cuts to the city budget haven’t been explored, and would like to see more of a plan in place before increasing the fee.

The projected increase passed this time on a 5-2 vote, with Van Zetten and Walling voting against the measure.

The last increase to the franchise fee came in the fall of 2011. Changes to the franchise fee agreement with the utility can take place once every two years, and if the measure passes its third reading on September 15, the increase will start appearing on the November bills of rate payers.

Also approved by the council was the second reading of the amended Oskaloosa Urban Renewal Area.

Iowa law allows municipalities to establish urban renewal areas to finance public improvements such as streets, sewers, sidewalks, and other infrastructure related to residential, commercial, or industrial development; to redevelop slum or blighted areas; to fund private economic development; and to finance construction of low and moderate income housing.

In Iowa, the primary source of funding for urban renewal projects is tax increment financing.

Tax increment financing is a method whereby a portion of the property taxes levied by all taxing authorities within a tax increment financing district (urban renewal area) are reallocated to the municipality that is undertaking the urban renewal project. Certain property tax levies are exempt from reallocation to the municipality.

The city must make its request to the county before December 1st of each year, and the incremental taxes are collected during the following fiscal year.

The second reading passed unanimously.

The Oskaloosa City Council will meet next on September 15th at 6pm in the city council chambers.