Oskaloosa City Council Votes Down Franchise Fee Increase
The Oskaloosa City Council 9-15-2014
Oskaloosa, Iowa – In a reversal of the previous two Oskaloosa City Council meetings, the proposed 2% increase to the franchise fee was defeated by a 4-3 vote.
Council member Scotty Moore wanted to know how the rate increases by MidAmerican Energy would impact the current franchise fee at the average 10.4% increase that will be taking place over the next few years. It’s uncertain what the increased revenue to the city will be because of the cost of electricity increasing.
The change in the council was lead by Tom Walling. “The City of Oskaloosa, I think, does an excellent job with the money they are given, and they do not waste it, but we just need to look a little harder. There’s time, it’s not a lot of time, but there is time, that if in two more years we needed to do the franchise increase, depending again on the projects, we can do that.”
That two year time-frame that Walling is referencing is the property-tax reform recently passed by the state legislature. The city could be facing a potential loss of 3 million dollars in property tax revenue from 2017 to 2024.
As it is currently, the 3% franchise fee collected now is used for road construction and other infrastructure. During the conversation, Walling said he wanted to make sure that the franchise fee money was used for necessary projects.
The conversation about increasing the franchise fee came on the heals of requests by Forest Cemetery, Stephen Memorial Animal Shelter and, most recently, the Mahaska County YMCA. Forest has requested $100,000 for two years to help it during its rebuilding process, while the animal shelter is looking for $150,000 over six years to build a new animal shelter. The YMCA made a request for $200,000 over three years to help it right the ship.
Van Zetten has opposed the increase to the franchise fee from the initial conversations and said that the city first needs to look at cuts it can make before increasing any fee. He said that only about 8% of cities in Iowa even utilize the franchise fee.
Oskaloosa City Manager Michael Schrock said that the City of Oskaloosa is not having financial troubles, but the increase would have allowed the city to have greater flexibility with the obligations the council had discussed previously, such as the animal shelter, YMCA and Forest Cemetery.
The city council can take up the issue of an increase in the fee at any time. Once enacted and in place, the agreement can then only be revisited once every two years.
