Oskaloosa Franchise Fee Runs Out Of Gas

Oskaloosa City Council Member Jason Van Zetten

Oskaloosa, Iowa – The current Oskaloosa City Council has, until the past year, been accused of not debating the issues, and many times measures were passed on a 7-0 vote. Those days are long behind the Council now. Many compare the current fractured council to those of a decade ago. Back when one member of the council was accused of always being the “NO” vote, and the city ultimately failed to move forward.

The discussion of increasing the franchise fee for Oskaloosa rate payers, that use MidAmerican Energy, once again took center stage at Monday’s city council meeting.

The evening’s contention started in regards to the revenue purpose statement. That statement outlines how the money collected from the franchise fee is to be used. Council member Jason Van Zetten expressed concern that the revenue would be used to fund projects versus being saved and utilized to offset lost revenue from property tax reform.

“Where do you want that money to go,” Van Zetten asked of Mayor Pro tem Doug Yates. Yates said the purpose statement would allow for flexibility in the expenditure of those funds raised from the franchise fee.

“I think the smarter way to approach this is make our cuts and see what we need for money rather than saying, ‘Ok, let’s raise your taxes and let’s add additional things we can do with your money’ without being able to tell the public where their money is going in the first place,” said Van Zetten.

Yates said that it’s two separate discussions as to “Where you get your revenue and how you use it.”

Van Zetten believes that one of the driving factors in raising the franchise fee is to help partially fund the Mahaska County YMCA.

Council member Aaron Ver Steegh agreed with Van Zetten, saying that when the franchise fee was originally adopted, it was for streets and sewer system.

The measure passed the city council on a 5-2 vote, in favor of a purpose statement that included the following;

E – Public safety, including the equipping of fire, police, emergency services, sanitation, street, and civil defense departments.
F – The establishment, construction, reconstruction, repair, equipping, remodeling, and extension of public works, public utilities, and public transportation systems.
G – The construction, reconstruction, or repair of streets, highways, bridges, sidewalks, pedestrian underpasses and overpasses, street lighting fixtures, and public grounds, and the acquisition of real estate needed for such purposes.

Jimenez, Moore, Van Zetten, Ver Steeg, Walling and Yates all voted in favor of the amended revenue purpose statement with Caligiuri being the lone dissenting vote.

The discussion then turned towards the actual franchise fee itself.

Andrew Jensen, Executive Director of the Mahaska Community Development Group spoke about how his board is concerned that certain businesses will be impacted greater than others, creating a disproportionate situation by the proposed increase. This was a change from the first time the franchise fee had been proposed. “I would say there is no longer widespread support,” said Jensen, in regards to a letter he presented on behalf of his board in earlier support of the franchise fee increase.

Mark Willett, the Assistant General Manger at Clow Valve Company expressed his company’s concern that a large portion of the proposed revenue would be incurred by Clow.

The City of Oskaloosa hoped the increase would generate $290,000 yearly in revenue. Willett said that Clow could bear an extra cost of $70,000, or 25%, yearly from the proposed increase.

“From the equality perspective, we’re obviously requesting we reevaluate that, to look at something that is a little more equally spread across businesses as a whole,” said Willett.

Clow has already been negatively impacted by increases in fees from MidAmerican Energy that could reach up to $500,000 a year for the Oskaloosa manufacturing faculty. “Couple that with this increase and the support from Clow Valve is waning quickly and is completely gone now.” Added Willett.

“We understand there are needs for the City,” said Willett, “We support those needs, but we just request that you take a step back, reevaluate what our options are, and look at something that can be equally divided.”

The measure to raise the franchise fee failed by a vote of 5-2 with Caligiuri, Jimenez, Van Zetten, Ver Steeg and Walling voting against the 2% increase. Moore and Yates voted in favor of the increase.