Council holds further discussions on setting franchise fees
The Red Oak City Council will take an additional step towards setting franchise fees with MidAmerican Energy at its March 20 meeting.
At the meeting March 6, the council had on the agenda to approve the adoption of a revenue purpose statement for the use of revenues from the fees. However, the council noted a mistake in the verbiage on the percentage of the franchise fee monies that would be distributed in a like manner to the local option sales tax revenues.
Councilperson Pete Wemhoff then asked the council whether or not they were moving too fast on proceeding with the establishment of the franchise fees.
“I feel rushed through all of this, and as I was thinking about it, while Al Vacanti is doing a great job, is this something we want to involve the new city administrator in through all of the process,” Wemhoff said. “I feel disjointed, and I feel the new city administrator needs to be involved in this too, I believe they have that right. I also would like to have some more time to educate folks.”
Councilperson Jeanice Lester clarified that the city only had to approve an agreement with MidAmerican Energy for gas and electrical services, and confirmed that all that was required was the agreement, and the franchise fees could wait.
Council person Brian Bills said he felt that the council had been discussing the potential franchise fees for quite some time. Wemhoff said he still didn’t feel the council had all of the information that they needed to share with the citizens.
Wemhoff also expressed concerns over what would happen to the LOST funds at the state level, and the effect they would have on the city, and felt there was time to think it over.
“We can still do the franchise fees later, there’s not a gun to our heads that says we have to make a decision on this today,” Wemhoff commented.
Lester said that in the steps moving forward, she felt the public hearings were the first and most important issue.
Red Oak Mayor Shawnna Silvius said approval of the revenue purpose statement was the necessary springboard into public hearings.
Council person Tim Fridolph said approval of the revenue purpose statement did not lock the city into a particular franchise free percentage, nor a time frame, and would be more beneficial to the city.
“Even if we do a 1% franchise fee, we’re going to keep more than we’re getting from the 1% LOST funding that’s on the bills anyway,” commented Fridolph.
Silvius stressed that the passage of the revenue purpose statement was instrumental in establishing public hearings on the franchise fee, and the revenue purpose statement did not have to identify the franchise fee percentage in the revenue purpose statement, it simply demonstrated what the funds were going to be used for. Fridolph agreed.
“This revenue purpose statement just gets us to the next point of larger conversations as a whole. We’re not committing to anything in this purpose statement,” Fridolph advised.
Bills added the franchise fee was not locked in place and could be updated at any time they wished.
Wemhoff still felt that the new city administrator should be involved more deeply in the process.
Lester was in favor of approving the revenue purpose statement and the agreement with MidAmerican Energy for gas and electrical services at the same time, and then hold public hearings and take a step back and see where the city was in the hiring of a new city administrator.
The council tabled action on the approval of adopting the revenue purpose statement, with plans to approve the statement with corrections to the verbiage and the Midamerican agreement at the next regular council meeting March. 20.