Council holds further franchise fee discussions

The Red Oak City Council once again discussed the possibility of implementing franchise fees in the community.
During a special meeting held July 10, Red Oak Mayor Shawnna Silvius shared with the council that another southwest community implemented new franchise fees.
“The City of Atlantic has recently implemented a 4% franchise fee to help offset the costs of wage increases for officers in their police department,” Silvius said.
Additionally, while the city was looking at implementing franchise fees to MidAmerican Energy customers, Alliant Energy provided gas services to Villisca and other communities, so franchise fee ordinances that were passed at 0% would not include those residences.
 • A 1% franchise fee would generate a total of $82,651 from gas and electric usage.
• A 2% franchise fee would generate a total of $165,302 from gas and electric usage.
• A 3% franchise fee would generate a total of $247,953 from gas and electric usage,
• With a 4% franchise fee the total was $330,604 from gas and electric usage.
• Finally, a 5% franchise fee for gas and electrical usage would bring in $413,255.
The Red Oak School District would pay $3,113 with a 1% franchise fee; $6,226 with a 2% fee; $9,339 with a 3% fee; $12,452 for 4%; and $15,571 with a 5% fee.
Councilperson Jeanice Lester sought the opinion of Red Oak city administrator Kyra Smith her thoughts on franchise fees, as discussion originally took place under interim city administrator Al Vacanti. Smith thought the fees were necessary.
“I think it’s something we have to look at to bring revenue into the city, especially with the budget we have right now,” Smith stated.
Lester then discussed the fact that the city was currently operating on a budget at a deficit.
“We can be deficit this year, but what are we going to do next year with all the things we’re doing? How are we going to fix it? I’m not saying this is the answer by any means, but we can’t continue with a deficit budget,” commented Lester. “We have to look at different sources of revenue for the city. I just worry that we have great ideas, but we have to live within our means at some point.”
At the time of the meeting, Silvius said they did not have the closing budget for 2022-23. Silvus said the Eastern Avenue project was budgeted for both years, and American Rescue Plan act funding was not spent last year. As far as wages went, the city came under what was originally budgeted for 2023.
Councilperson Pete Wemhoff said it had been a long enough time since the prior discussions he wanted to review the numbers again.
“I just want to see things broken out in some kind of chart where we can see where we’re at, and a summary of the budget,” Wemhoff stated.
No further discussion took place on franchise fees.
The council also discussed establishing a base wage adjustment schedule as part of the work session.
The council discussed the options of some of the salaries being standard percentage raises, and the rest being based on merit. Another issue raised was updating the city’s job descriptions, which Smith said she was working on.
“We’re redoing the employee policy manual and adding information in there as well about the job expectations, grievances, and disciplinary actions. I plan to have the revisions done by the end of August,” Smith said.
Employee evaluations were discussed as being completed by the end of October. The council was also presented a list of adjusted base salaries for review and further discussion.
In other business, the council:
• Approved a mutual termination of agreement contract with Nishna Productions for 1210 N. 4th St.
• Approved the second reading of an ordinance amendment regarding sewer service charges, and approved waiving the third reading.
• Approved the second reading of an ordinance amendment regarding water service charges, and approved waiving the third reading.
• Approved the renewal of a cigarette/tobacco/nicotine/vapor permit for Red Oak Family Dollar at 1205 N. Broadway St.
• Approved a special five-day Class C retail alcohol license, expiring July 23, for the Montgomery County Fair at 1809 N. 4th St.