Council debates franchise fee increase to fund pavement, sidewalks, retaining walls and a loan program for home energy upgrades

City staff on March 17 presented a multi-part proposal to increase Bloomington’s electric and natural‑gas franchise fees to support the city’s pavement management program (PMP), sidewalk and ADA improvements, retaining‑wall repairs and a new sustainability fund aimed at home energy upgrades such as attic and wall insulation.

Public Works and sustainability staff walked the council through program needs, past pavement and trail work funded by franchise fees (since 2016 the city has performed more than 202 miles of seal coats and 75 miles of overlays), and an inventory of sidewalks and pedestrian ramps. Public Works manager Bob Simons said the city’s pavement condition remains strong overall but noted growing retaining‑wall replacement needs on corridors such as Normandale Boulevard and West Bush Lake Road.

Sustainability staff (Emma Strauss) said city data shows more than half of one‑to‑four‑unit homes lack adequate insulation. Strauss offered modeling that to insulate the city’s housing stock on a 25‑year timeline would require roughly $2.6 million a year for attic insulation work (about 440 homes per year) and roughly $1 million a year for wall insulation; staff proposed loan or bonus‑rebate models to lower upfront costs for residents and enable a revolving program.

Staff modeled three fee scenarios: (1) no additional sustainability funding and a modest package of PMP/sidewalk/retaining‑wall funding (maintain present services) (2) add a $0.50M sustainability allocation, increasing fee from $5.95 to $6.53 per utility (≈ $13.06 per month across two utilities), or (3) add $1.0M for sustainability, increasing fee to $6.88 per utility (≈ $13.76 per month across two utilities). Staff said the $1.0M scenario would require a 93¢ per‑utility increase versus the current $5.95 level and would be phased to moderate later year increases.

Council members pressed staff on program design, target populations and alternatives. Council member Nelson and others asked whether the sustainability fund would be a loan (staff preference) or rebate; staff recommended a loan to allow funds to be recycled. Council member Lohmann asked how the retaining wall dollars would interact with the general fund; staff said the franchise fee addition would be an extra resource, not a full transfer of responsibility. Several council members urged staff to coordinate with utilities and consider other funding pathways; some asked staff to review whether existing home‑loan programs could be retooled to support insulation instead of creating duplicate programs.

Council member Rivas voiced broader philosophical opposition to using citywide fees to subsidize private‑home improvements. Multiple council members asked staff to conduct broader community engagement; staff said they would open a "Let’s Talk Bloomington" page, hold a public open house and schedule a public hearing in May, with implementation (if approved) proposed for Jan. 1 of the following year. No ordinance vote was taken at the March 17 meeting.