Des Moines to seek renegotiation of water/sewer franchise agreements; council authorizes notice to providers
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Summary
The council directed staff to notify three utility providers that the city wishes to renegotiate expiring franchise agreements, opening the possibility of revised franchise payments or, if necessary later, a utility tax; motion passed 6-1.
The Des Moines City Council authorized staff to notify eligible utility providers that the city intends to renegotiate existing water and sewer franchise agreements that are scheduled to extend automatically in mid-2026 unless the city triggers renegotiations. The motion passed 6-1.
Surface Water and Environmental Engineering Manager Tyler Beakley and City Attorney Tim George explained the legal and policy context. The city currently has five water and sewer franchise agreements governing use of public rights-of-way; the agreements include negotiated franchise payments and, in those agreements, the utilities waived the city's right to impose a municipal utility tax. Several contracts currently set a 6% franchise payment that was negotiated in 2016.
Tim George told the council that renegotiating expiring agreements would give the city an opportunity to evaluate what is working in the agreements, address new technologies and permit-fee calculations, improve uniformity between agreements, and reopen the city’s option to impose a utility tax if needed. He noted that any new franchise agreement would require agreement by the utility board and the city council; continued silence would cause an automatic extension to 2031.
Council authorized staff to notify the three eligible utility districts and asked that a council ad-hoc franchise committee be reconstituted to provide oversight during negotiations; the council agreed the ad-hoc committee details would be formed by the incoming council in January. The motion to notify providers passed 6-1; Councilmember Grace Matsui opposed, citing the regressive nature of utility taxes.
Ending: Staff will notify the named utility providers and return with a recommended formation approach for an ad hoc franchise committee; any negotiated changes will require council approval and, if no agreement is reached, the council retains the option to pursue a municipal utility tax in the future.
