Waukee council approves second reading of 2% utility franchise fee after public comment
Loading...
Summary
After extended public comment, the Waukee City Council approved the second reading of an ordinance to impose a 2% franchise fee on electricity and natural gas to be collected locally, replacing a 1% local-option sales tax on utilities; staff said the fee will generate roughly $900,000 annually and keep one-time utility-sale proceeds for infrastructure.
Mayor Clark and city staff opened the meeting to a sustained public comment period on a proposed franchise fee after the city sold its gas utility. Residents raised concerns about timing, transparency and whether proceeds from the utility sale should cover ongoing shortfalls.
City Administrator Brad (staff) presented the staff analysis and examples, saying staff recommended a 2% franchise fee on electric and gas utilities and that the fee would replace the existing 1% local-option sales tax on utilities. "Staff is recommending consideration of 2% franchise fee on electric and gas utilities," he said, and presented sample household calculations showing a net average annual impact of roughly $16 per household once the lower MidAmerican rates are factored in. Brad said the fee is estimated to generate "somewhere around that 900,000 mark in terms of the revenue for the city." He also said the $20,000,000 from the gas-utility sale had not been spent and was being reserved for infrastructure investments.
Resident Gabe Lambs pressed staff about the scale and duration of the budget shortfall, saying he understood there to be "about 1000000 dollar budget shortfall." Brad and other staff replied the shortfall is annual, that sale proceeds are being held for capital (roads, water, sewer and related infrastructure) and that using one-time proceeds to cover recurring expenses would be unsustainable.
Other residents urged changes to the proposal. Greg Jameson asked the council not to apply the fee to electric customers, saying many rental units are electric-only and would not benefit from gas-rate savings. Jess Steele characterized the timing as a "bait and switch" and asked whether the burden could be shared more broadly. Staff responded that the city cannot simultaneously collect the local-option sales tax on utilities and a franchise fee under Iowa law and noted the net effect would be roughly a 1% increase over current utility bills because the franchise fee replaces the 1% sales tax.
The ordinance (second reading) cites Iowa Code for franchise authority. Council approved the motion to adopt the second reading of the franchise-fee ordinance by roll call, 4–1; Council member Kron voted No. The vote advances the proposal to its third reading where final passage will be considered.
The staff presentation and residents’ comments made clear the principal trade-offs: the city will gain an ongoing local revenue stream (estimated at roughly $900,000 annually) to cover support department costs previously allocated to the municipal gas utility, while typical residential bills are projected to remain lower than the prior municipal rates after MidAmerican’s lower rates are applied, with the franchise fee reducing some of that saving. Brad said proceeds would be dedicated to public safety, infrastructure repairs and replacements, economic development and energy-assistance programs for low-income residents.
Next steps: the council must complete the ordinance’s third reading for final adoption. Staff invited attendees to stay after the meeting for one-on-one follow-up and to submit written comments for council consideration.
