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Waukee council adopts 2% utility franchise fee to replace 1% sales tax tied to MidAmerican transaction
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Summary
The Waukee City Council approved a third-reading ordinance imposing a 2% franchise fee on electric and natural gas revenues tied to the MidAmerican sale, a change staff says will generate about $900,000 and replace the existing 1% sales tax on utility bills.
Waukee — The City Council voted to adopt a 2% franchise fee on electric and natural gas revenues derived by MidAmerican Energy Company within city limits, a measure staff said will replace a 1% sales tax applied to utility bills and is expected to generate roughly $900,000 for city services.
Brad (staff) told the council that "staff is recommending consideration of a 2% franchise fee on electric and gas utilities," explaining the fee would replace the existing 1% sales tax so the city would receive the full 2% rather than an estimated 19 cents of each sales-tax dollar distributed under the county formula. "It's estimated that this would generate a revenue of approximately $900,000," he said.
The ordinance was read for final passage and approved by roll call. Council members voting yes were Council member Pierce, Council member Kron, Council member Grove, Council member Anderson and Council member Lyon.
Why it matters: Staff said the franchise fee proceeds are intended to offset lost revenue previously generated by the municipal gas utility and to support general city departments such as administration, finance and information technology. Brad presented examples showing net household effects can vary: using staff estimates, some households could see a small net annual savings because projected lower utility rates from the transaction can offset the fee increase, but impacts depend on individual usage and rates.
What council asked for: Council members had the opportunity to ask questions during the third reading; staff reiterated that the fee replaces the sales-tax share the city currently receives and that the city cannot collect both the sales tax and a franchise fee on the same utility receipts. No amendments or conditions were added at the final reading.
Next steps: The ordinance was approved on final passage at the meeting and will be implemented consistent with the MidAmerican transaction and applicable state law; staff did not provide an effective-date timeline at the meeting.
