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Grimes council advances 3% utility franchise fee on first reading after public debate
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Summary
On first consideration the Grimes City Council voted to advance an ordinance imposing a 3% franchise fee on electricity and natural‑gas sales to fund public safety positions; Councilmember Johansen cast the lone 'no' vote. Residents questioned impacts on nonprofits, solar customers and businesses.
The Grimes City Council on April 28 advanced Ordinance 8-12 on first consideration, authorizing a 3% franchise fee on gross revenues from electric and natural-gas service inside city limits to fund public-safety positions. Council voted to move the ordinance forward after a lengthy public hearing and council discussion; Councilmember Johansen voted no.
City staff said the fee was projected to generate about $700,000 annually (staff estimated roughly $717,000) and would exempt public schools, an exemption staff estimated would be worth about $17,000–$18,000 a year. “This ordinance … will generate about $700,000,” city staff said during the meeting, and staff said the revenues were intended to be dedicated to funding police and fire positions identified in the FY 2026–27 budget.
Two residents spoke during the public hearing. Dave Liska said he supported local fire and sheriff services. Retiree Leroy Edge urged caution and asked whether the fee was a bridge to a higher rate: “Is this just a way to get your foot in the door on this?” Edge asked, noting concerns that older, less efficient homes or businesses could pay more and that solar customers with little or no utility bills could be unaffected.
Councilmembers debated the fee’s fairness and necessity against legal limits on levy growth. City staff explained that state limitations on how quickly the property-tax levy can grow mean the city cannot rely solely on property‑tax increases to fund personnel. Staff compared the direct household impact, saying the average household would pay about $30 per year under the proposed fee versus roughly $100 per year if council raised property taxes to generate the same revenue. “If we were applying a property tax rate to generate $700,000 it would cost the average homeowner about $100 a year as opposed to the $30 a year cost” under the fee, staff said.
Councilmembers differed over whether to ask for the full 5% allowed by statute or adopt a more cautious 3% now. Several members said 3% was seen as a middle ground that could cover immediate public-safety needs without taking more than necessary. Councilmember Johansen said he would vote against the measure on principle, questioning long-term affordability and whether the city should smooth hiring rather than immediately adding staff.
The ordinance passed first consideration; council will take second and third considerations at future meetings before final adoption.
