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Council sets April 6 hearing to expand allowable uses of franchise fees and reviews budget priorities
Summary
Staff recommended amending the city's revenue purpose statement to allow the full set of state‑authorized uses for electric and gas franchise fees (including item 'g'); the council set an April 6 public hearing and discussed budget pressures, debt capacity (~$21M limit), a possible $1.2M 10th Avenue project, Highway 1 DOT timing, and funding trade‑offs such as borrowing versus using franchise fees.
City staff presented a proposal to amend the revenue purpose statement for electric and natural gas franchise fees so the city can use the full list of state‑authorized purposes (items a–g in the draft resolution). Staff explained that when the franchise fees were originally considered nine years ago the council left one item ("g") off as a precaution, but the current conversation centers on whether the city should adopt the full range of allowable uses to relieve pressure on the general fund.
"The general fund is the most difficult fund that I have to deal with every year," a staff member said, explaining that shifting eligible equipment and staffing costs to franchise‑fee eligible uses could preserve the general fund. The staff member asked the council to set a public hearing on April 6 so the community could comment on the proposed resolution.
Council set the public hearing date for April 6. Members asked practical questions about how franchise fees have been used historically, whether the change would permit staff to move equipment and staffing costs out of the general fund, and how that choice interacts with planned capital projects.
In the same discussion thread, staff provided an overview of capital projects and borrowing: the city estimated property‑tax revenue at roughly $1.28M for the current year and projected about $1.45M for the next fiscal year; staff outlined a possible $1.2M 10th Avenue water and sewer project, DOT's Highway 1 letting this calendar year for a '27 construction season, and the city's debt capacity (noted in discussion as about $21M). Staff cautioned that borrowing for major projects may trigger tax increases in future years to cover debt service unless other funding sources are used.
