Baldwin City council debates raising gas franchise fee; discussion tabled for more analysis

Council heard a detailed staff briefing and engaged in an extended debate about ordinance 15‑31, a proposed change to the city's gas franchise fee. Scott (Budget & Finance) explained that a 3% change to the gas franchise fee is roughly equivalent to one mill of property tax revenue in the city's budget and that franchise fees are passed through to customers rather than absorbed by utilities.

"Franchise fee grants the right to operate and use public rights away," Scott said during his presentation, adding that the city currently budgets about $60,000 for a 3% franchise fee and that the state statute maximum is 6%. The city attorney cautioned that House Bill 2745 and related state activity could alter tax and petition procedures and affect bond ratings, describing some elements of the legislation as consequential for small cities.

Council members debated equity (whether the fee would disproportionately affect residents with gas furnaces), alternatives (raising sales tax or shifting percentages among utilities the city controls), contract timing (a common 20‑year franchise with five‑year renegotiation windows) and procedural deadlines. Several members proposed a compromise approach — increase a utility fee now while lowering another so the net effect on residents is neutral — but others urged caution given recent rate increases and household cost concerns.

After questions about statutory limits and the 60‑day notice window for contract changes, the council voted to table the ordinance and asked staff to return with clear options and financial projections prior to the first April meeting, the practical deadline for contract decisions.