Only one member of the public spoke during the public hearing regarding franchise fees on two local utility companies. There were no submitted written statements on the issue.
Dorothy Cackley has spoken out against both the franchise fees and the fire service fees that the city has been working towards putting in place as sources of revenue for the general fund.
Cackley said she questioned some of the listed uses of the funds from the franchise fees, asking if they fit in with uses listed in the state code. City Administrator Cole O’Donnell said the funds from the franchise fee go into the general fund. A person could say money collected is going to something specific, but it’s all in the general fund that pays for a multitude of city expenses.
She also said with it appearing Keokuk’s population is heading below 10,000 people, the mayor has said that may open up new grant opportunities for the city. That may be a source of revenue.
There also was a concern about how the franchise fee would raise the bills of the major employers in town that use large amounts of gas and electricity. O’Donnell said he has been speaking with the major users in town about the proposed fee.
Some of those businesses are not paying the 1% sales tax on the large amount of energy being used as there are some tax exemptions available to these businesses. The franchise fees, however, are not a “tax” so they would see those fees on their bills, should the utility companies pass the fees on to the customers.
Council Member Linda Marsden said the council is balancing looking out for their constituents and looking out for the city departments. They don’t want to make cuts to departments. The city has held off on the franchise fees for a long time and decided to go for a 2% franchise fee as opposed to the maximum 5% to make it less of a burden on the city’s residents.
“We have to get money in here somehow,” she said.
Council Member Roslyn Garcia said one thing to consider is that right now the 1% sales tax gets spread across the county, where the franchise fee will stay in Keokuk.
Council Member Mike O’Connor said again that he understands the reason for the franchise fee, but he still doesn’t know how and where the city overspent to get into the situation it is in. He said they should look at what was spent and why and create a more balanced approach to revenue and expenditures.
After the public hearing, the council voted on the first reading of the franchise fee ordinance. It was passed. There will likely be two more readings, but the council would have the option to waive the third reading if it so chooses.
