The city’s proposed franchise fee is receiving more resistance this week.
Creston businessmen have drafted a petition opposing the fee and Mike Tamerius — co-owner of Precision Optical in Creston — said they’ve already collected enough signatures to hold a special election if Creston City Council does, in fact, decide to impose the fee. (Read more about the fee, below)
A special election would give citizens the chance to vote for or against the franchise fee.
“This petition is the collective effort of several businesses and industries as well as residential property owners who don’t feel like their voice was being heard,” Tamerius said. “We hope we don’t have to present this petition to the council at all. We hope they look at other ways (to resolve budget issues) and let this die.”
Sandy Hysell, auditor in Union County, said 55 signatures were needed on this petition because only 548 people voted in the last city election (10 percent needed). Tamerius said more than 200 signatures have been collected so far.
But, a special election doesn’t come without a price tag. Hysell estimated a special election would cost petitioners $5,000. Tamerius said 10 supporters have already committed financially to pay $500 each.
Tamerius said — if the council does approve the franchise fee in February — he would present the petition to the Creston City Council at the following council meeting and then follow through with the requirements needed to hold a special election in the spring or summer this year.
“Realistically, the franchise fee will not pass a public vote,” Tamerius said.
Creston City Council will meet tonight for a 6 p.m. work session to discuss possible cuts to the 2015-16 budget.
The second and third reading for the franchise fee are expected to be Feb. 3 and Feb. 17, respectively, at the council chambers inside the restored Creston Depot. The franchise fee must pass three readings before being adopted.
The first reading passed 4-3 earlier this month with Nancy Loudon, Gary Lybarger, Marsha Wilson and Randy White voting in favor of the fee and Rich Madison, Ann Levine and Dave Koets voting against.
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Franchise fee background
This franchise fee would replace the 1-percent local-option sales tax (LOST) currently on your Alliant Energy bill.
This franchise fee was originally proposed by the city at 5 percent on your bill, but was amended by Creston City Council prior to the first reading Jan. 20. The amended version would impose a 2 percent franchise fee on your Alliant Energy bill in October 2015, then will increase to 3 percent in April 2016, 4 percent in 2018 and 5 percent by 2020.
The fee — if passed at two more readings — would increase all electric and natural gas bills inside city limits including residential, industrial and commercial property. The only exemptions under the fee will be city-owned properties.
At the full 5 percent, some businesses would pay an extra $100,000 in utility costs each year while residential users would be looking at anywhere from $50 to $300 extra annually.
Mike Taylor, city administrator, has said the franchise fee is needed during this difficult budget year because "revenue streams for cities are drying up and this is one way to capture additional revenue."
The franchise fee would generate about $150,000 per percentage point meaning — at the full 5 percent — the city would receive about $600,000 in extra funding annually.