Money generated from that fee would also enable the City Council to lower that portion of the property tax rate that provides money to pay off general obligation bond debt.

Additionally, the revenue from the fee would provide funding for the Karl L. King Municipal Band and Citizens Central.

However, if approved, the fee would be passed on to electric and gas customers of MidAmerican Energy on their monthly bills. But the 1 percent local option sales tax would no longer be levied on utility bills if the franchise fee goes into effect.

The fee would add about $4 a month to a residential electric bill and about $3 a month to a residential gas bill, according to figures provided by the city.

The proposed franchise fee is estimated to generate $2.4 million annually.

The City Council will consider beginning the process of implementing a franchise fee when it meets tonight.

The council meeting will begin at 5 p.m. in the Municipal Building, 819 First Ave. S., with a budget workshop. The business meeting will begin at 6 p.m.

During tonight’s meeting the council is expected to pass a couple of preliminary resolutions and schedule a Jan. 22 public hearing on the franchise fee. The fee will have to be approved by the council on three votes in order to go into effect.

What is a franchise fee?

The city government has the power to grant individuals and businesses franchises to provide services within the community, according to City Manager David Fierke.

MidAmerican Energy has long held a franchise to provide electric and gas service to the city.

Fierke said the city has always had the right to enact franchise fees. He said those fees are essentially rent that the companies pay for use of public property and rights-of-way.

Mediacom, which has a franchise to provide cable television service, collects a franchise fee from its customers who have that service.

The city has not charged MidAmerican Energy a franchise fee in the past, although it has had the right to do so.

Revenue from a franchise fee can be used for any essential service of the city.

“There’s no other way to add police officers unless you’re going to make massive cuts to other things in the general fund,” Fierke said.

How much is

the franchise fee?

It would be 5 percent added to both the electric and gas bills.

At the same time the franchise fee is implemented, the 1 percent local option sales tax would be removed from those bills.

The result would be a net increase of $3.68 per month on average residential electricity bills, according to figures provided by Fierke.

There would also be a net increase of $3.18 per month on average residential gas bills, according to those figures.

More police officers

Increasing the 40-member police force has long been a goal of current and past City Council members.

A proposal to add eight officers was dropped during the preparation of the 2023-2024 budget because there was not enough property tax revenue to pay for it.

If the franchise fee is approved, about $800,000 from it will be used each year to pay for the additional officers, according to Fierke.

With a franchise fee in place, five additional officers would be hired in the fiscal year that will begin July 1.

Another three officers would be added in the fiscal year that will begin July 1, 2025.

Police Chief Dennis Quinn said having those additional officers would enable the department to have more people out on patrol and create a new Community Action Team.

He said one officer would be added to each of the four patrol shifts. Those shifts would then have eight people assigned to them, including a lieutenant, a sergeant and six patrol officers.

Having more people on a shift will make it possible to do more proactive policing instead of having officers just go from call to call, Quinn said. He added that more officers on a patrol shift will create the flexibility to do things like having someone concentrate on traffic speed enforcement.

That flexibility will also give the patrol officers some time to meet the public, Quinn said. He said that could consist of something as simple as stopping to chat with some kids playing basketball.

“We will get some community interaction that isn’t possible when going from call to call,” he said.

Having eight additional officers will also allow the creation of a three-member Community Action Team, which would work in tandem with patrol and investigations to address specific issues and areas, Quinn said. For example, if a lot of burglaries were reported in a neighborhood, team members could spend time in that area.

Lastly, the addition of eight officers would allow the creation of one additional detective position.

Debt relief levy

The property tax levy of the city is divided into different parts which pay for specific things. One part of that levy is earmarked for paying off general obligation bond debt. Currently, that specific levy is $4.50 per $1,000 of taxable value.

Fierke said about one-third of the franchise fee revenue will be used to offset part of that debt service levy. He said the levy would be reduced by $1 per $1,000 of taxable value.

Quality of life

Fierke said some of the franchise fee revenue would be used to sustain the Karl L. King Municipal Band and Citizens Central. Both of those are now supported by their own property tax levies, but those levies will be abolished on July 1 as a result of property tax law changes approved by Gov. Kim Reynolds and the legislature.

Fierke added that some franchise fee revenue would be used to help pay for infrastructure projects, offsetting the loss of local option sales tax revenue now collected on electric and gas bills.

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