Council delays decision on franchise fees
Additional franchise fees tacked on to monthly electric and gas bills could generate about $400,000 in additional funds for the city of Farmington, but not all council members are sold on the idea just yet.
After a discussion that lasted nearly an hour, Farmington City Council members chose to table the topic for more discussion at an upcoming workshop. For some, the idea was cut and dried, and they either understood and supported the recommendation or they understood and didn't favor it. Others wanted more information, and a little more time to weigh options.
The proposal brought before the council was the culmination of several months of work by city administrator Peter Herlofsky and city attorney Joel Jamnik, who hammered out agreements with the gas and electric companies that serve Farmington. They got the utility companies to add a $1.60 fee to each month's bill for every resident. That franchise fee would then be processed back to the city of Farmington to help cover costs of the annual seal coating projects that maintain the community's streets.
The city of Farmington has conducted seal coating in different areas of the community every summer for more than a decade. The program covers different areas every year, on a seven-year cycle, and residents in the affected areas are assessed 50 percent of the cost to do the project. The city of Farmington's road and bridge fund has covered the other 50 percent for as long as the project has been in place.
But the road and bridge fund has been funded by a one-time allocation made when the Pilot Knob Road extension was built more than a decade ago, and those funds are running out. If the city doesn't find some other way to finance that fund, it could mean residents would pay 100 percent of the assessments, the city would have to levy more every year or the seal coating project would cease. That would mean the city would have to reconstruct roads more often.
Which brings city officials back to franchise fees.
For one year of an electric bill, the fee would amount to $19.20 for each residential property owner. For one year for gas and electric, that would result in a total of $38.40.
According to Herlofsky's numbers, that could generate about $400,000 annually, which would be enough to cover the cost of the seal coating project every year. Residents in the affected areas would no longer be assessed because they, and everyone else, would have paid into the pot.
One of the sticking points for mayor Todd Larson is that the terms for commercial and industrial fees are still a little murky. As spelled out, the fees would increase - in some cases, double - for business owners, and Larson would like clarification of how that will all work out.
However, council member Christy Jo Fogarty is ready to accept the proposal. Not having a stable source of income for the seal coating project makes her uncomfortable because the cost to do the annual project would be "astronomical," she said.
"I've never been a big fan of raising taxes and I consider this raising taxes, but it is something that is absolutely necessary," she said. "This is good long-term planning."
But others weren't as easily convinced. Council member Julie May wanted time to weigh options, and council member Steve Wilson simply said he would vote against it because he thinks there may be other funding options still out there.
Council members agreed to table the discussion for a future workshop. A budget workshop has been set for Monday, Sept. 27.