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HomeMy WebLinkAbout2025-11-17 I07 Franchise Fee_Revenue Purpose StatementAGENDA ITEM: CITY OF WAUKEE, IOWA CITY COUNCIL MEETING COMMUNICATION MEETING DATE: November 17, 2025 AGENDA ITEM:Consideration of approval of a resolution adopting Revenue Purpose Statement regarding use of revenues from proposed gas and electric franchise fees pursuant to Iowa Code §364.2(4)(f)(2025). FORMAT:Resolution SYNOPSIS INCLUDING PRO & CON: Earlier this year, the City Council elected to place consideration of the sale of the Waukee Municipal Gas Utility on a special election which was overwhelmingly approved in March 2025. The City has recently completed the transaction and the natural gas utility is now owned and operated by MidAmerican Energy Company. There are several positions within the City organization that were partially supported by the revenues of the gas utility including positions in administration, finance, human resources, information technology and public works. In order to backfill the revenues lost with the gas utility sale to support these functions, it is recommended that a franchise fee be adopted on both the natural gas and electric utilities for customers within the City of Waukee. In order to collect a franchise fee, the City Council must adopt a revenue purpose statement which identifies the intended uses of the franchise fee. The proposed resolution identifies those activities which are eligible for use of the franchise fee and are consistent with State Code. Those activities include repair and improvement of public improvements and publicly owned facilities, projects that prevent or mitigate future disasters, energy conservation measures and programs for low-income homeowners, public safety expenses, transportation infrastructure, economic development activities and property tax relief. The immediate intended purpose and use of the franchise fee revenues is to offset the expenses of the positions that were partially being funded by the municipal gas utility in order to eliminate the need for a property tax increase. FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: COMMISSION/BOARD/COMMITTEE COMMENT: STAFF REVIEW AND COMMENT: Upon approval of the resolution to establish the revenue purpose statement for the collection of a franchise fee on the natural gas and electric utilities, the City Council will hold a public hearing to discuss the implementation of the franchise fee in an amount of 2% at the December 1, 2025 City Council meeting. RECOMMENDATION: Approve the resolution I7 ATTACHMENTS: I. Proposed Resolution PREPARED BY:Brad Deets, City Administrator REVIEWED BY: PUBLIC NOTICE INFORMATION – NAME OF PUBLICATION: DATE OF PUBLICATION: THE CITY OF WAUKEE, IOWA RESOLUTION 2025- RESOLUTION ADOPTING REVENUE PURPOSE STATEMENT REGARDING USE OF REVENUES FROM PROPOSED GAS AND ELECTRIC FRANCHISE FEES PURSUANT TO IOWA CODE § 364.2(4)(f)(2025) IN THE NAME AND BY THE AUTHORITY OF THE CITY OF WAUKEE, IOWA WHEREAS, the City of Waukee, Iowa has adopted franchise ordinances with MidAmerican Energy Company, for the purpose of granting the right and franchise to operate natural gas and electric utilities within the City; AND WHEREAS, pursuant to the natural gas and electric franchises granted to MidAmerican Energy Company, and Iowa Code 364.2 (2025), the City has the authority to impose franchise fees; and WHEREAS, the City Council of the City of Waukee will hold a public hearing regarding a proposed ordinance imposing a franchise fee in an amount equal to 2% of the gross revenues derived by the Company from the transmission or distribution of natural gas and electricity to customers within the corporate limits of the City; AND WHEREAS, Iowa Code§ 364.2(4) (f) requires adoption of a Revenue Purpose Statement by the City Council prior to the adoption or amendment of an ordinance which will impose or increase a franchise fee; AND WHEREAS, the "Revenue Purpose Statement” must specify the purpose or purposes for which any revenue generated by a franchise fee will be used by the City; AND WHEREAS, as required by Iowa Code § 364.2(4)(1) a copy of the proposed “Revenue Purpose Statement” shall be published in the manner provided by Iowa Code § 362.3. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Waukee approves the Revenue Purpose Statement as follows: Section 1: The following "Revenue Purpose Statement” is hereby adopted by the City Council of the City of Waukee, to wit: REVENUE PURPOSE STATEMENT REGARDING USE OF REVENUE FROM NATURAL GAS AND ELECTRIC FRANCHISE FEES Pursuant to Iowa Code § 364.2(4)(f) the City of Waukee states that all revenue generated by the City from franchise fees assessed on the sales of natural gas and electricity within the City shall be deposited in the franchise fee account in the general fund and shall be used to reimburse the City for all costs associated with inspecting, supervising or otherwise regulating its franchises. Moneys in the franchise fee account in the general fund in excess of the amounts necessary for costs associated with inspecting, supervising or otherwise regulating its franchises shall be expended for any of the following: a.The repair, remediation, restoration, cleanup, replacement, and improvement of existing public improvements and other publicly owned property, buildings, and facilities. b.Projects designed to prevent or mitigate future disasters as defined in Iowa Code Section 29C.2. c.Energy conservation measures for low-income homeowners, low-income energy assistance programs, and weatherization programs. d.Public safety, including the equipping of fire, police, emergency services, sanitation, street, and civil defense departments. e.The establishment, construction, reconstruction, repair, equipping, remodeling, and extension of public works, public utilities, and public transportation systems. f.The construction, reconstruction, or repair of streets, highways, bridges, sidewalks, pedestrian underpasses and overpasses, street lighting fixtures, and public grounds, and the acquisition of real estate needed for such purposes. g.Property tax abatements, building permit fee abatements, and abatement of other fees for property damaged by a disaster as defined in section 29C.2. h.Economic development activities and projects. i.Property tax relief. The City will use the revenue collected from the gas and electric franchise fee for the aforementioned purposes, and other lawful city purposes, which will provide property tax relief in the form of a deposit to the City's general fund, and the use of such fees collected to pay obligations that would otherwise be paid that fiscal year with a property tax levy. Section 2: The City Clerk shall cause this "Revenue Purpose Statement Regarding Use of Revenue from Natural Gas and Electric Franchise Fees” as adopted to be published in the manner required by Iowa Code §362.3. Passed by the City Council of the City of Waukee, Iowa, and approved this the 17th day of November, 2025. ____________________________ Courtney Clarke, Mayor Attest: ___________________________________ Rebecca D. Schuett, City Clerk RESULTS OF VOTE: AYE NAY ABSENT ABSTAIN R. Charles Bottenberg Chris Crone Rob Grove Anna Bergman Pierce Ben Sinclair