A possible franchise fee for Alliant utilities was discussed at length Tuesday by the Internal Operations Committee.
The city’s financial woes have put long-term investment projects in jeopardy, according to City Administrator Jeff Horne. Projects such as the Lincolnway Railport, the final phase of the 19th Avenue North extension and the Liberty Square Development all remain at least partially unfunded.
“If no other (funding) source is found, the city would need to use the general fund to balance capital accounts,” Horne said. “That could lead to more service cuts and budget cuts in coming years.”
The proposed fee would help cover costs for in progress projects, and also help fund quality of life projects Horne said are necessary to the community’s growth. If nothing is done, Horne warns that the ramifications could be catastrophic.
“I really believe the long-term viability of the city is at stake here,” he said. There would likely be a tradeoff, according to Horne.
New bonding projects by the city could be taken from the franchise fee funds, as opposed to property taxes.
The proposed fee would be at 3 percent, which would raise approximately $2.4 million annually. A household with a $250 per month Alliant bill would pay around $90 a year in franchise costs. Horne said Iowa law allowed for the city to charge the franchise fee at a rate up to 5 percent, but he said that his goals call for the smaller charge at this time.
The potential franchise fee was initially brought up at a July special meeting of the Committee of the Whole. Even if the fee is approved, Horne proposed cutting almost around $1 million from the city’s budget to help alleviate the financial tension.
According to Horne, the economy, while weakened, is evolving, and that some significant steps must be taken to conform to the new normal.
“I just can’t emphasize enough how much the economy has changed,” Horne said, saying that knowledge-based jobs and small to medium sized businesses are becoming the emphasis in America. “You have to adapt to the economic reality of the 21st Century.”
Cities that couldn’t evolve with the economy, like Youngstown, Ohio, have shriveled up to a fraction of what they once were, according to Horne. This is one reason he supports the franchise fee, as it would allow the city to pay off its debts and invest in projects Horne believes are necessary to promoting the city’s growth.
Projects mentioned include a new recreation center, a new or renovated library, and converting the Washington Middle School auditorium into a city performing arts center. Horne also said that the town pool is about five years away from needing renovation, and the downtown sprinkler issue needs to be addressed.
Deb Olson, superintendent of the Clinton Community School District, was present at the meeting. Under the proposed franchise fee, non-taxed entities like schools and churches would be required to pay the franchise fee. Though it would be an extra expense for the district, Olson said she supports Horne’s proposal.
“If we don’t do something within our community to maintain the folks that are here ...they’ll leave,” Olson said, later adding that the district supports the city’s goal of advancing as a community.
Olson also acknowledged that there was a possibility the added cost to the district could be made up by tax increases, but said that wasn’t something the district had planned.
Committee Chairman Mark Vulich said that the proposal didn’t address certain issues he thought important. He said it should be made clear to Clinton citizens what’s being asked of them, and what they’ll get in return.
“It may be a good fit, it may be bad,” Vulich said. “At this point there’s not enough” information to make a decision.
Vulich also emphasized the importance of getting public feedback. He said that the public would likely view the franchise fee as another tax, and would reject it out of hand. An explanation to the public may not change any minds, but it will get people involved.
“(We should) go out and talk to the community,” Vulich said, saying the city has not always done so in the past. “We come up with an idea, good or bad, ...and we don’t involve the community.”
Committee member Bev Hermann agreed with Vulich, adding that community members could be a valuable source of information and ideas.
“There are a lot of people out there who do have good ideas but don’t know where to go with them,” Hermann said.
Committee members suggested “town hall” type meetings with Clinton residents, both to inform them of the city’s goals, and collect input. They proposed having a meeting in each ward to gather ideas or comments from the public.
However, the committee decided not to form a council-appointed committee to arrange and run the meetings.
If the meetings were mandated by the full council, they would fall under open meetings law and action could be taken. To avoid making decisions before all the facts were in, the meetings will be conducted and arranged by city staff and will not contain an actionable agenda.
The meetings will be set up by Horne, and will likely begin as early as next month. The information-gathering phase would take time, he said, and it is unlikely any actionable item would appear before the city council this year.
Though much of Horne’s presentation dealt with the financial difficulties of the city, he said there remains a bright side.
“I don’t mean it to sound like it’s hopeless,” he said. “There are a lot of great things in town.”