SHELDON— Voters will ultimately have the final say on Sheldon’s proposed franchise agreements/fee, but the city council has paved the way for the potential mandates to move forward.
When it met Wednesday, June 5, the council approved two draft ordinances as well as a revenue purpose statement and proposed franchise agreement/fee between the city and MidAmerican Energy Co.
The utility provides electric and natural gas services to Sheldon.
Franchise fees serve as a revenue source for cities through an agreement reached with a community’s utility provider in which the company attaches an additional line item on a customer’s bill.
Under the proposed ordinances, residents would have to pay a 5 percent fee on their gas and electric bills. Nonresidential customers would pay a 2 percent fee and city accounts as well as public and private schools including Northwest Iowa Community College are excluded.
At a 5 percent rate, a person with a $100 electric bill would pay an additional $5 on their bill. Estimates from MidAmerican — based on 2018 billing — show the city could collect $625,000 with a franchise fee set at 5 percent.
Approximately 37.5 percent of those funds would be used to replace the city’s local options sales tax while the remaining amount would be used to support the city’s emergency services.
Those funds can be used for equipment or for the construction, reconstruction or repair of public grounds associated with public safety.
The council set a public hearing for 4:30 p.m. Wednesday, June 19; a second public hearing for 4:30 p.m. Aug. 7; however, the first reading of the ordinances will take place 30 days following the first hearing.
A third hearing would have to occur no later than Sept. 4 to make the Nov. 5 ballot.