City to vote on hearing for franchise fee increase

FORT MADISON – The Fort Madison City Council will be voting on setting a public hearing to double the franchise fees paid by city residents for electricity and natural gas.
According to an agenda for Tuesday’s regular meeting, the council will consider a resolution to set the public hearing for 5:30 p.m. on June 1 at City Hall.
The franchise agreements currently in place with Mid-American and Interstate Power and Light (Alliant Energy) have fees set at 1.5%. The new rates would be 3% beginning with the next budget year, which begins July 1.
A report issued to councilmembers by City Manager Laura Liegois referenced discussions during budget sessions earlier this year that led to an approved budget that included increasing the franchise fees to assist with demands on the city’s budget.
The city is working with the Ahlers & Cooney Law Firm, as well as the two utilities, to prepare information needed for the public hearing.
Liegois said the increase will generate an additional $270,000 in funds from Alliant and $61,800 from Mid-American. The total funds generated by the franchise taxes are now expected to be $663,600 from both utilities.
The city has had a franchise fee ordinance on the books for decades, but until 2021, those fees were set at 0%. In 2020, former City Manager David Varley proposed either instituting a 3% franchise fee, or bonding for Hwy 61 improvements and moving the funds the city received from the state to take over the business 61 district in Fort Madison, into the general fund to ease budget constraints.
The Council in 2021 voted to institute a 1.5% increase in the franchise fee to phase in the new fees, easing the burden on industries and taxpayers.
When discussions on the franchise fee surfaced in late 2019, the 3% fee was expected to generate the city $759,000. Iowa currently caps municipal franchise taxes at 5%.
In other action, the council is scheduled to vote on a final budget amendment for the current fiscal year increasing revenues by $14.1 million due to bond proceeds for the new fire station and public works building, and for transfers. The amendment also includes additional expenditures of $13.8 million including $6 million for capital projects. The city’s projected ending fund balance in the general fund will increase by $300,000 to $16.2 million. 
According to an explanation on the budget amendment form provided to councilmembers, the Revenue increases with a bond for the following: Fire Station of $7.2 million and Public Works Building of $950,000.00.  Several public works projects not completed in fiscal year 2025,  were pushed into fiscal year 2026. Several retirements occurred, which included payout of benefits for vacation and sick leave.
Related to that item is a request from the Fort Madison Fire Department for $222,359 for a communication system for the new Fort Madison Fire Station that was not included in the bid packages. However, a memo regarding the request indicates that LeeComm will be paying $65,359 for the Dispatch/Communication Center Infrastructure portion of the system, leaving the city with about $157,000 for station equipment and set up.
The communication system package research and procurement options has been managed separately by the city.  The system is a RACOM USDD G2 Fire Station Alerting System. The project does have funding allocated for the system
Also on the agenda for Tuesday night is the approval of a "Summer Selfie" bronze statue in Old Settlers Park donated by Paul and Rev. Bonnie Wilkerson's family. The two were also instrumental in getting the new "Ring Around the Rosie" statue that is now in place in the park.