ShawneeDispatch.com

Shawnee residents may not realize it, but their electric and natural gas bills are automatically a little bit lower than anyone else's in the state.

That's because for about 20 years, the city has not charged utilities a franchise fee for gas and electric services provided to residential customers. But with a tight budget again this year, and a lower-than-expected increase in property values, the Council may turn to this revenue source.

Bryan Kidney, finance director, said the city charges franchise fees on cable and phone services for residents, but gas and electric utilities are charged finance fees only for business customers.

"We are unique in that probably statewide, that I'm aware of," Kidney said.

Franchise fees can be charged as anywhere from 3 to 5 percent of the total bill, covering the impact of utilities on the city's roads and streets and the use of the city's right of way for utility lines. Utilities, typically, pass on franchise fee charges to their customers.

Gary Montague, former city manager, said the decision was made to move away from charging franchise fees on residential use of utilities in the 1980s as a trade-off for voters passing a half-cent sales tax for the city. The Shawnee City Council decided to begin with the "essential" utilities, gas and electricity.

Minutes from a Council committee meeting June 7, 1988, show that Montague, warned Council members the city was losing the equivalent of three mills without the franchise fees, and he recommended a four-mill increase to balance the budget.

At that time, Council members said they felt the revocation of the franchise fees was justified because the city had recently instated a new half-cent sales tax.

Council members were to meet Tuesday for the Finance & Administration Committee meeting to begin discussions of the 2009 budget.

Kidney said city staff was going to meet internally to discuss franchise fees and run the numbers on what funds the city is losing by not charging the fees. He said it was possible this information will be presented to the Council to consider reinstating such fees.

"I think we'll be looking at all the options this year," Kidney said.

Carol Gonzales, city manager, said the Council would look at the franchise fee information, but there may not be any interest in reinstating the fees.

"I don't anticipate we will actively push it this year," she said. "We'll put that out there and see if there's any interest in looking at it over the next year."

In 2007, Shawnee received $1,896,640 in franchise fees. The amount of money the city could raise through additional franchise fees would depend on the percentage rate it would charge, but it could easily be more than $1 million, Kidney said.

City staff members found that the city of Lenexa raised more than $5.25 from franchise fees in 2007. However, it is hard to compare with Lenexa because that city has a larger amount of commercial property than Shawnee but 10,000 fewer residents. The city of Leawood, which has about 25,000 fewer residents than Shawnee, received $2.68 million in franchise fees in 2007.

Vicki Charlesworth, assistant city manager/city clerk, said if the Council were to decide that the city should begin to charge the franchise fees, it was unclear how soon collections could begin.