Archive for Wednesday, August 26, 2009

Franchise fees to return April 1

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August 26, 2009

Shawnee’s franchise fees on residential gas and electricity bills will be reinstated next year, though not immediately at the full 5 percent, the Shawnee City Council decided Monday.

With a packed Council chambers, where even extra chairs added to the back were full, the Council and members of the public debated the issue for nearly four hours. At the end, Council members voted to reinstate the fees at 2 percent beginning April 1, 2010, with an additional 3 percent added beginning Jan. 1, 2011. The vote was split down the middle, with one Council member from each ward voting yes and the other no. Mayor Jeff Meyers broke the tie by casting a vote in favor.

Council member Cheryl Scott made the motion to approve the fees’ reinstatement, saying she understood concerns of the numerous residents she had heard from via telephone or e-mail.

“The need for this money couldn’t come at a worse time,” Scott said. “… I get it. I understand it. Nobody wants to pay more for anything, ever. But the lack of staff and the infrastructure problems this city has aren’t going to go away and they aren’t getting cheaper. I cannot in good conscience make a vote that would facilitate the decline of the city that I love.”

As discussion ensued, the lines on the council became clearly drawn and would later be reflected in the vote on reinstatement of the fees: Scott, Neal Sawyer, Dawn Kuhn and Mickey Sandifer thought the fees were the best solution, while Dan Pflumm, Frank Goode, Kevin Straub and Michelle Distler thought further cuts should be made, and reinstatement of the fees should be put to a public vote.

Distler said she was disturbed by the franchise fee because when the city raised its mill levy two years ago, she thought that would be enough to keep the city operating as needed. She said she also thought reinstatement of the fees would increase hardship on residents who had lost their jobs.

“I’m bothered when someone says it’s just an extra $12 a month, because for some people, that extra $12 a month is a frozen lasagna to feed a family of four,” she said.

Those opposed to the fee insisted further budget cuts could be made. Pflumm referred to a list of cuts he and Straub had suggested, saying that while every one of them was rebutted by staff, he still believed cuts could be made. He said he also would like to see the city’s expenses posted on the city Web site.

“I can’t say I would never vote for a tax increase, I just say I would never vote for a tax increase if we didn’t go through and cut out,” he said.

Meyers argued that the Council had been discussing the budget since April, and in that time, Council members opposed to the fees had never suggested a legitimate plan for cutting the budget. He listed off several cuts previously suggested by city staff, like closing city pools or doing away with crossing guards, but the Council didn’t come to a majority agreement on any of them.

He said the Council couldn’t put the city in a hole it couldn’t get out of.

“No one wants the tax, no one wants the fee,” he said. “I don’t want the fee, but I know that we’re in a situation where we were elected and I have to fulfill my responsibilities to make sure city provides necessary services. I am here to do what I think is the very best in our community because of what I see working very closely with our staff on a day-to-day basis so I can understand our needs.”

Meyers and some other Council members also insisted they weren’t making the decision for political reasons but for the best interest of the city. The terms of the four Council members who voted in opposition end in April next year.

Thirteen residents spoke to the issue, most of them against the fees. Many said they believed that since the governing body in 1985 had promised to remove the fees if a sales tax vote was approved, the matter should be put to public vote.

“Reinstating it with the vote of the Council may be legal, but it isn’t the right thing to do,” Greg Snell said.

Others asked why the city would reinstate the fees to raise revenues rather than increasing the mill levy, since property taxes are deductible on income taxes. The mayor and other Council members said all other Kansas cities charge the fees and this would put the city on a more level playing field. They also noted that both residents and new businesses coming to the city considered property tax rates, not franchise fees, when making their decisions on where to locate.

Gerald Keith said he believed with all of their disagreements, the Council was “dysfunctional” and ill-prepared to make the vote.

“I don’t see how any of you can sit here tonight and vote on anything because you haven’t convinced me, the taxpayer, that you know what you’re doing,” he said.

Dennis Kissinger, who said he worked as a city manager for 27 years, was among the few who spoke in support of the fees.

“I don’t think you can cut your way out of it,” he said. “Making deferrals only passes costs down to someone a few years later. ... If you choose not to do it, I think your problems and your challenges will be much harder next year.”

In the end, the majority agreed, voting to reinstate the fees for residential customers of the companies who provide natural gas and electric utilities in the city. The votes also increased the fees for commercial natural gas customers from 3 to 5 percent.

The Council also approved a rebate program for eligible low-income families to receive a refund of the franchise fees on gas and electrical utilities.

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