WILLMAR -- The Willmar City Council has voted to hold a public hearing Nov. 19 to consider creating a natural gas franchise fee.
The hearing could be delayed, however, until the first council meeting in December if the city cannot comply with a requirement to publish notice of the ordinance at least 10 days before the hearing.
The publication deadline issue arose during council discussion Monday night on a motion by the Finance Committee to set the hearing when the council would consider an ordinance to set the fee on CenterPoint Energy for use of the public right of way.
The motion was amended to require certain information be provided to City Attorney Richard Ronning in time for Ronning to prepare the ordinance and comply with the publication deadline.
Votes on both the amendment and the motion were 5-1. Council members voting in favor of the amendment and the motion were Denis Anderson, Doug Reese, Bruce DeBlieck, Jim Dokken and Steve Gardner. Ron Christianson voted against the amendment and the motion. Council members Cindy Swenson and Rick Fagerlie were absent.
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The fee was proposed by Mayor Les Heitke in the 2008 budget to replace lost state aid. But the council voted to use the revenue from the fee to pay for flood control measures.
"If we're going to (enact the fee), we need to get the ball rolling, and this is just to set the hearing. We can discuss the merits later,'' said Anderson, the Finance Committee chairman.
Christianson asked if the committee discussed reasons for and against the fee.
One reason in support, said Anderson, was the estimated $250,000 a year that would be raised by the fee. One reason against is the fact that not all residences use natural gas. "It becomes a fairness issue,'' said Anderson.
Dokken said the committee asked City Administrator Michael Schmit to provide information regarding the fee, such as the number of users. Schmit is out of town until Nov. 13.
Heitke asked if city staff members are putting those figures together.
Gardner said the information was coming to council members ahead of the hearing. Anderson said he thought the information would have been included in the minutes of the committee meeting.
Christianson said introducing the ordinance for a hearing before council members have information did not make sense.
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Ronning said he wasn't sure if he could draft an ordinance in time because he didn't have specifics such as the amount of money to be raised, the formulas and when the fee would be paid.
"I assume that information will be forthcoming before the public hearing,'' said Heitke. He thought the fee would be Schmit's first task when he returns to work.
"I can't meet the publication requirements in the charter if you wait until next week,'' said Ronning.
Council members voted to set the hearing, contingent on receiving sufficient information to meet the publication deadline.
According to a CenterPoint Energy fact sheet, a franchise fee is a straight pass-through fee to natural gas customers. The company said such a fee places the greatest financial burden on low-income individuals.
CenterPoint Energy said franchise fees can create an unfavorable business and community environment and create a competitive disadvantage for the city to attract and retail business. Natural gas is considered an essential service for homeowners and businesses, the fact sheet said.
The fee would be an additional tax on customers' gas usage and would be collected every month, the company said.
