WILLMAR -- The Willmar City Council voted 5-3 Monday to send the proposed natural gas franchise fee to the Finance Committee for clarification after a CenterPoint Energy official suggested the fee's rate schedule could be made more equitable.
Albert Swintek, manager of local government relations for CenterPoint Energy of Minneapolis, told the council during a public hearing that a franchise fee is an increase in the cost of energy to natural gas customers. But he said if the council thinks that the fee is in the best interest of the community, "we want the fee to be fair and equitable.''
City Administrator Michael Schmit said Swintek pointed out that the revised rates proposed by CenterPoint Energy provided for more fairness.
"I think the fee revisions make sense,'' Schmit said. "I recommend the City Council republish the notice of the hearing with revised proposed rates and set the public hearing for Dec. 3.''
Schmit said he used information from CenterPoint Energy to establish the initial schedule of rates according to customer classification.
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Swintek said CenterPoint Energy has provided natural gas service in Willmar since 1962 and serves more than 6,500 customers.
Of the 260 cities served by CenterPoint Energy, 27 have imposed franchise fees, he said.
Mayor Les Heitke had proposed in September that the estimated $250,000 raised by the natural gas franchise fee be dedicated to the general fund.
But in September, the council approved a proposal by council member Denis Anderson that franchise fee revenue be used to develop storm water and flood control remedies.
During the hearing, Willmar resident John Sullivan spoke against the fee. He said the council should increase the property tax levy if the city needs more revenue.
Council member Doug Reese suggested the fee schedule go back to committee.
Council member Ron Christianson said he opposes a natural gas franchise fee.
Anderson said he had some concerns about the revised fee and offered a motion to refer the schedule to committee to clarify the rates and other issues including a sunset provision, which would have the fee expire when the revenue is no longer required.
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He said a majority of council members voted in favor of having a franchise fee. He said it was clear that the fee would sunset.
Voting to refer the fee to committee were Anderson, Reese, Bruce DeBlieck, Cindy Swenson and Steve Gardner. Voting against were Christianson, Jim Dokken and Rick Fagerlie.
A franchise fee is an annual assessment paid by a utility for the privilege of doing business in a city. Cable TV providers pay a franchise fee and the revenue is used to operate WRAC 8, Willmar's cable access operation.
In other business during a more than three-hour meeting, the council received recommendations from Housing Task Force co-chairs Joline Hovland and John Bjornson. The task force was appointed by the council to address citizen concerns about deteriorating housing conditions.
