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Utility fee passes 1st test

BY NICOLE KARLIS | NOVEMBER 03, 2009 7:20 AM

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Iowa City residents are one step closer to seeing an increase in their utility bills.

The Iowa City City Council voted 6-1 to pass its first consideration of the city’s franchise fee at its meeting Monday night. The council needs to vote in favor of the fee two more times before the measure is approved.

The proposed fee would charge MidAmerican Energy between 1 and 5 percent of its total services, which would in turn tax consumers 2 percent on their monthly utility bills.

Many residents and business owners have voiced concern about another tax during a recession, but councilors made it clear they think it’s a necessity to fund public-safety initiatives.

“I’ve always been supportive of this,” said Iowa City Mayor Regenia Bailey. “I’m not sure everybody realizes this, but the franchise fee enables us to get the fee from these property owners who don’t currently pay a property tax.”

However, if the tax is passed, some say businesses will leave Iowa City.

Joe Raso, the president of the Iowa City Area Development Group, expressed these concerns from Iowa City businesses.

In a recent survey conducted by the group, 11 of the 29 selected local businesses responded, with all saying they oppose the fee. This represents 4,300 employees in Iowa City, he said.

“There are serious concerns with any increase,” Raso said.

The increase would bring in an estimated $1.7 million to hire more firefighters and police officers, councilors have said.

However, Councilor Connie Champion, who cast the lone vote against the fee increase, said she fears the burden it will have on local businesses.

“I find it very frightening that we’re going to lose some of the industry we have,” she said.

She hopes representatives of these businesses will attend the next public hearing to speak up.

UI Student Government liaison Jeff Shipley, who spoke to the council Tuesday night, said he is also worried about the future of Iowa City businesses.

“Businesses will be the most hurt by the increase,” he said. “Every single penny matters.”

And for some, each cent might affect their personal bills.

“People already can’t afford their bills in the first place and now be responsible for more,” said City Council candidate Dan Tallon.

Despite the seemingly negative public response, some councilors said they think Iowa City residents generally support the tax and its link to public-safety concerns.

“I’ve talked with quite a few people, and they did support the franchise fee, because it is specifically targeted toward public safety,” said Councilor Mike Wright, though he noted none of these people had financial needs.

The council will hold its next vote on the fee at its next meeting, on Nov. 17.


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