By Gregg Hennigan
IOWA CITY – The City Council tonight once again pledged support for a long-discussed new fire station — and utility customers may be paying more for gas and electric service to make it happen.
Council members were unequivocal that a fire station would finally be built on the northeast side of town, where response times lag. They even said they’d like to start construction in the coming months, and Fire Chief Andy Rocca said it would take about 14 months to complete.
This council and previous ones have long said they want to build a station, which would be the city’s fourth, but have been unwillingly to pay for the extra firefighters needed to staff it.
A new state law may give the council its chance. Gov. Chet Culver signed a bill on Tuesday that allows cities to impose franchise fees of up to 5 percent on gas and electric service
In Iowa City, every 1 percent on gas and electric utilities would generate an estimated $360,000 and $490,000 annually, respectively, according to Interim City Manager Dale Helling.
Local-option sales taxes, like the one Iowa City voters just approved, cannot be collected on natural gas and electric utilities if a franchise fee is in place, so Helling suggested the first 1 percent of the fee be used to offset the lost tax revenue, which is to go toward flood-related projects.
But even at 4 percent, the money brought in would be significant, at up to $1.96 million on electric and $1.44 million on gas annually, according to city estimates.
Council members said they needed more information on the fees and will discuss them at an upcoming meeting. But they strongly indicated they would favor imposing the fees to pay for the fire station.
“We’ve been handed an opportunity with franchise fees,” Mayor Regenia Bailey said.
Added Connie Champion, “I don’t think we have a choice.”
Matt Hayek said the fire station wasn’t just about safety, noting that the northeast side of town has businesses that employ thousands of people, including big-hitter ACT Inc.
“I fear that if we fail to get the fire station done, that will chill economic development” on that side of town, he said.
Helling said the fees are charged to utility companies, which havethe right to add the amount to customers’ bills. But officials with MidAmerican Energy, which serves Iowa City, said the fees go directly to customers. Regardless, it’s likely customers are the ones who will ultimately pay the fees.
The fire station and franchise fees came up as the council discussed the city’s money problems. The council tonight also gave its blessing to nearly $150,000 in service cuts and $170,000 in new revenue sources annually beginning in the year that starts July 1.
Some of the more prominent cuts include decreasing the public library’s collections, reducing travel for Fire Department training and discontinuing the public art program.
The Fire Department decision may raise some eyebrows, but Chief Andy Rocca told the council earlier this week cutting back was not a big safety concern in the short-term.
Library Director Nancy Craig said she’d reduce materials that are being used less than in the past, like magazines and newspapers.
Some of the new revenues include increasing cemetery fees, increasing membership fees at the Senior Center and generating more in library fines.