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Public hearing set for franchise fee | Preston Citizen

Public hearing set for franchise fee

November 15, 2013


Assistant editor

A public hearing will be held by the Preston City Council on Monday, Nov. 18, to discuss charging Questar Gas Company a franchise fee for its operation within the city limits.

Currently Preston charges Rocky Mountain Power and Direct Communications (local cable company) franchise fees, according to councilman Travis Kunz.

“But we have never charged Questar Gas a franchise fee, even though they have been providing service here in Preston since the early-to-mid 1980s,” said Kunz.

999649_U&I ANNIVERSARY 2013

Idaho code 50-329A allows Idaho cities to charge a franchise fee of up to three percent to public service providers. The Association of Idaho Cities encourages municipalities, such as Preston, to charge these franchise fees as another form of revenue to help stabilize city coffers, according to Kunz.

“If you think about it, Preston’s main source of revenue is property and sales taxes. The city doesn’t bring in enough property and sales taxes to allow it to operate. So the city charges fees for services,” he said. “These fees allow Preston to survive from year to year.

“Franklin, to our south, is in the same position as us and is contemplating a change in their agreement with Questar to also charge a franchise fee.”

Kunz said Brad Markus, general manager of Questar’s customer service, indicated almost all cities throughout Utah’s Questar gas service area charge franchise fees and was more than happy to help Preston with needed information.

“It is projected the implementation of a franchise fee on Questar will generate approximately $40,000 of additional revenue for Preston each year. The city is frugal with its money. Our city clerk/ treasurer doesn’t spend more than we bring in. We are prudent with our finances. But we also have increasing costs, price fluctuations in fuel, power, employee benefits, repairs and more. Even though the city is prudent, it still needs revenue sources to cover these costs,” said Kunz.

This story is sponsored by U&I Furniture.

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