Council delays action on franchise agreement with Cascade

Council members voted unanimously to use additional revenue from the natural gas excise revenue for sidewalks and street maintenance and repairs.

But 30 minutes later, the council voted to hold a public hearing and vote on an agreement that would include a step-up in excise tax revenue for the city.

During the May 27 council meeting, the council approved a resolution that excise tax revenue in excess of 2 percent of Cascade Natural Gas’s gross earnings would help supplement sidewalks and street maintenance and repairs. The tax is paid to the city because of a franchise agreement with Cascade that is necessary because it uses the city-owned rights of way to provide natural gas to customers.

By statute, franchise agreements require two readings. The first reading was on May 13.

Under a modified agreement with Cascade, the current 2-percent excise tax would increase to 4 percent on Jan. 1, 2015, then to 6 percent on Jan. 1, 2017.

Councilman Jerry Childs said he was not willing to vote on the agreement because citizens may not be aware of the tax increase.

“I’m never in favor of raising taxes if we don’t have to,” said Childs. “If it passes I would be happy to see it go to streets.”

Councilman Fred Chang, who noted the council voted to extend the contract with Cascade for two months, agreed with Childs and said he not ready to support the agreement.

He said there has been no public notice about the issue.

“I would like to wait a couple of weeks or even a month to give the public an opportunity to comment on the tax increase,” Chang said.

Councilman Rob Putaansuu said this was the second reading of the ordinance and no citizens have come forward about the increase.

Councilman Jeff Cartwright said the council has been discussing the issue for the past six or seven months.

Chang suggested that the city mail out notices through the gas bills or postcards. City staff noted the city doesn’t do billing for Cascade customers.

City Treasurer Allan Martin said the city doesn’t know which city residents are Cascade’s customers.

City Attorney Greg Jacoby said the city uses public notices in the newspaper for public hearings on a regular basis to inform the public on important issues.

“That is the minimum legal requirement,” Chang said. “I think in certain cases we should go beyond the minimum.”

He said residents should have more time to comment on the issue.

Putaansuu disagreed with Chang.

“We have been elected to make difficult decisions and to manage the city’s government,” said Putaansuu. “This body has a responsibility to watch the city’s affairs and reach out to our citizens. We’re going above and beyond by putting a notice. We’ve been elected to make these difficult decisions.”

Putaansuu said the cost for the city doing business is “going up.”

“If we don’t increase these fees, all we’re doing is providing less and less services for our citizens and kicking the can down the road to the next generation which I don’t think is fair,” he said.

Cartwright said if residents comment, most likely they would say “no” to the increase.

“Is that going to change our minds from where we first discussed this and how we got here to dedicate where the money is going to,” said Cartwright. “If five people come in here on June 24 and say don’t raise it, it’s not going to change my opinion on representing the other 12,000 citizens in this city. We were elected to do the right thing. We’re not raising it just to raise it.”

Jacoby suggested the council table action on the agreement until next month and the city publish a public notice in the newspaper.

Jacoby said the council could adopt the second reading at the June 10 or June 24 meeting.

“By statute, a franchise agreement requires five votes to be approved,” Jacoby noted.

Mayor Tim Matthes recommended the council delay action until the June 24 meeting. Jacoby said to give residents adequate notice, the public hearing should be during the June 24 meeting.

Putaansuu said the council should be ready to take action after the public hearing.

Jacoby said the contract with Cascade was extended until July 18.


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