Tuesday, January 8, 2002
Steamboat Springs The new City Council's first heated ideological debate ended with a 4-3 vote Tuesday night that could result in local gas bills going up 2 percent by the end of the month.
In a decision that council members on both sides of the issue said would send a message to the community despite the fact that it will be worth only about $70,000 to the city, the council narrowly moved to raise franchise fees on Greeley Gas by 2 percent. That increase will result in a direct pass-through to the consumer, said Mike Lehmann, the operations supervisor for Greeley Gas in Steamboat.
Franchise fees are charged for the use of rights of way on city property and are assessed on all utilities. The franchise fee on Greeley Gas is currently at 1 percent and will go up to 3 percent.
The three council members who opposed the decision Paul Strong, Loui Antonucci and Steve Ivancie said they did not want the city to do anything that would increase the cost of living in Steamboat.
"It is getting more and more difficult for people to live here," Strong said. "All this does is increase that cost."
When the council first discussed the issue in December, Antonucci was the only council member to oppose the increase. The other two opponents said they had a change of heart after thinking about the ramifications of the increase for low- and middle-income households.
On Tuesday, Antonucci compared the fee increase to raising taxes without a vote and warned the council not to drive people away.
"People do not get taxed out of a city all at once," Antonucci said. "It's a little here. It's a little there."
Proponents of the move said it was necessary for a number of reasons, including the desire for the city to make sure rates are fair and equal among utility companies. Currently, other city utilities pay 3 percent, though Yampa Valley Electric Association pays 4 percent, with 1 percent put away for the undergrounding of electric lines.
"If the community wants one utility to put away franchise fees for undergrounding, then it's not fair that we give another utility an economic advantage," said City Council President Kathy Connell.
Lehmann, however, said he didn't feel the issue was necessarily about competition among utilities.
"There's not a house in Steamboat that doesn't have electricity, so I don't see it as a competitive thing," he said.
Connell said previous councils had balked at raising the fee, but this council needs to act now to be fiscally responsible.
Councilwoman Arianthe Stettner added she thinks the city needs to recover some of the money it will be taking out of reserves in this year's budget.
City officials said the 2-percent increase would be swallowed up by a nearly 45-percent decrease in natural gas this winter, which was announced by Greeley Gas.
Proponents also argued the city was reducing the impact on its residents by increasing the sales-tax rebate for senior citizens and certain disabled residents from $150 to $200 per year.
The gas rate decision will be voted on again on Jan. 22 before it takes effect.