A potential new agreement between Casper and Rocky Mountain Power that would increase the electrical company’s franchise fee — and as a result bump up rates for consumers — gained another opponent at Casper City Council’s Tuesday night meeting.
The agreement — which Council must vote in favor of approving a total of three times before it will become official — passed the first round of voting on Oct. 17, despite objections from Councilman Shawn Johnson and Councilwoman Amanda Huckabay.
The two council members voted “no” again during the second round Tuesday night, and this time Councilman Jesse Morgan concurred.
The primary justification for increasing the fee is to help the city balance its budget, meaning there will no longer be a reason for the increase once the budget is fixed, explained Morgan. The councilman said he is concerned that the increased fee would never be reduced after it was raised.
Like the current contract, which expires Dec. 31, the new agreement will grant Rocky Mountain Power an electric utility franchise in Casper that allows the company to have a general utility easement to locate its electrical facilities in public areas, such as streets and alleys. However, the new agreement will increase the electrical company’s franchise fee from 5 to 7 percent of its gross revenues derived from within the corporate limits of the city.
The increased fee would annually bring in an estimated $800,000 to the city, City Manager Carter Napier previously told the Star-Tribune.
Napier has been tasked by City Council with reducing the roughly $4 million in reserves now being used in the budget. He proposed an amendment at council’s Oct. 24 work session that he said will reduce most of the reserves being used in the budget without any layoffs.
The amendment, which has not yet been authorized by the Council, relies heavily on the assumption that the new agreement with Rocky Mountain Power will be approved. It also factors in an unexpected sales tax revenue bump of $680,000, as well as savings expected to result from a series of budget cuts that took effect in September.
If the city continues to spend money on its current path, it will be declared officially “broke” by December 2020, Napier warned the Council at the work session.
During the first vote on the agreement last month, the city manager told Council members that the fee hike would likely increase the average residential customer’s bill by about $1.50 a month.
Pointing out that this is about the cost of a cup of coffee, Councilman Bob Hopkins said he felt that was a reasonable amount, and most council members concurred.
“All of us citizens are going to have to start paying a little more to keep the city running,” said Mayor Kenyne Humphrey.
But stating that not every resident can afford a cup of coffee, Johnson quickly objected. Small fee increases eventually add up to significant amounts, said the councilman, who expressed concerned about burdening residents who are already financially struggling.
The city’s economic challenges stem from low sales tax revenue and concerns over the certainty of state funding. City leaders are worried that the money they receive from the Wyoming Legislature is in jeopardy, as the state continues to take in less revenue due to weak energy prices.