JAMESTOWN — The Jamestown City Council still has decisions to make for the city of Jamestown’s final budget.
Mayor Katie Hemmer proposed on Monday, Sept. 21, adding $120,000 in revenue for a franchise fee for Otter Tail Power Co. to offset what the company charges the city for poles, $150,000 to the Street Department budget for improvements that will benefit pedestrians on Hospital Hill, and $250,000 to the Water Department’s budget to update existing well houses into pump-style facilities.
The franchise agreement between the city of Jamestown and Otter Tail Power Co. allows the city to implement a franchise fee, Hemmer said.
The city of Jamestown has a franchise agreement with Otter Tail Power Co. that allows the company to install poles and transmission lines in city limits. Otter Tail Power can charge the city of Jamestown for electricity and poles.
City Administrator Sarah Hellekson said Otter Tail Power has requested a new franchise agreement.
“When I talked to Otter Tail Power about it, they said it's very common for them to have a franchise fee implemented,” Hemmer said.
Hemmer said Otter Tail Power pays a franchise fee in almost every city that it operates in.
“This isn’t unique,” she said. “It's actually unique that they don't have a franchise fee here.”
Hemmer said the franchise fee is intended to eliminate the monthly light and signal utility fee for light poles charged to residences and businesses that have a utility bill with the city of Jamestown. The monthly light and signal utility fee helps cover the costs of traffic signals and street lights.
In July, the previous City Council — Mayor Dwaine Heinrich and City Council members Brian Kamlitz, Pam Phillips, David Schloegel and David Steele — unanimously approved the establishment of a light and signal utility fee for residents and commercial property owners who have a utility bill with the city of Jamestown. That City Council also unanimously approved creating a light and signal utility fund for the expenses and revenue of street lights and traffic signals.
At that time, Hellekson said the city of Jamestown gets charged more than $120,000 for poles that are paid with the general fund.
The monthly light and signal utility fee is $4 for a wooden pole, $6 for a decorative/fiberglass pole and $8 for the tall metal poles on commercial/industrial properties. The $8 monthly fee is only charged to commercial/industrial properties.
The estimated annual revenue from the monthly rates is more than $357,400.
“In this particular case and the way it was implemented and the concern about the implementation from the public when there is an alternative source for the revenue that you're primarily looking to accomplish, which is this electricity for streetlights, this makes more sense for Otter Tail,” Hemmer said, referring to implementing the $120,000 franchise fee.
Schloegel questioned the $120,000 franchise fee.
“This franchise fee is going to jack up electrical costs for Jamestown residents,” he said.
Schloegel said the Jamestown City Council currently has the ability to set the rates for the monthly light and signal utility fee.
“They (Otter Tail Power) are going to pass it on to consumers because … they are a for-profit company,” he said.
Schloegel questioned if Otter Tail Power would have different rates for residents and commercial property owners or if they would pay an equal amount.
He said if the Jamestown City Council sets the rates, residents can talk to the City Council members on how it sets the rates.
“We can answer to them about the fee for the rates, but they can't go vote for the president of Otter Tail,” he said. “They can't go to complain to them. What are they going to do? Not have electricity.”
Hemmer said the City Council received plenty of complaints with the establishment of a light and signal utility fee. She also said Otter Tail Power can only collect the amount it is authorized by the North Dakota Public Service Commission to collect from consumers.
“Alternatively, you could just eliminate the street light utility and not transfer as much from your other utilities into the general fund and pay for it that way because you already have plenty in your utilities to pay for it,” she said. “So, if you wanted to say, ‘Well, we're transferring from our water utility to our streetlight utility to pay for these expenses,’ you could without actually implementing a street light utility fee. So, I'm just suggesting that where it makes sense is for Otter Tail to pay a fee for operating in the city with the franchise that they have.”
Improvements on Hospital Hill
Hemmer said improvements on Hospital Hill include the addition of rapid flashing beacons for pedestrian crossings. She also said the $150,000 to the Street Department budget can be used to work on creating a pedestrian crossing at the top of Hospital Hill on 8th Street Northeast where the University of Jamestown entrance is located.
“One of the things that we have had as an obstacle to creating a crosswalk at the top of the hill has been a receiver sidewalk on the other side,” she said. “In our discussions with the University of Jamestown, that has gone well, and I think if we coordinate everything, we would need that in the street department budget.”
Hemmer said she would also like to see city staff explore alternatives to transportation funding related to sidewalks and pathways.
The Jamestown City Council will meet at 4 p.m. Wednesday, Sept. 30, at City Hall to discuss the budget.
The Jamestown Finance and Legal Committee unanimously recommended approval on Monday of the 2027 preliminary budget.
The preliminary budget includes more than $12.5 million in total general fund revenue and over $11.6 million in total general fund expenditures.
If the Jamestown City Council approves the preliminary budget, the budget can be lowered but not increased.