Click to Home
Go To Search
Franchise Fee Information
Utility Franchise Fee in Newton
The Newton City Council is considering establishing a Utility Franchise Fee to provide adequate funding for street repair and maintenance. This is an important community issue affecting our citizens. In an effort to provide Newton citizens information related to the utility franchise fee, we are inviting you to review the information below.

Open House Discussion
Planning Session 8-7-2014.JPG
The City of Newton is hosting two open house discussions on the Franchise Fee in addition to the public hearings that will be held. Open house discussions provide citizens with the opportunity to ask staff questions about the Franchise Fee in a less formal setting. 

Both open houses will be held at the Newton Public Library, located at 100 N 3rd Ave W, Newton, IA 50208. The open house discussions will be held at the following times:
  • Tuesday, October 14 from 12:00-1:00 p.m.
  • Tuesday, October 14 from 6:30-7:30 p.m.

10 Year Plan
4th St..jpg
Follow this link to view a map displaying proposed streets projects over the next 10 years. 

Resurfacing, Repair, and Improvement Program--10 Year Plan

Frequently Asked Questions

Q: What is a franchise fee?

A: A “franchise” is an agreement that gives a utility company the right to operate in a jurisdiction and sets out the ground rules for their operations.  Since 2009, Iowa Code has specifically allowed communities to add on a percentage fee to utility bills as part of the franchise agreement and utilize the funds for a wide array of public services. 

Q: Why is the City considering a franchise fee?

A: A recent community survey told us that Newton residents are not satisfied with the condition of our city’s streets. Click here to read more detailed results of the National Citizen Survey.

After receiving these survey results, City Council explored multiple ways that street repairs could be better financed. Revenue options were explored, including the Franchise Fee, Capital Improvement Levy, Emergency Levy, and Bond Issues. What was found was that even if used to the maximum levy amount, neither the Capital Improvement Levy nor the Emergency Levy will generate enough revenues to meet the capital needs. Using bond issues would be the most expensive method of covering these costs. Finally, it was estimated that the Franchise Fee would be the most cost-effective way to raise the necessary funds to cover the costs of the capital improvement needs. 

Q: When will the franchise fee start appearing on my bills?

A: The implementation of a franchise fee involves a public process that includes public hearings and ordinances.  If the City Council adopts a fee, it would take several months for Alliant Energy and Black Hills Energy to complete the process and be ready to implement it. The 2% franchise fee would be effective April 1, 2015, the 3% franchise fee would be effective July 1, 2016, and the 4% franchise fee would be effective July 1, 2017. 

Q: What projects will the City complete with the funding from the franchise fee?

A: The City of Newton Public Works Department has developed some anticipatory maps that show the amount of progress that could be made over the next several years if the franchise fee is implemented. Additionally, funds from the franchise fee may be used to purchase large capital equipment that does not otherwise fit into the City’s budget. This would include items such as fire engines and police vehicles. 

Q: How much will the franchise fee cost?

A: The franchise fee is based on a percentage of your utility costs, so the actual amount paid will vary citizen-to-citizen based on energy usage. 

In order to ease burden on citizens paying this fee, City Council is looking at implementing the franchise fee gradually through annual steps. The first year, it would be a 2% franchise fee. If a franchise fee is implemented, State law requires that the local option sales tax would no longer be charged to energy bills. Therefore, the 1% sales tax that is currently added to bills would go away and be replaced with the franchise fee. So, in year one of the franchise fee, the net increase on energy bills would be 1%. In years two and three, the rate would again increase 1% each year, so that in year two it would be a 3% franchise fee and in year three it would be a 4% franchise fee. 

If the fee is a burden to your finances, one way to lower costs would be to lower your energy usage. The City of Newton is working to provide programs for citizens to lower their energy costs. One such program the City of Newton is currently applying for is the Hometown Rewards Program through Alliant Energy.