City Council raises gas fees

2-percent increase will generate $70,000

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— Councilman Loui Antonucci proved to be the lone holdout Tuesday as the City Council decided to raise franchise fees for Greeley Gas for the first time in 11 years.

The 2-percent increase, which needs to be adopted by ordinance in January, will likely be passed directly on to consumers and will raise about $70,000 for the city.

Franchise fees are charged for the use of right of ways on city property and are assessed on all utilities. Other utilities, including electric and telephone companies, currently pay 3-percent charges for franchise fees. City staff said the goal was to make sure all utilities pay similar amounts.

The council felt that this was a good year to pass the increase given the downturn in gas prices over the past few months as compared to last year. City officials said the 2-percent increase would be swallowed up by a nearly 45-percent decrease in natural gas prices this winter, which was announced by Greeley Gas.

The city's franchise fee would rise from 1 percent to 3 percent. That would put it more in line with other cities in Colorado, said Deputy City Manager Wendy DuBord.

Antonucci, however, noted the cost of the increase will be passed on to Steamboat residents and could hurt consumers who are already struggling to make payments or those who cannot afford high-quality insulation. He added the current low gas prices are probably only temporary.

"Last year they were high. Don't bet that because they are low now that they won't be high again in six months," Antonucci said.

Antonucci said that when he was on council in the early 1990s, the council decided not to raise franchise fees because of the effect it could have on people in the low to middle income brackets.

Councilwoman Arianthtettner said she thought the city needs to recover some of the money it would be taking out of reserves in next year's budget.

The council attempted to mitigate the effects of the increase on low-income residents by directing staff to do what they could to lessen the impact on senior citizens and others with fixed incomes, perhaps with a rebate.

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