Council Votes to Fund Street Projects with Franchise Fee Hikes

The Hermiston City Council voted unanimously Monday night to increase franchise fees charged to a number of companies in order to raise revenue for several big-ticket street projects.

The council voted to raise franchise fees for the following:

• Umatilla Electric Cooperative
• Charter Communications
• Eastern Oregon Telecom
• EZ Wireless
• Cascade Natural Gas
• Inland Development Corp.
• Windwave Communications
• M2 Machmedia, LLC
• Hermiston Energy Services

The increases would range from 1.5 percent to 2.5 percent.

Hermiston Assistant City Manager Mark Morgan said the city’s Public Infrastructure Committee (PIC) looked at several funding options including adding a 5-cent gas tax as well as a flat monthly $5 utility fee. Morgan said, however, that the gas tax would impact local drivers more than out-of-towners who can easily gas up elsewhere, even though out-of-towners put wear and tear on the streets, as well.

Morgan said the PIC rejected the utility fee because it would regressive and hit low-income folks harder than others. Morgan there is little grant money available to pay for the city’s street projects.

By raising franchise fees across the board, the city expects to generate about $413,000 per year. That, coupled with the city’s already-existing street funds of about $200,000 as well as around $400,000 the city receives from the state transportation package, would net the city just over $1 million a year to tackle projects.

Some of the projects proposed include:

• First Street Bridge replacement
• Newport Park roadway improvements
• Resurfacing portions of W. Theater Lane
• Installing traffic signals at the intersection of Highland and S. First Street
• Orchard Avenue and S. First Street intersection improvements

The projects, said Morgan, would be spread out over a five-year period.

Morgan said Hermiston residents will see their electric bills increase by about $1.70 per month as a result of the fee increase to electrical utilities. He said it’s harder to estimate the cost increase for other services affected by the fee hike such as Internet, phone and TV users.

Steven Gerber of Charter Communications urged the council Monday night to table the plan until utility representatives can sit down with the city to further discuss other available options.

“These increases will be passed on to the customers,” he said.

Hermiston resident Cindie Traner told the council she was opposed to the fee increases and would prefer to have the citizens vote on the matter.

Hermiston City Councilor Manuel Gutierrez said the council is responsible for addressing issues as they arise.

“We need to fix our streets and we need to find the money,” he said. “To me, if we decide to live here, we need to take care of our city.”

Hermiston Mayor Dave Drotzmann said the franchise fee increase is necessary to maintain the streets.

“This is a fair and equitable way to pay for this,” he said. “We don’t want to be the city that is filled with potholes and then have to scrounge money from other programs.”

Franchise fee increases for electric utilities will take effect Oct. 1, while most of the other increases will take effect on Jan. 1.