Proposed Minot City fee would increase utility bills

Verendrye Electric is closely following and strongly opposes a proposal from the City of Minot to implement a percentage fee on all utilities that do business inside city limits.

We’ve been told the proposed fee, which we call a tax on city residents, could be as much as 5% on all gross revenue. If it passes the city council, the fee would be a line item on all bills for Minot residents. It would also be assessed on customers of other utilities, including Xcel Energy, MDU Utilities and SRT Telecommunications. Midcontinent Communications already pays a 5% franchise fee. Verendrye members living outside of Minot would not be assessed the fee.

Other cities, including Fargo, West Fargo and Grand Forks charge this fee that is passed on to consumers.

According to City Manager Harold Stewart, a franchise fee is the “rent” paid to use the public right-of-way. He said the North Dakota Constitution allows communities to implement a franchise fee, but Minot has not capitalized on the revenue it would provide.

The proposed fee is not actually part of the 2025 budget because the city doesn’t know how much revenue it would generate. However, at the July 15 Budget presentation, he included information about it.

“My recommendation would be to potentially implement this at some point in 2025, allow those revenues to come in, set those aside, restrict those for whatever the potential solution is for the police department, or the legacy city hall as we call it now,” he said.

Stewart said the fee can work as tax relief.

“That would give us the data to build and project what those revenues would be in 2026 and then the council and the community can discuss at that point how those revenues should be used in supplementing tax relief and the city’s operational budget for the future.

He acknowledged there is already opposition to the plan.

“That’s a big conversation to have and unpack. I can tell you right now there are already a couple utilities in the community that are not really excited about this idea,” he said.

Verendrye is opposed to it for several reasons.

• It’s a regressive tax. The state actually abolished heating fuels taxes in 2007. This fee would also apply to electricity used for heat, and to natural gas customers
• If the city needs more revenue, it should collect it directly from its citizens, rather than have us collect it for them
• It’s an administrative burden for us that will cost to implement
• This goes against economic development efforts in the city
• Charging taxpayers a new fee to help alleviate property taxes is not tax relief
• It is arbitrary to simply pick a percentage and call that “rent” for the use of right-of-way