KELLOGG – Voters in Kellogg will decide in November whether to approve an increase in the city’s franchise fee. 

During its August council meeting, the Kellogg City Council agreed to ask voters to approve raising the fee to the maximum allowed 3%. 

Kellogg Community Planner Monica Miller said the city is seeking ways to boost revenue amid ongoing cuts in state and federal funding. One proposed solution is raising the franchise fee, which has historically been set at 1%. 

In Idaho, cities can charge utility companies a fee, between 1% and 3% of their gross revenue, for using public property. This fee appears as a separate line item on residents’ utility bills and goes directly to the city. It applies to all customers within city limits, including residential and commercial accounts. 

According to Miller, there are two ways a city can do this: First, by going directly to the provider and having them increase the fee percentage without public input; Or second, by taking it to the public in a vote and then going to the provider with the results.    

In Kellogg, Avista Utilities and Optimum are the only companies currently paying franchise fees. 

“All parties involved, ourselves and Avista included, felt that it was better to take it to the public and the public can decide if they want to increase them,” Miller said. 

Miller pointed out that utility companies often raise rates in response to increased franchise fees. However, they are only allowed to raise rates by the same percentage as the fee increase. This month, Avista announced rate hikes for Idaho customers, 6.3% for electricity and 9.2% for natural gas. 

“The state is making it difficult for cities and a lot of other entities to get any type of money,” Miller said. “We understand that this is an increase, and we know that’s not ideal. It gives residents a little more power and control over how much they’re paying because it is a percentage.” 

Last year, Kellogg collected approximately $56,000 in franchise fees. 

While no specific projects have been earmarked for the potential new revenue, city officials have several initiatives in mind, including the planning and construction of a new civic building. 

For more information, contact Monica Miller or Lindsy Strobel at Kellogg City Hall at (208) 786-9131.