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Franchise Fee Affecting Utility Bills

CEDAR RAPIDS, Iowa (CBS 2/FOX 28) -- It may have caught off guard, if you actually read your mail -- an increase in your utilities bill.

"We do that as a courtesy for customers anytime there's a change in our billing procedures," Alliant Energy spokesperson Ryan Stensland said.

The franchise fee affects your Alliant Energy electric bill or MidAmerican Energy gas bill, but it is actually a city of Cedar Rapids tax.

Alliant Energy, for instance, is the means for collecting it, but all that money goes to the city.

Assistant City Manager Sandi Fowler said the fee helps pay for things like police, fire, parks and recreation.

"The normal things that make a city run," Fowler said.

The fee used to be one percent of your bill. This spring, the city council voted to increase it to two percent.

That's two dollars more on a $100 utility bill, and Fowler said it adds up citywide.

"Going from a one percent to a two percent franchise fee for the fiscal year 2014 budget will yield about $6.8 million to the city's budget," Fowler said.

But why a franchise fee instead of property tax increases? The council decided this was the most fair way to include people or entities that don't pay property taxes to contribute to the city's budget.

"So that they also support the city's services so that Cedar Rapids is a great place," Fowler said.

Alliant Energy said if the change is too much, there are programs in place to hep save money.

"We do encourage customers to get on the budget billing program, so you'll have a set amount per month. It does provide some stability for your budgeting each month," Stensland said.
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