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ESCANABA -- Escanaba upped Charter Communications' annual franchise fee by more than $100,000 for allowing the company to run cable lines in the city. The fee increase was approved by the Escanaba City Council during its regular meeting Thursday.
The city's current agreement -- which charges Charter a 2 percent franchise fee -- is expiring on Oct. 18 and provides the city approximately $78,000 a year. After looking at fees in other communities, council increased the fee to 5 percent bringing Charter's annual fee to $195,000.
"The city took part in a survey of 18 communities in the state to see what others are assessing through their franchise agreements. The results of that survey showed Escanaba on the low end on what communities were assessing," explained City Manager Patrick Jordan.
He also noted most communities participating in the survey charge the 5 percent franchise fee rate.
Prior to council discussing the administration's request, Jordan mentioned areas in the city's budget which could use the extra funds generated from the increased franchise fee.
Due in part to the city's budget being hit with declining state revenue sharing funds each year -- $500,000 less since 2002 -- the city struggles to continue to provide services in the community, said Jordan.
On top of the revenue cutbacks, the city's legal fees continue to increase for tax tribunal litigation to appeal business property tax cut appeals based on the dark store concept, the city manager added.
Since 2014, Escanaba's tax tribunal costs have amounted to $229,000.
Other taxing entities -- such as the county and Bay College -- are helping to pay the bill to fight the dark store loophole, said City Controller Melissa Becotte, noting these entities can't be billed for more without an agreement.
In addition to decreasing state funds and increasing tax tribunal costs, Jordan also said veteran property tax exemptions are also affecting the city's finances.
He also mentioned future projects the city needs to consider, including upgrading equipment to live-stream council meetings for the public, installing security cameras around city hall and the library, and making the part-time community preservation clerk a full-time position.
Following discussion by city council, the franchise fee increase was approved by a 3-1 vote. The no vote came from Mayor Marc Tall, who had expressed concerns about Charter passing the increased cost on to subscribers.
The motion was approved by Mayor Pro Tem Ron Beauchamp and council members Pat Baribeau and Michael Sattum. Council member Ralph Blasier was absent from the meeting.
In other action, council unanimously approved hiring C2AE to conduct engineering services to replace aeration blowers at the wastewater treatment plant at a cost not to exceed $17,500. C2AE will prepare bid documents and specifications for the needed equipment.
City Attorney Ralph "B.K." Peterson updated council on a lawsuit the city has been party to regarding a Brownfield (contamination cleanup) project which Escanaba asked the county to process for the city a few years ago.
Peterson explained Fleet Maintenance -- which planned to expand its business on the contaminated private property within the city limits -- started the Brownfield process and paid two engineer firms $33,531 from a $450,000 loan from the Department of Environmental Quality (DEQ).
Finding the cleanup process too expensive to expand the business, Fleet Maintenance backed out of the land deal and later filed a lawsuit against the county for the DEQ loan money spent on the project, claiming the county was negligent in administering the project.
The city, which had held the county harmless for processing the Brownfield project, stepped in to defend the lawsuit and filed a counter claim against Fleet Maintenance and filed additional claims against the two engineering firms, said Peterson.
Fleet Maintenance then filed complaints against the two firms which in turn sued Fleet Maintenance, he added.
In an effort to prevent attorney costs from going any higher, the parties got together in the summer of 2016 to discuss resolving the issue. The city agreed to reduce its $33,531 counter claim against Fleet Maintenance by $5,000, said Peterson.
In August of this year, the matter was finally resolved and agreed to by all parties, he told council. Escanaba received $28,531, which the city gave to the county to reimburse the DEQ. The county will ask the DEQ to forgive the $5,000 shortfall. If the DEQ denies the request, the city will pay the $5,000, explained Peterson.
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Jenny Lancour, (906) 786-2021, ext. 143, jlancour@dailypress.net