JOHNSTON, Iowa — Tuesday night the Johnston City Council unanimously voted to approve the first reading of two measures that would implement a 5% franchise fee to electric and gas bills of residents.

The City hopes the franchise fees will fund additional fire and police staff.

Paula Dierenfeld, the Mayor of Johnston, said during the council meeting that due to pressure from new state laws limiting property tax growth, the city must find other ways to fund essential services.

“We are feeling a lot of pressure from the legislature on trying to find alternative sources of revenue to provide services to our residents in our community,” Dierenfeld said in the meeting.

Last year the Johnston City Council implemented a 1% franchise fee on MidAmerican Energy Company utility bills which provided an estimated $295,243 of revenue for the city. A 5% fee is estimated to generate close to $1.5 million.

City Administrator Mike Pogge-Weaver said during the meeting that the franchise fee would lessen the tax burden on residents as it provides a way for the city to collect tax revenue from organizations that are property tax exempt like Camp Dodge.

“It really does reduce the burden on the taxpayers. It does ensure that other tax-exempt entities like Camp Dodge, some of our major regional nonprofits that are in town, and some other nontaxable property owners are paying franchise fees who receive city services,” Pogge-Weaver said in the meeting.

The Johnston City Council will review the second reading of the franchise fee ordinances at a city council meeting on February 1st when it can take action or opt to hold a third meeting on February 18th. If approved the new franchise fees would go into effect starting June 1st, 2025.