By JASON COX
Of the Keizertimes
The seeds for a franchise fee on wireless telecommunications companies – a cost that could be passed on to customers – were sown Monday.
The Keizer City Council opted in a 6-1 vote to give themselves authority to establish a franchise fee primarily targeting wireless communications companies, i.e. cell phone service providers. The stated reason was to recover some of the costs associated with providing 911 service to residents, along with radio communications and an area-wide records system for police officers.
Because the vote was not unanimous the matter will go before the council again for a second reading.
The ordinance would create a licensing system for telecom companies. Those firms would have to provide revenue information to the city in order to ascertain their yearly fee. Firms with less than $10,000 in annual revenue from Keizerites would be exempt.
Councilors will also have to pass a resolution setting the amount. City Manager Chris Eppley has proposed 3 percent. A third of that would be sent to the Keizer Fire District. This could come before the Council as soon as its first December meeting.
A packed house showed up, mostly speaking against the proposal. Some residents said they had been receiving robocalls – automated telephone calls – urging residents to come out to the meeting and speak against the proposal.
Brian Butler and Darsy Olafson, respective presidents of the Keizer Professional Firefighters and the Keizer Police Association, spoke up in favor, along with several other residents. Representatives from Verizon Wireless, AT&T and Qwest spoke of potential problems with the ordinance as written.
Voting in favor were: Mayor Lore Christopher and Councilors Cathy Clark, Mark Caillier, Jim Taylor, Richard Walsh and Brandon Smith. Voting against was Councilor David McKane.
City Manager Chris Eppley proposed the tax as a way to make up a funding gap between what the city takes in from the state in 911 fees – the current year is expected to be about $107,900 net after remitting a portion to the Keizer Fire District – and the total cost of communications-related expenses for police. When asked how much revenue the new tax would produce Eppley gave a preliminary estimate of about $300,000 per percentage point.
Between providing 911 service via the Willamette Valley Communications Center and the other tasks performed by WVCC – such as managing KPD’s radio system and providing a records management system – the gap between 911 revenues and total communications-related costs is about $610,700.
This gap includes about $30,700 for police cell phone allowances, and a five-year average cost of $57,000 for information technology like network support, hardware and software.
At Monday’s council meeting, testimony continued well into the evening.
Butler said “our expenses are outpacing our revenues,” noting the district is budgeted to pay WVCC $319,792 for 911 service and communications equipment.
Olafson said the officers he represents in the police union “strive to provide the best service we can to this community.
“We do it as efficiently as we can with the resources we’re given, but as time goes on it’s going to become increasingly hard, if not impossible, to give the level of service citizens have come to expect from us without adding some additional resources,” Olafson said.
But the pro-fee side was outnumbered, at least in the number of people testifying, by those who oppose the proposal.
Jon Wolf said he’s still paying the cell phone bill for his three adult children who no longer live in Keizer.
“The fee is not equitable. … If they’re here it’s a service that’s provided,” he said.
A self-described “techno geek,” he said he expects to pay a disproportionate sum due to having several phone lines, including voice over internet protocol (VOIP).
Amanda Dalton, representing the Salem Association of Realtors, said “now is the wrong time to raise new fees and taxes,” noting real estate agents rely heavily on cell phones.
She also questioned how long funding would be dedicated to public safety communications. City Attorney Shannon Johnson said any fund dedication would take place in the resolution actually setting the fee, not the resolution authorizing it.
Officials from Qwest, AT&T and Verizon were also on hand to oppose the proposal.
Richard Kosesan, a lobbyist representing Verizon Wireless, told the Keizertimes Tuesday of his concerns with the ordinance.
“A wireless provider does not occupy nor does it utilize the public right-of-way (as do landline providers), and the city has apparently seen fit to suggest one should be on the same footing as the other,” Kosesan said.
He also questioned whether the resolution method of setting the fee amount could be referred to the ballot.
“I don’t believe it’s appropriate to address a tax by mere resolution,” Kosesan said. “An ordinance is always subject to initiative and referendum. A resolution, a mere resolution by a governing body, is probably not subject to referendum. So the voters are disenfranchised, and they have no recourse.”
Laura Brown, a Mill City resident, questioned the city’s priorities.
“There’s fountains that needed repairs,” Brown said. “There’s civic fixtures you want money for. There’s parks for dogs you want money for. So what I am hearing is it’s OK for you to spend money for parks for dogs, and that’s fine, but for us to take care of the police or fire department you want to raise taxes.”