Utility bills going up in Fargo

FARGO, N.D. (Valley News Live) - You can soon expect to pay more in your monthly utility bills if you live in the city of Fargo.

At a City of Fargo Commission meeting, the majority of the commission voted to approve a 2 percent franchise fee increase. Currently the franchise fee is 2 percent and the new increase would bring it to 4 percent.

Commissioner Dave Piepkorn was the lone dissenting vote, saying the increase will have a “huge impact on people’s utility bills from here on out.”

That means if you live in an apartment or small home, your bill would increase $36 annually. If you live in a typical single family home, your bill would go up $60 annually. For larger homes or medium sized businesses, the bill would go up $120 annually.

City of Fargo increased fees graphic.(City of Fargo, ND)

A franchise fee is what a private company pays to use public utilities installed. For example, Xcel Energy pays the city to use power and gas lines the city installed. Those fees then get passed on to the consumer.

However, utility bills for gas and electric aren’t the only fees increase, the city is also increasing your fee for street lights and forestry. For a single family home, the street light fee would go from $3.50 to $7 monthly and the forestry fee would go from $4.48 to $5.98 a month.

With combined increased utility fees and forestry and street light fees, a $275,000 home would pay $145 annually in increased fees, on top of what you already pay.

The city is also looking to increase property taxes by 2 mills, to 55 mills. In the mayor’s budget, he’s proposing the extra 2 mills to be used for public safety, including hiring 15 firefighters and six total police officers with help from a Dept. of Justice grant.

The money from the proposed property tax increase would also go to departments that service public safety, such as IT, HR and Public Works.

In a presentation to the commission, Mayor Tim Mahoney says 35 percent of the general revenue comes from taxes, 20 percent comes from state, federal or local grants, and 13 percent comes from fees and charges. The rest of the budget comes from several other smaller areas.

With the increase in property taxes, the city is hoping to have a budget revenue of approx. $120.29 million in 2024. The majority of the city’s revenue goes to salary and benefit packages, eating up 75.3 percent of the budget for 2024.

In his presentation to the commission, the mayor says previous COVID relief money is gone and expenses continue to rise, saying inflation is hitting the community hard. “Going forward we should have a sustainable budget,” Mayor Mahoney says.

The city expects the full budget for 2024 to be voted on an approved by Sept. of 2023, taking effect on Jan. 1.