Irondale council preserves option for 3% gas franchise fee, approves ordinance for immediate consideration

Irondale City Council voted unanimously to advance an ordinance that preserves the city's right to set a 3% franchise fee on gross receipts of natural and manufactured gas utility franchises when the city's existing Spire franchise renews in 2050.

The measure, introduced as Ordinance (transcript: "20 25"), does not change Spire's current franchise arrangement, which the council record shows was approved in 2021 with an effective start date of Feb. 6, 2020 and a 30-year term that the presiding official said will expire in 2050. The ordinance would set the post-enactment franchise fee for such facilities at 3%.

Council President Spivey, who opened the item and read a staff-provided memo, said the city was "merely being proactive to preserve its rights to charge a 3% franchise fee to such facilities as allowed by law." He told the council that the current franchise imposes a 1% fee and that the ordinance would not affect that rate until the franchise renewal date.

During public comment, a resident warned the action would effectively raise gas bills and questioned the timing. "This is a tax... It will be passed on to the users," the resident said, adding the council was avoiding a referendum required under a recently passed state law if action occurred after Dec. 31, 2025.

Councilwoman Arnold asked whether the ordinance commits the city to a mandatory 3% fee in 2050 or merely preserves the option to negotiate up to 3%. "Is this saying for certain that we would charge 3% in 2050, or does that mean we have the option to charge up to 3% so we could negotiate it?" she asked. The council's response clarified the ordinance sets the franchise at 3% when the franchise term ends, rather than leaving it only as a negotiable cap.

Council members and legal counsel reiterated they understood the statute cited in the memo (transcript reference: "act 20 25 3 96") to limit municipalities to a 3% cap. Council members also noted that if a different natural gas utility were to enter the city before 2050, the ordinance language would apply immediately to that new provider while Spire would remain at the existing 1% until its renewal.

After discussion the council moved to approve the ordinance and to suspend the rules for immediate consideration. The motions were seconded and approved in roll-call votes recorded as unanimous in the transcript. The council then adjourned.

Details and next steps: the ordinance as approved at the meeting preserves the city's authority to set a 3% franchise fee for future franchise terms; it does not amend or increase Spire's current 1% fee until the franchise is renewed per the dates cited in the memo. The transcript did not provide the gross-receipts figures or an estimate of how much a 3% fee would raise individual household bills; those financial details were not specified.