COURT RULING: court rules in favor of a class action lawsuit awarding thousands of Des Moines residents a refund.
It’s a State Supreme Court decision eight years in the making.
Des Moines resident Lisa Kragnes says it all started back in 2004 when she noticed an increase in fees on her MidAmerican energy bill.
The increase was listed as franchise fees, which is supposed to be collected to compensate the city for the regulation of gas and electric utilities, however in this case the money was going into a general fund.
Kragnes sued the city of Des Moines saying the tax was illegal and after an 8 year battle won the class action lawsuit.
“The city has done things wrong and illegally and I’m really happy that they have been taken to task and it’s going to be rectified,” says Kragnes.
During the suit the city raised the franchise fee from 1 to 5 percent, that fee between 2004-2009 racked what lawyers estimate as $35 million dollars in refunds the city will have to pay back to approximately 100,000 utility customers in Des Moines.
“The only way for the city to be held accountable in this kind of case is to pay the money back as painful as it might be it’s the only way to deter future conduct along these lines as well,” says Kragnes attorney Brad Schroeder.
The city says they’re disappointed about today’s ruling but say the legal process is far from over, and it’s up to a district court to determine the actual amount and to whom the refunds will go to.
City councilwoman Christine Hensley said she doesn’t understand why a tax payer would challenge an issue that in turn they will have to help pay back.
“It’s really ironic that the same people that will receive the refund are the same people that are going to have to be paying for it, so why did we go through this process, but there has been the ruling so we need to move forward and look at what our options are and deal with it,” says Hensley.
The full amount of damages owed to each class member will be determined by a Polk County judge.