FRANCHISE FEE: Residents Vote To Increase

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The city owes current and former residents $40 million dollars for franchise fees it illegally charged for years on utility bills.

However, the only way the city can pay that money back, is by forcing residents to pay for it.

Tuesday, voters were asked to approve a seven-year increase in their franchise fee to pay for the refunds and they overwhelmingly agreed to the plan.

More than 85% voted yes with more than 9,000 votes cast.

But voters were not happy about the no-win question they were forced to answer.

Voters had the task of deciding whether or not to increase the current franchise fee from 5% to 7.5% for the next 7 years.

A judge ruled the city charged an illegal tax by raising the franchise fees on Mid-American Bills between 2005-2009 and ordered the city pay back 40 million dollars.

“I personally believe it`s the fairest, it`s the cheapest, and it`s temporary,” says City Council Member Christine Hensley.

Hensley says if they don’t raise the franchise fee the city will have to increase property taxes, and voters don’t like the sound of that.

“I thought it was more important for everybody to have to pay the franchise fee then to have the property tax owners pay it so I  felt like I should vote yes,” says Anna Johnson of Des Moines.

Another voter, Scott Hutchens agreed saying, “It`s a better way to pay it off, it`s faster and get it over with, instead of raising the property taxes for such a long period of time.”

However, some at the polls don’t think they should have to pay for an increase in franchise fees to pay for a franchise fee settlement.

“Franchise fees should have never happened, I don`t know how the city got themselves in the mess they should take care of it themselves,” says Nolan Etter of Des Moines.

Hensley says why she understands why voters are upset; it was the best option the council had to choose from.

“This was dictated to us by the courts we would have loved it be neutralized but that was not the way the courts ruled so we`re carrying out what we`ve been dictated to do,” says Hensley.

And most voters agreed increasing franchise fees was better than increasing property taxes.

“t`s a bad situation but the best option for a bad situation,” says Hutchens.

Des Moines City Manager Rick Clark said the increased franchise fee of 7.5% will go into effect on July 1st and will appear on your Mid-American Bill for seven years.

 

4 comments

  • Stella Lane

    The vote was made necessary to pay the attorneys. I would assume most people would have preferred to have just called it a loss and gone back to the legal franchise fee from that date forward but that would have provided no pay to the attorneys.

  • J

    Sue the city so we pay a lawyer to get the city to raise a fee to pay us back for a fee that we were were charged. Sounds like a great deal!

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