DES MOINES, IOWA ---WEDNESDAY-- June 3, 2009 ---Today, the District Court issued a ruling in the Kragnes case. The ruling deals with the question of whether or not past collected franchise fees should be refunded. The Court ruled that a portion of the fee was legal, but a partial refund would be required. The ruling did not specify the amount of the refund, and indicated that the Court retained jurisdiction to determine the exact amount.
”It is ironic that just 2 weeks ago the state enacted legislation which memorializes Iowa cities’ right to collect up to 5% gas and electric franchise fees. Franchise fees have been collected by some cities in Iowa for over 100 years,” said Mayor T.M. Franklin Cownie.
We have not yet completed our review of the Court’s ruling. However, while we respect the work of the Court, we must strongly disagree with the Court’s conclusion. The cost imposed upon the City and its citizens by the existence of a franchise for gas and electric utilities has been significantly underestimated by the Court. We will follow the next legal steps to reach a final determination in this issue, which may include an appeal to the Iowa Supreme Court.
If this ruling is allowed to stand, the effect upon our taxpayers could be significant. In essence, the City will be obligated to allocate scarce tax dollars to pay any refund. This will cause an increase in the tax rate, a reduction in services, a reduction in capital improvements, or a combination of all three.
Wednesday, June 03, 2009
Cownie Calls Judge's Ruling 'Ironic"
A District Court judge has ruled against the city of Des Moines in the way it charged franchise fees on residents' bills. And Mayor Frank Cownie is none too happy about the decision, which will cost the city millions of dollars. Here's the release from Hizzoner...