by Tracy Chamberlin

With the election only weeks away, voters are likely focused on who they want living at 1600 Pennsylvania Ave. But, one item on the November ballot hits a little closer to home.

 

Durangoans will also be voting Nov. 6 on whether or not to approve a 20-year franchise agreement between the City and La Plata Electric Association.

 

This is not the first time this agreement has been put on a ballot. Last spring, voters were asked to approve the deal, essentially a renewal of an agreement that has existed between the city and its electrical provider for decades, which allows LPEA to make long-term investments and planning decisions while streamlining right-of-way procedures.

 

Pressured by the potential loss of $930,000 from the general fund, the City Council approved putting the franchise deal to voters by a 4-1 margin in March. City Councilor Paul Broderick voted in opposition, citing concerns over ballot language and the voting process. Under City Charter, only registered city property owners were allowed to participate in the election.

 

The measure was narrowly defeated. Following that, the city chose to address the concerns raised and revisit the issue.

 

First, city leaders focused on the City Charter voter eligibility language, which limited the pool to less than one third of city voters. In July, a special election of city residents adopted new language, which allows all eligible voters within the city limits the chance to decide the fate of future franchises.

 

The council also altered the ballot language to spell out key provisions, including the length of the contract (20 years ) and the amount of the fee (4.67 percent). Lastly, the contract was amended to explain that the fee would be applied to energy usage, not the bill’s bottom line. Therefore, residents would have an incentive to conserve energy and be rewarded for doing so. This also addressed the idea that by applying the fee to the actual usage and not the bottom line, which already included a city tax, residents weren’t being taxed on a tax.

 

Despite this, some opponents still consider the fee double dipping, since residents are essentially being taxed twice on the same monies. They already pay the city tax on usage, and would also be paying the franchise fee on that same amount.

 

“This is another tax that’s not necessary,” said Tom Darnell, who financed opposition to the first franchise vote and spoke against it during a ballot forum sponsored by the La Plata County League of Women Voters on Oct. 8.

 

The idea of a “double tax” isn’t the only thing Darnell is speaking out about. He said he is concerned that the city is forgetting one key point about electricity – that it is a necessity.

 

In a world of online banking and microwavable meals, it would not be easy to choose a life illuminated by candles. Darnell questioned the wisdom of taxing the must-haves, like food and electricity.

 

It’s estimated that electric bills would only increase by an average of 12 cents per day for residents, but for some, every penny counts. “When I didn’t have money, nickels and dimes mattered,” Darnell said.

 

He added that residents living on fixed incomes would be hit the hardest. Students, seniors, single parents or property owners struggling with big mortgages could not easily absorb the additional cost.

 

City Councilor Dick White said he would argue that city services paid for with revenues like the franchise fee are especially important for low-income residents. He added that infrastructure, public safety and capital improvements are just some of the services paid for out of the general fund, where the fee would go.

 

Certain services cannot be cut from the city’s budget, according to White, like funding for the Durango Fire and Rescue Authority, which leaves few items on the chopping block.

 

White said relying primarily on sales tax revenues to fill the general fund would not be as dependable as a franchise fee. White said the city budget was slashed three years ago, and of the 27 city employees laid off, only a couple have returned.

 

The franchise fee would be a far more dependable source of revenue, even in the face of a changing energy landscape.

 

According to City Manager Ron Leblanc, approximately $800,000 would be added to the city’s general fund each year under the agreement. That amounts to a 14 percent drop from the $930,000 that was coming in under the previous agreement, but expectations are that population growth and rising energy costs will buoy that.

 

Tri-State, the power provider for LPEA, is expected to raise prices next year and the co-op would have to pass that increase onto its members. The rate is yet to be determined, but it could rise by 10 to 15 percent.

 

“We know the rates are going up, we don’t know how much,” said Indiana Reed, spokeswoman for LPEA.

 

The Board of Directors will decide on the new rate at a meeting at 9 a.m. Mon., Nov. 19. Members are invited to attend and comment. If they are unable, comments will be accepted for 30 days after the meeting.

 

White admits that the city’s revenue could drop if residents find self-sufficient ways of producing electricity, like solar panels. However, the risk of losing revenue from a sales tax approach is greater.

 

Solar farms and gardens are a common part of the energy conversation. The idea of adding them to the local landscape is far from shovel-ready, but LPEA and city officials have expressed interest. If projects like these come to fruition, residents could take less energy from the grid, which would actually mean fewer fees flowing into the general fund.

 

However, those changes would be gradual, giving the city time to adapt. A recession could come without warning and cause a dramatic loss in revenue, as evidenced by the most recent downturn.

 

White said because the population is also expected to grow, more residents would be paying in. “Maybe it wouldn’t grow, but it wouldn’t go away either,” he added.

 

In the end, one thing that Darnell and White agree upon is that it’s about the money. Whether it’s about keeping pennies in the pockets of voters or providing essential revenues to the city’s general fund, Durango residents have a decision to make Nov. 6.