LPEA agreement set for April 3 residents’ vote

Some property owners soon will be asked to approve a 20-year extension of a monopoly by the La Plata Electric Association to provide power to the city of Durango.

Not eligible to vote in the April 3 mail-in election are renters and property owners not registered to vote here. Only those who own property in Durango and are registered to vote in Durango are eligible to participate. If a house is owned by a trust, members of the trust will have to decide among themselves who should vote, City Attorney David Smith said.

City officials said the election rules are set by the city charter.

Ballots are scheduled to be mailed March 16 for a special election that is expected to cost the city $11,000.

Inactive voters who don’t receive a ballot in the mail can request a ballot at City Hall beginning March 20.

From March 19 to April 2, voters can cast their ballots between 7:30 a.m. and 4:30 p.m. at City Hall. On April 3, election day, ballots can be cast between 7 a.m. and 7 p.m.

Smith believes the rationale for the voter eligibility rules is that property owners ultimately are responsible for the electric bill. So they should have responsibility for approving a new franchise agreement.

City Councilor Paul Broderick believes that is “flawed” logic because renters typically get electric bills in their name.

“I would guess the vast majority of residents are not going to be able to vote, but they are the ones paying the electrical bill,” Broderick said at a City Council meeting. “It seems like there’s a big disconnect.”

Voters will be asked to approve a new franchise agreement which keeps LPEA’s franchise fee at 4.67 percent of gross revenues collected in Durango.

Because LPEA passes along the franchise fee to the consumers, it appears as a line item on their electric bill.

Consumers also are charged a 3 percent sales tax by the city and a 2 percent sales tax by the county for their electricity.

Because the franchise fee is a “tax on top of a tax,” Broderick questioned its necessity and the fairness of sticking consumers with the cost of the franchise.

“We’re giving them something of considerable value (a monopoly), and we’re paying for it. It doesn’t make sense to me,” Broderick said.

But City Manager Ron LeBlanc said franchise fees are common throughout Colorado, even in cities that own their utilities. It’s normal business practice to pass along costs to consumers, even if the costs do not always show up as a line item on a receipt.

“In the cost of goods I purchase at Walmart, there are corporate taxes being paid by Walmart,” LeBlanc said.

The franchise fee is not something arbitrary but is the cost associated with LPEA’s public right of way so it can work on city streets and infrastructure, officials said.

The city expects to receive $900,000 annually from the franchise fee. That money flows into the general fund to pay for expenses such as police cars and the cost of broadcasting city meetings on cable television.

Councilor Dick White noted that $900,000 is how much the city has budgeted for street maintenance this year.

jhaug@durangoherald.com