Durango voters rejected a 20-year franchise extension for the La Plata Electric Association with 735 votes against and 694 for it, according to an unofficial tally reported Tuesday night that must be verified.
The election means the city will immediately lose the LPEA franchise fee, putting a $900,000 hole in the city budget. Officials said they will have to soon look for cuts to offset the loss in revenue.
City Councilor Sweetie Marbury predicted residents would feel the hardships with the loss of jobs and shorter hours at city facilities such as the Durango Community Recreation Center and the Durango Public Library.
“My stomach is in knots,” Marbury said before the announcement of the vote. “Where do we find almost a million dollars? There are consequences you will feel almost immediately.”
But City Councilor Paul Broderick had called the election “misleading and deceptive” because the ballot question did not explain the 4.67 percent fee that LPEA passes on to city consumers on their electric bill. Consumers might have thought that LPEA paid the fee, he said.
Deborah Betwee, a city voter, said she had opposed the franchise agreement because of the fee.
“I don’t like secret taxation, and that’s what this whole thing with the franchise fee was,” Betwee said outside City Hall on Tuesday afternoon after delivering her mail-in vote.
“La Plata Electric was collecting taxes for the city of Durango, only people didn’t realize that’s what it was,” Betwee said. “It’s not that we didn’t need the money, but it didn’t seem right.”
The franchise fee was to compensate the city for giving LPEA access to public right of way so it can work on city streets and infrastructure.
LPEA, a member-owned cooperative, will continue to provide power to its consumers or members in the city, but the electric cooperative will still have to work out an agreement with the city for using its public right of way, said Greg Munro, chief executive of LPEA.
City councilors and city officials were clearly upset with Broderick for galvanizing opposition against the franchise.
City Attorney David Smith told Broderick that “you conveniently ignore that the franchise agreement was published in full in The Durango Herald. I’m really distressed by your manipulation of the facts. I think it’s very unfair, and I’m disappointed, not that you care.”
In a response to whether a one-year extension of the franchise had violated the City Charter, Smith argued that there was leeway in the Charter for franchise extensions.
Councilor Doug Lyon said Broderick’s position was ”a nihilist ideology substituting for common sense.”
Lyon explained that the franchise fee was “conceptually no different than people who shop in our stores and pay sales taxes.”
Councilor Dick White said Broderick had not raised his objections “in a timely way” so the city could have responded before the election.
Another objection to the franchise was that the 20-year extension was too long considering rapid technological change, but Marbury said a 20-year agreement was standard for electrical utilities.