The town of Bayfield has approached La Plata Electric Association about a franchise tax on power consumption, similar to the one Durango has in place that became the source of controversy two years ago.
Ignacio town officials also are considering a franchise tax.
“I don’t know how far along the matter is,” Ignacio Town Board member Dixie Melton said Friday. “But it was brought up as a possibility at the last budget hearing.”
Bayfield Town Manager Chris La May said Friday that it’s too early to talk about details.
“We’ve had one telephone conversation,” he said.
But a franchise tax makes sense, La May said, in light of voter rejection in April and again Tuesday of raising the town sales tax from 2 to 3 percent.
The latest rejection came Tuesday when 508 voters (53.1 percent) said no to the sales tax boost.
The revenue would have been used for street improvements and transportation.
A utility franchise agreement starts with a town or city asking a utility to add a certain surcharge on consumption. The utility returns the additional revenue to the city or town, which can be used for any purpose.
For its role, a utility can use the public right-of-way for it operations.
Franchise taxes are not new to town residents, La May said.
“We have franchise agreements with Source Gas (a natural gas utility) and USA Communications (for cable television),” La May said.
“In coming weeks, we’ll be talking more with LPEA,” La May said.
Durango voters rejected and then approved a franchise agreement with LPEA in 2012.
After voters rejected the tax that spring, city officials made it more palatable by limiting the tax to electricity consumption and opening voting to all registered voters. Previously, only property owners could vote.
The Durango franchise tax adds 4.67 percent to monthly electric bills.
daler@duragoherald.com
