Thursday, October 24, 2013

City Screws Citizens Twice on "Franchise Fee"

From the "they'll get you one way or another" department comes this story about the city of Des Moines, Iowa, which overcharged its citizens by $40 million for a fee they tacked on to utility bills. Des Moines is like damn near every mid-sized city run by liberals: It's not in great financial shape. So how do they pay this money back to their citizens? Issue bonds that will be paid for by raising the current franchise fee:

The city of Des Moines is on the hook to pay $40 million to some of its citizens.  The city was charging an illegal  fee on peoples' MidAmerican energy utility bills.  The case made its way all the way to the Iowa Supreme Court, and the court said the fee was illegal because it went to the city's general fund, not just to pay costs associated with the utilities.
One-hundred thousand people are owed back money.  Eventually they will be issued checks, but first the city says they'll have to borrow the money to pay them back.
"We don't just have $40 million lying around as one might expect," said City Manager Rick Clark.
On Monday night, the council voted 6 to 1 to issue general obligation bonds to raise the money.  The irony is how the state said the city could pay the bonds off.
"One of the options that they've given us to pay it back is essentially the same way that the funds were accumulated in the first place, which is a slight increase in the franchise fee," said Mayor Frank Cownie.
That's right: residents will be getting a refund with the possibility of paying it back the same way it was collected.
"A lot of the citizens are saying why am I getting the money back and putting it my right pocket and then I got to take it out of my left (to pay for the fee)," said Mayor Cownie.
 That's a real good question, Mayor Cownie. And the answer is a government bureaucracy's ability to tax the hell out of it's citizens is exceeded only by it's ability to spend money with reckless abandon. Which is why the city of Des Moines illegally taxed the money from it's citizens in the first place -- and spent it all.

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