Des Moines to borrow $42M to repay franchise fee

DES MOINES, Iowa (AP) — The Des Moines City Council has voted to borrow up to $42 million to repay fees collected on citizens’ utility bills that the courts have declared unlawful.

The city must refund a portion of the city franchise fees paid by gas and electricity customers of MidAmerican Energy from September 2004 through May 2009. The courts have determined nearly $40 million the city had collected was an unlawful tax.

The Des Moines Register reports ( ) the city council Monday approved issuing up to $42 million in bonds to refund the fees.

The city hasn’t decided how to pay back the bonds.

Options include cutting services and taking the money out of the budget, raising property taxes, or temporarily raising the franchise fee from 5 percent to 7.5 percent for seven years.


Information from: The Des Moines Register,

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