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HASSO HERING

A perspective from Oregon’s mid-Willamette Valley

Albany electric tax hike delayed

Written July 9th, 2015 by Hasso Hering
Rich Kellum (at right in this file photo) forced a delay in Albany's planned fee increase on electric service.

Councilman Rich Kellum (at right in this file photo) forced a delay in Albany’s planned fee increase on electric service.

The Albany City Council was all set to pass a $930,000 increase in electric taxes Wednesday. Five council members voted to go ahead, but Rich Kellum said no, which meant that the second and final reading of the ordinance containing the boost had to wait for another day.

The increase takes the form of a two-point hike, from 5 to 7 percent, of the franchise fee the city collects from Pacific Power. Based on power sales of $45.6 million in the city in 2014, the boost will cost Albany ratepayers $76,000 a month or about $912,700 a year.

The added money is already part of the city budget for the fiscal year that started July 1. There was no public controversy when the budget committee settled on this revenue boost during the spring, probably because the action was not reported. (Budget discussions usually put reporters and the public to sleep, so they don’t get much play in the press, or in this case any at all that I saw.)

Tom Cordier, the North Albany retiree who often urges the city to cut spending, spoke to the council Wednesday and complained about the electric boost. He ticked off all the money the city of Albany collects from utility customers in the form of franchise or “privilege” taxes, and he said the total amounts to about $4.2 million for the year. He found it “unbelievable” that now the city wants another $930,000.

Cordier objected to the emergency clause attached to the electric franchise ordinance, which includes the tax hike, because if citizens wanted to block it, they could not refer it but would have to try an initiative, which takes more signatures. City Attorney Jim Delapoer told the council later that the Pacific Power franchise ordinance was administrative — not legislative — and not subject to initiative or referendum anyway.

According to Delapoer, the emergency clause was attached because it allows the rate hike to take effect right away. Without the clause, ordinances take effect in 30 days, which in this case would cost the city — and save ratepayers — $76,000.

Kellum objected to the frequent use of the emergency clause when there is no emergency. And Delapoer said  the council can remove that clause whenever it considers it unwarranted.

Mayor Sharon Konopa felt it necessary to tell Cordier that the city charges utilities a franchise fee for the right to put their facilities on public property. She didn’t explain why, if that is so, it’s members of the very same public, the utility customers, who have to pay the fee.

The next regular council meeting is on July 22. Expect the electric tax to jump the following day.(hh)



11 responses to “Albany electric tax hike delayed”

  1. tom cordier says:

    Thanks Hasso for telling the story completely and accurately. The $4.2M figure comes directly from Stewart Taylor–City Finance Director. I’ll send you his email to me.
    The whole idea of franchise fees and privilege taxes is a construct out of “animal farm”.
    The City says–well Mr. Businessman, since you are placing your equipment on our City’s land; we’ll charge you a fee/tax for that use. Mr. Businessman says –well ok
    but we’ll pass that cost on the those who use our product. Then I see that line charge on
    my residential bill because Mr. businessman wants me to know the product I buy would be less expensive except for greedy local government.
    I think the voters can see this construct is nothing more than a local sales tax for the City to spend in a non-prudent way. I bet, given the opportunity, voters would strip the Council’s ability to impose all such sales taxes and fees.

  2. Gordon L. Shadle says:

    “City Attorney Jim Delapoer told the council later that the Pacific Power franchise ordinance was administrative — not legislative — and not subject to initiative or referendum anyway”

    There is a recent court case here in Oregon that ruled the language in an initiative petition focused on voter approval of increased fees/taxes was legal and could move to the ballot. I think Delapoer is blowing smoke.

    The smart thing for the council to do is refer their own charter amendment to the ballot that includes voter approval of taxes/fees. If they let this go to a citzen-led initiative petition, it could be very embarrasing to the council. And the council won’t have any control over the amendment language. I guarantee the council won’t like the language a citizens group comes up with.

    It would be a slam dunk getting the required signatures and passing a ballot measure focused on voter approval of taxes/fees. Who doesn’t want to have a direct say in the taxes they pay?

    The only question is – does the council want to fight its citizens and lose, or get ahead of the issue and refer their own charter amendment? I strongly recommend the latter.

  3. Bill Kapaun says:

    Maybe we need to start charging rent to any city employee that uses “our” property?

  4. Jim Clausen says:

    “According to Delapoer, the emergency clause was attached because it allows the rate hike to take effect right away. Without the clause, ordinances take effect in 30 days, which in this case would cost the city — and save ratepayers — $76,000.”

    Ok, Delapoer tells us that if the rate takes effect right away then the tax payers get to pay an extra $76,000 and Delapoer considers this a ‘savings to ratepayers’. In what bizzaro world does paying $76,000 – $76,000 that wouldn’t have been paid – equate to a savings?

    Such is the sad state of mind pervading our government today. It’s insanity is what it is…

    • No, Jim, read it again. Delapoer explained the effect of the emergency clause, which is to make the franchise and rate hike take effect immediately. I explained, based on the estimate of monthly income from the rate hike, that a 30-day delay (without the emergency clause) would cost the city government that much money. But I also point out that it would save the ratepayers the same amount. (hh)

      • Jim Clausen says:

        Ahhh, ok, the sentence was a bit muddy. I see what you mean now. That said:

        These “emergency clauses” are nothing more than a tool that make it harder for taxpayers to object. They were originally intended to be able to pass something of importance quickly without interference. Now they’re used as a tool to quickly pass anything they want and create a costly and cumbersome roadblock for the taxpayer.

  5. tom cordier says:

    It appears to me that HH and Jim C. are saying the same thing–both accurate.

  6. Richard Vannice says:

    Just got my Pacific Power statement and see the item “ALBANY CITY PRIVILEGE TAX”. If it is a “TAX” we are paying why can’t we deduct it on our Stare and Federal tax returns????

  7. tom cordier says:

    the whole tax thing is a sham method the city uses to extract money for services we pay for

 

 
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