Since voters last month defeated a 20-year franchise extension for La Plata Electric Association, some residents and public officials have suggested Durango try another franchise agreement in order to recoup the loss of $20 million over the next 20 years.
But Greg Munro, the electric cooperative's chief executive, sees problems with a do-over election.
In an email to City Manager Ron LeBlanc, Munro said: “One last thought, I believe trying to do another vote on a franchise agreement would be very problematic. LPEA may not have an interest.”
Because the proposed franchise agreement came with a 4.67 percent fee, which the cooperative passed onto city consumers' electric bills, the city lost about $900,000 annually for the next 20 years.
The city is now in the position of having to raise taxes or cut services to make up for the lost revenue, which represented about 3 percent of its General Fund budget.
At a pubic hearing on city's finances last week, residents and two city councilors, Sweetie Marbury and Dick White, expressed support for pursuing another franchise agreement.
White said he did not know what to make of Munro's email.
“It raised my eyebrow,” White said. “I don't know how to interpret it.”
Britt Bassett, a candidate to represent Durango on the electric cooperative's board of directors, said the confusion was an indication that “LPEA is too secretive about too many things. I would think the board of directors should weigh in.”
In an interview, Munro clarified that he's not taking a position on another franchise.
“That's up to the (LPEA) board of directors to decide,” Munro said.
But pursuing another franchise agreement could be problematic because it's a “fairly long and cumbersome process,” Munro said.
The proposed franchise agreement that recently failed took a year to negotiate. Munro is assuming the city and LPEA would have to start all over.
Munro already has heard residents express opposition to another election.
“That could be problematic, too,” he said.
As an alternative to franchise agreement, the city could pass an occupational tax for the electric co-op like it does for other utilities, Munro said. LPEA would be like a collector for the city because it would pass the tax onto consumers.
An occupational tax would have to be approved by the voters in a general election. Unlike the vote on the franchise, which was limited to city voters who own property in Durango, all voters in Durango could participate, LeBlanc has said.
The purpose of the franchise was to set the terms for the electric utility to work on city streets and infrastructure. Because the franchise was defeated, LPEA and the city have been negotiating a six-month to a year public-work permit, Munro said.