By SHEL SEGAL
Vern Hensel is mad. A longtime resident of Sierra Madre, like other residents Hensel feels he is paying taxes upon taxes.
And he thinks the city of Sierra Madre is the culprit. So much so that he recently wrote a letter to the city council and the city manager reading the following:
“Are you aware that the city is now charging us a total of 25 percent in additional fees on our utility related bills, which is being collected by the various utility providers and given to the city? As an example, just take a look at your (garbage) bill and you will find that it clearly itemizes the following two fees:
“Fee #1 – Franchise Fee = 15 percent; Fee #2 – City Fee (Utility Tax) = 10 percent; total fees charged on utility bills that go to the city of Sierra Madre = 25 percent.”
Hensel added in the letter that he knows this practice is used widely by the city, and it is something that should not occur:
“And all of our other utility type bills have similar charges listed. In fact, one of our utility bills has the Sierra Madre utility tax being charged not only on the utility bill amount, but also on the fees/taxes being charged on the bill by other entities, so it’s a charge on top of a charge. That is totally inappropriate and should not be acceptable to any of us.”
Hensel said this logic just does not add up.
“They’re not charging me to drive home every day, I have exclusive use of the streets,” he said.
However, Sierra Madre City Manager Elaine Aguilar said while she can appreciate Hensel’s concern, he doesn’t have all the information.
“I can say definitively it is not a tax on a tax,” Aguilar said. “Franchise fees are not a tax. There is a legal difference between fees and taxes. I’m a consumer like everybody else is and in the end it’s money out of my pocket, but as far as the law is concerned there is a difference between fees and taxes.”
She added they are mutually exclusive of each other.
“The utility users’ tax is a tax and it is voter approved,” Aguilar said. “The people did vote in 2008 for an increased utility users’ tax. Franchise fees, on the other hand, are authorized pursuant to state law. Cities are authorized whenever they are granting an exclusive contract – garbage, gas, electric – cities are authorized to negotiate a franchise fee. It’s not a tax on a tax. If you look at the bill you’re not paying the utility users tax on the franchise fee. They’re calculated separately.”
(Shel Segal can be reached at ssegal@beaconmedianews.com. He can be followed via Twitter @segallanded.)
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