Sioux City to pay franchise fee settlement in class action lawsu - KTIV News 4 Sioux City IA: News, Weather and Sports

Sioux City to pay franchise fee settlement in class action lawsuit over utility bills

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Monday night, Sioux City leaders accepted a six-and-a-half million dollar settlement in a class action lawsuit filed against it and several other Iowa communities.

The lawsuit stems from a two-percent franchise fee tacked onto gas and electric bills.

At the time, there was no state law that authorized the fee, and the towns involved in the suit were ordered to pay back the money collected.

Since then, the Iowa legislature has pass a law that allows a five-percent franchise fee.

City leaders plan to raise the fee to five-percent, to pay for the settlement.

"It allows (us) to spread the cost to the rate payers, a larger population rather than just raising property taxes, which would only be paid by those who have taxable property,” said City Manager Bob Padmore.

Though the city council has accepted the settlement, a judge will still have the final say.

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