By Lisa Young

Staff writer


The town of Paonia will look into franchise fees and sales tax after a question on how DMEA figures gross revenue was brought up at a recent meeting. 

After a lengthy discussion Paonia Board of Trustees approved a motion for the town treasurer and town attorney to find out if the town can charge sales tax on franchise fees. The question came up at the last meeting after a citizen questioned how Delta-Montrose Electric (DMEA) figures its gross annual revenue in regards to the franchise fee.

Town Treasurer Ross King told the board that the “issue boils down to the definition of gross revenue.”

He said that for accounting purposes the gross revenue does include franchise fees according to the DMEA. He recommended that no further action be taken by the board as DMEA was doing it correctly.

Following the explanation, Trustee Bill Bear stated that citizens were getting taxed twice.

“We’re having to pay the franchise fee for the DMEA to use our land and then we pay that to the town, on top of that we get taxed for it. The DMEA can say what they want but this is not a DMEA issue it’s a Town of Paonia issue,” Bear stated.

Ross pointed out that the town would be reducing the revenue generated by the franchise fee if they told DMEA that the town would no longer impose such fee.

Bear said he wasn’t asking for the franchise fee to be eliminated rather he wants DMEA to move the charge for the sales tax the other side of the equation before it adds the franchise fee in.

“It’s strictly a Town of Paonia question. Do we collect sales tax on stuff that is non-tangible? And I don’t think that the franchise fee is tangible and I would like to hear what Mr. Nerlin has to say about it and have him take a close look at the reading of our sales tax enactment and see if that tax covers that franchise fee.”

In other meeting news, the possibility of testing town waste water of COVID-19 went down the drain after Corinne Ferguson, town administrator, explained that the cost of testing and shipping is around $450 per test.

Ferguson said the town has not budgeted for the testing costing about $5,000 a year if testing was once a month. In addition, she said there’s a delay in the data results and the only thing the test would prove was that someone using the system had COVID.

All but one trustee voted in favor of sending a letter to Sens. John Hickenlooper and Michael Bennet expressing the town’s support of conservation direction of the Biden Administration regarding the oil and gas industry.

“I think it’s still important for our senators to hear input from local voices and I think the voice from the Town of Paonia would be a really important voice for them to hear... to know that we’re still here and we’re still concerned and looking for permanent protection,” said Tanya Henderson, Western Slope Conservation Center executive director.

Henderson offered the board a sample letter that details much of the organization’s concerns. Mayor Mary Bachran told Henderson that she would be happy to sign the letter on behalf of the town. Voting against the letter was Bear.

Trustees unanimously approved a letter in support of the North Fork EMS grant application for a valley wide injury prevention program encompassing strength, balance and fitness classes for adults 65 and older.

Anyone waiting for a definitive answer on format changes to town council meetings will have to wait a bit longer. At the recommendation of the town administrator and other trustees the issue was tabled until the Feb. 23 meeting.

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