EL PASO, TEXAS (KFOX14\/CBS4) \u2014 The Texas 8th Court of Appeals upheld a lower court’s decision on Tuesday that the city of El Paso’s environmental franchise fee, which was on residential water bills, was an illegal tax. <\/p>\n
The case was brought by former state Rep. Joe Pickett, who filed a lawsuit against the city in 2020 over existing fees tied to utility bills. He argued those charges were labeled as street-repair fees but instead were used to help balance the city\u2019s general fund. Pickett sought damages of up to $100,000 and a declaratory judgment preventing the city of El Paso from charging him or his property the fee.<\/p>\n
The fee, approved in 2014 and implemented in 2015, was tacked on to residents’ water bills to cover the cost of wear and tear on streets by city sanitation trucks. <\/p>\n
According to court documents obtained by KFOX14\/CBS4, the court ruled in favor of Pickett because the city did not show the fee was reasonably tied to street damage caused by garbage trucks.<\/p>\n
“The trial court agreed that the City did not have the authority to charge the fee, and that it was an illegal tax,” the opinion by Chief Justice Maria Salas Mendoza states.<\/p>\n
The court documents showed the fee grew from $1.10 to $6 per month per household.<\/p>\n
Additionally, according to El Paso Matters, the city has collected about $14 million per year from the franchise fee.<\/p>\n
Speaking to KFOX14\/CBS4 on Thursday, Pickett called the ruling \u201ca win for the tax and the ratepayer of El Paso,\u201d but added, \u201cI don’t think it’s over.\u201d<\/p>\n
Pickett said the city should stop collecting the fee. <\/p>\n
\u201cWhat is practical and what the city should do is stop collecting the fee. They have enough waste in their billion-dollar budget to absorb this, and especially for what they said it was to be used for,\u201d Pickett said.<\/p>\n
Meanwhile, the court documents also detail how the money was used.<\/p>\n
“When the fee was set at $4 per month and generated almost $9 million a year, only $7 million of that was allocated to street repair. Nearly $2 million was placed into the general fund and could be spent on any City expense regardless of its relation to solid waste disposal. The increase to $6 per residence per month generated an additional $4 million in revenue and Cote\u2019s testimony indicated that the increase was intended to fund the purchase of vehicles and equipment for the fire and police departments,” the court documents state. <\/p>\n
The court documents further state that “Evidence that the calculation of the fee was arbitrary and was increased so that the City had the funds to buy equipment for the fire and police departments was legally and factually sufficient to support the trial court\u2019s findings that the EFF is excessive and therefore a tax.<\/p>\n
The ruling might open the door to refunds for the $6 monthly fee collected by the city. The city has 45 days to respond<\/p>\n
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