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Sioux City residents receiving franchise fee lawsuit settlement letters

Sioux City residents receiving franchise fee lawsuit settlement letters

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SIOUX CITY | Sioux City residents have begun receiving claim forms notifying them of their eligibility to receive a monetary settlement regarding the city's overcharging of franchise fees on utility bills.

The settlement is the result of a lawsuit in which the city of Sioux City agreed to pay nearly $6.5 million it overcharged in franchise fees to city residents and businesses. A judge approved the settlement in November.

Sent from a settlement administrator, each claim informs the recipient of the amount of money he or she is entitled to. The recipient must check a box to accept or decline the settlement, sign the letter and return it in an enclosed, postage-paid envelope. Claim forms that are returned must be postmarked on or before Feb. 26.

"It's been a smooth process so far," said Terry Giebelstein, one of the lawyers who represented Sioux City resident Kathleen Sweisberger, who filed the class-action lawsuit in 2006. The suit was filed on behalf of all households and businesses that paid the 2 percent franchise fees for gas or electricity to MidAmerican Engergy Co. or Woodbury County Rural Electric Cooperative from Sept. 5, 2001, to May 25, 2009.

Iowa courts have ruled that franchise fees added to utility bills were illegal. The Iowa Legislature has since passed a law legalizing franchise taxes of up to 5 percent.

Lawyers have said 61,948 individuals and businesses will qualify for a payment. Former Sioux City residents who lived in the city during some or all of the time period covered in the lawsuit also will receive claim forms if the administrator was able to find their current address.

The city approved the settlement in April and will borrow the money to pay it. The city has raised the franchise tax from 2 percent to 5 percent to pay off the settlement debt.

Giebelstein said those who request a refund should expect a wait of at least 30 days after the Feb. 26 deadline before receiving their settlement.

For more information about the settlement, call 866-483-0376 or visit siouxcityfranchisesettlement.com.

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