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Alabama Power, mayor meet over business license fee dispute

VALLEY GRANDE — The city’s mayor is hoping for answers from Alabama Power after disputing a business license tax for a year.

Alabama Power officials met with Mayor Tom Lee on Tuesday to discuss the payment of a 1.5 percent tax of receipts for customers within the police jurisdiction. Talks will be ongoing, both sides said.

The meeting stemmed from a disagreement over what constitutes providing public safety.

Companies are required to pay a 3 percent business license tax of their gross receipts within a city’s limits. They must pay an additional tax, not exceeding the amount a city pays for protective services in its police jurisdiction.

“In essence, what’s happening is you’ve got an agency dictating to the city how they can and can’t provide services,” Lee said. “That’s the issue. They say we’re not providing them because we’re not providing them in a manner in which they would like us to; like having our own fire department, having our own police department. Well, that’s not what the statute says.”

Valley Grande contracts with the Dallas County Sheriff’s Department for patrol services and also contracts with the Summerfield Volunteer Fire Department and two volunteer fire departments in Valley Grande. The city is on an immediate response system with the fire stations in Plantersville and Potter Station.

Valley Grande operates two $20,000 weather sirens, which Lee contends also contribute to public safety. The city provides salaries to a public safety director and building inspector.

Valley Grande receives the 3 percent payment annually. But a letter dated Dec. 23, 2008, from Alabama Power to Selma attorney John W. Kelly IV, who represents the city, said the company “does not intend to pay” the additional tax.

“It is the practice at Alabama Power to pay a municipality that provides police and fire protection a business license tax of 1.5% of the gross receipts for customers located in the police jurisdiction of that municipality,” the letter stated.

Alabama Power recently agreed to stop paying the 1.5 percent business license tax to Orrville, according to Pat Wylie, a spokesman for the company.

Orrville does not have a police department or full-time fire department.

“As a regulated utility, we’re constantly updating our records to follow laws when it comes to these business license fees,” Wylie said. “The situation with Orrville has been rectified.”

Orrville Mayor Gene McHugh was not at Tuesday’s meeting, but said earlier the payment of the combined taxes usually amounts to more than $10,000. He said he did not know how the city would recoup the lost money.

“I don’t know how much we’re going to lose, but it’s going to affect our budget,” McHugh said.

Margaret Bentley, Montgomery area manager for Alabama Power, said she was encouraged by the nearly two-hour meeting.

“I think we had a very positive meeting with Mayor Lee, and we did share a lot of information,” Bentley said. “We look forward to continuing to be a partner in the growth and development of Valley Grande.”