02-12-2013 ERMU MIN - Laserfiche WebLink

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John Dietz said the numbers were great and would like to see the Utilities advertise these numbers more often. He also wanted a chart brought back showcasing ERMU's reliability numbers against other utilities. 5.3 Tax Exempt Financing For more than 100 years, the concept that one body of government should not tax another body of government has existed. Currently, the owners of municipal bonds are not required to pay federal income tax on the interest income they receive from the bonds. (And, the owners of federal bonds are not required to pay state and local income tax on the interest they receive from those bonds.) Municipal bonds are a tool that local government entities use to finance their critical infrastructures including but not limited to: electric, water, wastewater, and gas systems; roads and bridges; government buildings, schools, and hospitals. Beginning in 2010 and again with the recent "fiscal cliff' negotiations, Congress and the Executive branch have discussed making changes to the federal income tax exemption on municipal bonds. The elimination of these exemptions would result in one body of government taxing another. This would also result in a crippling effect on local government's ability to finance new (or maintenance on) critical infrastructures. The increased cost of money to finance these critical infrastructures would inevitably be passed on through taxes, fees, and rates. For municipal utilities, this additional cost of doing business places additional burdens on the utility's ability to remain competitive. The elimination of tax exempt financing does not provide any real savings to taxpayers. The savings at the federal level would just be passed down to taxpayers at the state and local level. Because of the ramifications of the elimination of tax exempt financing to municipal governments, this topic will be a priority for MMUA this year. Troy Adams asked the Commission to sign a resolution stating ERMU's support to preserve tax exempt financing. Discussion followed. Al Nadeau motioned to approve Resolution 13-1 "ERMU Support of the Preservation of Tax Exempt Financing." Daryl Thompson seconded the motion. Motion carried 3-0. 5.4 Aquifer and Ground Water Supply The 2012 summer drought was tough on ERMU's wells and aquifer and the predictions for 2013 are not looking any brighter. Every month, the wells are measured while they are flowing to see how drawn down the water is, or in other words, how far down the well our water is sitting. In 1997, ERMU had roughly 2,000 customers hooked up to ERMU's water system. In July of 1997, Well #3's water was flowing 46% of the way down the pipe. In 2012, ERMU had roughly 4,500 water customers and in July of 2012 the same well was 61% of the way down the pipe. Page 3 Regular meeting of the Elk River Municipal Utilities Commission February 12,2013