4.2. ERMUSR 10-13-15 - Laserfiche WebLink

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Elk River Municipal Utilities 8.13 PAYMENT IN LIEU OF TAXES (PILOT) AND OTHER DONATIONS TO THE CITY OF ELK RIVER 1.0 Purpose and Summary The success of ERMU is linked with the success of our community. And the success of our community is linked with the operation of our city government and ERMU. ERMU was purchased by the City of Elk River in 1945 and separate governance was created per State Statute in 1947. Although governed separately, ERMU is still an important component of our local government and our city services. It is typical for a municipal utility to provide a Payment in Lieu of Taxes (PILOT) and other donations to their city, regardless of a separation of governance. Although typical,this contribution should never inhibit ERMU's ability to make repayment on debt, cause ERMU to become non-competitive, or inhibit needed investment in personnel or infrastructure which may hurt ERMU's ability to meet the needs of their customers. For these reasons the PILOT and other donations should be reviewed at least once every five (5) years by the ERMU Commission. 2.0 Payment in Lieu of Taxes (PILOT) The PILOT transfer from Elk River Municipal Utilities to the City of Elk River shall be three I percent (34%) of the revenues generated by ERMU's electric customers within the corporate boundaries of the City of Elk River which are not subject to a loss of revenue payment resulting from the March 20, 2015, electric service territory transfer agreement with Connexus Energy. 3.0 Donated Electricity Elk River Municipal Utilities shall donate all electricity to the City of Elk River for all of their •• . . ..• . . - . • . , - . _ !-• - , - • • , 8.13 Payment in Lieu of Taxes Page 1 of 2 Adopted December 6, 1994 (PILOT)and other Donations to the Revised June 6, 2008 I City of Elk River Revised July 2, 2013 *Revised October 13, 2015 Proposed Rev Jan 1, 2016 63