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<br />Terpstra, Black, Brandell & Jensen
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<br />
<br />.ald G. Black
<br />E. Brandel!
<br />Jeffery J. Jensen
<br />Elizabeth K. Moore
<br />Brian A. Park
<br />James A. Bumgardner
<br />
<br />June 4, 1999
<br />
<br />Attorneys at Law
<br />913 Main Street
<br />Elk River, MN 55330-1508
<br />(612) 441-7040 ofe
<br />(612) 441-0901 fax
<br />
<br />John W. Terpstra (retired)
<br />
<br />Bryan C. Adams
<br />Elk River Municipal Utilities
<br />322 King Avenue
<br />Elk River, Minnesota 55330
<br />
<br />RE: Utility Commission and the City Council
<br />
<br />Dear Mr. Adams:
<br />
<br />Pursuant to your request, we have prepared this letter which addresses: 1) the Elk
<br />River City Council's (hereinafter the "City Council") lack of authority to make unilateral
<br />decisions regarding surplus utility funds held by the Elk River Municipal Utilities
<br />Commission (hereinafter the "Commission"); and 2) management of utility operations.
<br />
<br />. By way of background, under Minnesota Statute 9 412.331, any utilities commission
<br />in existence prior to July 1, 1949 is subject to Minnesota Statute sections 412.321
<br />to 412.391. As you know, in 1947, the Village of Elk River elected to form what is
<br />now the Commission. Accordingly, the Commission is subject to Minnesota Statute
<br />sections 412.321 to 412.391.
<br />
<br />Generally, under 9 412.321, the City Council makes all rules and regulations for the
<br />protection, maintenance, operation, extension, and improvement of the utilities.
<br />However, the City Council's authority in this regard is limited to the extent it placed
<br />certain public utilities--pursuant to 9 412.351--within the Commission's jurisdiction.
<br />See Minnesota Statute 9 412.321 (city has authority over utilities "except as its
<br />powers have been limited through establishment of a public utilities commission in the
<br />city"); Village of Blaine v. Independent School Dist. No. 12, Anoka County, 1 21
<br />N.W.2d 183 (Minn. 1963) (city may vest control of utilities' functions and services in
<br />a public utilities commission).
<br />
<br />Further, 9 412.361 details the powers held by a utilities commission over any utility
<br />placed within its jurisdiction. Under 9 412.361, subd. 5, the "commission shall have
<br />power to enter into agreements with the council for... transfers of surplus utility funds
<br />to the general fund...." Therefore, the transfer of funds from any surplus utility fund
<br />to the city's general fund can occur only by agreement of the Commission. This
<br />. position is supported by a 1955 opinion by the Minnesota Attorney General. Per that
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