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<br /> <br /> Page 1 of 2 <br /> <br /> <br /> <br /> <br />A.17 – Payment in Lieu of Taxes (PILOT) and Other Donations to the City of Elk River <br /> <br />1.0 Purpose and Summary <br />The success of ERMU is linked with the success of our community. And the success of our <br />community is linked with the operation of our city government and ERMU. ERMU was <br />purchased by the City of Elk River in 1945 and separate governance was created per State <br />Statute in 1947. Although governed separately, ERMU is still an important component of our <br />local government and our city services. <br /> <br />It is typical for a municipal utility to provide a Payment in Lieu of Taxes (PILOT) and other <br />donations to their city, regardless of a separation of governance. Although typical, this <br />contribution should never inhibit ERMU’s ability to make repayment on debt, cause ERMU to <br />become non-competitive, or inhibit needed investment in personnel or infrastructure which may <br />hurt ERMU’s ability to meet the needs of their customers. For these reasons the PILOT and <br />other donations should be reviewed at least once every five (5) years by the ERMU Commission. <br /> <br />2.0 Payment in Lieu of Taxes (PILOT) <br /> <br />The PILOT transfer from Elk River Municipal Utilities to the City of Elk River shall be four <br />percent (4%) of the revenues generated by ERMU’s electric customers within the corporate <br />boundaries of the City of Elk River which are not subject to a loss of revenue payment resulting <br />from the March 20, 2015, electric service territory transfer agreement with Connexus Energy. <br /> <br />3.0 Donated Electricity <br /> <br />Elk River Municipal Utilities shall donate all electricity to the City of Elk River for street lights <br />and signal lights. <br /> <br />4.0 Donated Water <br /> <br />Elk River Municipal Utilities shall donate water for use by the Elk River Fire Department <br />(ERFD) for the purpose of extinguishing fires within the City of Elk River and other cities under <br />contract with the ERFD.