2.2. ERMUSR 10-8-2019 - Laserfiche WebLink

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denominator in the calculation for PILOT. Specifically, for the immediate issue of the city's budget gap, there is an option to transfer additional money to the city through releasing PILOT from electric service territory transfer areas eight years sooner than agreed upon. Details were provided on the estimated financial impact this would have to the annual PILOT transfer to the city. Commissioner Westgaard provided an overview on the City Council discussions that had taken place regarding the PILOT. Commissioner Westgaard also spoke to the inaccuracies that had been published in the newspaper relating to the PILOT and overall budget, and offered clarification on what had actually been discussed. Those discussions included what an increased contribution from 4%to 4.5%would look like, and the impact it may have on rate payers. There was discussion on the other donations ERMU contributes to the city including the donated labor to facilitate projects funded by the local option sales tax (LOST). It was noted that with donations such as this, the avoided cost to the city and value of donation is not always recognized. There was discussion on whether ERMU should be donating their labor for LOST designated projects, or whether the city should be paying for the cost of labor from the LOST funds. Chair Dietz directed Attorney Beck to look into this further. Chair Dietz explained that an increase to PILOT is just one of the options the City Council is looking at to meet the preliminary tax levy that has been passed. Chair Dietz shared the challenges of representing both the city and the utilities on this issue. Chair Dietz stated that he is in support of releasing PILOT from the electric service territory transfer sooner than what was initially agreed upon, and encouraged the Commission to strongly consider it.There was discussion on how this may affect rates. Commissioner Bell was receptive to releasing the PILOT on the acquired electric service territory sooner than agreed upon versus increasing the percentage of the PILOT itself. Commissioner Nadeau concurred. Commissioner Stewart was not against the suggestion of releasing the PILOT earlier than planned, however she had some reservations. Commissioner Stewart expressed her concerns and stressed the importance of the City Council considering all of the other options, and not just an increase to PILOT. Commissioner Bell stated that he agreed with Commissioner Stewart's concerns and hopes the city understands how this decision will affect the utilities and will take that into consideration when looking at other ways to increase revenue and reduce costs. There was discussion on the preliminary levy. As there were some misconceptions on the preliminary levy and the levy that is approved in the final budget, Mr. Portner provided clarification on the process and stated that the final levy has always been lower than the preliminary one in his eight years with the city. Mr. Portner also touched on the goals of the City Council regarding sustainable funding. Elk River Municipal Utilities Commission Meeting Minutes September 10, 2019 Page 4 36