Laserfiche WebLink
<br /> 101 <br />City of Elk River <br />Notes to Basic Financial Statements <br /> <br /> <br />NOTE 15 – TAX ABATEMENTS (CONTINUED) <br /> <br />As part of the City's tax abatement program, the City also enters into agreements with local <br />businesses in the form of business subsidy agreements established under Minnesota Statutes Section <br />116J.993 through 116J.995. These agreements must meet a public purpose which may include , but <br />may not be limited to, increasing the tax base. <br /> <br />In 2024, the City of Elk River had five business subsidy agreements in place which resulted in <br />property taxes totaling $133,100 being abated. Individual agreements which result in taxes abated in <br />excess of 1% of the City's total tax levy would be disclosed individually. There were no such payments <br />made in 2023 or 2024 in excess of this amount. <br /> <br />NOTE 16 – OTHER INFORMATION <br /> <br />A. Territorial Acquisition Agreement <br />In 2015, the Utilities entered into an agreement to transfer ownership of electric plant and electric <br />service to customers in eight designated areas receiving service from Connexus Energy. Specific <br />payment terms have been negotiated for five years, and if any of the eight areas are not acquired <br />within this timeframe, the payment terms may be renegotiated. In 2019, the Utilities acquired the <br />final service areas. <br /> <br />The agreed cost of property purchased from Connexus Energy is net book value, integration <br />expenses, and a loss of revenue payment. The loss of revenue payment for each area acquired is <br />based on a formula outlined in the agreement, payable for the subsequent ten years after initial <br />purchase. <br /> <br />The Utilities acquired designated service area one in 2015 for $877,807, service area two in 2016 for <br />$663,586, service areas three and four in 2017 for $276,776, service areas five and six in 2018 for <br />$298,736 and service areas seven and eight in 2019 for $78,457. The loss of revenue payments made <br />were $411,157 in 2017, $570,725 in 2018, $751,860 in 2019, $834,185 in 2020, $857,538 in 2021, <br />$924,187 in 2022, $940,467 in 2023, $933,159 in 2024 , and $946,133 in 2025. All amounts paid are <br />included in property and equipment, and loss of revenue payments are included in intangible assets. <br /> <br />Page 291 of 637