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Elk River .. <br /> Municipal Utilities UTILITIES COMMISSION MEETING <br /> TO: FROM: <br /> ERMU Commission Troy Adams, P.E.—General Manager <br /> MEETING DATE: AGENDA ITEM NUMBER: <br /> September 10, 2019 4.2 <br /> SUBJECT: <br /> Payment in Lieu of Taxes and Other Donations to the City of Elk River <br /> ACTION REQUESTED: <br /> None <br /> BACKGROUND: <br /> As documented in the ERMU Payment in Lieu of Taxes and other Donations to the City of Elk <br /> River policy: <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 <br /> State Statute in 1947. Although governed separately, ERMU is still an important <br /> component of our local government and our city services. <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 <br /> ERMU to become non-competitive, or inhibit needed investment in personnel or <br /> infrastructure which may hurt ERMU's ability to meet the needs of their customers. For <br /> these reasons the PILOT and other donations should be reviewed at least once every five <br /> (5)years by the ERMU Commission. <br /> This policy was last reviewed in late 2015 and updates were made effective January 1, 2016. <br /> DISCUSSION: <br /> The subject of increasing the overall donation level to the city has been brought up by the <br /> council and had subsequently been printed in the Star News. Although earlier than the policy <br /> requires, it is in the best interest for the commission to review the current policy, the <br /> philosophy behind the policy, how this policy fits in with ERMU's mission/vision/values, and <br /> how the donations from ERMU to the city play a role in the big picture of providing value and <br /> services to the community we serve.The current policy is attached for review. <br /> The total transfer from the electric fund to the city is determined from a number of calculated <br /> components and other donations. The philosophy behind the transfer policy was to contribute <br /> Page 1 of 3 <br /> 152 <br />