8.3. SR 10-21-2013 City of
Elk Request for Action
River
To Item Number
Mayor and City Council 8.3
Agenda Section Meeting Date Prepared by
General Business October 21, 2013 Troy Adams, P.E. —ERMU General Manager
Item Description Reviewed by
Ordinance Amendment: Collection of Electric Cal Portner, City Administrator
Utility Charges and Fees Reviewed by
Action Requested
Approve by motion an ordinance amendment adding Section 78-332 Collection of Fees and Charges to
Chapter 78 Utilities,Article N Electric Systems,Division 3 Rates and Charges,which will authorize
certain unpaid electric service charges and fees to be certified for collection with real estate taxes.
Background/Discussion
Every fall, the Elk River Municipal Utilities Commission approves a list of delinquent accounts to be
passed on to Council for approval to be certified for collection with real estate taxes. The list includes
sewer and trash accounts to be assessed for the city and water accounts to be assessed for the utility.
These utility services are subject to specific statutory authority to certify delinquent charges to taxes.
Minnesota Municipal Utilities Association (MMUA) and the League of Minnesota Cities (LMC) have
presented that,in addition to these types of utility services, electric and gas municipal utilities may certify
delinquent charges as well.
In a January of 2012 publication from the League of Minnesota Cities (LMC) titled "Securing Payment of
Utility Charges," there was a section directed to the certification of municipal gas and electric charges.
The publication stated that although these utility services are not specifically listed with the utilities that
Minnesota Statute grants municipalities the authority to assess, and the authority to certify delinquent
charges and fees for electric can be concluded through the recognition of two other laws. The first,
Minn. Stat. X366.012,was passed in 1989 and authorizes towns to certify unpaid electric service charges
for collection with taxes. The second,Minn. Stat. X415.01,is a 1973 law amended in 2003 which grants
municipalities all the power granted to towns.
Given that, 1) the LMC has reviewed the law, evaluated it, and came to the conclusion that assessment of
electric charges is allowable; 2) the LMC is promoting the assessment of delinquent electric charges, and
would therefore,help defend any opposition to this position; and 3) there is minimal risk that this
position would result in any legal action being necessary, ERMU's legal counsel now supports the
position that there is the statutory authority for the assessment of delinquent electric charges.
ERMU would like to pursue assessing delinquent electric charges. And on October 8, 2013, the ERMU
Commission approved a revision to ERMU policy to reflect this authority and directed staff to request
Council adopt an ordinance allowing for delinquent electric charges and fees to be certified for collection
with real estate taxes. The adoption of this ordinance would reduce uncollectible amounts,which may
include city franchise fees, and would ultimately help keep the electric rates lower.
P a w E R E U 6 Y
NaA f RE]
Note that the ability to certify will be limited to electric accounts of that property owner. As prohibited
by statute, delinquent charges and fees associated with a tenant's account would not be assessable to the
property owner.
Financial Impact
Adoption of this ordinance does not have a direct financial impact on the City of Elk River.
Attachments
■ Proposed Ordinance Adopting Section 78-332 Collection of Fees and Charges
N:\Public Bodies\Agenda Packets\10-21-2013\Final\In Laserfiche\x8.3 sr ERM J Ord Electric.docx
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City of Elk -m"' -�
River
Ordinance 13 -
An Ordinance Adding Section 78-332 "Collection of Fees and Charges" to the City
of Elk River, Minnesota, City Code
The City Council of the City of Elk River does hereby ordain as follows:
§ 78-332 Collection of Fees and Charges
All electric service fees, and all charges and costs charged to a property pursuant to this Article
and/or the Rules and Regulations of ERMU,which remain unpaid 30 days after the due date,may
be certified by the City Clerk to the County for collection with real estate taxes. In addition,no
property which has been disconnected from electric service will be reconnected unless and until all
unpaid fees, charges,and costs have been paid in full.
Effective Date
That this ordinance shall take effect upon adoption and be published as provided by law.
Passed and adopted by the City Council of the City of Elk River this 215`day of October,2013.
John J. Dietz,Mayor
ATTEST:
Tina Allard, City Clerk
NATURE