8.3 SR 12-16-2024City of
Elk -
River
To
City Council
Meeting Date
December 16, 2024
Item Description
Resolution 24-81 Voter Referendum Required for
Utility Disposition
Request for Action
Item Number
8.3
Prepared By
Cal Portner, City Administrator
Reviewed by
Cal Portner
Tina Allard
Action Requested
Adopt, by motion, Resolution 24-81 requiring a voter referendum to dispose of the Elk River Municipal
Utilities.
Background/Discussion
At the recommendation of the Minnesota Municipal Utility Association, the Elk River Municipal Utilities
Commission (ERMU) approved a resolution requiring a voter referendum by a 2/3 vote to dispose of the
municipal utility. The use of referendum is provided for in Minnesota Statutes to ensure voters consent to a
sale or dissolution.
ERMU approved the requirement change at their meeting on December 10 with a 5-0 vote.
Financial Impact
N/A
Mission/Policy/Goal
EII< River Vision
Attachments
1. 2024 Resolution - Voter Referendum Required for Utility Disposition
2. 2024-12 - 5.4 - Disposition of City's Utility by Referendum
The Elk River Vision
A avelcoming community with revolutionary and spirited resourcefulness, exceptional service, and community p p W E H E U A Y
engagement that encourages and inspires prosperityIck
273
City of Elk River
City Council
Resolution 24-81
A Resolution of the City Council of the City of Elk River to Acknowledge and
Protect the Rights of Voters Regarding the Provision of Utility Service
WHEREAS: Elk River Municipal Utilities (Utility) is a valuable public asset through which
the City of Ek River, Minnesota (City), maintains and perpetuates significant self -investment
and public services made currently and by past generations to promote the general welfare of
City residents; and
WHEREAS: such investments contribute to ensuring and preserving the financial stability
and fiscal integrity of the city's overall financial structure and credit rating; and
WHEREAS: such public services ensure reliable, affordable, and sustainable utility service to
all residents and users in the City at reasonable rates subject to the control and regulation of
the City; and
WHEREAS: access to service should be provided for all uses necessitated by all residents and
entities of the City; and
WHEREAS: Utility and its services are vital to the continued planned and orderly growth of
the City; and
WHEREAS: the right of the citizens of Elk River to determine the disposition of their Utility
through referendum is protected due to enactment of 1949 Minnesota Laws Chapter 119,
section 42, codified as Minnesota Statutes, Section 412.321, subdivision 4:
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk
River, Minnesota, as follows: The City shall continue to own and operate the Utility unless
and until, two-thirds of voters voting in a general or special election approve an ordinance or
resolution passed by the City Council, concurred in by the public utilities commission if the
utility is under the jurisdiction of such a commission, to lease or sell the utility or discontinue
its operation, wholly or in part, as provided by Minnesota Statutes, Section 412.321,
subdivision 4.
Passed and adopted this 16th day of December 2024.
John J. Dietz, Mayor
P0WEBEU 0Y
NAWREI
Page 261 of 273
ATTEST:
Tina Allard, City Clerk
P0WEBEU 0Y
NAWREI
Page 262 of 273
��i
Elk River
Municipal Utilities UTILITIES COMMISSION MEETING
TO:
FROM:
ERMU Commission
Mark Hanson — General Manager
MEETING DATE:
AGENDA ITEM NUMBER:
December 10, 2024
5.4
SUBJECT:
Disposition of City's Utility by Referendum
ACTION REQUESTED:
Recommend City Council approval of the attached Resolution
BACKGROUND:
The right of citizens to determine the disposition of their municipal utilities through referendum
is protected due to enactment of 1949 Minnesota Laws Chapter 119, section 42, codified as
Minnesota (MN) Statutes, Section 412.321, subdivision 4. Although State law mandates a two-
thirds affirmative vote from the community for such sales or closures, the statute has not been
enforced in recent sales.
At the 2024 Minnesota Municipal Utilities Association (MMUA) Summer Conference, Ursula
Schryver, a Senior Vice President with the American Public Power Association (APPA),
presented five recent case studies of MN municipal utilities selling to larger cooperative or
private utility companies. According to MMUA's 2024 Annual Report, however, four of those
utilities were sold without a required referendum.
According to APPA, public power utilities are typically being sold in cases where the system has
not been maintained, the cost of upgrading the system substantial, and/or when there are
other financial stresses on the utility or community. Private utilities often promise to replace
aging system components, but these upgrades typically lead to higher rates, lower customer
satisfaction, and slower response times after outages.
DISCUSSION:
With the support of a strong governing body, APPA states municipal utilities proudly bring
tremendous value to the city, its citizens, and customers. Local control of utility means
enhanced reliability, faster response times, and a singular focus on the customer. Additionally,
municipal utilities provide financial support to their local governments through payments in lieu
of taxes, in kind labor contributions, local employment, and support of local businesses.
It is MMUA's belief that awareness of this referendum requirement empowers voters served by
municipal utilities with the ability to shape their communities as they see fit and in accordance
with their values and state statute. The attached MMUA model resolution provides a locally
binding process that requires a two-thirds community vote before any sale or closure.
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Page 263 of 273
NEXT STEPS:
The ERMU Commission's approval of the resolution is needed prior to placing the attached
resolution on the Elk River City Council agenda for adoption. If approved, ERMU staff will work
with city staff to facilitate the council approval process.
ATTACHMENTS:
• Resolution - Voter Referendum Required for Utility Disposition
Page 2of2
Page 264 of 273