ERMUSR Misc 09-20-2006~i
Elk River
Municipal Utilities
13069 Orono Parkway
Elk River, MN 55330
September 8, 2006
To: Elk River Municipal Utilities Commission
Jerry Takle
Jim Tralle
John Dietz
From: Bryan Ada>ns
Subject: Miscellaneous Issues
phone: 763.441.2020
Fax: 763.441.8099
Enclosed is the packet for the Tuesday, September 20, 2006, commission meeting at
4:00 pm.
Good progress is being made on our large projects. Much of staff time is being spent on
the budget process. This process allows us the opportunity to re-examine our goals and
values as we balance the needs and financial constraints of our organization.
APPA recently completed a study on payments and contributions by Public Power
Distribution Systems to state and local governments. Attached is the executive summary
for your review. If you desire the entire report, please let me know. In 2005 Elk River
Municipal Utilities contributed $388,927 in cash and $331,644 in donated services to the
City. Based upon Elk River electric revenues of $12,964,236, Elk River Municipal
Utilities donated $720,571 or 5.56% to the city. This is in line with APPA's study results
of a median contribution of 5.3%.
Payments and
Contributions by Public
Power Distribution
Systems to State and
Local Governments,
2004 Data
Published June 2006
w •-~
~~~~~ American Public Power Association
2301 M Street NW
Washington, D.C. 20037-1484
202/467-2900
Payments and Contributions by Public Power Distribution Systems
To State and Local Governments, 2004 Data
Executive Summary
Public power systems provide a direct benefit to their communities in the form of payments
and contributions to state and local government. The total value of the contributions made
by the publicly owned utilities often comes in many forms and is not always easily
recognized. In addition to payments such as property-like taxes, payments in lieu of taxes,
and transfers to the general funds, many of the utilities make other contributions in the form
of free or reduced cost services provided to states and cities. APPA calculated net
payments and contributions for 343 public power systems in the most current data year of
2004 and determined that the median amount contributed was 5.3 percent of electric
operating revenues. .
In 2004, investor-owned utilities paid a median of 4.6 percent of electric operating revenues
in taxes and fees to state and local governments.
It is a common misconception that investor-owned utilities provide a benefit to the local
communities by paying taxes that the publicly owned utilities do not. This report
demonstrates just the opposite. When all taxes, tax equivalents and other contributions to
state and local government are considered, the median amount contributed by public power
systems in 2004, as a percent of electric operating revenues, was 15% higher than investor-
owned utilities (5.3% vs. 4.6%).