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SHAKOPEE PUBLIC UTILITIES
MEMORANDUM
TO: SHAKOPEE PUBLIC UTILITIES COMMISSSION
FROM: JOHN R. CROOKS, UTILITIES MANAGER
SUBJECT: WATER CONNECTION CHARGE AND TR NK WATER
CHARGE COMPARITIVE ANALYSIS
DATE: MAY 1, 2014
The Water Connection Charge (WCC) Policy was adopted in 1982. The charge is
intended to fund water production, treatment and storage facilities, namely wells,
pumphouses and storage tanks The WCC, as the name indicates, is collected
when the property connects to the municipal water system.
The Trunk Water Charge (TWC) Policy was adopted in 1981. This is an area
charge, which is intended to fund trunk watermain and oversizing costs. The
charge is collected from properties to which municipal water is newly made
available.
The Water Connection Fund and Trunk Watermain Fund — Analysis and Report
as prepared by MFRA and Northland Securities was accepted by the
Commission in January 2008. A revisit of the calculations was presented to the
Commission October 2010. Fund balances and increases to each charge are
reviewed by the Commission during the yearly budget process
Attached to this memo is a comparable analysis of both the current WCC and
TWC with neighboring communities.
Water Connection Charge & Trunk Water Charge
Comparison
WCC TWC
(per SAC Unit) (per Acre)
SPUC
$4,738
$2,688
Prior Lake
$9,000
$5,500
Savage
$2,721- Res.
$4,886 - C/I
$3,925
Chanhassen
$6,060
N/A
Chaska
$3,757
$1,906
SPUC is 2014 fees - all others are 2013
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SHAKOPEE PUBLIC UTILITIES
MEMORANDUM
TO: SHAKOPEE PUBLIC UTILITIES COMMISSSION
FROM: JOHN R. CROOKS, UTILITIES MANAGE
SUBJECT: FRANCHISE AGREEEMENTS WITH OTH R UTILITIES
DATE: MAY 1, 2014
No franchise fees exist for electric utilities serving Shakopee. Power is provided
by three different electric companies: SPUC, Xcel and MVEC. In 2001 Shakopee
Public Utilities established "a basis for the payment of an amount to the City
which would be equivalent to a franchise fee on its electric services revenues,
utilizing some of the factors under consideration by the City" at that time.
The City made the decision to not impose the proposed franchise fees with the
other electric utilities, but SPUC continues to provide the contribution to
Shakopee. Attached is a history of the yearly contributions and the value of the
free services provided to Shakopee since 2000. Also attached is Resolution #672
— Authorizing Certain Payments From the Shakopee Public Utilities Commission
To the City of Shakopee, which set the calculation for the contribution.
Shakopee Public Utilities Commission
Payment in Lieu of Taxes and Free Service to City of Shakopee Cost History
M: \2014 \PILOT and Free service Payment History 5/1/2014
TOTAL COSTS
PILOT,
PILOT
PILOT
Maintenance
Free Service
Electric
Water
Free
of Street
& Maintenance
Year
Transfer
Transfer
Service
Lights
of Street Lights
2000
727,102
366,736
47,597
(7,491)
$
1,133,944
2001
727,102
446,703
54,353
10,136
$
1,238,294
2002
492,262
438,281
49,871
76,734
$
1,057,148
2003
534,344
534,025
53,982
4,960
$
1,127,311
2004
593,115
532,725
40,498
140,681
$
1,307,019
2005
741,847
584,850
46,434
146,140
$
1,519,272
2006
858,898
677,999
50,082
103,290
$
1,690,269
2007
987,031
704,809
93,931
128,282
$
1,914,053
2008
1,021,293
651,924
130,135
33,450
$
1,836,802
2009
905,441
726,200
189,761
43,617
$
1,865,019
2010
975,175
816,350
197,882
59,982
$
2,049,389
2011
993,928
822,726
194,705
45,469
$
2,056,828
2012
1,057,044
1,054,271
208,204
35,185
$
2,354,704
2013
1,083,698
937,073
164,973
63,801
$
2,249,545
2014 (Budget)
1,087,087
955,608
208,908
75,482
$
2,327,085
Total
10,614,582
8,357,599
1,731,315
820,437
$
21,150,052
M: \2014 \PILOT and Free service Payment History 5/1/2014
RESOLUTION #672
A RESOLUTION AUTHORIZING CERTAIN PAYMENTS
FROM THE SHAKOPEE PUBLIC UTILITIES COMMISSION
TO THE CITY OF SHAKOPEE
WHEREAS, the Shakopee Public Utilities Commission has
historically contributed from its resources to the City of
Shakopee General Fund, and
WHEREAS, the City of Shakopee has considered the adoption of
a franchise fee to be imposed upon all energy providers within the
City, although its action thereon has not been completed, and
WHEREAS, the Shakopee Public Utilities Commission believes it
would be beneficial to the City and the Utilities Commission to
establish a basis for the payment of an amount to the City which
would be equivalent to a franchise fee on its electric services
revenues, utilizing some of the factors under consideration by the
City, and
WHEREAS, the Shakopee Public Utilities Commission has
determined that this approach to the contribution to the City will
permit the Commission to achieve an equitable balance between
support of the City's General Fund and maintaining rates that are
fair to the Commission's customers and which will sustain the
Commission's ability to provide reliable electric service at a
competitive price, and
WHEREAS, the Commission desires to confirm the basis of the
transfer to the City from water operations is unchanged by this
Resolution,
NOW THEREFORE BE IT RESOLVED, that the following
contributions from the electric and water utility operations shall
be made by the Shakopee Public Utilities Commission to the General
Fund of the City for the year 2002 and subsequent years, until
such further action as may be taken by the Shakopee Public
Utilities Commission:
Payment on
Electric Gross
Residential $$
Commercial $ $
Industrial $$
Customer Late Fees $$
Total Gross Electric Sales $$
Times 2.71% 0.0271
Payment to City
from Electric Operations $$
Payment on
Water Gross Margin
Water Sales $$
Total Gross Water Sales $$
Less Cost of Energy for pumping: $$
Gross Water Margin $$
Times 23.77% 0.2377
Payment to City
from Water Operations $$
BE IT FURTHER RESOLVED, that energy for street lighting and
the cost of maintenance and operation of street lights will
continue to be donated to the City of Shakopee consistent with the
past practices of the Shakopee Public Utilities Commission.
BE IT FURTHER RESOLVED, that the payments due to the City
pursuant to the foregiong schedule and the determination of gross
sales shall be based on the corresponding figures contained in the
audited financial statements of the Shakopee Public Utilities
Commisison for the year 2002 and thereafter. Until those figures
are available, monthly payments shall be made to the City
commencing in January 2002 and each month thereafter equal to one -
twelfth (1/12) of the annual payment due, estimated on the basis
of the gross sales figures reflected in the audited financial
statements of Shakopee Public Utilities Commission for the year
2000, rounded down to the nearest $1,000. Upon the availabaility
of the audited financial statements for the year 2002, a
determination will be made if an over or under payment has been
made for the year 2002 and that difference will be remitted to the
City of Shakopee or refunded to the Shakopee Public Utilities
Commission. This procedure shall be followed in subsequent years,
substituting the appropriate year under consideration.
BE IT FURTHER RESOLVED that the following Resolutions of the
Shakopee Public Utilities Commission shall be repealed, effective
on the date of the adoption of this Resolution: Numbers 193, 272,
385 and 553 and, effective upon completion of the last payment due
in respect to year 2001, Number 409.
BE IT FURTHER RESOLVED, that the payments and services
authorized to be provided hereunder are subordinate to the
obligation of the Shakopee Public Utilities Commission to timely
pay principal and interest upon its outstanding bonds and is
further subject to reconsideratiion in the event of unforeseen
events which may adversely affect the utility operations or the
best interests of the utilities customers of Shakopee Public
Utilities Commission.
BE IT FURTHER RESOLVED, that all things necessary to carry
out the terms and purposes of this Resolution are hereby
authorized and performed.
Passed in regular session of the Shakopee Public Utilities
Commission this 3rd day of December, 2001.
Commission President: Joan Lynch
ATTEST:
Commission Secretary; Jerry Fox