City Council Minutes 01-24-2000 SpecialMINUTES
SPECIAL MEETING - MONTICELLO CITY COUNCIL
Monday, January 24, 2000 - 5:30 p.m.
Members Present: Roger Belsaas, Roger Carlson. Clint Herbst, Brian Stumpf and Bruce Thielen.
Members Absent: None.
Mayor Belsaas called the meeting to order at 5:30 p.m. and declared a quorum present. The purpose of
the special meeting was to discuss personal property tax reform for utility companies. Representatives
from Northern States Power Company and Tim Flaherty from the Coalition of Utility Cities were present.
Todd Rapp from NSP submitted a summary of NSP"s position on the property tax issue. He indicated
that NSP is working with the Coalition of Utility Cities to come up with a proposal that will provide tax
relief for the utility and negate the impact any tax change would have on the communities where utility
plants are located. It is the belief of NSP that once deregulation takes effect it will be difficult for
investor owned utilities to be competitive. He noted that all businesses are exempt from personal property
tax except investor owned utilities. In his presentation he pointed out that any new power plants that are
being built in Minnesota are being given a tax exemption.
Bruce Thielen stated the nuclear power plant within the City of Monticello was taken on with the
understanding that there would be some revenue generated off that for perpetuity and that because it is a
nuclear power plant there is a measure of risk to the City by having the plant sited here. Todd Rapp indicated
that NSP's position has evolved since the issue was initiated. NSP now feels the utility cities should retain the
revenue level but that the revenue should not be generated by personal property tax on the utility companies.
Several options were reviewed including:
1. Creating a special government aid program to replace the utility property tax.
2. Payment to each host community funded by a charge to the utility customer.
The positives and negatives of each proposal was discussed. The timing of the legislation was also
discussed. Does the legislation take effect prior to deregulation or when restructuring shows utilities are
not competitive. At this point it is not certain when deregulation will be in effect.
It is the intent of the NSP and the Coalition of Utility Cities to reach a consensus on a proposal to submit to
the legislature. Because the issue is complex it will take time to work out all the details once a consensus is
reached. Although they have looked at what other states have done, they noted it may be difficult to apply
what happened there to Minnesota because of differences in tax structure. etc.
It was suggested that the Council be updated again on this issue and any progress that may have been made
on it after the next legislative session has ended.
The special meeting was adjourned at 6:40 p.m
Recording Secretary