Council adopts electric, gas and water dividend fees and removes pilot line from rates

The Hastings City Council approved ordinances creating explicit electric, gas and water dividend fees and removed the previously described “pilot” line from utility rates. The council voted 8–0 on ordinances to establish the dividend fee for each utility and, after a second reading, suspended the rules to adopt final reading as part of the same meeting. City staff said the new dividend amounts — expressed as percentages per utility — replace the prior “payment in lieu of taxes” (PILOT) treatment and make the transfer to the general fund more transparent in the fee schedule. Staff presented the electric dividend at 6.645%, the gas dividend at 7.578% and the water dividend at 8.907%; together the three dividends were expected to generate roughly $4.3 million for municipal functions, the city reported. The council’s ordinances move the dividend calculation into the fee resolution so the percentage is visible in the published fee schedule. Council discussion focused on transparency and timing. Staff said the change does not create a new revenue stream but changes how the existing transfers are shown in rate documents; the administration is also developing customer communications to explain the change. One council member said the delay before final reading allowed additional public review, and the council approved the ordinances unanimously. What happens next: the water, gas and electric rate ordinances will be implemented per the utility billing schedule, city staff said, and changes will be reflected in the fee schedule and customer notices.