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Utilities commission backs one-year 3% pilot payment for 2026, asks charter commission to review pilot language
Summary
The Brainerd City Utilities Commission recommended a 3% payment‑in‑lieu‑of‑tax for 2026 and voted to ask the Nov. 5 charter commission to review charter language governing the pilot after members raised concerns about rate pressure, fairness and council authority.
The Brainerd City Utilities Commission on Oct. 28 recommended that the city receive a payment equal to 3% of electric revenues for 2026 and deferred decisions about higher percentages in later years pending results of a full electric rate study.
The motion — brought at the council's request and seconded — passed after commissioners debated whether raising the pilot to 4% in 2027 and 5% in 2028 would simply shift costs back onto ratepayers. ‘‘If we add a pilot and then increase the rates, we’re just increasing the cost to the city… it’s like the money’s just circling,’’ one commissioner said during the discussion.
Commissioners pressed whether the charter properly allocates authority over the pilot. Some argued the charter’s current language leaves confusing overlaps between council and the commission. The body voted unanimously to ask the Nov. 5 charter commission to review and consider removing the pilot language from the charter so that the payment could instead be set through an administrative agreement.
Commissioners and staff said the 3% recommendation is intended as a one‑year approach while the utility completes a pending electric rate study that staff said will give needed data to evaluate multi‑year proposals. Finance manager Danny Lock told the panel the 3% is included in the draft 2026 budget packet and said commissioners would revisit the matter once the rate study is complete.
The commission’s action was procedural: it forwarded a recommendation to city council and simultaneously requested charter‑language review by the charter commission. Commissioners who opposed embedding percentages in the charter said they worried higher fixed percentages would increase electric rates for residents and local businesses while the city benefits from the pilot.
The commission also instructed staff to prepare pro forma financials and to present rate‑study timing and implications at future meetings. The charter commission meeting is scheduled for Nov. 5; the utilities commission said it will request an opportunity to present and participate.
The commission adjourned with the pilot recommendation passed and the charter review request filed.
