Section 12.01. Commission. There is created and continued a public service commission of the city with the powers and duties set forth in this chapter. The public service commission is referred to in this chapter as "the commission".
Section 12.02. Commission: jurisdiction. The commission is responsible for the control, management and operation of the water utility plant and distribution system, the electric utility plant and distribution system, and the district heating system. The council may by ordinance delegate to the commission the control, management and operation of any city owned public utility, sewage disposal and sewerage system, sanitation facility or public service enterprise of the city.
Section 12.03. Commission: membership. Subdivision 1. The commission consists of six commissioners. Only one of the members of the commission shall be a current member of the City Council. Except for the current member of the City Council appointed to the commission, each commissioner is appointed for a term of three years and serves until their successors are appointed and qualify. A commissioner must be a resident of the city. Four of the commissioners must be a resident of each of the four wards in the city, one commissioner is appointed at large, and one commissioner must be a current member of the City Council. When the term of the current member of the City Council expires or their office is vacant as set forth in Chapter Two of this Charter, that commissioner’s term shall be deemed to terminate and the City Council shall appoint a current City Council member to the commission. A change of residence of a commissioner from the ward from which the commissioner is appointed creates a vacancy in the office. A vacancy in an office of commissioner is filled by appointment for the unexpired term. The City Council may by ordinance provide for the compensation of the commissioners; however the current member of the City Council shall not be compensated for serving on the commission. (Ord. 2021-15, 11-22-2021)
Subd. 2. The commissioners from wards one and four are appointed for terms beginning February 1, 1991. The commissioners from wards two and three are appointed for terms beginning February 1, 1993. The commissioner at large is appointed for a term beginning February 1, 1992. Commissioners in office on March 9, 1990, remain in office until the respective dates set forth in this subdivision. The commissioners from wards are appointed by the council. The commissioner at large is appointed by the mayor with the approval of the council.
Section 12.04. Organization: officers. The commission must adopt bylaws governing its operations and proceedings. The commission must annually elect a chairperson and such other officers as prescribed by its bylaws.
Section 12.05. Powers. Subdivision 1. The commission has the powers and duties given in this section.
Subd. 2. The commission must appoint a chief administrative officer.
Subd. 3. The commission may employ persons necessary for its management and operation, prescribe the duties of its officers and employees, and fix their compensation.
Subd. 4. The commission may exercise any power necessary and convenient for the efficient and economical operation of the utilities and services under its control and may enter into contracts for these purposes. The provisions of state law relating to competitive bidding apply to contracts of the commission. A contract for an amount for which competitive bidding is required by law must be approved by the council and executed in the same manner as other city contracts. The commission bylaws must provide procedures for the execution and delivery of contracts and other documents by the commission.
Subd. 5. The commission may purchase fuel, equipment and supplies necessary for its operation. The commission may purchase wholesale utility products for retail distribution.
Subd. 6. The commission may adopt reasonable rules and regulations for the efficient and economical operation of utility services and public services under its control.
Subd. 7. Subject to the provisions of section 12.10, the commission may impose just and equitable rates and charges for the use and availability of the utility services and public services under its control. In determining the reasonableness of the charges to be imposed, the commission may consider all costs of the establishment, operation, maintenance, depreciation and necessary replacements of the utilities, improvements, enlargements and extensions necessary to the utilities, and the principal and interest on obligations issued or to be issued by the city for capital improvements to the utilities.
Subd. 8. Subject to the provisions of this chapter, the council and the commission may enter into agreements for
(a) payment by the city for utility service,
(b) compensation for the use by either the city or the commission of buildings, equipment and personnel under the control of the other,
(c) payments by the commission to the city in lieu of taxes, transfers of surplus utility funds to the general fund or capital improvements fund of the city, and
(d) any other matter deemed necessary by the commission and the council.
Subd. 9. Locations; extensions. The commission must locate fire hydrants and public lights as the council directs. The extension of water and district heating mains by the commission must be approved by the council.
Section 12.06. Rules and regulations: operation. The rules and regulations of the commission may provide for but are not limited to the following matters:
(a) the entry upon land and property by commission employees at reasonable times for examination and service in connection with utility properties,
(b) the procedures for prosecution by the city for violation of rules regulating the unauthorized use of utility services or for damage of utility properties,
(c) the extension of water mains, district heating mains and electrical transmission lines, as approved by the city council,
(d) the prevention of waste of utility products and services, and
(e) the procedures for the termination of utility services for non- payment of rates and charges.
The rules and regulations of the commission relating to rates and charges and the use of the utilities by the public must be published in such manner as the commission deems necessary to reasonably inform the public of their content and may be embodied by the council in ordinances of the city.
Section 12.07. Payment: rates and charges: remedies.The commission may provide by rule that charges for the use and availability of water, electricity and district heating are a charge against the owner, lessee or occupant of the property served, or all of them, and may provide for certifying unpaid charges with interest thereon to the county auditor with taxes against the property deemed for collection as other taxes are collected. Charges for utility services may be recovered in a civil action against the owner, lessee or occupant, or all of them, on the property served.
Section 12.08. Financial matters.Subdivision 1. The commission must annually, prior to the date fixed by law or this charter for the approval of the city budget, submit to the council a preliminary and tentative budget for the ensuing fiscal year and must supply to the council the commission's final budget and such other financial data and reports as the council may request from time to time. The commission must annually prepare and file a financial report with the city manager. The financial report must be included in the annual financial statement of the city.
Subd. 2. All monies paid to the commission from whatever source derived must be paid into the appropriate city fund established pursuant to section 7.09 of this charter. All disbursements of the city or the commission attributable to a utility or service under the control of the commission must be paid from the appropriate fund subject to the procedures set forth in section 7.07 of this charter.
Subd. 3. The city council may, on its own initiative or at the request of the commission, issue and sell obligations as provided by law and this charter to provide monies for the acquisition and betterment of utility facilities under the control of the commission. The council may not issue and sell the obligations without the consent of the commission embodied in a resolution of the commission.
Section 12.09. Capital improvements fund: bonds.Subdivision 1. There is created and continued a capital improvements fund as a fund of the city. Monies in the capital improvements fund may be used by the city for the acquisition and betterment of capital improvements of the city.
Subd. 2. The city council may from time to time in any fiscal year and by a vote of six members of the council transfer from net revenues in its utility funds to the capital improvements fund an amount not to exceed 5 percent of the gross revenues derived by the commission in that fiscal year from utilities or services under the control of the commission except the district heating system.
Subd. 3. In this section the terms "gross revenues" and "net revenues" have the meanings given them by section 12.11, subdivision 5.
Subd. 4. The council may by a vote of six members of the council issue and sell obligations of the city to provide monies for the construction of capital improvements and may pledge to the payment of the obligations all or a defined portion of the estimated receipts of the capital improvements fund. Obligations so issued are payable solely from the receipts pledged for their payment, but if the question of the issuance of the obligations is approved by the voters of the city at a regular or special election, the obligations may be issued as general obligations of the city. The obligations must be issued in accordance with law and section 7.10 of this charter but are not a debt of the city within any statutory limitation of debt.
Subd. 5. The capital improvements fund may be terminated at any time by the council by the same vote required for its establishment. A pledge of utility receipts of the capital improvements fund made for the benefit of the holders of obligations issued under subdivision 2 will not be affected by the termination of the capital improvements fund.
Section 12.10. Rates.Changes in rates and charges for services under the jurisdiction of the commission may be initiated by resolution of either the commission or the council. Following such a resolution, the commission must hold a public hearing at which anyone may present oral or written testimony. A meeting notice must be published ten days before the hearing. During the 30 day period following the public hearing, the commission may receive written testimony and must consider such testimony at its next regular meeting or at a special meeting called for that purpose. The changes in rates and charges as proposed or modified by the commission are effective on the expiration of the 30 day period following the public hearing or at a later date fixed by the commission. The commission must adopt rules governing the conduct of hearings on changes in rates and charges and must publish the rules in such manner as it deems necessary to fully inform the public of their content.
Section 12.11. City use of utilities: transfer of funds.Subdivision 1. The council and the commission may agree on reasonable rates and charges to the city for utility products and services, but the rates and charges may not be higher than those imposed upon similar classes of customers.
Subd. 2. The commission's charge to the city for the use and availability of fire hydrants for municipal fire protection may not exceed $40.00 for each hydrant in the city unless otherwise provided by written agreement between the city and the commission.
Subd. 3. The city may not levy taxes of any nature on utilities under the control of the commission or on the revenues of the commission.
Subd. 4. The council may by a vote of six members transfer in any fiscal year to the general revenue fund of the city from the net revenues of a utility or service under the control of the commission and from the net revenues of any city owned utility the following amounts:
(a) from the electric utility, an amount not to exceed 20 percent of gross revenues,
(b) from the district heating utility, an amount not to exceed 10 percent of gross revenues,
(c) from any other city owned utility, an amount not to exceed 5 percent of gross revenues, and
(d) any amount authorized by law to be so transferred.
Subd. 5. In this chapter the term "gross revenues" means all operating and non-operating revenues of a utility from whatever source derived; the term "net revenues" means gross revenues less current expenses of the operation of the utilities. The amounts of gross revenues and net revenues must be determined by the commission in accordance with generally accepted accounting principles. Transfers made pursuant to this section must be consistent with covenants with bondholders in city resolutions authorizing the issuance of obligations payable from revenues of the utilities.