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City hears details of partnership agreement with MMU

ARSHALL — The city of Marshall and Marshall Municipal Utilities work together in a lot of ways — so many, in fact, that the city and the utility regularly enter into partnership agreements to help keep track of them all. An agreement for 2020 that members of the Marshall City Council approved earlier this week included a dozen separate agreements in one comprehensive package.

While there wasn’t controversy over the partnership agreement, council members and MMU General Manager Brad Roos still went over some of the details at Tuesday’s city council meeting.

Council member Craig Schafer asked to go over the agreement, “Just to give our residents an idea of what we look at.”

The partnership agreement covers a dozen areas where the city and the utility work together, including providing street lights, maintaining fire hydrants and water towers, and how much payment in lieu of taxes (PILOT) MMU will make to the city.

Marshall Mayor Bob Byrnes said PILOT was a major part of the agreement. The amount that MMU pays in lieu of city taxes each year is based on a rolling five-year average of electricity sales. Byrnes said those averages were in line with utilities around Minnesota and the U.S.

Counting both PILOT and industrial land development PILOT, MMU’s maximum payment to the city for 2020 would be about $1.3 million, the agreement said.

Council member Glenn Bayerkohler noted that the amount of kilowatt hours of electricity MMU sold seemed pretty stable over the past few years.

“Do you foresee that changing much in the years to come here?” he asked Roos.

“Actually, we take some level of pride in the fact that those sales are fairly level,” Roos said. MMU works to make sure Marshall residents get as much electricity as they need, but also to help them be more energy-efficient about it. However, he said the increasing popularity of electric cars might have an impact on how much electricity Marshall residents and businesses consume.

“In the electric industry, that is something that all electric utilities are thinking is going to be a growth area,” he said. A public electric car charging station is being built in Marshall, near the Tall Grass Liquor store. “But in the new year, 2020, our utility is going to be offering a discount program for Level 2 chargers that people might want to put in their garage.”.

Council members also had questions about part of the agreement that governs how the city and MMU use information technology. Next year, the plan is for the city and MMU to no longer have shared IT services.

“We’ve had the agreement, I assume, for quite a while,” Bayerkohler said. “I guess what I’m wondering is, if it worked all these years … what is it that has changed that it’s better to go our separate ways?”

The use of technology has become more complex for the city and MMU over the years, Roos said. Every three to five years, MMU works with an IT consultant to develop an action plan that helps meet the city and utility’s IT equipment and cybersecurity needs.

“As we did that this cycle,” Roos said, “It became pretty obvious to city staff that it may be time to look at a different way of doing it.”

One of the reasons why discussed by MMU and city staff was that MMU’s software and security needs are different from the city’s, Byrnes said. Marshall City Administrator Sharon Hanson said there were also a few other reasons why the split was being recommended, including cost. In a memo to the city council, Hanson said the projected cost of the technology action plan for the next three years exceeded the city’s proposed costs for IT network solutions.

The overall projected cost to implement the technology plan in 2019-2022 was about $1.38 million, with MMU paying a portion of about $684,000 and the city paying a portion of about $697,000.

“We did want to explore, could we find a better cost alternative to this?” Hanson said. She said the city had obtained a quote from The Computer Man in Marshall for IT equipment. While she said the quote amount was “evolving,” it looked like it could be about half the city’s projected costs to stay with MMU.

“I kind of feel like, if this was personal, we’d stay with MMU. We like MMU,” and the leadership and analysis Roos brought to managing the IT systems, Hanson said. But, she said, the city’s needs have grown and changed. “I think for us, the needs that we have are becoming greater, similar to what Brad says, where we’re using IT more and more on a year-to-year basis.”

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