Bills and city money
What the electric utility sends to the rest of city government, and what a change could mean for one household.
Luverne's electric customers pay more than the cost of running the utility. Part of the difference goes to other city funds, which means less has to come from property taxes. How much, and who decides, is the core of the ballot argument.
What money are people arguing about?
Three separate payments from the electric fund: transfers to other city funds, a contribution to the Economic Development Authority, and a franchise fee.
Transfers are the audited “transfers out” line: money moved from the electric fund to other city funds. Not all of it goes to the general fund. In 2025 none did.2025 audit, p. 71
Total support adds the other two payments: the $80,000 EDA contribution the audit shows separately, and the electric franchise fee. City Code § 55.17 requires the city utility to pay that fee per kilowatt-hour, at a rate the council sets.City Code § 55.17
This page keeps those two measures apart. Mixing them is how the same year gets described as $624,330 by one side and more than $1 million by the other.
How much supports other city services?
Transfers fell 58%, from $624,330 in 2024 to $261,675 in 2025. Total support was about $1.08 million in 2024; the 2025 total is not yet verified.
| Electric fund payment | 2024 | 2025 |
|---|---|---|
| Transfers to other city funds (audited) | $624,3302024 audit | $261,6752025 audit |
| EDA contribution (audited, separate line) | $80,0002024 audit | $80,0002025 audit |
| Electric franchise fee (reported estimate) | About $380,000City MPA report 2025 | Not verifiedNot itemized in the 2025 audit; general fund electric + gas franchise receipts were $558,515 |
| Total support (approximate) | About $1.08 million | Not verified |
Historical electric-fund payments, 2024 and 2025; dollars per calendar year; City of Luverne electric fund only. Transfers and the EDA contribution are separate audited lines.
The 2024 total is approximate because the franchise-fee figure is a reported estimate, not a receipt: the city's own report gives a round $380,000, which equals the 2024 budget line, and the audit books electric and gas franchise receipts together. The city's budget books and its power-supplier report also give different fee figures for 2021–23, which no record explains. The 2025 electric fee has not been published separately, so no 2025 total is shown. The 58% drop is in transfers only.City MPA report 2025, p. 72025 audit, p. 49
For scale, 2024 transfers were 7.1% of the electric fund's operating revenue, and 2025 transfers were 2.8%.
Transfers out of the electric fund, year by year
Money moved from the electric fund to other city funds. The 2022 peak ($1.17M, about 15% of that year's operating revenue) coincides with the power-plant construction year; the 2025 figure ($262K) is the lowest since 2017. Transfers into the electric fund were $0 in every State Auditor year (2015–23).
Where the transfers went, and how the measures reconcile
2024: General Fund $95,000; Childcare Facility Fund $43,370; Other (nonmajor) governmental funds $485,960.2024 audit, page 72, transfers note
2025: General Fund $0; Other (nonmajor) governmental funds $261,675.2025 audit, page 71, transfers note
Total support for 2024 = transfers $624,330 + EDA $80,000 + franchise fee about $380,000 = about $1.08 million. Each payment is counted once.
The city's Municipal Power Advantage report uses a third measure: franchise fee plus transfers including the EDA contribution, as a share of electric revenue. On that measure the 2021–24 average was 15.5%. The petition committee's “three times national levels” is consistent with comparing that measure with a national median of 5.1% of revenue. It predates the 2025 drop in transfers.Missouri River Energy Services / City of LuverneAmerican Public Power AssociationRock County Star Herald
Operating income is not the same as money available for rate cuts. The electric fund's operating income was $1,372,337 in 2024 and $1,230,506 in 2025. That figure is before bond interest, transfers, and capital spending, and it counts depreciation rather than cash.2025 audit, p. 49
What could change for my household?
If transfers shrank, the city tax on a home could go up and the electric bill could go down. Which is bigger depends on your home value, your electricity use, and choices nobody has made yet.
This calculator starts from an illustrative household: a $250,000 owner-occupied home using 900 kWh a month. It is not a typical or median household. Change the numbers to match yours. Nothing you enter leaves this page.
The estimated market value on your property tax statement. Owner-occupied homes only.
The kWh used on your electric bill. An average month works best.
All of it ends: $261,675 a year. The city adds all of it to city property taxes.
An example, not a forecast. No one has decided any of these amounts.
Try other outcomes
All: $261,675 a year added to city property taxes.
All: $261,675 a year in lower rates for all customers.
How this was calculated
- Payment that ends: $261,675 of the utility's audited 2025 payment to the city ($261,675).
- City property taxes: the city now collects $3,789,392 a year in property tax (taxes payable 2026). Adding $261,675 makes that $4,051,067, a 6.9% increase.
- Your share of it: state rules convert market value into a much smaller taxable number called tax capacity. For a $250,000 home, after the homestead exclusion, that number is $2,259.50. The combined tax capacity of all Luverne property is $5,897,742. That is not the levy or the city budget. Your home pays that fraction of the added tax: $2,259.50 ÷ $5,897,742 × $261,675 = +$100.
- Your electric bill: $261,675 in lower rates, spread over the 74,106,536 kWh the utility sold in 2025, is 0.353¢ per kWh. At 10,800 kWh a year, that is −$38.
- Both years of payment use the same current tax base (payable 2026) and 2025 electricity sales.
These are sensitivity examples, not forecasts. The amendment does not specify a fallback transfer amount. The continuing requirements for existing payments have not yet been established from their authorizing documents. The calculator counts only the city's share of your property tax, before income-based property-tax refunds. It assumes unchanged electricity use, other utility costs, capital plans, and debt. It also assumes savings would be spread evenly per kWh, though a future commission could change rates differently by customer class. The franchise fee is charged per kWh, so a rate change alone would not change it.
The tax side uses taxes payable 2026: the city levy is $3,789,392, spread over $5,897,742 in combined tax capacity. Tax capacity is the smaller taxable number state rules calculate from every property's market value; it is not the levy or city budget. Homestead rules follow the state's payable-2026 method. The electricity side uses 2025 sales and 2025 transfers, the latest audited year.State tax data, payable 2026Minnesota Department of Revenue2025 audit, p. 200MN Revisor of Statutes
Renters and institutions don't get this tax bill directly, but property taxes on rental and business property can still reach them through rents and prices.
| Share of 2025 transfers removed | City tax | Electric bill | Net |
|---|---|---|---|
| 0% ($0) | $0 | $0 | $0 |
| 50% ($130,838) | +$50 | −$19 | +$31 |
| 100% ($261,675) | +$100 | −$38 | +$62 |
Annual household scenario; electric transfers only; $250,000 homestead using 900 kWh a month; each reduction fully replaced by the levy and fully passed through to rates, spread evenly per kWh. City share of property tax only, before refunds.
The larger case: replacing all of 2024’s total support
Using 2024's total support (about $1.08 million), fully replaced by the levy and fully passed through to rates, the same household would see about +$420 in city tax and about −$160 on the electric bill, a net of about +$260 a year. The result is rounded to $10 because the franchise fee is approximate. It mixes a 2024 payment with the payable-2026 tax base and 2025 sales, and it assumes the franchise fee itself goes away, which no proposal says.
Is one system harder on lower-income households?
Probably somewhat. Bills rise little with income while property tax rises with home value, and eligible homeowners may get part of a tax increase refunded. These are examples, not a local income study, and a separate question from whether costs shift between homes and businesses.
A tax is called regressive when it takes a larger share of income from lower-income households. Two neighbors using the same electricity pay the same electric bill no matter what their homes are worth, but a more valuable home pays more property tax. Here is what replacing all 2025 transfers would mean for two homes, each using 900 kWh a month:
| Home value | Tax capacity | City tax | Electric bill | Net |
|---|---|---|---|---|
| $200,000 | $1,715 | +$76 | −$38 | +$38 |
| $400,000 | $3,895 | +$173 | −$38 | +$135 |
Annual household scenario; replacing all 2025 electric transfers; hypothetical homesteads using 900 kWh a month; payable 2026 tax base and rate; full replacement by the levy and full pass-through to rates; before any state refund.
These are hypothetical homes, not a measured study of Luverne incomes, and home value is only a rough stand-in for income. Federal survey data point the same way: Midwest households with incomes of $150,000 or more used about 1.6 times the electricity of households with $20,000 to $40,000, while their incomes were several times higher.U.S. Energy Information Administration
The state's homestead property-tax refund can offset part of an increase for eligible homeowners. Whether an added tax dollar brings added relief depends on the household's income and where it falls on the refund schedule: within the phase where the refund grows with tax, part of each added dollar comes back; a household at its maximum refund, or above the income limit, gets none. Electric bills have no comparable refund.Minnesota Department of Revenue
As background only: the Revenue Department's 2026 incidence study, which models statewide 2023 taxes, finds residential property tax after refunds and utility gross-earnings taxes both regressive. Neither category is Luverne's utility transfer, so the study does not measure the size or direction of this local change for any income group.Minnesota Department of Revenue
The committee has called the current system regressive for this reason.Charter Amendment Committee
Do homes or other customers pay more of each?
Residential property is a larger share of the city property-tax base than identifiable residential accounts are of electric revenue. Because the reporting categories differ, the exact shift can’t be calculated from these tables.
Who pays electric bills (2024)
Electric revenue by customer class, calendar 2024, as Luverne reported it to the Minnesota Commerce Department. The figures are self-reported and total $421,897 more than audited electric sales. Households with electric heat are counted in “all other,” not residential.Commerce annual report, CY2024
| Customer class | Customers | Revenue | Share |
|---|---|---|---|
| Residential (non-farm) | 1,802 | $2,492,215 | 29.2% |
| Farm | 4 | $9,855 | 0.1% |
| Commercial | 419 | $2,854,900 | 33.5% |
| Industrial | 3 | $1,937,181 | 22.7% |
| Street lighting | 4 | $110,463 | 1.3% |
| All other, including residential with electric space heat | 381 | $1,122,435 | 13.2% |
| Total | 2,613 | $8,527,049 | 100% |
Residential accounts paid at least 29% of electric revenue. The true share is higher, because the filing puts homes with electric heat in the “all other” row with other accounts. In utility reporting, “commercial” includes government buildings, schools, and other institutions. There is no separate institutions row, so none is added here.EIA definition
Property tax capacity by class, payable 2026, before capture and other adjustments
Tax capacity by property type. This is the measure the city levy is spread on: market value after the homestead exclusion, times each class's rate. Homes get a lower rate than businesses, so their share here is smaller than their share of market value.State tax data, payable 2026
| Property type | Tax capacity | Share |
|---|---|---|
| Homes (owner-occupied) | $3,249,512 | 53.9% |
| Rental houses and small rentals | $386,129 | 6.4% |
| Apartments (4+ units) | $214,130 | 3.6% |
| Commercial | $1,013,507 | 16.8% |
| Industrial | $1,096,955 | 18.2% |
| Utility and business personal property | $52,668 | 0.9% |
| Farm | $16,063 | 0.3% |
| Total | $6,028,964 | 100.1% |
| From class total to the levy base | Tax capacity |
|---|---|
| Class total (above) | $6,028,964 |
| Less tax-increment capture | −$130,791 |
| Less power-line adjustment | −$431 |
| Taxable capacity the levy is spread on | $5,897,742 |
Shares are of the class total, before capture and other adjustments, so they are not exact shares of the final levy; the state reports capture only as a total, not by class. They add to 100.1% because each is rounded. The household scenario uses the $5,897,742 figure.State tax data, payable 2026
Tax-exempt property, like schools, churches, and government buildings, has no tax capacity and pays no property tax, but does pay electric bills. The largest single taxpayer, Lineage Logistics, held 11.1% of the city's tax capacity for taxes payable 2025.2025 audit, p. 186, Table 9
The two tables use different categories, and electric “commercial” is not the same as property-tax “commercial,” so this page does not compute an exact shift from one to the other.
Workbook cells, and how the filing compares with the audit
Sheet “ElectricityByClass,” cells B11:D11 (Residential (non-farm)); B10:D10 (Farm); B12:D12 (Commercial); B13:D13 (Industrial); B14:D14 (Street lighting); B15:D15 (All other, including residential with electric space heat). The rows add up to $8,527,049 in the workbook's calculated total (B18:D18). Cell D16 ($7,404,614) is a formula that adds the rows but leaves out the “all other” row. The filing's total is $421,897 above the audit's electric sales revenue ($8,105,152), and the published records do not explain the difference; the audit's total operating revenue ($8,794,494) also includes service income that is not retail sales. The rates page sets out the three measures. Sales volume does match: the filing's 73,828 MWh equals the audit's 73,828,009 kWh.
What else is in the electric fund’s books?
Bond debt that stays with the city under either system, and loans to other city funds that a split would have to settle.
Debt. The electric fund owed $13,840,000 on two revenue-bond issues at the end of 2025. They are payable only from electric revenues, not city taxes, and the city promised to keep net revenues at least 125% of annual debt payments until 2051. Whoever sets rates inherits that promise.City of LuverneCity of Luverne / MSRB EMMA
Loans to other funds. The fund has lent $3,278,956: $2,408,010 to the Sharkee's–Merts tax-increment project (no public rate) and $870,946 to the sewer fund at 0.5%. It also held $5,193,030 in unrestricted cash and investments.City of Luverne
Rates, bills, and how Luverne compares with its neighbors are on Rates compared.
Bond issues and debt service
- Electric Revenue Bonds 2018A: issued $4.88M, $3.77M owed at the end of 2024, matures 2038.
- Electric Revenue Bonds 2022A (power-plant project): issued $11.3M, $10.5M owed at the end of 2024, matures 2051.
Scheduled 2025 debt service was $931,226. At the September 15 forum the city said the electric bonds are general obligations; their official statements say they are not.City of Luverne / MSRB EMMARock County Star Herald
Where the city’s general fund money comes from (2025)
- Property taxes: $2.94M
- State Local Government Aid: $1.74M
- Franchise taxes on electric and gas combined: $559K
- Transfers in from all city enterprises: $310K (the electric fund's share was $0)
Out of $6.69M in general-fund sources. State aid is set by a formula that does not look at utility transfers, so it would not rise if transfers fell.City of LuverneMN Revisor / House Research / MN Dept. of Revenue
How other Minnesota city utilities compare
This compares the defined payments shown below—not every form of financial support the utilities provide. Franchise fees are excluded.
The payments counted are the same for every row: money the electric utility paid into the city's own funds (general, capital, and other city funds), plus any payment in lieu of taxes booked as an expense. Not counted, for any row: franchise fees, payments to separate development authorities, transfers to water or sewer funds, and transfers that cover the utility's own bond payments. The percentage is those payments divided by the same utility's electric operating revenue for the same year. For Luverne in 2024 that is $624,330 of $8,794,494, or 7.1%. Single years can be lumpy.
| Utility and year | Payments as a share of revenue | Payments counted | Electric operating revenue | How the number was built |
|---|---|---|---|---|
| Moorhead2024 data | 21.6% | $9,550,766 | $44,179,429 | Counted: General fund $7,475,000; capital improvement fund $2,025,766; city economic development fund $50,000. Not counted: Franchise fee (not found). Result: $9,550,766 ÷ $44,179,429 = 21.6%. Payment rule: Charter caps the general-fund transfer at 20% of electric gross revenue (plus up to 5% for capital); a multi-year transfer agreement sets the amount. Appointed commission.Moorhead Public Service |
| Jackson2024 data | 8.7% | $488,917 | $5,610,075 | Counted: General fund $488,917 (described as in lieu of taxes). Not counted: Debt-service funds $121,001 (the electric fund’s share of bond payments); water $8,039; sewer $58,950; franchise fee (not found). Result: $488,917 ÷ $5,610,075 = 8.7%. Payment rule: Set in the budget each year; no formula found. Council-supervised commission.City of Jackson |
| Luverne2024 data | 7.1% | $624,330 | $8,794,494 | Counted: General fund $95,000; childcare facility fund $43,370; other city (nonmajor governmental) funds $485,960. Not counted: Economic Development Authority $80,000 (a separate component unit); franchise fee (reported estimate about $380,000, not reconciled). Result: $624,330 ÷ $8,794,494 = 7.1%. Payment rule: Set in the budget each year; no formula. Council (today).City of Luverne |
| Hutchinson2024 data | Not shown | — | — | Not shown: the electric-only statements could not be reopened, and the city audit combines electric and gas. Payment rule: Charter § 11.05 calls for a payment agreement with the city; the agreement itself was not reopened. Appointed commission.City of Hutchinson |
| Buffalo2024 data | 5.6% | $1,000,000 | $17,954,579 | Counted: General fund $900,000; civic center $100,000. Not counted: Non-cash transfer of $1,946,892 in fiber assets; franchise fee (not found). Result: $1,000,000 ÷ $17,954,579 = 5.6%. Payment rule: Annual contribution set in the budget; an agreement approved Feb. 2, 2026 sets 5.5% plus 0.25% from 2027 (not re-verified). Council through 2025; appointed commission from 2026.City of Buffalo |
| New Ulm2024 data | 4.8%Earlier: 2022: 4.6%. 2023: 4.8%. | $1,348,553 | $28,063,599 | Counted: Electric share of the payment in lieu of taxes, booked as an operating expense. Not counted: Franchise fee (not found). Result: $1,348,553 ÷ $28,063,599 = 4.8%. Payment rule: Charter § 235: 5% of specified receipts, in lieu of taxes. Appointed commission.New Ulm Public Utilities Commission |
| Litchfield2024 data | 4.5%Purpose of $100,000 not identified | $600,000 | $13,303,749 | Counted: General fund $500,000; other city governmental funds $100,000. Not counted: Franchise fee (not found). Result: $600,000 ÷ $13,303,749 = 4.5%. Payment rule: Set in the budget each year; no formula found. Council.City of Litchfield |
| Fairmont2024 data | 3.2% | $557,297 | $17,156,243 | Counted: General fund $557,297, described as payments in lieu of taxes. Not counted: Economic Development Authority $77,684 (component unit); franchise fee (not found). Result: $557,297 ÷ $17,156,243 = 3.2%. Payment rule: Fixed dollar amount in the budget (details not verified). Council, on advice of an appointed commission.City of Fairmont |
| Worthington2024 data | 3.2% | $743,632 | $23,089,737 | Counted: General fund $743,632. Not counted: A $180,000 transfer into the electric fund is not netted; franchise fee (not found). Result: $743,632 ÷ $23,089,737 = 3.2%. Payment rule: Charter § 6.05: transfers need a joint resolution of the commission and council (not re-verified). Appointed commission.City of Worthington |
| Austin2024 data | 3.2%Payment line inferred; the audit does not label itEarlier: 2022: 3.5%. 2023: no audit found. | $1,279,533 | $40,282,925 | Counted: Electric “taxes other than income taxes,” booked as an operating expense. Not counted: Franchise fee (not found). Result: $1,279,533 ÷ $40,282,925 = 3.2%. Payment rule: Gross-earnings payment in lieu of property taxes; the source of the rule was not found. Elected commission.Austin Utilities |
| Marshall2024 data | 2.5%Revenue includes net revenue from a contracted plantEarlier: 2022: 2.7%. 2023: 2.6%. | $964,614 | $38,377,367 | Counted: Payment in lieu of taxes, booked as a transfer to the general fund. Not counted: Franchise fee (not found). Result: $964,614 ÷ $38,377,367 = 2.5%. Payment rule: Negotiated formula based on average kWh sales plus an economic-development amount; the audit and the 2026 agreement describe different averaging periods. Appointed commission.Marshall Municipal Utilities |
| St. James2023 data | 10.5%2023 data; State Auditor figures, not checked against an audit | $646,000 | $6,137,002 | Counted: Transfers out, as reported to the State Auditor (destinations not itemized). Not counted: Not itemized. Result: $646,000 ÷ $6,137,002 = 10.5%. Payment rule: No formula found. Council.Minnesota Office of the State Auditor |
| Granite Falls2023 data | 11.7%2023 data; State Auditor figures, not checked against an audit | $466,868 | $3,995,965 | Counted: Transfers out, as reported to the State Auditor (destinations not itemized). Not counted: Not itemized. Result: $466,868 ÷ $3,995,965 = 11.7%. Payment rule: No formula found. Council, with an advisory commission.Minnesota Office of the State Auditor |
| Windom2023 data | 3.1%2023 data; State Auditor figures, not checked against an audit | $200,750 | $6,464,048 | Counted: Transfers out, as reported to the State Auditor (destinations not itemized). Not counted: Not itemized. Result: $200,750 ÷ $6,464,048 = 3.1%. Payment rule: Set through the city budget (not verified). Appointed commission.Minnesota Office of the State Auditor |
Each row: one utility, one year, selected payments to city funds divided by electric operating revenue. Most rows use the city's 2024 audit. Rows marked “2023 data” use State Auditor figures because no audited 2024 statement was found online; those figures do not say which funds received the money. Earlier years are shown only where the same measure could be taken from audits.
Luverne's share would be about 11.4% if the franchise fee (a reported estimate of about $380,000) were counted, but no peer's franchise fee could be found, so the table leaves it out for everyone. Compare other cities has every Minnesota municipal electric utility on the State Auditor's data.