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Posted: November 08, 2024
Rapid City
Agenda Item Summary

Agenda Item Ref. #: LF111324-12

Agenda Item Title:

Approve Electric Cooperative Revenue Agreement between the City, West River Electric Association, and Black Hills Electric Cooperative

Origination Group:
Legal & Finance Committee
Origination Meeting Date:
11/13/2024
City Council Hearing Date:
11/18/2024
Petitioner:
West River Electric
Staff Contact:
Daniel Ainslie
Location:
Council Chambers
Agenda Item Summary:
In South Dakota, municipalities that have more than one electrical service provider within the city’s boundaries are able to impose a gross receipts tax on rural electric cooperatives. This option is available within the municipality’s boundaries if the rural electric cooperative is a minority electric utility supplier for the community. In Rapid City, Black Hills Electric is the majority provider and West River Electric and Black Hills Electric Cooperative are minority rural cooperative providers.

State Statute states that the municipality may choose a range of 0-2%. Currently, Rapid City collects a 1% Gross Receipts Tax within its City limits. In 2023, this generated $152,408 for the City’s General Fund. West River Electric Association has requested a one year renewal agreement at 1%. If the City does not pass an agreement by the end of the year, statute places the tax rate at 2%. The attached agreement renews the 1% rate for calendar year 2025.

Funding Source & Fiscal Impact (if applicable):

Funding Cost Center
Is Funding Budgeted?:
Budgeted

Recommendations:

Origination Recommendation Action:
Approve

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