Proposed Charter Amendment

On November 6, 2018, voters in the City of Marquette will be asked to approve a change in the City Charter. The proposal would change the way PILT is calculated between the City of Marquette and the Marquette Board of Light and Power (BLP). Both the City and the BLP worked together to develop this change.

The following question will be posed on the November 2018 ballot:

Shall Sections 11-6 and 11-7 of Chapter 11 of the Marquette City Charter be amended to revise the calculation related to the payment of a portion of electric light and power utility system revenues to the City of Marquette, which payment is made in lieu of taxes that would be paid on electric light and power utility system property if it were privately owned?

Frequently Asked Questions

What is a PILT?
PILT stands for “Payment in Lieu of Taxes.” PILT is paid annually by the BLP instead of property taxes to the City of Marquette as established by the City Charter.

Is the PILT something new?
No, the PILT has been in place for a long time.

I live in the City and am a BLP customer. Will this affect my electric bill?
No, the proposed change in the formula for calculating the PILT would simplify the calculation administratively but the resulting PILT payment would be substantially the same as the current PILT. The customer would not see a difference in the amount or the calculation of his or her electric bill.

My mother lives outside the City limits and is also a BLP customer. Will this affect her electric bill?
No, the proposed change in the formula for calculating the PILT would simplify the calculation administratively but the resulting PILT payment would be substantially the same as the current PILT. The customer would not see a difference in the amount or the calculation of his or her electric bill.

How is the PILT calculated now?
The PILT formula is based on the total capital assets of the BLP and requires annual calculation and adjustment in coordination with the City assessor’s office.

What would change?
The PILT would be 5.5% of the BLP’s annual operating revenues.

How does this compare to how other electric municipalities pay their PILT?
A majority of electric municipalities in the state of Michigan pay their PILT based on a percentage of operating revenues.

How was 5.5% determined?
In choosing the percentage rate the MBLP and the City mutually agreed to a rate that would be substantially equivalent to the current PILT payment. The percentage was also benchmarked against other municipalities and found to be in line with national averages for publicly owned utilities such as the BLP.

Why make this change?
The change is being made to simplify the administration of the PILT process. Currently much administrative time is required to make the annual calculation. Staff at both the City and the BLP must classify, value, and account for the variety of capital assets held by the BLP. This process is also subject to changes in state law, which can create unintended consequences for the PILT calculation; the most recent example being the state’s change to personal property taxes. Changing the PILT formula to a simple percentage of operating revenues will save administrative time and resources. Doing so will also provide for a more consistent budgeting process and better long term planning for both the City and the BLP.

 

Where can I read the current City Charter?

www.marquettemi.gov/charter/

Brochure

The below brochure has been distributed in City water bills and BLP electric bills. Use the slider to view the pages of the brochure or download directly.

page1webPage2web