The Shakopee Public Utilities Commission and the Shakopee City Council recently approved the terms of a key payment the commission makes to the city — unanimously.

That agreement, once a point of contention, is one of many indicators of an improved relationship between the Shakopee Public Utilities Commission (SPUC), an independent arm of the city, and the council. It comes just over a year after Shakopee residents voted to keep the commission arrangement in its current form.

"It has been quite a transformation and a lot to be proud of," Mayor Bill Mars said.

The goodwill contrasts starkly with how things used to be. Two years ago, local leaders say, the relationship was marked by distrust and disagreements.

"It was always this kind of back-and-forth relationship of who was managing who," said Kathi Mocol, president of the Shakopee Public Utilities Commission and a former City Council member. "The spike in tension is what caused the council to say, 'Maybe we put this back to a vote.'"

In November 2020, about 59% of residents voted against changing the arrangement.

Mocol said it used to be hard to get answers from SPUC, which makes decisions about utilities, including water and electricity. The commission also weathered controversy related to the salary of its former general manager, whose base salary exceeded that allowed for public officials by $21,000.

Leaders from both entities say the relationship shifted with new personnel and a conscious effort to do better. A new SPUC general manager and auditor have been hired in recent years, and the entire commission, which is appointed by the council, turned over between 2019 and 2021. City Council Member Jody Brennan now sits on the commission.

Greg Drent, general manager for Shakopee Public Utilities, said he's concentrated on building relationships and transparency since he took the job on an interim basis in December 2020 and permanently six months later.

"I want to focus on, 'How do we improve things going forward?'" he said. "What you see is what you get — I'm open, I'm honest, I'm going to tell you what I think."

Under the new agreement with the city, the commission will pay 5.5% of gross water and electricity revenue to the city, plus an additional 0.5% of that revenue to support economic development in Shakopee.

The last time the payment in lieu of taxes changed was in 2019 when SPUC changed it without council input. Council members were upset and didn't understand how the commission came up with its percentages, Mocol said.

Other changes have occurred during the past two years. Some utility rates, which Mars said were once "out of tune" and at times impeded development, have been lowered. The water connection charge for apartments and townhomes is one example, he said.

Mocol said the utility also benefits from the renewed partnership with the city, including having city staff create its employee handbook. And the city's new electric cars, unveiled this week, are wrapped to promote the utility.

The city has long wanted "an ethical, transparent partnership" with the utility, City Administrator Bill Reynolds said in a statement.

"Now that we have leadership both in the commission and the general manager that reflects those values and understands the need for a cooperative working relationship, previous issues have melted away," he said.