Agenda - Council - 12/11/2012 - Laserfiche WebLink

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CC Regular Session 4. 2. Meeting Date: 12/11/2012 By: Tim Gladhill, Community Development Information Title: Review Proposed Amendments to SAC Credit Policy and Consider Policy for Credit Distribution Background: In the summer of 2012, the Metropolitan Council Environmental Services (MCES) Division began reviewing potential amendments to the Sewer Availability Charge (SAC). SAC is a fee collected by MCES from the City that ensures future capacity in the Metropolitan Disposal System. SAC is collected by the City, typically at time of Building Permit, and paid to MCES. In October 2012, a working group formed to review the SAC credit and transfer policies completed several recommendations. Broadly speaking, there are three (3) categories that the City could consider in administering the SAC program (if adopted by the Metropolitan Council): 1. Net Credits 2. Minor Transfer 3. Short -Term 'Loan' Program Observations: As a result of changes to the SAC Program in 2010 by the Metropolitan Council, SAC Credits created by permanent reduction in demand can only be used on the same site in which the permanent reduction occurred. Currently, SAC Credits cannot be taken city-wide. Net Credits A proposed amendment to the SAC policy is to allow for the provision of Net Credits. Net Credits are created when a permanent reduction in demand is created by removal of a structure or permanent change in use to a lower demand. Actual payment will serve as proof of SAC paid. Net Credits are proposed to be allowed to be applied city-wide. The City can choose to develop a policy that either leaves Net Credits site -specific or allows Net Credits to be applied city-wide. Net Credits are proposed to be created for future, permanent demand. Net Credits are not proposed to be retroactive (for structures already removed or use reduced), and the Metropolitan Council's financial analysis did not include a study of looking retroactively. The result of Net Credits would be a bank of credits that could be applied. There would be a small amount of increased administrative time to track the status of the Net Credit Account and coordinate with the Metropolitan Council. Attached is a draft policy for consideration on the City's goals in distributing Net Credits. Minor Transfer A Minor Transfer is similar to Net Credit, except that a permanent reduction in demand is not experienced. A Minor Transfer would allow a user move SAC units from one site to another upon relocation, and would be limited to ten (10) SAC Units or less. A potential downside of a Minor Transfer is the fact that a finished space of one site is now removed of its previous SAC payment. Staff does have concern with allowing the Minor Transfer as part of the City's SAC Transfer Policy due to the liability exposed to the City. Since no actual reduction in demand is experienced, it would be the City's responsibility to ensure that SAC for the existing space was re -paid and made whole. Typically, a Building Permit is the trigger for SAC review. In the case of a Minor Transfer, there may not be a need for any City review if no