Agenda - Council - 09/24/2013 - Laserfiche WebLink

Home

CC Regular Session Meeting Date: 09/24/2013 By: Tim Gladhill, Community Development Information 6. 2. Title: Adopt Ordinance #13-17 to Amend 2013 Rates and Fees Related to Water Trunk and Existing Reimbursement Agreement Background: The proposed ordinance is to amend the 2013 Water Trunk Fee to create a two (2) tier fee. A second tier of water trunk fee is required in order to honor an existing reimbursement agreement with 21 st Century Bank related to the extension of sanitary sewer and water trunk lines to the BROOKFIELD and SWEETBAY RIDGE developments. The original developer of BROOKFIELD paid the capital costs to extend the northwest water loop. The City entered into a reimbursement agreement with the Developer that future trunk fees in the reimbursement area would be credited to the Developer. In this case, there is an essential nexus between the fee and the actual capital costs of construction to be reimbursed. With any City fee, there needs to be a reasonable nexus between the two in order to establish the fee. On September 23, 2005, the City Council approved a Preliminary Plat for the BROOKFIELD ADDITION, a 241 lot Major Subdivision located along Nowthen Boulevard (CSAH 5), north of 167th Avenue. The Preliminary Plat has been phased over three (3) phases, with additional phases remaining to be completed. On June 13, 2006, the City Council Approved the Preliminary Plat for SWEETBAY RIDGE, a 165 lot Major Subdivision located along Variolite Street and 161st Avenue. The Plat has completed one (1) of three (3) planned phases. In order to service both of these developments, the Developer entered into a Reimbursement Agreement on March 22, 2006 with the City and the Developer subsequently agreeing to construct municipal Sanitary Sewer and Water Trunk lines. The Reimbursement Agreement allows the Developer to be reimbursed through future trunk fee payments. The capital cost was approximately $6,000,000 paid by the Developer. In December, 2009, the Reimbursement Agreement was re -assigned to 21 st Century Bank. The Reimbursement Agreement states that the City will not collect Sanitary Sewer or Water Trunk Fees for the area defined as BROOKFIELD, and that those fees will exist as a credit towards the Reimbursement Agreement. The Reimbursement Agreement also defines an additional Reimbursement Area that benefits from the construction of these trunk facilities.The Reimbursement Agreement states that the City would collect $1,925 per Water Trunk connection. The Reimbursement Agreement further states that in the event the trunk fee is increased, the reimbursement will increase as well, until the termination date or the entire reimbursement amount is achieved, whichever comes first. On June 26, 2012, the City Council Approved the Comprehensive Sanitary Sewer and Comprehensive Water Studies by Bolton and Menk. These studies recommended adjustments to the City's Rates and Fees for trunk and user fees. The City's general Sanitary Sewer Trunk and Water Trunk Fees were reduced while user fees were adjusted as offset. One of the major adjustments was proposed financing structures for the future water treatment plant. As all users on the water systems would benefit from this facility, the City balanced the cost between trunk fees (new development) and user fees (current users). Some cost reductions were also recommended in the studies. The studies did acknowledge the Reimbursement Agreement. Both the Reimbursement Agreement and the Comprehensive Utility Studies acknowledged that the entire reimbursement amount would not be realized. Through the sources and uses table, the study acknowledges that the Reimbursement Amount would not be fully realized and acknowledges that a lower rate would be collected. Again, in further review of the Reimbursement Agreement, it is recommended that the tiered Water Trunk Fee be established over the remaining life of the Reimbursement