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

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Agreement (through 2026). On November 27, 2012, the City Council approved the 2013 Schedule of Rates, Fees, and Charges, including the recommended adjustment to sanitary sewer and water trunk fees. In reviewing further with the City Attorney and discussions with legal counsel for 21 st Century Bank, the tiered rate is recommended in order to honor the existing Reimbursement Agreement with 21 st Century Bank. This applies only to the water trunk fee. The water trunk fee within the reimbursement area is proposed to be $1,925, consistent with the Reimbursement Agreement. The water trunk fee outside the reimbursement area is proposed to remain at $1,550, consistent with current rates and fees as well as the 2012 Comprehensive Water Study. The City has received applications for two (2) plats within the Reimbursement Area. The City has been reviewing OAKWOOD ACRES, a three (3) lot subdivision along the re -aligned 167th Avenue, west of Nowthen Boulevard. This plat would be subject to the Water Trunk Reimbursement. The City has also received an application for BROOKFIELD 4TH ADDITION. This is a proposed 77 lot Major Subdivision. This plat is subject to a simple Water Trunk and Sanitary Sewer Trunk credit, meaning there is no money collected by the City to reimburse to 21st Century Bank (21st Century Bank is owner of this site). The City has also been working with a potential developer of the remainder of SWEETBAY RIDGE. The potential developer is under current agreement with the Property Owner. This 85 lot major subdivision is subject to the Water Trunk Reimbursement. The total financial liability or gap if the underlying Water Trunk Fee is collected is approximately $33,000 for SWEETBAY RIDGE. Notification: A Public Hearing Notification was posted in the Anoka County Union. Observations/Alternatives: Alternatives Alternative # 1. Adopt the Ordinance as drafted. This would appear to be the preferred option to honor the existing contractual arrangement and plain language of the agreement with 21st Century Bank. This alternative distributes the true costs to those parcels that would benefit from this original capital investment by the original developer. Alternative #2. Adjust all Water Trunk Fees to account for the deficiency in trunk fee rates. This alternative would distribute costs to users not directly benefiting from this trunk line construction and may be more difficult to establishing the essential nexus between the fee collected and the service provided. There is less certainty in this scenario as well, as the City would need to average the gap over an estimated number of connections. Alternative #3. Do not adjust the Water Trunk Fee. Staff, in working with the City Attorney, believes this alternative opens the City up to legal challenges regarding the interpretation of the plain language in the Reimbursement Agreement. The Agreement does not state that the City can collect less in Trunk Fees, and thereby reduce the reimbursement to 21st Century Bank. This alternative seems to expose the City to the highest financial liability if a challenge is submitted and the City is not successful in defending said challenge. Recommendation: Staff recommends that the City Council introduce Ordinance #13-17. Funding Source: Preparation of the Ordinance is being handled as part of normal Staff duties. Council Action: