Minutes - Public Works Committee - 09/15/2020

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5.01: Consider Settlement Offer for Water and Sewer Cost Contribution and st Reimbursement Agreement; Case of 21 Century Bank Deputy City Administrator Gladhill reviewed the staff report and noted that staff acknowledges st that there is some risk in accepting this offer. It is possible that there are no fees to reimburse 21 Century Bank due to lack of development between now and 2026, although that is unlikely. Staff believes that the risk tolerance is low of having a higher reimbursement amount by waiting to see if the Harmony Farms area develops after 2026. It is more likely that the level of development that will occur will result in a reimbursement amount higher than the current settlement amount. Additionally, the settlement amount itself appears to be fairly low. While there is some risk involved, staff believes it to be a fair offer and takes a potentially significant liability off the books. Chairperson Kuzma asked if the City would be able to recoup additional costs from future build outs if the settlement is accepted. Deputy City Administrator Gladhill confirmed that the City would still be able to recoup additional funds through trunk fee collection in future projects. Councilmember Menth asked if the additional trunk lines would be added to the green area. Deputy City Administrator Gladhill explained that within the reimbursement area there are sub areas. He noted that while staff feels that this would be an acceptable settlement to accept, there have been ongoing discussions with Lennar related to the area of Harmony Farms. He stated that st the trunk lines already exist and therefore the trunk fees would be reimbursed to 21 Century Bank. He explained that in another area, additional trunk lines would be required which would be subtracted from the reimbursement. He noted that those are the two areas likely to develop within the next five years. He stated that there are multiple areas that are more uncertain for development within the next five years but will likely develop in the future. Councilmember Riley stated that as he understands it, if the City does nothing, the City will get nothing, and it will cost nothing; as developments would happen, they would pay and the City would pay it out. Deputy City Administrator Gladhill confirmed that to be true but noted that the City would receive less of the trunk fees. Councilmember Riley stated that on the other hand it would appear that if the City were to pay $70,000 now, as development happens the City would collect funds from the developers that it would keep, which would put the City ahead. He commented that even if development does not happen within the identified time period, it will happen, and the City will be paid back. Deputy City Administrator Gladhill confirmed that to be true. Councilmember Riley commented that it seems to be an easy decision; if it does nothing, it gets nothing but if it accepts this offer, it would be able to receive additional funds in the long run. Public Works Committee / September 15, 2020 Page 2 of 5