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6.2. SR 04-02-2012REQUEST FOR ACTION TO ITEM NUMBER Ma or and Ci Council 6.2. AGENDA SECTION MEETING DATE PREPARED BY Admuustration A ri12, 2012 ustin Femrite, P.E., Ci En ' eer ITEM DESCRIPTION REVIEWED By Ordinance, Associated Petition, and Policy Relating to the Cal Portner, Ci Administrator Assessment of Private Utility Line Work REVIEWED BY Peter Beck, Ci Attorne ACTION REQUESTED 1. Council motion adopting preferred ordinance allowing for the assessment of costs associated with private utility line repairs or connections. 2. Council motion adopting Petition, Waiver Agreement and Policy based on selected Ordinance. 3. Council motion approving the Memorandum of Understanding with the Elk River Municipal Utilities. All approvals shall be contingent on the Elk River Municipal Utilities Commission approving the Memorandum of Understanding at their next meeting. BACKGROUND/DISCUSSION As discussed at the January 9, 2012, Ciry Council meeting, staff has further reviewed the idea of allowing for the city to pay for the costs associated with private sewer and water service repairs and assess those costs against the petitioning property. Some items of discussion came up during the work session in which staff has further reviewed. Those items have been included with explanation in this memo or incorporated into the attached draft ordinances. Staff has attached two separate ordinances for consideration of the Council. The first ordinance reflects staffls original request to put a mechanism in place which would allow property owners already connected to city sewer and water system, the option to have. costs for repairs or modifications to their private owned services assessed against their properties. Eligible sewer or water service repairs projects under this ordinance include those specific cases that pose a direct risk to public health and safety. These include but are not limited to the following examples: A) The repair of a leaking sewer or water service that is causing or expected to cause damage to improvements within the public right-of--way or a neighboring property. B) The separation of a shared sewer or water service line. C) The proper abandoning or disconnection of a sewer or water service line that has been disconnected from a building. D) The reconnection of a private sewer or water service line if modifications to the public mains have caused the property owner to no longer have service in the existing location. Other eligible projects will be considered by the city on an individual basis. ~ i~ E 8 E i ~ 1 V The second ordinance has been generated based on discussion from the January 9 City Council meeting. In addition to the improvements that would be allowed in the previous option, this ordinance would allow for existing businesses or homes that are currently not connected to the public sanitary and or water system to connect and have those costs assessed against their property. The policy associated with this ordinance, as drafted, would allow for the petitioning property owners to include the water and sewer access charges in the assessment. The question regarding the ability to recover this assessment if a property were to go into foreclosure has been further reviewed by Ciry Attorney Peter Beck. It is his finding that the assessment would be treated the same as other special assessments against the property and would need to be repaid by the new owner. Staff will be present at the Apri12, 2012, meeting to further detail the two options and answer any questions you may have. FINANCIAL IMPACT There is no direct financial impact associated with the requested actions. Adoption of this ordinance will allow for petitioners to come forward and request funding for approved repairs and/or connections. The costs for the sewer connections would be drawn from the sewer fund and repaid to that fund as the special assessment payments are received. Costs for water repairs would be paid by the Elk River Municipal Utilities. The Elk River Municipal Utilities costs will be reimbursed by the city as special assessment payments are received. The first described ordinance, which only authorizes repairs to existing service lines, has a smaller potential funding obligation associated with it. While it remains to be seen how many properties might take advantage of the assessment option, staff is estimating five sewer petitions and five water petitions may be submitted in a year. Staff estimates the repair cost, of an average petition, to be around $8,000. This would have a total impact of $80,000 per year, $40,000 for the city and $40,000 for the Elk River Municipal Utilities. The second ordinance, which in addition to repairs would allow for new connection of sewer and water services, has the potential for a higher obligation of payments. There are currently about 90 properties within the city that have both sewer and water available but have not connected to them. There are also about 105 properties that are connected to either sewer or water but not the other. Staff has estimated, if all of the unconnected properties were to take advantage of this new program, with an average cost of $11,000 per utility, including access charge, the city and the Elk River Municipal Utilities may be requested to cover costs up to $3,135,000. Staff does not expect all of these connections to be made the first year. More likely these connections would be spread out over five to ten years. A more realistic estimate of financial obligation in the first year of the program would be $175,000 from the city and $175,000 from the Elk River Municipal Utilities. After the first year the obligation would be lower as the first special assessment repayments would help offset the costs of new petitions. Both ordinances have been drafted to allow the city to deny any petitions received, if there is not sufficient money in the associated funds to cover the costs. P ~ ~E'8~`£ m B V i ~~ ATTACHMENTS Draft Ordinance -Assessment of costs to repair private utility lines Draft Ordinance -Assessments of costs to connect and repair private utility lines Memorandum of Understanding -Payment of private water line connection and repair costs Action Motion by Second by Vote FOllow Up PO~IERE~ E ORDINANCE N0.12- CITY OF ELK RIVER AN ORDINANCE OF THE CITY OF ELK RIVER AMENDING CHAPTER 78, ARTICLE I OF THE ELK RIVER CODE OF ORDINANCES TO ADD NEW DIVISION 1, PROVIDING FOR PAYMENT AND ASSESSMENT OF THE COSTS TO REPAIR PRIVATE UTILITY LINES The City Council of the City of Elk River hereby ordains as follows: Section 1. That Chapter 78, Article I of the City of Elk River Code of Ordinances shall be amended to add new Division 1, which shall read as follows: Division 1. Payment and Assessment of Costs to Repair Private Utility Lines. Section 78-1. Finding of Public Health and Safety Hazard. a) The City Council finds that failure to maintain in good, operable condition private water and sanitary sewer utility lines creates public health and safety hazards on private property which must be eliminated. b) In addition to the provisions of chapter 46, article II of this code, which declares defective sewage systems and plumbing a nuisance affecting the public's safety and health and authorizes the City to abate such nuisances and to assess the costs therefor to the affected properties, the City Council finds that it is necessary and in the public interest to provide a mechanism for costs incurred by private property owners to eliminate such public health and safety hazards on private property to be assessed against the property as a special assessment. Section 78-2. Petition Authorized. Property owners who have private water and/or sanitary sewer lines which have failed, and such failure has been determined by City land development staff to be a public health or safety hazard, may petition the City, on a form provided by the City, to pay the costs to repair the private utility lines and to assess amounts paid as a special charge under Minnesota Statutes, Section 429.101. The City may accept or reject such petitions in its sole discretion, and may impose such conditions and requirements to acceptance as it deems appropriate. Section 78-3. Work to be Completed by Property Owner. If a petition to pay and assess the costs of repair is accepted by the City, installation of the required repairs to private utility lines on private property shall be the responsibility of the property owner, shall be contracted for by the property owner, shall be completed by the property owner as required by the policies and ordinances of the City of Elk River and Elk River Municipal Utilities, and shall be inspected and accepted by the city building official before payment of costs is made. Section 78-4. Payment and Assessment of Costs Authorized. a) Upon completion and acceptance by the City of all work required, the City will make payment to the party or parties who performed the work in an amount not to exceed that set forth in the petition accepted by the City. Such payment by the City shall constitute a special charge against the affected property pursuant to Minnesota Statutes, Section 429.101 and shall be specially assessed against the property by the City pursuant to the provisions of Minnesota Statutes, Section 429.101. Special assessments levied under this Section shall be payable in a single installment, or by up to 10 equal annual installments, as provided by the City Council. b) The City Council. shall establish, and may amend from time to time, policies regarding: (i) projects eligible for this program; (ii) petitions which may be accepted by the City Administrator; (iii) petitions which may only be accepted by the City Council; (iv) the number of annual installments over which amounts paid and assessed will be levied; and (v) the interest rate applicable to unpaid installments. Section 2. That this Ordinance shall be published and take effect as provided by law. Passed and adopted by the City Council of the City of Elk River this day of , 2012. John J. Dietz Mayor Attest: Tina Allard City Clerk PETITION, WAIVER AND AGREEMENT FOR PAYMENT OF THE COST OF REPAIRS TO PRIVATE UTILITY LINES AND ASSESSMENT OF AMOUNTS PAID AS A SPECIAL CHARGE UNDER MINNESOTA STATUTES, SECTION 429.101 TO: City Council of the City of Elk River located at (the Owners), owners of the property Exhibit A attached hereto (the Property), and legally described on Petition the City of Elk River (the City) to pay the costs of certain repairs (the Repairs) to private utility lines located on the Property or in the Right-of--Way directly adjacent to the Property, including: Repair of private water service line(s) currently connected to the City System Repair of private sanitary sewer service line(s) currently connected to the City System In an amount not to exceed that set forth on Exhibit B attached hereto (the Cost of Repairs), And to levy a special assessment against the Property in the amount of the Cost of Repairs as an unpaid special charge pursuant to Minnesota Statutes, Section 429.101. Owners acknowledge and agree: 1) that there has been a failure of the private utility lines on the Property; 2) that the failed service line(s) is connected to the public system; 3)that the failure of the utility lines has created a public health and safety hazard near the failure; 4) that the Work identified on Exhibit B is reasonable and necessary to eliminate the public health and safety hazard on the Property; 5) that the Cost of the Work identified on Exhibit B is reasonable and necessary to affect the Work and is the responsibility of Owners; and 6) that Owners have been provided the opportunity to pay the Cost of the Work without the City's involvement and have elected, instead, to petition the City to pay the Cost of the Work and to assess the full amount of the Cost of the Work to the Property. Owners acknowledge that the City may accept or reject this Petition, Waiver and Agreement in its sole discretion, for any reason, including, but not limited to, the availability of City funds to pay the Costs of the Work and agree, if the City accepts this Petition, Waiver and Agreement: 1) to have the Repairs identified on Exhibit B completed as required by the policies and ordinances of the City; 2) that the Repairs performed shall be privately contracted by the Owners; 3) that the City shall bear no responsibility for or liability related to the performance of the Repairs; 4) that Owners shall hold harmless and indemnify the City from any claims related to the performance of the Repairs; 5) to procure and pay the cost of all permits required for the Repairs; 6) to submit evidence to the City that the Repairs have been inspected and accepted by the City Building Official; 7) that, upon completion and acceptance of the Repairs, City shall make payment to the Owner's contractor or other parties who performed the Work in an amount not to exceed the Cost of the Work identified on Exhibit B; 8) that payment by the City of the Cost of the Work shall create an unpaid special charge against the Property; 9) that this unpaid special charge shall be specially assessed against the Property by the City pursuant to Minnesota Statutes, Section 429.101; and 10) that the special assessment shall be payable in equal annual installments with interest accruing on unpaid installments at the rate of %. Owners expressly waive the right to a hearing on assessments levied pursuant to this petition; expressly waive objection to any irregularity with regard to the assessment of the Property for the Cost of Repairs; expressly agree that the amount assessed is reasonable; expressly waive any claim that the amount assessed is excessive; expressly waive all rights of appeal, including any rights under Chapter 429, Minnesota Statutes, from the assessment by the City of the Cost of Repairs; and expressly agree to pay when due all assessments levied for the Cost of Repairs. Owners represent and warrant that they are the sole fee Owners of the Property; agree to make payment of all assessments levied pursuant to this Petition, Waiver and Agreement for Payment of the Cost of Repairs; agree that they shall be personally liable for payments not made; agree that this Agreement shall be binding on Owners and Owner's successors and assigns; agree that all assessments levied pursuant to this petition shall be paid in full prior to or at the time of transfer of the Property to a subsequent owner; and agree that this Agreement may be recorded against the title to the Property. Dated this day of , 20_ OWNER By: Its: EXHIBIT A Legal Description EXHIBIT B Repairs: Cost of Repairs: GP:3135369 vl CITY OF ELK RIVER POLICY FOR PAYMENT AND ASSESSMENT OF THE COSTS TO REPAIR PRIVATE UTILITY LINES Adopted: April 2, 2012 The City of Elk River has adopted an ordinance which provides for payment and assessment of the costs to repair private utility lines. As detailed in the ordinance, the following policy has been developed to detail (i) projects eligible for this program; (ii) petitions which may be accepted by the City Administrator; (iii) petitions which may only be accepted by the City Council; (iv) the number of annual installments over which amounts paid and assessed will be levied; and (v) the interest rate applicable to unpaid installments. Policy 1. Eligible Projects Eligible sewer or water service repairs projects include those specific cases that pose a direct risk to public health and safety. These include but are not limited to the following examples: A) The repair of a leaking sewer or water service that has created a public health, or safety hazard on the property or to improvements within the public right-of--way, or on a neighboring property. B) The separation of a shared sewer or water service line. C) The proper abandoning or disconnection of a sewer or water service line that has been disconnected from a building. D) The reconnection of a private sewer or water service line if modifications to the public mains has caused the property owner to no longer have service in the existing location. Other eligible projects will be considered by the City on an individual basis. All work shall be contracted between the Property owner and their Contractor. The City will reimburse eligible costs in accordance with the terms listed below, but shall not warrant or be involved in any claims that arise from the work. 2. Eligible Project Costs Eligible expenses include costs that are directly related to the repair of said service line and restoration of disturbed areas that have resulted from the construction. Expenses related to plumbing on the interior of a building will only be covered if the plumbing work is required to facilitate proper repair with the external sewer or water service line work. 3. Initiation of Project Projects shall be initiated by the submission of a Petition, Waiver and Agreement, on a form supplied by the City, which has been signed by the Property Owner. Eligible project costs shall be detailed on Exhibit B of the signed Petition, Waiver and Agreement and be approved by City Staff or the City Council prior to any work being completed. Any expenses that are determined, by City staff or the City Council, that are not required to facilitate the service connection or repair, will be deducted from the requested amount. All permit fees and any escrow money required by said permits will not be eligible for reimbursement. 4. Approval and Terms of the Assessment Petitions shall be limited to a minimum request of $3,000 and a maximum request of $20,000. The City Administrator shall have the authority to approve all petitions up to $5,000. Those petitions above $5,000 will require the approval of the City Council. All qualified expenses, reimbursed by the City, will be levied as a special assessment against the property, pursuant to the Petition, at the current bonding interest rate available to the City plus a 1.5% administrative fee. The final rate will be determined at the time of improvement. The term of the assessment will be as follows: Single Family Residential $3,000 to $5,000 Up to 3-years Single Family Residential $5,001 to $10,000 Up to 5-years Single Family Residential $10,001 to Max Up to 10-years All Other Properties $3,000 to Max Up to 3-years All Petitions are subject to final approval by the City Administrator or the City Council. The City retains the right to reject any Petition submitted for consideration. ORDINANCE NO. 12-_ CITY OF ELK RIVER AN ORDINANCE OF THE CITY OF ELK RIVER AMENDING CHAPTER 78, ARTICLE I OF THE ELK RIVER CODE OF ORDINANCES TO ADD NEW DIVISION 1, PROVIDING FOR PAYMENT AND ASSESSMENT OF THE COSTS TO CONNECT AND REPAIR PRIVATE UTILITY LINES The City Council of the City of Elk River hereby ordains as follows: Section 1. That Chapter 78, Article I of the City of Elk River Code of Ordinances shall be amended to add new Division 1, which shall read as follows: Division 1. Payment and Assessment of Costs to Connect or Repair Private Utility Lines. Section 78-1. Findin~of Public Health and Safety Hazard. a) The City Council finds that failure to connect to the city water system as required by section 78-21 of this code, failure to connect to the city sewer and sewage disposal system as required by section 78-97(d) of this code, and failure to maintain in good, operable condition private water and sanitary sewer utility lines, creates public health and safety hazards on private property which must be eliminated. b) In addition to the provisions of section 78-22 and section 78-97(d), which authorize the city to make connections to the city water and sanitary sewer systems and to assess the costs therefore to the affected property, and the provisions of chapter 46, article II of this code, which declares defective sewage systems and plumbing a nuisance affecting the public's safety and health and authorizes the City to abate such nuisances and to assess the costs therefor to the affected properties, the City Council finds that it is necessary and in the public interest to provide a mechanism for costs incurred by private property owners to eliminate such public health and safety hazards on private property to be assessed against the property as a special assessment. Section 78-2. Petition Authorized. Property owners who are required to connect to the city water and/or sanitary sewer system pursuant to section 78-21 and section 78-97(d) of this code, or who have private water and/or sanitary sewer lines which have failed, and such failure has been determined by City land development staff to be a public health or safety hazard, may petition the City, on a form provided by the City, to pay the costs to connect (including applicable water and sewer connection charges) or repair the private utility lines and to assess amounts paid as a special charge under Minnesota Statutes, Section 429.101. The City may accept or reject such petitions in its sole discretion, and may impose such conditions and requirements to acceptance as it deems appropriate. Section 78-3. Work to be Completed by Property Owner. If a petition to pay and assess the costs of connection or repair is accepted by the City, installation of the required connections and/or repairs to private utility lines on private property shall be the responsibility of the property owner, shall be contracted for by the property owner, shall be completed by the property owner as required by the policies and ordinances of the City of Elk River and Elk River Municipal Utilities, and shall be inspected and accepted by the city building official before payment of costs is made. Section 78-4. Payment and Assessment of Costs Authorized. a) Upon completion and acceptance by the City of all work required, the City will make payment to the party or parties who performed the work in an amount not to exceed that set forth in the petition accepted by the City. Such payment by the City shall constitute a special charge against the affected property pursuant to Minnesota Statutes, Section 429.101 and shall be specially assessed against the property by the City pursuant to the provisions of Minnesota Statutes, Section 429.101. Special assessments levied under this Section shall be payable in a single installment, or by up to 10 equal annual installments, as provided by the City Council b) The City Council shall establish, and may amend from time to time, policies regarding: (1) projects eligible for this program; (ii) petitions which may be accepted by the City Administrator; (iii) petitions which may only be accepted by the City Council; (iv) the number of annual installments over which amounts paid and assessed will be levied; and, (v) the interest rate applicable to unpaid installments. Section 2. That this Ordinance shall be published and take effect as provided by law. Passed and adopted by the City Council of the City of Elk River this day of , 2012. John J. Dietz Mayor Attest: Tina Allard City Clerk PETITION, WAIVER AND AGREEMENT FOR PAYMENT OF THE COST OF INSTALLATION AND CONNECTION OF, OR REPAIRS TO PRIVATE UTILITY LINES AND ASSESSMENT OF AMOUNTS PAID AS A SPECIAL CHARGE UNDER MINNESOTA STATUTES, SECTION 429.101 TO: City Council of the City of Elk River located at (the Owners), owners of the property Exhibit A attached hereto (the Property), and legally described on Petition the City of Elk. River (the City) to pay the costs of installation and connection of, or Repairs to, (the Work) private utility lines located on the Property or in the Right-of--Way directly adjacent to the Property, including: Installation and connection of private water service line to the City system Installation and connection of private sanitary sewer service line to the City system Repair of private water service line currently connected to the City system Repair of private sanitary sewer service line currently connected to the City system In an amount not to exceed that set forth on Exhibit B attached hereto (Cost of the Work), And to levy a special assessment against the Property in the amount of the Cost of the Work as an unpaid special charge pursuant to Minnesota Statutes, Section 429.101. Owners acknowledge and agree: Installation and connection: 1) that the Property is required to be connected to the City water and/or sanitary sewer systems; 2) that the Property is not connected to the City water and/or sanitary sewer services as required;- 3) that the Work identified on Exhibit B is reasonable and necessary to connect the Property to the City water and/or sanitary sewer system; 4) that the Cost of the Work identified on Exhibit B is reasonable and necessary to affect the Work and is the responsibility of Owners; and 5) that Owners have been provided the opportunity to pay the Cost of the Work without the City's involvement and have elected, instead, to petition the City to pay the Cost of the Work and to assess the full amount of the Cost of the Work to the Property. Repairs: 1) that there has been a failure of the private utility lines on the Property; 2) that the failed service line(s) is connected to the public system; 3)that the failure of the utility lines has created a public health and safety hazard near the failure; 4) that the Work identified on Exhibit B is reasonable and necessary to eliminate the public health and safety hazard on the Property; 5) that the Cost of the Work identified on Exhibit B is reasonable and necessary to affect the Work and is the responsibility of Owners; and 6) that Owners have been provided the opportunity to pay the Cost of the Work without the City's involvement and have elected, instead, to petition the City to pay the Cost of the Work and to assess the full amount of the Cost of the Work to the Property. Owners acknowledge that the City may accept or reject this Petition, Waiver and Agreement in its sole discretion, for any reason, including, but not limited to, the availability of City funds to pay the Costs of the Work and agree, if the City accepts this Petition, Waiver and Agreement: 1) to have the Work identified on Exhibit B completed as required by the policies and ordinances of the City; 2) that the Work performed shall be privately contracted by the Owners; 3) that the City shall bear no responsibility for or liability related to the performance of the Work; 4) that Owners shall hold harmless and indemnify the City from any claims related to the performance of the Work; 5) to procure and pay the cost of all permits required for the work; 6) to submit evidence to the City that the Work has been inspected and accepted by the City Building Official; 7) that, upon completion and acceptance of the Work, City shall make payment to the Owner's contractor or other parties who performed the Work in an amount not to exceed the Cost of the Work identified on Exhibit B; 8) that payment by the City of the Cost of the Work shall create an unpaid special charge against the Property; 9) that this unpaid special charge shall be specially assessed against the Property by the City pursuant to Minnesota Statutes, Section 429.101; and 10) that the special assessment shall be payable in equal annual installments with interest accruing on unpaid installments at the rate of %. Owners expressly waive the right to a hearing on assessments levied pursuant to this petition; expressly waive objection to any irregularity with regard to the assessment of the Property for the Cost of the Work; expressly agree that the amount assessed is reasonable; expressly waive any claim that the amount assessed is excessive; expressly waive all rights of appeal, including any rights under Chapter 429, Minnesota Statutes, from the assessment by the City of the Cost of the Work; and expressly agree to pay when due all assessments levied for the Cost of the Work. Owners represent and warrant that they are the sole fee Owners of the Property; agree to make payment of all assessments levied pursuant to this Petition, Waiver and Agreement for Payment of the Cost of the Work; agree that they shall be personally liable for payments not made; agree that this Agreement shall be binding on Owners and Owner's successors and assigns; agree that all assessments levied pursuant to this Petition shall be paid in full prior to or at the time of transfer of the Property to a subsequent owner; and agree that this Agreement may be recorded against the title to the Property. Any unpaid or outstanding trunk utility assessment already levied against the Property shall be paid in full prior to this Agreement being executed. These outstanding assessments will not be rolled into the assessments authorized by this Petition, Waiver and Agreement. Dated this day of , 20 OWNER By: Its: EXHIBIT A Legal Description EXHIBIT B Work: Cost of the Work: GP:3135289 vl CITY OF ELK RIVER POLICY FOR PAYMENT AND ASSESSMENT OF THE COSTS TO CONNECT AND REPAIR PRIVATE UTILITY LINES Adopted: Apri12, 2012 The City of Elk River has adopted an ordinance which provides for payment and assessment of costs to install and connect or repair private utility lines. As detailed in the ordinance, the following policy has been developed to detail (i) projects eligible for this program; (ii) petitions which may be accepted by the City Administrator; (iii) petitions which may only be accepted by the City Council; (iv) the number of annual installments over which amounts paid and assessed will be levied; and (v) the interest rate applicable to unpaid installments. Policy 1. Eligible Projects Eligible projects include but are not limited to the following: A) The connection of an existing building to an existing City owned sanitary and water system. Properties qualifying as eligible under this option that have access to both sewer and water service are required to connect to both utilities at the time of petition. B) The repair of a leaking sewer or water service that has created a public health, or safety hazard on the property or to improvements within the public right-of--way, or on a neighboring property. C) The separation of a shared sewer or water service line. D) The proper abandoning or disconnection of a sewer or water service line that has been disconnected from a building. E) The reconnection of a private sewer or water service line if modifications to the public mains has caused the property owner to no longer have service in the existing location. Other eligible projects will be considered by the City on an individual basis. All work shall be contracted between the Property owner and their Contractor. The City will reimburse. eligible costs in accordance with the terms listed below, but shall not warrant or be involved in any claims that arise from the work. 2. Eligible Project Costs Eligible expenses include costs that are directly related to the connection or repair of said service line.. This includes the following: ^ Installation of required pipes and connection to the service stubs ^ Restoration of disturbed areas ^ Interior plumbing to facilitate proper connection to the external sewer or water service line(s) ^ Abandoning and sealing of existing wells and septic systems Sewer Access Charge and Water Access Charge (SAC and WAC) for initial connections only 3. Initiation of Project Projects shall be initiated by the submission of a Petition, Waiver and Agreement, on a form supplied by the City, which has been signed by the Property Owner. Eligible .project costs shall be detailed on Exhibit B of the signed Petition, Waiver and Agreement and be approved by City Staff or the City Council prior to any work being completed. Any expenses that are determined, by City staff or the City Council, that are not required to facilitate the service connection or repair, will be deducted from the requested amount. All permit. fees and any escrow money required by said permits will not be eligible for reimbursement. 4. Approval and Terms of the Assessment Petitions shall be limited to a minimum request of $3,000 and a maximum request of $20,000. The City Administrator shall have the authority to approve all petitions up to $5,000. Those petitions above $5,000 will require the approval of the City Council. All qualified expenses, reimbursed by the City, will be levied as a special assessment against the property, pursuant to the Petition, at the current bonding interest rate available to the City plus a 1.5% administrative fee. The final rate will be determined at the time of improvement. The term of the assessment will be as follows: Single Family Residential $3,000 to $5,000 Up to 3-years Single Family Residential $5,001 to $10,000 Up to 5-years Single Family Residential $10,001 to Max Up to 10-years All Other Properties $3,000 to Max Up to 3-years MEMORANDUM OF UNDERSTANDING BETWEEN ELK RIVER MUNICIPAL UTILITIES AND THE CITY OF ELK RIVER, MINNESOTA REGARDING PAYMENT OF PRIVATE WATER LINE CONNECTION AND REPAIR COSTS This MEMORANDUM OF UNDERSTANDING, hereinafter referred to as "MOU", is hereby made and entered into on this day of , 2012, by and between the City of Elk River, Minnesota, hereinafter referred to as the "City" and Elk River Municipal Utilities; hereinafter referred to as the "Utilities". 1.0 Purpose The purpose of this MOU is to address the payment of costs for the connection and repair of private water lines within the City of Elk River, Minnesota. 2.0 Connection and Repair of Private Water Lines The City Council of the City of Elk River has adopted an ordinance which provides for payment by the city and assessment to the property owner of the costs to connect and repair private utility lines. This ordinance authorizes private property owners who are required to connect to the city water utility, or who have private water lines which have failed, to petition the City to pay the costs of connection or repair of the private water line and to assess amounts paid by the City as a special charge to the owner's property. The ordinance further provides that the City Council will establish policies regarding when and on what terms the costs to connect or repair private water lines will be eligible for payment and assessment. 3.0 Payment and Reimbursement of Elk River Municipal Utilities The City and Utilities agree that when payment of the costs to connect or repair private water lines has been approved pursuant to the City Code and the City Council policies, payment of the approved costs will be made by Utilities, the City will assess the costs paid by Utilities to the property, and the City will reimburse Utilities for the costs paid as the special assessments are paid. City and Utilities staff are directed to coordinate and adopt appropriate procedures to implement this payment and reimbursement process. 4.0 Termination of MOU This MOU may be cancelled or terminated without cause by either party by giving (30) calendar days advance written notice to the other party. Such notification shall state the effective date of termination or cancellation. Any and all amendments must be made in writing and must be agreed to and executed by the parties before becoming effective. Cancellation of this MOU shall not affect the parties rights and responsibilities regarding payments already approved and made by Utilities. IN WITNESS WHEREOF, each of the parties has caused this MOU to be executed by their duly authorized representatives: ELK RIVER MUNICIPAL UTILITIES THE CITY OF ELK RIVER, MINNESOTA BY BY John Dietz Chair. John J. Dietz, Mayor By By Troy Adams, P.E. Utilities Director GP:3136155 vl Tina Allard, City Clerk 2