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2.5. ERMUSR 08-13-2013 Elk River Municipal Utilities UTILITIES COMMISSION MEETING TO: FROM: Elk River Municipal Utilities Commission Troy Adams, P.E. —General Manager John Dietz—Chair Al Nadeau—Vice Chair Daryl Thompson—Trustee MEETING DATE: AGENDA ITEM NUMBER: August 13, 2013 2.5 SUBJECT: Service Availability Charge Deferment Policy DISCUSSION: For policies relating to ERMU's Water Access Charge (WAC), Utilities has historically mirrored the City of Elk River's policies for their wastewater Service Availability Charge (SAC). On August 5, 2013,the Council approved a SAC Deferment Policy. Utilities staff worked with city staff through the development of the deferment policy and it was created with the intent of the Utilities approving adopting a minor of this policy for WAC. The policy was an expansion of a 2012 City policy and ordinance that allowed for payment of the cost and connection charges associated with work on private lines to be done over time. Their deferment policy establishes criteria for connection charges to be financed. The policy also establishes a table for payment that correlates the amount financed to the maximum number of years allowable for financing. The ordinance was created with a sunset of December 31, 2015. ACTION REQUESTED: Staff recommends the Commission adopt the SAC/WAC Deferment Policy as adopted by Council on August 5, 2013. ATTACHMENTS: • Existing City Ordinance • Sample Petition • Draft Policy pt11, PONEOEI Ir �1f 3 Page 1 of t NATURE Reliable Public Power Provider 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, and all other outstanding fees and charges required for connection to the public systems, 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 78-5. Sunset on Payment and Assessment for Connections. Petitions to pay and assess the costs of connection to the City water system and the City sewer and sewage disposal system will not be accepted by the City for any connection project which is completed after December 31, 2015. 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 (the Owners), owners of the property located at and legally described on Exhibit A attached hereto(the Property), 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 lines Installation and connection of private sanitary sewer service lines Repair of private water service lines Repair of private sanitary sewer service lines Connection charges only 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 as an unpaid special charge pursuant to Minnesota Statutes, Section 429.101 in the amount of the Cost of Work plus the total of the following charges (if Applicable):. Cost of the Work(from Exhibit B) Sewer Access Charge (fill in current year fee) Water Access Charge (fill in current year fee) Trunk/Lateral Charges (to be determined based on costs to provide services) TOTAL ASSESSMENT AMOUNT (Sum of all listed amounts) 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 public 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 utility lines on the Property; 2) that the failure of the utility lines has created a public health and safety hazard on the Property; 3) that the Work identified on Exhibit B is reasonable and necessary to eliminate the public health and safety hazard on the Property; 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. 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; agree that this Agreement may be recorded against the title to the Property; and agree that any unpaid or outstanding trunk utility assessments already levied against the Property shall remain in effect and will not be rolled into the assessments authorized by this Petition, Waiver and Agreement. Dated this day of 20 OWNER By: Its: For Office Use Application Approved: By: Date: Permit No(s): Work completed on: Approved for Final Payment: By: Date: EXHIBIT A Legal Description EXHIBIT B Work: Cost of the Work: CITY OF ELK RIVER POLICY FOR PAYMENT AND ASSESSMENT OF THE COSTS TO CONNECT AND REPAIR PRIVATE UTILITY LINES Adopted: 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. This ordinance also allows for the payment and assessment of connection charges. 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 public sanitary and water line(s). Properties that have both sewer and water service available are required to connect to both utilities at the same time. 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. F) Water and Sewer connection and availability charges associated with a project that meets at least one of the following criteria: a. single family residential b. service or industry unique to the City c. Redevelopment or vacant property d. Increase of SAC/WAC units that doubles the number of SAC and WAC units 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 Abandoning and sealing of existing wells and septic systems Sewer Access Charge and Water Access Charge (SAC and WAC) for initial connections or change in use 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 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 for residential uses shall be limited to a minimum request of$3,000 and a maximum request of$40,000. Petitions for all other uses shall be limited to a minimum request of$25,000 and a maximum request of$150,000. The City Administrator shall have the authority to approve all petitions up to $20,000. Those petitions above $20,000 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 15-years All Other Properties $25,000 to 50,000 Up to 3-years All Other Properties $50,001 to 100,000 Up to 5-years All Other Properties $100,001 to 150,000 Up to 7-years GP:3301030 vl