2.0.5. SR 08-25-2004IVlEFIORANDUFI
TO:
FROM:
DATE:
SUBJECT:
Mayor and City Council
.at K aers, City
August 25, 2004 ~
Joint Pleeting
The last joint meeting between the Utilities Commission and the City Council was held on
September 25, 2000. I guess this is an indication that having a City Councilmember on the
Commission and having monthly Commission updates on the City Council agenda has led to good
communication between the Commission and the Council. Additionally, it is not unusual to have a
staff member attend the Utilities Commission meetings or have a Utilities staff member attend a
City Council meeting. This doesn't mean that everything has been "perfect" as there has been some
issues of concern in the recent past (such as the well location in the park just east of Royal Oaks);
but overall, the working relationship between both groups has been going very well. There is a lot of
staff interaction on planning, growth, and development issues and this has been even more so since
the Utilines have relocated to their current home on Orono Parkway.
HIGHWAY LIGHTS AND SIGNALS (Item 2.1.)
Please see the attached material from Bryan Adams and Terry Maurer. This issue specifically relates
to streetlights on High~vay 10.
The city has not been involved with either doing or paying for repair and maintenance ~vork for the
Highway streetlights. The City-Utilities relationship has been such that the Utilities have assumed
responsibility for the repair and maintenance of the Highway streetlights. In fact, without any
notification to the city, in the mid-1990s the Utilities painted the streetlights.
Currendy, a very large, comprehensive type of Highway streetlight project is being considered
whereby all 26 lights may need to be replaced. This replacement is not immediately required but
should be planned to take place within the next few years. I would suggest that the city and Utilities
split this project expense (i.e.: replacement of all 26 lights) equally on a 50/50 basis.
Regarding intersection signals, the survey included within the memo from Bryan Adams indicates
that Utilities are generally not involved with this type of repair and maintenance work. Future work
on the signals mainly consists of painting and this is estimated to cost $10,000-$12,000 per
intersection.
UTILITY CONNECTIONS (Item 2.2.)
Please see the attached memos from Terry Maurer and Bryan Adams on this topic.
In the past, there have been only a few cases where property owners have not complied with the city
ordinance to connect to utilities when they become available. However, as we install utilities into
more existing subdivisions that have private wells and septic systems, this connection requirement is
becoming more and more of an issue. In fact, we are starting to get complaints from residents that
have connected regarding neighbors that have not connected. This is an issue that needs to be
discussed as there ',viii be more of these types of improvement projects taking place in the future.
One of the options for the city is to "force" the connection. Based on past history it is unlikely that
the city will take it upon itself to use these police like powers and have a contractor go into a home
or on private property and complete the improvements. (Any expenses incurred for this type of
work could be assessed to the property owner).
What does seem likely and appropriate is for the city to charge these homeowners some expenses if
they have not complied with the city ordinance. These expenses could be SAC and WAC and a
minimum monthly utility usage bill. If these bills are not paid, it would be legal for the city to assess
these expenses against the property. This is no different than what the city does with unpaid garbage
bills. An amendment would be needed to our city ordinance for the city to follow this approach for
the sewer system.
The city is in a slightly difficult situation from the Utilities with this connection issue. This is due to
the fact that often times when homes are sold there are demands placed on the homeowner (by the
real estate industry or MPCA) that requires the hook-up to the municipal sexver system.
A comment in the memo from Bryan Adams is very much on target in that it is a challenge to keep
track of the properties that have not hooked up so that appropriate charges can be made when the
actual hook up does takes place. Again, this challenge of keeping track of non-hook ups will grow as
the number of improvement projects in these areas increase.
It is appropriate that we get some feedback from the Council and the Commission on how to
proceed with this issue and also to get some advice from our attorney, either Chris Johnson and/or
Peter Beck, on the legality of some of the options that were discussed at the August 10, 2004
Utilities Commission meeting. These options are identified in the memo from Bryan Adams.
CENTRAL BUSINESS DISTRICT REDEVELOPMENT PROJECT (Item 2.3.)
Please see the attached memos from Bryan Adams and Catherine Mehelich.
In the past, the city has made special SAC and WAC arrangements for some business owners that
completed renovation projects in the downtown. In reviewing the financial analysis for the current
downto~vn redevelopment project it has become apparent that SAC and WAC charges are
substantial and may be a stumbling block to getting any project completed. The city is a partner in
this downtown redevelopment project by way of the HRA doing a request for proposal for projects
and selecting MetroPlains as the developer and by way of our involvement with downtown parking.
With this project, city staff has indicated that the city would consider some type of different
arrangement for SAC and WAC if necessary. Since state loans and grants, land acquisition, TIF,
developer profit, etc. are all involved in this project it is uncertain at this time if a delay in payment
of SAC and WAC is needed and if so, for how long. The SAC is estimated at $234,000 and the
WAC at $175,000 based on current rates. The good news is that the redevelopment plan calls for
both the city and Utilities to get all of its SAC and WAC fees. The less-than-great news is that we
may have to wait a while to receive payment.
If necessary, staff supports the delayed payment for SAC and WAC for this redevelopment project
for both buildings. This situation for special conditions for payment of SAC and WAC is unique to
this redevelopment project in the Central Business District and in this case, one which the HRA
solicited proposals/developers.
The second part of this agenda topic is a general update on the parking plans for downtown. In this
regard, the plans still call for the Utilities building to be removed, Highway 10 to be closed at ICing
Avenue, and for the parking lot to be expanded. It is scheduled for the Utilities building to have an
environmental audit this fall. Parking lot plans are now being developed. The parking lot plans will
be approved in the winter. The building will also be removed sometime in the winter. And finally,
construction of the parking lot will take place in late spring. TIF funds ',viii finance this
improvement.
MECHANIC PROGRAM (Item 2.4.)
No attachments are included for this item. This is a general verbal update item per request from
John Dietz. Both Phil Hals and Bryan Adams will be available to discuss this topic.
WATER FACILITIES (Item 2.5.)
Please see the attached memo from Bryan Adams on this topic. A note at the end of this memo
from Bryan indicates that some type of well facility in west Elk River may be needed in the future. It
is acceptable for this well facility to be on city property only if it does not impact development
options. The site being considered is the 3 1/2 acre parcel across Orono Parkway from City Hall.
SHARED BUILDING OPERATING EXPENSES (Item 2.6.)
Early on in the building project there was a meeting between staffs and an acknowledgement that
there will be some shared operating expenses with our new arrangement. We are currently tracking
all of these expenses and a final determination on a fair-share split will be made at some future date.
Shared expenses include such things as garbage service, janitorial service, gas bill, and
building/grounds maintenance.
S:kCouncilkPat\2004kjtcouncilutilitiesmtg. doc