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8.1. SR 10-05-2015 Request for Action To Item Number Mayor and City Council 8.1 Agenda Section Meeting Date Prepared by General October 5, 2015Suzanne Fischer, Director, COD Item Description Reviewed by Ordinance 78-5 Sunset on Payment and Justin Femrite, City Engineer Assessment for Connections Reviewed by Cal Portner, City Administrator Action Requested Supplemental information to facilitate any proposed changes. Background/Discussion The sunset date on payment assessments for connection to the public system and private utility line repairs was discussed at the September 21, 2015, meeting. At that time, Council requested staff return with additional information before determining the execution or extension of the December 31, 2015, sunset date. Council requested the following information: 1.City-wide clarification of property owners connected and not connected to the public system 2.The YTD financial impact to the city since the 12.12.12 ordinance amendment 3.Re-notification letters to impacted properties with funding options prior to the sunset date 4.Recommendation to address property owners who should be connected but choose not to be If Council desires to adhere to the sunset date of December 31, 2015, staff will modify the Petition, Waiver and Agreement form to reflect it is only for private utility line repairs. The affected property owners will be mailed this document along with the final notification letters. If the Council wishes to consider any modifications to the ordinance staff will take direction and bring back the proposed changes prior to the sunset date. Financial Impact $74,904 Attachments  Property owner notification letters  Ordinance 78-1 through 78-6 October XX, 2015 Dear : You are receiving this letter as a reminder that affective December 31, 2015, two important sewer and water financing incentive programs will sunset, which will effect additional interest accrual on city water and sewer systems deployed in your neighborhood and will terminate a financing plan option for city water and sewer service hookups. This information was originally communicated in my letter to you dated December 20, 2012. A copy of that letter is attached. The policy surrounding the existing deferred assessment and costs for connection to the sewer and water system remains as follows: The assessment per residential property will be $15,000 until December 31, 2015. In order to hook up to the sanitary sewer and water systems, you will need to sign a Petition, Agreement and Waiver agreeing to the $15,000 assessment or make this payment in full to the City of Elk River. For those that connect after 2015, or have not begun payment on the assessment by that time, this $15,000 assessment will increase by 3.0% annually and to be calculated from 2006. This would result in a principle assessment amount for properties choosing to connect in 2016 of $20,163 and increasing 3.0% annually thereafter. In addition to accepting the assessment, at the time of connection you will be required to pay a Sewer Availability Charge (SAC) and a Water Availability Charge (WAC). These charges are your individual share of the sanitary sewer treatment plant and the water wells, storage and treatment facilities. You will be asked to pay the SAC and WAC in full at the time you choose to connect to the sanitary sewer and water systems or if connection is made before 2016, you can elect to have these costs assessed against your property. These charges are adjusted annually. Current amounts can be obtained by calling City Hall. To physically make the connection to the sanitary sewer and water systems, you will need to hire your own contractor to construct the sewer and water pipes on your property. City ordinance requires old septic tanks to be pumped empty, tops collapsed, and backfilled to eliminate a potential long-term safety issue. Private wells will either need to be appropriately capped or separated from the City water system in accordance with the Elk River Municipal Utilities’ policy. Similar to the SAC and WAC charges, if the connection is made before 2016, the costs for physically making the connections can also be assessed against your property. If you do not chose to connect at this time, but want to begin payment on the $15,000 assessment to avoid deferred interest addition and accrual, please complete the same Petition, Waiver and Agreement Form to initiate this process. Any property owner wishing to take advantage of the financing program through the city are Phone: 763.635.1000 www.ElkRiverMN.gov required to make application by November 15, 2015, to allow time for processing of the application before the December 31, 2015 sunset date. Contact me at 763-635-1051 or at jfemrite@elkrivermn.gov if you have questions about the form. Sincerely, Justin Femrite, PE City Engineer Enclosures October XX, 2015 Dear Property Owner, City records indicate your property has access to public sewer and water services but it is not connected to either system. On December 12, 2012, an ordinance amendment was adopted which incorporated the following conditions about connection:  Properties with access to public utility services be connected to the public sewer and water systems at the time of failure of either the property’s existing septic system or the property’s existing well; Or,  When the property is sold, whichever comes first. In 2012, the City Council further approved a financing program to assist property owners with the cost of connections. The program allows connection costs (construction, meter, sewer access charge (SAC), and water access charge (WAC), to be financed through the city and levied as a special assessment against the property. This program expires on December 31, 2015. This letter is being sent as a reminder of the sunset of this program. If connections are made after December 31, 2015, property owners are responsible for financing all associated costs when a connection is made. We have attached a Petition, Waiver, and Agreement form, for your use, should you elect to make connection before the end of 2015 and desire to take advantage of the current financing program through the city. Feel free to contact me if you have any questions on the completion of the form. If your property is currently connected to the public systems and you believe you have received this notice in error, please contact me at 763-635-1051. Sincerely, Justin Femrite, PE City Engineer jfemrite@elkrivermn.gov ARTICLE I. - IN GENERAL  DIVISION 1. - PAYMENT AND ASSESSMENT OF COSTS TO CONNECT OR REPAIR  PRIVATE UTILITY LINES \[2\]  Sec. 78-1. - Finding 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 subsection 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 subsection 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 Sherburne County Zoning Ordinance \[section\] 17.5 and 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. (Ord. No. 12-06, § 1, 4-2-2012; Ord. No. 12-17, § 1, 12-10-2012; Ord. No. 15-07, § 1, 2-17-2015)  Sec. 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 subsection 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 any outstanding lateral/trunk assessments and applicable water and sewer connection charges) or repair the private utility lines and to assess amounts paid as a special charge under Minn. Stats. § 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. (Ord. No. 12-06, § 1, 4-2-2012; Ord. No. 12-17, § 1, 12-10-2012)  Sec. 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. (Ord. No. 12-06, § 1, 4-2-2012; Ord. No. 12-17, § 1, 12-10-2012)  Sec. 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 Minn. Stats. § 429.101 and shall be specially assessed against the property by the city pursuant to the provisions of Minn. Stats. § 429.101. Special assessments levied under this section shall be payable in a single installment, or by up to ten 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. (Ord. No. 12-06, § 1, 4-2-2012; Ord. No. 12-17, § 1, 12-10-2012)  Sec. 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. (Ord. No. 12-17, § 1, 12-10-2012)  Secs. 78-6—78-10. - Reserved. nY Ord. 78-5 Sunset on Payment and Assessments for Connections City of Elk River C Sunset discussed on Sept. 21 , 2015 Council requested additional information ■ Property owners connected/not connected ■ YTD financial impact ■ Final notification letter to impacted property owners ■ Recommendation • Property owner public system connection status City-wide (originally) 91 Connected to sewer & water 29 Connected to sewer but not water 17 No sewer connection 45 No water connection 62 Map I BUWNESS CENTER"DH NW — Orono Lake Nr RD AVEWW Em Lad 788 ORONO PKWY NW iR9RDAVEN '182ND W: }BYST LN N!Vj 1111,STR�NW �y is THAVENw, iBPTHAYE NW — a{ e = a 40 — Gt'6f _ _ Utility Connections El ° RIVERYlEWDR°NN' {y y a { t41Ve N d_ RfVfRYlEW—NM1° � fI Legend ~ Sewer and Water Stubs Sewer and Water Available,Not Connected to Either - Needs to Connect to Water,Connected and Billed Sewer Map 2 t !► +.. v ��� q�� � 82l 831 3,B 8 Y d22 di� B20 B17 W U 8iB e� d76 d.Uj 818 .�. .. &TN 5T Mw 0 da� d86 5 B88 Z T9d rg�yC Y �14 -' 9n m 796 STN'ST NW_ a ry 72A 726 ; lid J516 718 719 714 7TNS/ NSM .nom m 1947 AVE 2VW Vj 2'Fd �+. 214. 608 .� x .. zrr�sr raw 6� 627 51i � 692 ^�■r�,�./ 626 6TN$ TNW, 609 �4�k 12 �•" 610 q fi rN.S T Nw ++4P 793Rd AVENW a w � - 596 995 590 591 5.112 ST Nw 5� 527 hi 529 „ S�l�my Zia ,yry� r 519 515 1 r5 IT Nw tbflM 5,2 yl `L~i'• 510 �e 519 503902nrw 442 .. ..e 3,, �192NUAVE NW �t µ r � 'Nn Ro � ti $ �. El Utility Connections IPlvc�r Ny ! E : _ rI9rsravE_Hw` Legend t _ Sewer and Water Stubs sewer and water Available;Not Connected to Either Needs to Connect to Water, Connected and Billed Sewer a< - Map 3 ID W ?r Lj L�71 9819, pp W .m ,.m Kliever Marsh S w r ,1:u VENW 41 z � � a a a a Io M W y� ,.K �S tS910 1VS +� a rsra AVE N _ W N m. yzN t+ H �y� F *Vc�r Utility Connections z rrasrAvexW r ^ Legend 4T1Sr AVENW Sewer and Water Stubs Sewer and Water Available; Not Connected to Either Needs to Connect to Water,Connected and Billed Sewer C Financial impact since the Dec. 12, 2012 amendment � jCost of Work SAC WACALatcral Total 2013 $ 271076 $ 21,765 $ 121423 $ 44,190 $ 105454 2014 $ 18,446 $ 7,345 $ 9,275 $ 15,000 $ 501066 2015 $ 293382 $ 163540 $ 143232 $ 453000 $ 1053154 $ 74,904 $ 45,650 $ 351930 $ 1041190 $ 260,674 C Fls Final notification letter to impacted property owners ■ Letter references initial correspondence sent 12.20. 12. ■ States the assessment/residential property is $15K until 12.31 . 15. ■ Option to submit a Petition, Waiver and Agreement, thereby agreeing to the assessment (due by 11 . 15. 15); or, to pay the assessment in full to the City by the sunset date. ■ Notifies property owners that connection costs after 12.31 . 15 are their responsibility and carry a 3% annual interest rate thereafter. C Y Recommendation to property owners who should be connected Enforce the Ordinance - Section 78-4 (a) Payment and assessment of costs authorized Sec. 78-4 Payment and assessment of costs authorized. 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 Minn. Stats. 429.101 and shall be specially assessed 1 against the property by the city pursuant to the provisions of Minn. Stats. � 429.101 . Special assessments levied under this section shall be payable in a single installment, or by up to ten equal annual installments, as provided by the city council. C Options for Council Direction Adhere to the 12.31 . 15 sunset date ■ Modify the Petition, Waiver and Agreement to reflect it is only for private utility lines ■ Mail this document and the final notification letter to affected property owners Or, Modify the ordinance for next City Council meeting