5.3. SR 05-09-2005
Item 5.3.
13065 Orono Parkway
Elk River, MN 55330
April 28, 2005
File #: 823310]-0240
The Honorable Mayor and City Council
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
RE: PETITION FOR ING..USIONIN URBAN SERVICE AREA
EAST OF COUNTY ROAD 40
Dear Council Members:
At your workshop on May 9, 2005 the issue of whether or not the property lying east of
County Road 40 between CSAH 12 on the south and CSAH 13/ CR. 31 on the north should
be brought into the Urban Service Area will be an item of discussion. The consideration to
expand the City's Urban Service Area is clearly a City Council policy decision. However, if
the City Council believes that it is a matter of when this area should be brought into the
Urban Service Area and not necessarily a question of if it should be brought in to the area,
then staff believes there are a number of issues that serious consideration should be given to
regarding bringing this area into the Urban Service Area at this time. Staff has met with Mr.
Ed Dulak and his engineer and attorney on several occasions to discuss his desire for
inclusion in the Urban Service Area. As you may be aware, Mr. Dulak controls
approximately 260 acres in the northern stretch of property east of County Road 40.
A summary of the issues we believe the City Council should consider in deliberating this
issue are as follows:
A. Middle School Site
Mr. Dulak has indicated he is willing to provide the School District an approximately 40
acre middle school site in his project. In our discussions with Mr. Dulak, it has been
agreed that any gift of property to the School District would follow the same conditions
and parameters as the elementary school site in the River Park project to the west.
Phone: 763.635.1000
Fax: 763.635.1090
www.cLelk-river.mn.us
Mayor and City Conncil
April 29, 2005
Page 2
B. County Road 40 Right of Way
As the City has discussed the turnback of County Road 40 from Sherburne County to
the City of Elk. River, the City has committed to acquiring all necessary right of way. Mr.
Dulak's property is one of the three largest right of way needs for the County Road 40
alignment together with the River Park plat and the Foster property to the south. By
allowing east of County Road 40 into the Urban Service Area at this time, staff is
confident that we could acquire the necessary County Road 40 right of way from Mr.
Dulak through the platting process in a timely manner.
C. County Road 40 Financing
As you are aware, the financing for County Road 40 reconstruction requires the City to
pay approximately $1 million with the County contributing a similar amount and a
federal grant in excess of $700,000, completing the financing scenario. In our meetings
with Mr. Dulak we have indicated that one of the conditions on development of his
property if brought into the Urban Service Area would be a contribution to the
reconstruction of County Road 40 in the amount of $1,000 per single family residential
unit. The River Park Addition on the west side of County Road 40 is contributing
$1,000 per single family unit and $500 pertownhouse unit.
D. No Townhomes
In staff's meetings with Mr. Dulak and his representatives, he has made it clear that he
will not pursue any townhouse or multi-family units on his property if it is brought into
the Urban Service Area. His approach to developing a concept plan for his property will
revolve around a density transfer; that is, determine how many lots could be developed
utilizing the entire parcel minus wetlands with a zoning of R1d (14,000 square foot lots),
then layout that many lots in the remaining property after the School District site and
park land are deducted. Mr. Dulak's current concept plan shows approximately 500 lots
on 261 acres together with the School site and park land.
E. Trunk Sewer and Water Assessments
Back in 1998 when the eastern area of Elk. River was first analyzed for expansion of City
sewer and water, a calculation was done based on assumptions of how quickly land
would develop to determine an assessment rate. The City made a substantial investment
in the initial infrastructure to provide sewer and water east of Trunk Highway 169
hoping to recover their initial investment as areas developed. By extending the Urban
Service Area east of County Road 40, there will be very- little additional trunk
infrastructure that needs to be constructed, however, there will be significantly more
acres to be assessed for trunk infrastructure as it develops. These additional assessments
will help to ensure that the City recaptures its initial investment from the late '90's when
sewer and water was first extended east of Trunk Highway 169.
S:\Engineer\2005 cc memos\04 29 05 East Co Rd 40.doc
Mayor and City Conncil
April 29, 2005
Page 3
F. Development Timing
Obviously if the area east of County Road 40 is brought into the Urban Service Area, it
cannot develop immediately because sanitary sewer and water service are not to County
Road 40 at this time. In discussing with Mr. Dulak his desires for initial development of
his 260 acres, he has indicated that he can proceed with no building permits being issues
until 2008. This would give the Orrin Thompson River Park plat a three-year head start
to develop and market their lots. The area south of Mr. Dulak's down to CSAH 12
would be dependent on other areas west of County Road 40 developing and bringing
utilities to County Road 40 to make it readily available to these properties. This would
likely be in the 2008 or beyond time frame.
G. River Park Infrastructure Sizing
Staff expects to see final construction plans for the first phase of the River Park
development within the next several weeks. It will be important to know whether or not
east of County Road 40 is to be allowed into the Urban Service Area at some time in the
future as we are reviewing those plans for appropriate sizing and depth of sanitary sewer
and water infrastructure. If the River Park plat is allowed to develop without a firm
decision on the area east of County Road 40, it may ultimately preclude or make
significantly more expensive the ability to bring the area lying east of County Road 40
into the Urban Service District in the future because of the need for deeper and larger
utility infrastructure.
H. Ultimate WWTP Capacity
The ability to provide sanitary sewer service to all areas lying east of Trunk Highway 169
is limited by the ability of the major lift station located near the Wal-Mart development
to pump sewage, collected east of Trunk Highway 169 to the W astewater Treatment
Plant. If additional capacity is allocated to the area lying east to County Road 40, this
will mean that there is less additional sanitary sewer capacity to allocate elsewhere, such
as the Cargill land in the future. It does not mean that there will be no capacity for the
Cargill area. At a June 2004 City Council presentation we estimated that if the area east
of County Road 40 were to be brought into the Urban Service Area, it would generate
250,000-300,000 gallons a day of sewage flow when fully developed. That would leave
approximately the same amount of sewage capacity for the Cargill area. Generally,
textbook numbers for commercial or industrial sewage flow generation are 1,000 gallons
per acre, so 300,000 gallons of capacity for the Cargill area would relate to approximately
300 acres of commercial/industrial development.
I will be in attendance at your May 9th Council workshop to discuss this issue further.
Sincerely,
.c- ~~
T~urer, PE
City Engineer
S:\Engineer\200S cc memos\04 29 OS East Co Rd 40.doc
Item # 5.3.
MEMORANDUM
TO: Mayor and City Council
FROM: Pat Klaers, City Administrator
DATE: May 9,2005
SUBJECT: East Elk River Urban Service Area
There are two major issues in east Elk River that are on the verge of colliding. These two issues
require City Council discussion and some direction to staff on how to proceed. The fIrst issue is the
County Road 40 improvement project. The city and county are working through a turn-back
agreement so that County Road 40 can be "given" to the city and then the city will take the lead in
ensuring that the improvement project takes place in 2006. The second issue is a City Council policy
decision on the possible expansion of the Urban Service Area (a Comp Plan amendment that
requires 4/5 vote) east of County Road 40 from County Road 12 on the south to County Road 31
on the north.
Staff anticipates that County Road 40 will be turned back to the city by the County and that this
road will be upgraded in 2006. With this road project, the city needs to acquire right of way. Most of
this needed right of way is in the northern section of the road. Additionally, the city would like to
collect as much street assessments as reasonable for this improvement project from the benefIted
property owners on both sides of the road.
While this County Road 40 discussion is going on, the city has had repeated requests from
landowners east of County Road 40 for the city to change its Comprehensive Plan and to expand
the Urban Service Area. Assuming that the answer to this request for expansion of the Urban
Service Area is when will the Area be expanded and not necessarily if the Area will be expanded,
then staff recommends that the Urban Service Area be expanded now under certain conditions. The
immediate benefIts to the city for the expansion of the Urban Service Area include obtaining right of
way and increasing assessments for the improvement of County Road 40 plus collecting area wide
trunk assessments that were not in the original east Elk River calculations.
If the City Council agrees that it is best to expand the Urban Service Area at this time, then the issue
needs to be separated out into the northern development proposal area where utilities will soon be
available and the southern area where smaller parcels exist and utilities may not be available for a
number of years. The southern area can be defmed as the area south of the Holzem property and
Mayor and City Council
East Elk River Urban Service Area
May 9, 2005
Page 2 of 3
north of County Road 12. This area should be assessed in 2006 for the County Road 40
improvement at a rural residential rate. The area will be allowed to be developed in an urban manner
once utilities are available. When development happens, then right of way can be obtained thru the
platting process and then the deferred assessment for the street (based on an urban density) can start
to be collected. In this southern area, staff believes that the street can be reconstructed in the
existing right of way but additional right of way on the east side of this road is in the best interest of
the city for snow removal clearance, pedestrian movement, and possible future expansion. If some
of the properties east of County Road 40 in this southern section do not redevelop in an urban
manner, then the city will deal with right of way issues as needed at a future time and the deferred
assessments will never be collected. It is likely that a number of these smaller southern property
owners will work together to develop a larger parcel collectively. A starting point for these
properties may be a Rid zoning designation (14,000 sq. ft lots).
For the northern area, we are looking at a win-win-win concept between the developer, School
District, and the city. All three groups win to a large degree but no one group gets everything they
desire. The developer gets more residential lots and subsequently a larger profit from the property
but will not get as many lots as they desire. The School District will get a 40-acre Middle School site
but it will not be 100% high and dry property and there will be some expenses that the school will
need to absorb once the school project moves forward. The city will get right of way, some money
for the street improvement and trunk assessments, and some recreation opportunities with the
school project; but it loses some sewer capacity that could go elsewhere (like down Highway 10),
and the city also adds to some of the east Elk River traffic concerns.
Staff has indicated to the developer that it supports the change in the Urban Service Area and the
concept for their development provided that:
.
The developer provides the school a 40-acre site that the school finds acceptable.
The developer provides the city with the necessary right of way for the improvement of
County Road 40.
The developer provides the city its fair share of the improvement of County Road 40 based
on $1,000 per single-family residential lot when a plat is approved.
The developer pay the city trunk sewer and water assessments for the entire parcel (including
the school site) when a plat is approved.
No townhomes can be part of the development project
The development project is phased in whereby grading of the site is the only thing that can
happen in 2007 and no building permits are issued until 2008.
.
.
.
.
.
Staff has met with the developer a number of times and we believe that they are in agreement in
principle with the terms and conditions outlined above. The total amount of lots platted and the
minimum (or average?) lot size will be key issues for both the city and the developer. In the end, if
the developer does not obtain as many lots through the platting process as they feel they need in
order to make the project work, then they can always back away and leave the property as 2 % acre
lots. If this happens, then the school site disappears and the city will address the road right of way
and assessments as a separate issue.
Mayor and City Council
East Elk River Urban Service Area
May 9, 2005
Page 3 of 3
In discussions with School District representatives, city staff has indicated that it would work with
the District in order to obtain a 40-acre Middle School site as part of this development proposal
provided that:
.
If a Middle School is not constructed within 10 years then the site is donated by the District
to the city to be used for public park purposes.
With the construction of a school, the District reimburses the city 100% of the cost of the
pedestrian tunnel underneath County Road 40 (built in 2006 with the CR 40 project).
With the construction of the school, the District reimburses the city $100,000 for the
improvement of County Road 40.
The school includes a 1500 square foot warming house that would be scheduled and
operated by the city during non-school hours.
The Middle School site includes a hockey rink and open skating area adjacent to the
warming house with lights (the city will pay for electricity on an ongoing basis).
.
.
.
.
The School District has not officially accepted the above terms and conditions. Nonetheless, these
terms and conditions have been discussed with two board members and management staff and they
believe the requests are reasonable and a good starting point for future negotiations in exchange for
them obtaining a 40-acre site that is free of trunk assessments. If the above scenario is generally
acceptable to the City Council, then staff would like to firm up the School District's position while
the development proposal and the expansion of the Urban Service Area moves forward in the next
six months or so.
All in all, it appears that this is the time to make a decision whether to expand the Urban Service
Area as the County Road 40 improvement project is moving forward and the trunk utilities are being
installed in the River Park plat. The development concept for the northern section of this area
appears to be a win-win-win situation whereby all three parties, the developer, the School District,
and the city, obtain some benefits but not everything they desire. This expansion of the Urban
Service Area also allows for the future urban development for the southern area once utilities are
available, which is likely to be after the 2008 timeframe.
S:\Council\Pat\2005\ Worksessions\east ER Urban Service. doc
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Location Map
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Case Number: URBAN SERVICE DISTRICT EXPANSION