9.2. SR 03-16-2020
Request for Action
To Item Number
Mayor and City Council 9.2
Agenda Section Meeting Date Prepared by
Work Session March 16, 2020 Cal Portner, City Administrator
Item Description Reviewed by
Windsor Park 3 Septic Improvements Lori Ziemer, Finance Director
Justin Femrite, Public Works Director
Reviewed by
Peter Beck, City Attorney
Action Requested
Receive information, provide staff direction.
Background/Discussion
The Windsor Park 3 Home Owners Association has been working with the city to find solutions to their
failing septic system. You may recall, we provided some preliminary cost estimates to connect them to the
proposed sanitary sewer extension to the Elk River Landfill to resolve their leachate disposal issue.
They have also worked with Shane Steinbrecher of Steinbrecher Companies, Inc. for an upgrade to their
existing system. An upgrade to their system appears to be a lower cost solution, however, they may not have
a private financing option. Mr. Steinbrecher has proposed the city acquire a loan through the State of
Minnesota Pollution Control Agency Clean Water Partnership Loan program, use the loan proceeds to make
the improvements, and assess the costs of the improvements back to the benefitted property owner.
For discussion-sake, Mr. Steinbrecher estimates the total cost of the improvement at $800,000 and there are
roughly 88 parcels in this development for a per parcel cost of $9,091 plus interest, possible origination fee
and/or a tax recapture of 105% similar to city requirements to account for bond repayment.
All property owners would need to sign a petition and waiver agreement and the city would assess the costs
back as a special assessment in accordance with city policy and the assessment agreements.
Our current Petition and Waiver Policy would need to be amended to include this type of improvement. The
Council also needs to consider that there are other developments with a similar need and any precedent could
result in future loans.
Financial Impact
The use of the state loan is backed with a general tax obligation as we pledge our full faith and credit. Tax
delinquencies may provide a payment deficit which would need to be made up with general tax funds.
The city is able to charge an interest rate of 1.5%, which may cover staff administrative costs. The city has
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity
no existing fee structure for loan origination-like costs. It would not be a best practice to use general tax
revenues to subsidize the improvement funding.
Attachments
Petition and Waiver Policy
Clean Water Partnership Loan
N:\\Public Bodies\\Agenda Packets\\03-16-2020\\Done\\9.2 sr Windsor Park 3 Septic Improvements.docx
CITY OF ELK RIVER POLICY FOR PAYMENT AND ASSESSMENT OF
THE COSTS TO REPAIR PRIVATE UTILITY LINES
Adopted: 11/20/2017
The City of Elk River has adopted an ordinance which provides for payment and assessment of
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 include but are not limited to the following:
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.
This includes the following:
Installation of required pipes
Restoration of disturbed areas
Interior plumbing to facilitate proper repair
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 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
$40,000 for residential uses and $75,000 for all other uses. 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 petition signing. The term of the assessment will be as follows:
$3,000 to $10,000 Up to 5-years
$10,001 to Max Up to 10-years
5. Special Circumstances
Special circumstances will be evaluated on a case-by-case basis by city staff, the City
Administrator, or the City Council.
GP:3301030 v1
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
(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 Repairs to, (the Work) private utility
lines located on the Property or in the Right-of-Way directly adjacent to the Property, including:
Repair of private water service lines
Repair of private sanitary sewer service lines
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):.
____________ TOTAL ASSESSMENT AMOUNT
(Cost of Work from Exhibit B)
Owners acknowledge and agree:
1) that there has been a failure of the private 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:
www.pca.state.mn.us
Minnesota Pollution Control Agency
651-296-6300 | 800-657-3864 or use your preferred relay service | Info.pca@state.mn.us
January 2019 | wq-cwp1-18
Available in alternative formats
Clean Water Partnership loans
The Clean Water Partnership (CWP) Program is currently offering zero percent interest loans to eligible
applicants. These loans are available for implementing nonpoint source best management practices (BMPs) and
other activities that target the restoration and protection of a water resource (i.e., lake, stream, or groundwater
aquifer). The loans are available to local units of government sponsoring CWP projects. A local government can
use the funds itself (first-tier BMP) to implement BMPs, or it can re-loan the funds to private parties (second-tier
BMPs) for further activities to implement the practices.
Who is eligible for a loan?
Local units of government that meet the following requirements:
• The ability to pledge its full faith and credit to ensure repayment of a project loan
• The authority to generate cash revenues for the repayment of a loan
• The authority to enter into a loan agreement with the agency
Local governmental units that meet these requirements include counties, cities, townships, tribes, watershed
districts, and watershed management organizations. Joint powers organizations composed of previously
mentioned entities are also eligible but must submit a resolution from at least one local governmental unit that
meets the criteria stating that they will participate in the project as a loan sponsor.
What types of projects are eligible for loan funding?
Eligible CWP project activities include:
• Green infrastructure projects such as; rain water harvesting and reuse, rain gardens, green roofs, tree
boxes, porous pavement, street parking lot redesign or similar green infrastructure approaches.
• The purchase of vegetation or seed of ecotypes native to Minnesota.
• Subsurface sewage treatment system upgrades or replacements.
• Outreach, technical assistance, implementation of source control and runoff control BMPs, and
education activities related to stormwater control.
• Water quality monitoring, water resource and project area data and information collection, data and
information analysis and assessment.
• Selection, design, layout, and installation of BMPs consistent with Federal Section 319 or 320 of the
federal Clean Water Act, as amended.
• Development, review, and inspection of procedures for the installation, operation, and maintenance of
BMPs.
• BMP implementation for animal feedlot operations if the installation is not related to a criminal
enforcement action or a civil enforcement action involving financial penalties.
• Outreach, technical assistance, and education activities concerning animal waste management, and the
costs of BMPs for National Pollutant Discharge Elimination System feedlot facilities if the
implementation activities are part of an eligible watershed or groundwater project.
• Fiscal and management activities and report preparation.
• Creation and dissemination of public education materials and activities.
• Development and implementation of ordinances .
Page 2 of 2 January 2019 | wq-cwp1-18
• Acquisition of easements and property.
• Use of ferric chloride, aluminum sulfate, or other chemicals to precipitate phosphorus.
• Dredging of harbors, lakes, ditches, constructed wetlands, and existing sedimentation basins.
How do I apply for CWP loan funding?
For more information on how to apply for CWP loan funding, visit the MPCA’s contract, grant and loan
opportunities webpage at https://www.pca.state.mn.us/water/clean-water-partnership-loans
What are the interest rates?
The current interest rate for loans to local governments is 0%. Interest rates available to private parties from
local governments for second-tier loans must be at or below 1.5%.
As of December 2018, 318 projects have constructed $56.3M of BMPs:
$45.2M Individual septic treatment systems
$4.0M Feedlots
$1.8M Permanent structures
$1.6M In-lake chemical treatments
$.8M Equipment
$2.5M Land use practices/erosion control activities
$.4M Administration/education and training