8.2. SR 07-25-1994
I ~\j
( )I
!Ill
ITEM 8.2
MEMORANDUM
TO:
MAYOR & CITY COUNCIL \
LORI JOHNSON, FINANCE DIRECTOR~
FROM:
DATE:
JULY 21,1994
SUBJECT: UPDATE ON SURFACE WATER
MANAGEMENT FEE
.
At the July 11, 1994, Council meeting, the City Council discussed the storm
water impact fee, the surface water management fee, and the resolutions and
ordinance which must be adopted in order to implement the fees. The
Council requested that additional information on the surface water
management fees be presented at the July 25 Council meeting based on the
rates approved by the City Council.
CommerciallIndustrial
Residential
Multifamily
Undeveloped
Government
$15/acre
$2/unit
$15/acre
$.50/acre
Yet to be determined
The Council also requested that all property within the City limits be subject
to the surface water management fee.
Based on the decisions made by the City Council, the surface water
management fee would generate approximately $258,000 per year. This
includes reclassifying the government property to bill undeveloped and park
land at the undeveloped rate and the remainder at the government rate of
$3.50 per acre. Although this is less than is currently needed to fund the
existing bond issue and a second $1 million bond issue, the impact fee should
make up the difference. This does not allow for additional projects without
increasing the fees or increased development revenue.
The shaded areas on the attached spreadsheet indicate how much revenue
each of the various classifications of property would generate based on the
. rates discussed by the City Council. Adding the property north of County
P.O. Box 490 . 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
.
Road 33 and reclassifying the government property increased the
undeveloped acreage from 10,433 acres to approximately 16,110 acres.
It was initially hoped that billing for the surface water management fee
would be included on the July bill for June service. For various reasons that
deadline could not be met and it was agreed that the billing would be delayed
until the August bills. In speaking with the Elk River Municipal Utilities,
they have indicated that they may not be able to meet the August billing
deadline. Staff at the Utilities is indicating that approximately 60 hours of
programming services will be required to allow the software to accommodate
this billing. Additionally, the Utilities staff needs time to input all of the
billing data. In earlier conversations with the Utilities, it was understood
that the billing would start in June and that the Utilities could accommodate
the June deadline. This recent development is an unfortunate and
unanticipated delay which will result in the loss of another month of revenue.
.
Software changes are estimated to cost $3,000. This cost, along with all
other start up costs will be paid from future revenue collections. Ongoing
billing fees will also be paid with monthly revenue collections. An
informational postcard will be sent with the bills telling property owners
about the program and who to call if they have questions. City staff expects
to receive manv calls after the fIrst bills are received by property owners.
ACTION REQUESTED
The City Council is asked to approve the ordinance establishing a surface
water management utility for the City of Elk River and providing for the
payment of storm sewer impact fees and surface water management fees, the
resolution setting the storm sewer impact fees, and the resolution setting the
surface water management fees.
.
SURFACE WATER MANAGEMENT FEE
. Classification Government Comm/lnd Residential" Multifamily Undeveloped
Units 367.22 266.95 3,084.00 132.11 16,109.98
Monthly Rate 2.00 10.00 0.50 10.00
Annual Revenue 8,813.28 32,034.00 18,504.00 15,853.20
Monthly Rate 2.50 12.50 1.00 12.50 1.00
Annual Revenue 11,016.60 40,042.50 37,008.00 19,816.50 193,319.76
Monthly Rate 3.00 13.75 1.50 13.75 1.50
Annual Revenue 13,219.92 44,046.75 55,512.00 21,798.15 289,979.64
Monthly Rate 2.00
Annual Revenue 386,639.52
Monthly Rate 4.00 16.50 2.50 16.50 2.50
Annual Revenue 17,626.56 52,856.10 92,520.00 26,157.78 483,299.40
"Each residence is a unit regardless of acreage. All other charges are based on acreage.
.
.
7/22/94
FINANCE
STRMSWR2.XLS
r I ~'\(
( )!
t:lll River
- ')October 26, 1993
INFORMATION
Mr. Bill Birrenkott
Elk River Municipal Utilities
322 King Avenue
Elk River, MN 55330
Dear Bill,
As you know, there were several items on last night's Council
agenda which related to the Utilities. Although you were
present for discussion on some of the items, there were other
items discussed after you left of which you should be aware.
The following is a summary of the Council discussions which
involve the Municipal Utilities.
.
POLICY ON SEWER AND WATER STUB-INS
You were present for this discussion when the City Council
referred this item back to the Utilities Commission for
comment.
NORTHEAST AREA TRUNK WATER IMPROVEMENT
The Council adopted a resolution approving the plans and
specification and ordering the advertisement for bids for
the northeast area trunk water improvement. It is yet to
be determined how this will be financed. If proceeds are
available from the recent water revenue bond issue, those
could be used for this project. If not, the water utility
may want to consider other methods of financing this
project.
~ STORM SEWER FEES
.
As we have discussed previously, the City is planning to
implement a city-wide storm sewer fee policy. It is
anticipated that charges will begin in 1994. There will
be a fee schedule outlining a per unit or per acre
charge. This charge will be added to the monthly utility
bill. In that regard, there are new customers who will
need to be added and software changes to your system may
need to be made in order to accommodate this additional
billing item. Please be prepared to begin billing for
P.O. Box 490 . 13065 Orono Parkway' Elk River, MN 55330 . (612) 441-7420 · Fax: (612) 441-7425
.
.
.
this charge in 1994. We will keep you updated on the
progress of this project and assume that you will contact
us to get the necessary information so that you can begin
preparing for this.
I have attached a copy of the October 25, 1993, City
minutes for your information. If you have any questions
items discussed, please feel free to contact City staff.
Sincerely yours,
~~
Lori Johnson
Finance Director
LJ:ah
Attachment
cc: Pat Klaers
Council
on the
.
ORDINANCE 94 .
CITY OF ELK RIVER
AN ORDINANCE ESTABLISHING A SURFACE WATER MANAGEMENT
UTILITY FOR THE CITY OF ELK RIVER AND PROVIDING FOR
THE PAYMENT OF STORM SEWER IMPACT FEES AND SURFACE
WATER MANAGEMENT FEES
The City Council of the City of Elk River does hereby
ordain as follows:
Section 1: The Code of Ordinances for the City of Elk
River is hereby amended by the addition of Section 1304
thereof, as follows:
Section 1304 - Surface Water Management
.
Section 1304.00 Establishment of Surface Water Manaaement
Utilitv . There is hereby established in the City of Elk
River, pursuant to Minnesota Statutes Section 444.075, a
stormwater management utility for the purposes of
implementing a master plan and pOlicies for the management
of surface water within the City of Elk River, and for
generating revenue to pay for the construction and
maintenance of facilities for the management of surface
water runoff generated within the boundaries of the City.
Section 1304.02 Surface Water Manaaement Master Plan and
Policies - The City Engineer shall prepare a Surface Water
Management Master Plan and Surface Water Management
Policies for review and approval by the Elk River City
Council. Once approved by the City Council, the Surface
Water Management Master Plan and POlicies shall be adhered
to by all property owners, users and developers within the
City. The Surface Water Management Master Plan and
POlicies may be amended from time to time. All amendments
shall be approved by the City Council.
Section 1304.04 Establishment of Storm Sewer Impact Fee _
There is hereby established within the City of Elk River,
pursuant to Minnesota Statutes Section 444.075, a Storm
Sewer Impact Fee, which shall be applicable to all new
development or construction within the City. The amount of
the Storm Sewer Impact Fee shall be established by the City
Council by resolution. The amount of the fee shall be
based upon the impact of proposed development or
construction on the City of Elk River Surface Water
Management System. The Storm Sewer Impact Fee applicable
.
.
to a property shall be collected prior to final plat
approval for new development, and at the time of building
permit issuance for construction on existing lots when
platting is not required.
.
Section 1304.06 Establishment of Surface Water Manaaement
~ . There is hereby established within the City of Elk
River, pursuant to the authority of Minnesota Statutes
Section 444.075, a Surface Water Management Fee applicable
to all properties within the City of Elk River. The amount
of the Surface Water Management Fee shall be established by
the City Council by Resolution.
Section 1304.08 Billing and Payment of Surface Water
Management Fee - The Surface Water Management fee shall be
payable at the same time as bills for water service and
subject to the same conditions of payment. If any charge
is unpaid on September 1 of any year, the Council shall
levy an assessment against the property equal to the unpaid
charges as of that date plus interest at a rate set by the
Council from that date and a penalty not to exceed ten
percent (lot). The Clerk shall certify the assessment to
the County Auditor for collection in the same manner as
assessments for local improvements.
Section 1304.10 Use of Funds - Revenues received from
Storm Sewer Impact Fees and Surface Water Management Fees
shall be used to pay the costs of constructing, operating
and maintaining the City's surface water management system.
Section 1304.12 Anpeals - Property owners or other persons
responsible for the payment of Storm Sewer Impact Fees or
Surface Water Management Fees may appeal a particular
assigned fee by filing an appeal on a form provided by the
City. Appeals will be heard by the City Council of the
City of Elk River or, at the Council's discretion, by an
appeal board established by Resolution of the City Council.
Determinations of the appeal board may be appealed to the
City Council.
Seotion 1304.14 Penalties - Any violation of the
provisions of this ordinance, or the requirements of the
Surface Water Management Master Plan and Policies, shall be
a misdemeanor. In addition, failure to pay the Storm Sewer
Impact Fee as required by the terms of this ordinance and
the City Council's resolution establishing the applicable
fees shall be cause for denial of the issuance of a
building permit, conditional use permit, plat approval or
any other construction, land use or zoning permit or
approval.
Section 2: This Ordinance shall take affect upon
pUblication, as provided by law.
.
2.
.
.
.
Passed and adopted by the City Council of the City of Elk
River, this ____ day of , 1994.
Attest:
Sandra Thackeray, City Clerk
PKB:JD6s
Henry A. Duitsman, Mayor
3.
~ 0 ~ f\. "\- \.J..Jn \ ~ -\- \ e. ~ """ C-.., ~ Lo u I'\. '-~ I
Elk River City Council Special Meeting
) April 11, 1994
('{\JU -n t'\)-
Page 4
.
sewer and water trunk line going down Freeport will be set up so that if someday
the school property is redeveloped. the property can be hooked up and the
private line can be abandoned. He stated that he did not feel it was necessary
to force the schools to hook up to the new line, but if there were ever a
commerciol use located on the property, the hookup would be required. The
City Engineer noted that they will also need to work around an underground
private communication line between the schools.
The City Engineer explained that the Bk Park Center developers would be lighting
the parking lots and entrances, but the area from School Street up to the south
plat boundary will be fairiy dark and the City and Utilities may wish to consider
lighting for thot area.
Discussion followed regarding a lighting theme for this area and the type of
lighting poles to be used.
It wos the consensus of the City Council and Utilities Commission that the area in
question be welHit and that some type of theme be used in lighting fixtures.
.
COUNCILMEMBER HOLMGREN MOVED TO AUTHORIZE THE CITY ATTORNEY TO
INCLUDE THE NECESSARY LANGUAGE IN THE DEVELOPER'S AGREEMENT TO INSURE
THE LIGHTING OF THE EXTENSION OF FREEPORT AVENUE NORTH FROM SCHOOL
STREET TO THE PROPOSED ELK PARK CENTER MALL, BE FINANCED BY THE DEVELOPERS
WITH STANDARDS TO BE ESTABLISHED BY THE UTILITIES COMMISSION.
COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 4-0.
Cable Television Lines
The City Council and Utilities Commission discussed concerns regording the
appearance of the coble television lines. It was the consensus thot the contract
with the cable company be reviewed. ond specifically, the language regarding
ordering conversion of overhead lines to underground in specific areas.
') Surface Water Manoaement Fee Prooosal
Mayor Duitsman explained a proposal to have all City property owners pay for
costs associated with storm water drainoge (surface water) improvements. He
stated that it would cover all areas of the city with the exception of the northern
area and that there would be a different fee for residential and commercial. The
City needs the Utilities to do the billing for this fee.
~
~
Lori Johnson. Rnance Director. stated that staff has inventoried about 1,000 of the
5.000 porcels of property in the City, breaking them down into 14 classifications
for billing colculation. Lori Johnson stated that the fee will be calculated on
acreage for commercial property, schools and exempt-type property, and per
unit for apartments and per lot for residential property. The Finance Director
exploined that if the Council approves the fee and the proposed $1 million storm
water bond issue. the fee will probably start in July. She further explained that if
the inventory is not completed by the July target date, the City could bill
retroactive to July 1. 1994. Lori Johnson stated that she has discussed the
proposol with Pat and Vivion of the Municipol Utilities and they ore ready to meet
-
Z
""
o
~
~
-
o
z
Elk River City Council Special Meeting
April 11, 1994
Page 5
.
with the staff to discuss computer program changes that need to be made in
order to accommodate adding to the current utility bill.
Mayor Duitsman explained that the City is proposing to take over the county
ditch improvement costs and include them in the City's overall surface water
management program.
Council member Holmgren suggested that the storm water management fee be
assessed on property taxes. Discussion followed regarding utilities billing vs.
property tox billing of the fee. The Rnance Director stated that the City would
need to approve a watershed pion, and then the County would determine the
billing by 5 c1ossifications, based on valuation. She further stated that apartments
would be based on 1 - 3 units, and 4 units and over and, commercial would also
be based on valuation. The Rnance Director explained that tax districts would
need to be set up if the Council wished to eliminote some areas. She added that
the billing could definitely be set up through the County property taxes. but that
the method would be more complex and the Council would lose the flexibility
they would have billing it through the utilities plan.
. Members of the Utilities Commission were in ogreement that they would
anticipote few problems in adding the proposed fee to the utilities payments.
---------------------
---------------------
.
President Simpson stated that the Utilities Commission would review the School
Street area on the map and discuss plans for utility poles and street lights.
---------------------
---------------------
The Street/Park Superintendent questioned whether or not the line down Gary
Street was a main feeder line. The Utilities Superintendent stated eventually it will
be a main feeder. when the courthouse is added and the industrial park
develops.
Discussion followed regarding water and sewer hookup for the courthouse and
residential development along Highway 10.
---------------------
---------------------
The City Administrator stated that the Fire Deportment equipment van will be
delivered Tuesdoy. April 12, and a check will be issued in the amount of
$125,584.00. He explained that $30.000 will come from the liquor store fund and
$30.000 from the Utilities, with the balance being financed over time.
---------------------
---------------------
.
The Utilities Commission agreed that a representative of the Commission would
attend meetings regarding updating the Comprehensive Plan. The City
Administrator stated that minutes and agendas would be sent to members of the
Utilities Commission.
.
RESOLUTION 94 -
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION ESTABLISHING THE SURFACE WATER
MANAGEMENT FEE RATES
WHEREAS, the City has decided to restructure the method of fInancing
trunk storm sewer improvements; and,
WHEREAS, the new structure will include a Storm Sewer Impact Fee
together with a Surface Management Fee; and,
WHEREAS, the policy requires the Surface Water Management Fee to be
established by resolution.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Elk River, Minnesota:
1. That the Surface Water Management Fees be as follows:
.
Residential $
Commercial/Industrial $
Multifamily $
Government/Church $
Undeveloped $
per lot
per acre
per acre
per acre
per acre
2. That the minimum Surface Water Management Fee be $
per parcel.
BE IT FURTHER RESOLVED that the rates be reviewed and adjusted as
necessary to provide sufficient revenue to fInance all storm sewer projects.
Passed and adopted this 25th day of July, 1994.
Henry A. Duitsman, Mayor
ATTEST:
. Sandra A. Thackeray, City Clerk
.MS,;
CONSULTING IlI/G1N1lERS
(Nil ENGINEERiNG
EI','VIRON/vIENTA!
N,UNIOPAi
PiANNlNG
STRUCTURAl
. SUWEYING
TRAFFIC
TRANSPORTATiON
1326 Energy Pork Drive
St. Paul, MN 55108
612-(\44-4389
Fox: 612-644-9446
. 9800 Shelord Porkwoy
Minneapolis, MN 55441
612-546-0432
Fox: 612-544-6398
JUt 18 ~
July 12, 1994
File: 230-161-70
Honorable Mayor and City Council
City of Elk River
13065 Orono Parkway
P.O. Box 490
Elk River, MN 55330
RE: STORM SEWER IMPACT FEE
Dear Council Members:
As you discussed at your July 11, 1994, City Council meeting, we have revised the
resolution regarding the storm sewer impact fee rate structure. Based on your discussion and
direction, we have set the impact fee for single family rural (non-City sewer and water)
residential lots at $60.00. The rate for single family urban (City sewer and water) lots at
$120.00 and all other property at $720.00 per acre. The resolution also implements a three
percent annual increase in each of these rates. Also attached for your information is a copy
of our July 7, 1994, correspondence which discusses the storm sewer impact fee policy.
If you have any questions regarding this information, please call.
Sincerely,
MSA, CONSULTING ENGINEERS
c--'
Te~~
TJM:tw
Enclosures
161-J20J.jul
.
.
.
,
RESOLUTION 94-_
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION ESTABLISHING THE
STORM SEWER IMPACT FEE RATES
WHEREAS, the City has decided to restructure the method of financing trunk storm sewer
improvements; and
WHEREAS, the new structure will include a Storm Sewer Impact Fee together with a Surface
Water Management Fee; and
WHEREAS, the policy requires the Storm Sewer Impact Fee to be established by resolution;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River,
Minnesota:
1.
The Storm Sewer Impact Fee for all rural (non-city sewer and water) single family
residentiallots shall be $60.00 in 1994. On January 1st of each succeeding year, the rate
shall increase three percent.
2. The Storm Sewer Impact Fee for all urban (city sewer and water) single family residential
lots shall be $120 in 1994. On January 1st of each succeeding year, the rate shall increase
by three percent.
3. The Storm Sewer Impact Fee for all non single family residential property shall be $720
per acre in 1994. On January 1st of each succeeding year, the rate shall increase by three
percent.
Passed and adopted this 25th day of July, 1994.
Henry A. Duitsman, Mayor
A TrEST:
Sandra A. Thackery, City Clerk
000-0702.jul
. JI~ ~
JUL 11 1994
rnNSILTlNG E~GINEEIIS J ul Y 7, 1994
File: 230--161-70
CIVil ENGINEERING:
ENVIR@NMENTA[
MUNICIPAl
PLANNiNG
STRUCTURAl
.SURVEYING
TRAFFIC
TRANS,PORTATlON
1326 Energy Park Drive
51. Paul, MN 55108
612.644-4389
Fax: 612.644.9446
e98DO 5helard Parltwoy
Minneapolis, MN 5544 I
612.546-0432
Fax: 612.544.6398
Honorable Mayor and City Council
City of Elk River
13065 Orono Parkway
P.O. Box 490
Elk River, MN 55330
RE: STORM SEWER IMPACT FEE POLICY
Dear Council Members:
As previously discussed, on several occasions, a Storm Sewer Impact Fee in conjunction
with a Surface Water Management Fee is being proposed in lieu of trunk storm sewer
assessments. Much like the Sewer Availability Charge (SAC) and the Water Availability
Charge ryv AC), the Storm Sewer Impact Fee is the property's cost for facilities constructed
outside of the immediate boundaries of the development. This fee is intended to generate
monies, together with the Surface Water Management Fee, for the City to utilize to construct
storm sewer facilities which collect runoff from many different developments. By utilizing
this method, the actual users of the system will pay for the system. The Storm Sewer Impact
Fee would not be charged until the time of development or construction on existing
properties. Therefore, the situation of an improvement causing a trunk storm sewer
assessment to a large area; a portion of which is developing and a portion of which is
undeveloped property should be avoided in the future.
We would recommend that the City policy be to collect the Storm Sewer Impact Fee at the
time of platting or, in the case of existing lots, at the time of building permit. As previously
discussed, the proposed initial rates for the Storm Sewer Impact Fee is $50.00 per lot for
rural (non city sewer and water) single family residential lots, $100.00 per lot for urban (city
sewer and water) single family residential lots, and $600.00 per acre for other types of
property. Since the City has already spent approximately one million dollars on storm sewer
within the last twelve to eighteen months and can foresee additional substantial investments
with the current developments and potential take over of the county ditch system, we would
recommend that the Storm Sewer Impact Fee rate structure have built into it a escalating
factor. Attached is a draft resolution, for the consideration of the city council, which would
set the 1994 rates at $50/$100/$600 with escalating factors in each of these.
In the past discussions, there have been questions as to whether these fees are too much of
a burden on potential developments. There are several recent examples of the impact of
these fees relative to the amount of runoff generated. We believe that these show that the
fee is not a burden and in fact, provides a substantially lower cost to the development than
.
.
Honorable Mayor and City Council
July 7, 1994
Page Two
if there were trunk storm sewer assessments. Three examples from recent developments are
as follows:
1. The Guardian Angels expansion on Evans Street will create approximately one
additional acre of roof top and parking area which are totally impervious. This will
generate a substantial amount of increase in runoff that flows directly to the
intersection of Main and Evans. Based on this impact fee their cost will be $600.
Certainly if the proposed improvements to the Main and Evans intersection would be
assessed, the cost to Guardian Angels would be substantially higher.
2.
T.J. Properties is currently constructing a commercial building at the intersection of
Main Street and Holt Avenue. This construction removed a single family home and
replaced it with a commercial building and parking lot. The change has again
significantly increased the runoff characteristics of the property. Their development
site is slightly under one acre and their contribution to storm sewer improvements,
again at Main and Evans, will be approximately $450. The estimated cost of the
Main and Evans storm sewer improvements is approximately $250,000. With the
relatively small but intense drainage area which contributes runoff to this intersection
an assessment of this improvement would be in the range of $2,000 to $3,000 per
acre. Much greater than the impact fee of $600 per acre.
.
3. The Hillside Crossing Commercial Development is approximately thirteen acres in
area and will be charged a $7,800 impact fee, based on $600 per acre. Drainage
from this development flows to the regional pond adjacent to Trunk Highway 169
south of 193rd Avenue. As you are aware, the Comprehensive Storm Drainage Plan
calls for an outlet from this pond, in the future, all the way down to County Ditch
10 in the Earl HoWen property. Once again an assessment against Hillside Crossing,
for their proportionate share of this outlet pipe, would be substantially greater than
$7,800.
Once the City Council adopts the Storm Water Impact Fee policy, staff will prepare a
concise summary of the policy which can be distributed to all the potential developers in the
City. If you have any questions, or comments, regarding this issue I will be in attendance
at your July 11, 1994 City Council meeting.
.
Sincerely,
MSA, CONSULTING ENGINEERS
~~~
T~urer, P.E.
Attachment
161-Q703.jul
.
.
.
RESOLUTION 94-
A RESOLUTION OF THE CITY OF ELK RIVER
A RESOLUTION ESTABLlSIDNG THE
STORM SEWER IMPACT FEE RATES
WHEREAS, the City has decided to restructure the method of financing trunk storm sewer
improvements; and
WHEREAS, the new structure will include a Storm Sewer Impact Fee together with a Surface
Water Management Fee; and
WHEREAS, the policy requires the Storm Sewer Impact Fee to be established by resolution;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River,
Minnesota:
1.
The Storm Sewer Impact Fee for all rural (non city sewer and water) single family
residential lots shall be $50.00 in 1994. On January 1st of each succeeding year the rate
shall increase $5.00.
2. The Stonn Sewer Impact Fee for all urban (city sewer and water) single family residential
lots shall be $100 in 1994. On January 1st of each succeeding year the rate shall increase
by $10.00.
3. The Storm Sewer Impact Fee for all non single family residential property shall be $600
per acre in 1994. On January 1st of each succeeding year the rate shall increase by $50.00
per acre.
Passed and adopted this 11th day of July, 1994.
Henry A. Duitsman, Mayor
ATTEST:
Sandra A. Thackery, City Clerk
230/000-0702Jul