3.4. SR 08-04-2008lu ~~
,,,~ REQUEST FOR ACTION
Elk
River
To Item Number
Ci Council 3.4.
Agenda Section Meeting Date Prepared by
Consent Au ust 4, 2008 Lori ohnson, Ci Administrator
Item Description Reviewed by
Approve Trunk Utility Fund Policy and Funding of 19314 Water
System Improvements Reviewed by
Action Requested
Approve Trunk Utility Fund Policy and Elk River Municipal Utilities' request to fund the trunk water
connection under the 193=4 Avenue extension in the amount of approximately $250,000 from the Trunk
Utility Fund.
Background/Discussion
At the July 7, 2008, worksession, the Council discussed the Elk River Municipal Utilities' request for the
City to fund the trunk water main improvements under the 193=4 Avenue extension out of the City's
Trunk Utility Fund. The City has previously funded the Eagle's Marsh and County Road 40 trunk water
main projects for ERMU out of the Trunk Utility Fund. Staff discussed the need for a policy on use of
the Trunk Utility Fund to ensure that the funds are spent for eligible projects and that both the water and
sewer utilities have access to the available funds. The Council directed staff to develop a policy based on
xhe outline presented at the worksession and place it on a future consent agenda along with approval of
funding the requested 193=4 trunk water main improvements.
Attached is the proposed policy. It defines the parameters under which these funds may be spent and
that the City maintains control of the fund.
Financial Impact
Fund approximately $250,000 of trunk water main improvements from the Trunk Utility Fund.
Attachments
^ City of Elk River Trunk Utility Fund Policy
Action Motion by Second by Vote
Follow Up
S:\Council\Lori\2008\trunk policy applova108 04 08.doc
City of Elk River
Trunk Utility Fund Policy
The City maintains a Trunk Utility Fund (Fund) made up of special assessment revenue from water
and sewer improvement projects. The money in the Fund is to be spent on certain trunk water and
sewer expansion/improvement projects as defined in this policy and approved by the City Council.
The use of this Fund will be dictated by the City Council. The City Council will determine when
expansion of the water and sewer trunk facilities will be made within the urban service area and will
determine and approve any future expansion of the urban service area.
The City will levy, collect, and retain revenue from all special assessments for projects funded
through the Fund. The City retains ownership of the funds in the Fund and has the right to change
this policy at any time as it deems appropriate.
Future assessment revenue deposited in the trunk utility fund from assessments currently levied is to
be shared equally between the water and sewer trunk accounts. Future revenue fox assessments not
yet levied will be split based on the proportionate share of levied water improvements and sewer
improvements and be placed in the water trunk account and sewer trunk account accordingly.
The Fund may be used only for trunk connections or improvements in the area for which the
assessments were collected (i.e., funds may not be spent in the northeast area of the urban service
district if no assessment revenue from that anginal assessment project was deposited in the Fund).
Water trunk projects will be paid from the Fund only if funds exist in the trunk water account.
Sewer trunk projects will be paid from the Fund only if funds exist in the trunk sewer account.
Financing for eligible water and sewer expansion/improvements that will be special assessed maybe
paid from the Fund in lieu of issuing bonds if the Council determines it is in the City's best interest
to do so and all special assessments levied fox the project are credited to the Fund when received.
Elk River Municipal Utilities may request funding fox eligible trunk water facilities not included as
part of a special assessment project from the Fund. The request shall be made in writing to the City
Administrator. The City Administrator shall forward all eligible requests to the City Council for
consideration.
The City's finance department will maintain an accounting of the fund including determining the
balance available for water improvements, the balance available for sewer improvements, and the
areas in which those funds must be spent.
S:\Council\Lori\2008\trunk policy appxova108 04 08.doc