ITEM 4.4 Wetland Banking Credits410
OtSTY
e F o
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT
REQUESTOR:
MEETING DATE:
Public Works
City Engineer Wagner
March 12, 2018
PRESENTER(s)
REVIEWED BY:
ITEM #:
Public Works
City Administrator/ Finance Director Flaherty
City Attorney MacArthur
4.4
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff recommends that the City Council authorize City staff to enter into a Wetland Banking Credits
Purchase Agreement for the Kadler Avenue project not to exceed $250,000.
ARE YOU SEEKING APPROVAL OFA CONTRACT?
IS A PUBLIC HEARING REQUIRED?
Yes
No
BACKGROUND/JUSTIFICATION: -
The Kadler Avenue project will fill or adversely affect approximately 1.25 acres of wetland along the 0.5
miles of the reconstructed and widened street. The City must acquire by purchase wetland credits to
mitigate adverse effects. In order to meet the project timeline, the City must complete the wetland
applications at least 60 days prior to work starting. With a mid-May to early June start of the project
anticipated, the City must enter into an agreement to purchase needed wetland bank credits as soon as
possible so that the wetland project application review process can begin and deemed complete prior to
construction starting.
Approved BWSR wetland bank can be difficult to come by, and prices range drastically from around $1.50
up to $2.25 per square foot. City staff has been in discussions with a wetland broker who may have
wetland bank available early next week at around $1.50 per square foot. City staff would like to be able to
proceed with Council authorization, to enter into a purchase agreement if the lower cost credits become
available.
Costs for wetland bank are DEED eligible. Attached is a completed purchase agreement form indicating the
amount of bank required and the total amount based on $1.50 per square foot. City Attorney MacArthur
will provide for any necessary changes and approval prior to final execution. The Purchase Agreement will
be modified in accordance with Project and DEED requirements and may be modified for contingencies.
The form Agreement is contingent upon final wetland mitigation approval and final project approval and
can be cancelled by the City in the event this project does not go forward.
SUPPORTING DOCUMENTS ATTACHED:
• Draft Purchase Agreement for BWSR approved Wetland Bank for Kadler Ave Project
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR 1N THE MINUTES:
Motion to authorize the City Administrator to execute a Wetland Banking Credits Purchase Agreement for
the Kadler Avenue project, not to exceed $250,000.00, and further subject to the City Attorney approval of
the respective agreement.
BUDGET INFORMATION
FUNDING: BUDGETED:
Fund #438 — Kadler Avenue Street Improvement Yes
The following is a sample of a possible Purchase Agreement for the sale of Wetland Banking Credits.
This Purchase Agreement does not necessarily cover all of the issues that would be important to Sellers
and Buyers, nor does it address the terms that would be appropriate for any particular transaction.
Sellers and Buyers should obtain the services of qualified legal counsel to adapt this Purchase Agreement
to meet their specific needs.
PURCHASE AGREEMENT
FOR
WETLAND BANKING CREDITS
THIS AGREEMENT is made this _13_ day of —March—, 2018_
Eric Trelstad (Seller) and _City of Ots
2.
1. Seller agrees to sell to Buyer, and Buyer
(Credits) listed below:
(Buyer).
ler, the wetland banking credits
Seller represents and warrants as follows:
a) The Credits are deposited in an account in the Minnesota Wetland Bank administered by the
Minnesota Board of Water and Soil Resources (BWSR) pursuant to Minn. Rules Chapter
8420.0700-.0760.
b) Seller owns the Credits and has the right to sell the Credits to Buyer.
Kadler Avenue Purchase Agreement Draft
Page 1 of 2
Credits to be Sold
Credit
Wetland Type/Plant Community Type
Cost per Credit
Credit Amounts
Subgroup
Type 2
Wet Meadow
$65,475
2.50 ac
Per Credit Withdrawal Fee by
Enter the Withdrawal Fee
Total
$163,687.50
Total
2.50
BSA
for the BSA of the account:
Cost:'
Credits:
BSA 1 $520
BSA 6 $1,083 -
(Withdrawal Fee x total credits)
BSA 2 $371
BSA 7 $1,992 , $1,992 per credit
Withdrawal Fee: 1
$4,980
BSA 3 $725
BSA 8 $2,577 Easement Stewardship Fee:
EasementStewardshipfeez total credits
BSA 4 $1,412
BSA 9 $2,628 $302 per credit
Stewardshi Fee': '
$755
BSA 5 $685
BSA 10 $3,099
Total Fees: '
$5,735
BWSR fee
01i0y: httn://cvNvw>bwsrstatemnvs/Nvetlandshvetlandbankin0fee and sales data/Wetland Banking Fee Policy
Effective Junel 2017.0f
Seller represents and warrants as follows:
a) The Credits are deposited in an account in the Minnesota Wetland Bank administered by the
Minnesota Board of Water and Soil Resources (BWSR) pursuant to Minn. Rules Chapter
8420.0700-.0760.
b) Seller owns the Credits and has the right to sell the Credits to Buyer.
Kadler Avenue Purchase Agreement Draft
Page 1 of 2
3. Buyer will pay Seller a total of $_163,687.50` for the Credits, as follows:
a) $ 1,000_ as earnest money, to be paid when this Agreement is signed; and
b) The balance of $_162,687.50 to be paid on the Closing Date listed below.
4. [M ] Buyer, [❑ ] Seller agrees to pay to a withdrawal fee of $_,5 ,735 to the State of Minnesota
based on the per credit fee of $1,992 for Bank Service Area 7 and a stewardship fee of $_755_ based
on the per credit fee of $ 302 At the Closing Date, [M] Buyer, [❑ ] Seller will execute a check made out
for this amount, payable to the Board of Water and SoilResources.
5. The closing of the purchase and sale shall occur on May 15 , 2018_ (Closing Date) at 10 AM—.
The Closing Date and location may be changed by written consent of both parties. Upon payment of the
balance of the purchase price, Seller will sign a fully executed Transaction Form to Withdraw Credits
provided by BWSR, provide a copy of the Transaction Form to Withdraw Credits to the Buyer and forward
the same to the BWSR along with the check for the withdrawal fee and stewardship fee.
6. Buyer has applied or will apply to ' City of Otsego_ (Local Government Unit (LGU) or other
regulatory authority) for approval of a replacement plan utilizing the Credits as the means of replacing
impacted wetlands. If the LGU has not approved the Buyer's application for a replacement plan utilizing the
Credits by the Closing Date, and no; postponement of the Closing Date has been agreed to by Buyer and
Seller in writing, then either Buyer or Seller may cancel this Agreement by giving written notice to the other.
In this case, Seller shall return Buyer's earnest money, and neither Buyer nor Seller shall have any further
obligations under this Agreement. If the LGU has approved the replacement plan and the Seller is ready to
proceed with the sale on the Closing Date, but Buyer fails to proceed, then the Seller may retain the earnest
money as liquidated damages.
(Signature of Seller) (Date)
Adam Flaherty
City Administrator
Kadler Avenue Purchase Agreement Draft
Page 2 of 2
(Date)