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ITEM 4.4 Sewer Connection AgreementCITY O 0 is eFao MINNESOTA < 7 101 :119114 0 IT, I :10 111 d 10 1 MQ N ivir-11 111101? Request for City Council Action ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE: Legal City Attorney July 23, 2018 PRESENTER(s) REVIEWED BY: ITEM #: City Attorney City Administrator/Finance Director Flaherty 4.4 City Planner STRATEGIC VISION MEETS: THE CITY OF OTSEGO: X Is a strong organization that is committed to leading the community through innovative communication. x Has proactively expanded infrastructure to responsibly provide core services. Yes Is committed to delivery of quality emergency service responsive to community needs and expectations in a cost-effective manner. x Is a social community with diverse housing, service options, and employment opportunities. Darkenwald's Riverbend Company LLC, Darkenwald's Riverbend Wastewater Company LLC and Otsego Is a distinctive, connected community known for its beauty and natural surroundings. AGENDA ITEM DETAILS RECOMMENDATION: Adopt Resolution 2018- 51 Approving Sewer Connection Agreement Between the City of Otsego, Darkenwald's Riverbend Company LLC, Darkenwald's Riverbend Wastewater Company LLC and Otsego Apartments LLC. ARE YOU SEEKING APPROVAL OF A CONTRACT? ISA PUBLIC HEARING REQUIRED? Yes No BACKGROUN D/J USTI FICATION: City staff recommends approval of the attached Sewer Connection Agreement between the City of Otsego, Darkenwald's Riverbend Company LLC, Darkenwald's Riverbend Wastewater Company LLC and Otsego Apartments LLC. The Sewer Connection Agreement allows for connection of the Riverbend Mobile Home Park to City municipal sanitary sewer services. The Agreement allows for the connection, sets terms and conditions for delivery of municipal service and indemnifies the City for any failures occurring within the existing mobile home park infra -structure. The basic agreement is patterned after the previous agreement between the City and Darkenwald's Riverbend Company LLC for connection to City water services. The Agreement requires that the current private wastewater treatment facility be decommissioned and that the existing permit for discharge be discontinued. Additionally, the Agreement calls for periodic payment to the City for connection fees. The payment is guaranteed by Otsego Apartments, LLC the owner of the apartment property. In the event that payments are not made (which are anticipated to come from TIF reimbursements) Otsego Apartments LLC has agreed to assessment for any unpaid amount against the apartment property. For that reason, Otsego Apartments, LLC is a party to this Agreement as well as the general Land Use Developers Agreement wherein they waive any objection to and agree to the assessment against the Development property in the event that amounts owed under the Connection Agreement are not paid. Otsego Wastewater is also signing the Agreement since they have the current obligation to provide the Mobile Home Park with sanitary sewer service and they hold the existing discharge permit to the Mississippi River. The Connection Agreement will be recorded against the Mobile Home Park Property and the Apartment Property. The mobile home park could continue to utilize the private wastewater treatment facility indefinitely under their current permit, without paying connection fees to the City. This Connection Agreement assures the City of receiving the connection fees over time, and provides additional money for the City sewer and water funds. SUPPORTING DOCUMENTS ATTACHED: • Resolution 2018-51, Approving Connection Agreement • Connection Agreement POSSIBLE MOTION PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR IN THE MINUTES: Motion to Adopt Resolution 2018-51 Approving Agreement Between the City of Otsego, Darkenwald's Riverbend Company LLC, Darkenwald's Riverbend Wastewater Company LLC and Otsego Apartments LLC for Connection of Riverbend Mobile Home Park to Municipal Sanitary Sewer Service. BUDGET INFORMATION FUNDING: BUDGETED: N/A N/A CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO. 2018-51 RESOLUTION APPROVING SANITARY SEWER CONNECTION AGREEMENT- RIVERBEND MOBILE HOME PARK WHEREAS, Riverbend Mobile Home Park has requested access to municipal sanitary sewer service in conjunction with development of the adjacent land parcel as RIVERBEND NORTH ADDITION; and WHEREAS, the mobile home park is owned and operated by DARKENWALD' S RIVERBEND COMPANY LLC, the existing wastewater treatment plant is located within RIVERBEND NORTH ADDITION and is operated by DARKENWALD' S RIVERBEND WASTEWATER COMPANY LLC which also holds the current discharge permit and the Plat of RIVERBEND NORTH ADDITION will be acquired by OTSEGO APARTMENTS LLC; and WHEREAS, the attached Agreement sets forth the terms and conditions of connection to the City wastewater treatment service, payment for the connection and remedy for non-payment, obligations regarding billing payment and requirement to keep internal pipes repaired so as to not detrimentally affect the City system; and WHEREAS, those obligations are contained and memorialized in the attached Connection Agreement; and NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Otsego, Wright County, Minnesota as follows; 1. The attached AGREEMENT BETWEEN THE CITY OF OTSEGO, DARKENWALD' S RIVERBEND COMPANY LLC, DARKENWALD' S RIVERBEND WASTEWATER COMPANY LLC, AND OTSEGO APARTMENTS LLC FOR CONNECTION OF RIVERBEND MOBILE HOME PARK TO MUNICIPAL SANITARY SEWER SERVICE is hereby approved in form, subject to minor modifications as approved by City staff. 2. The Mayor and City Cleric are hereby authorized to execute the final Connection Agreement on behalf of the City of Otsego. ADOPTED this 23rd day of July, 2018 by the City Council of Otsego. MOTION TO ADOPT the Resolution by Council Member and seconded by Council Member. IN FAVOR: OPPOSED: ABSTAINING: CITY OF OTSEGO Jessica Stocicamp, Mayor Tami Loff, City Cleric 2 CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA AGREEMENT BETWEEN THE CITY OF OTSEGO, DARKENWALD'S RIVERBEND COMPANY LLC, DARKENWALD'S RIVERBEND WASTEWATER COMPANY LLC, AND OTSEGO APARTMENTS LLC FOR CONNECTION OF RIVERBEND MOBILE HOME PARK TO MUNICIPAL SANITARY SEWER SERVICE THIS AGREEMENT made this day of July 2018 by and between the City of Otsego (CITY), a municipal corporation under the laws of the State of Minnesota, Otsego Apartments, LLC (DEVELOPER), a Minnesota limited liability company, Darkenwald's Riverbend Wastewater Company, LLC (WASTEWATER), a Minnesota limited liability company, and Darkenwald's Riverbend Company LLC (RIVERBEND), a Minnesota limited liability company. The Agreement affects real property located within the City of Otsego, Wright County, Minnesota described as follows: See attached EXHIBIT A WHEREAS, RIVERBEND currently operates a Mobile Home Park on the above described property with approximately two hundred (200) manufactured home units; and WHEREAS, the Mobile Home Park is currently served by a private wastewater treatment facility (TREATMENT FACILITY) owned and operated by WASTEWATER pursuant to the terms and conditions of the Wastewater Treatment Agreement and easement dated July 17, 2000, filed August 2, 2000 as Document Number 715544 subsequently amended by Amendment to Wastewater Treatment Agreement and Easement filed May 6, 2010, filed as Document Number Al 146890 (collectively WASTEWATER EASEMENT); and WHEREAS, the Treatment Facility is located on real estate owned by Wastewater located within the City of Otsego, Wright County, Minnesota (WASTEWATER PROPERTY) described as follows: See attached EXHIBIT B WHEREAS, DEVELOPER wishes to purchase and develop the WASTEWATER PROPERTY, but termination of the WASTEWATER EASEMENT must occur in order for such development to proceed; and WHEREAS, DEVELOPER will acquire the WASTEWATER PROPERTY contemporaneously with the execution of this Agreement; and WHEREAS, in order to terminate the WASTEWATER EASEMENT, RIVERBEND seeks to connect the Mobile Home Park to City municipal sanitary sewer; and WHEREAS, as consideration for RIVERBEND's agreement to terminate the WASTEWATER EASEMENT, DEVELOPER agrees to pay all connections cost for the connection of the Mobile Home Park to City municipal sanitary sewer; WHEREAS, the CITY has agreed to the connection and the amount of sewer availability and connection fee in part due to such actions positive affect on the CITY's payment schedule for bonded indebtedness incurred in construction and maintenance of CITY's municipal sanitary sewer system; and WHEREAS, CITY has agreed to connect the Mobile Home Park to City sanitary sewer utilities and provide ongoing services subject to the terms and conditions of this Agreement. NOW, THEREFORE the Parties agree as follows: 1. RIVERBEND shall be allowed to connect to the municipal sanitary sewer utilities after execution of this Agreement and, DEVELOPER, as stated in Section 2, agrees to the payment of any professional fees incurred by the CITY relative to this Agreement and necessary steps to effectuate connection. 2. Upon execution of this Agreement, RIVERBEND shall record a termination of the WASTEWATER EASEMENT. In exchange for such termination DEVELOPER agrees to pay all connection fees under this Agreement that would otherwise be due from RIVERBEND. DEVELOPER expressly agrees and acknowledges that termination of the WASTEWATER EASEMENT is required to allow the development of WASTEWATER PROPERTY and, therefore, the connection of the 2 Mobile Home Park to City municipal sanitary sewer is of significant benefit to DEVELOPER and is a special benefit to the WASTEWATER PROPERTY. DEVELOPER, in lieu of RIVERBEND, shall pay a Sewer Availability Charge and Sewer Connection Charge in the total amount of $1,684,685.00. The Sewer Availability and Connection Charge shall be paid to the City twice annually in the amount of $32,398.00 per payment commencing on August 15, 2021, payment to be received from DEVELOPER. This payment schedule is subject to modification upward in the event that the tax increments as set forth in the Tax Increment Developers Agreement between the City of Otsego and Otsego Apartments LLC dated are more than anticipated, but shall remain at the stated rate above in the event that the tax increments are less than anticipated. In the event that the payments are not timely made and upon notice by the CITY with thirty (30) days to cure the non-payment and payment is still not made, CITY may activate assessment against the property whose owner is responsible for the payment as set forth in that Land Use Developers Agreement between the City of Otsego and Otsego Apartments, LLC dated , 2018. 4. DEVELOPER agrees to the payment as stated above, on behalf of itself, its heirs, assignees, and any successors in title or interest. Any transfer of the WASTEWATER PROPERTY shall require notification of and assumption of this payment responsibility by the acquiring person or entity. 5. DEVELOPER agrees to reimburse the CITY for any and all charges related to drafting this Agreement, any related professional service costs incurred including Legal, Planning and Engineering services, all Engineering costs related to plan review of the connection and observation of the construction work related to the connection as well as any engineering fees incurred by the CITY in making the connection. 6. RIVERBEND shall be billed for sanitary sewer usage by a monthly billing statement from the CITY in accordance with the City Code. RIVERBEND shall be responsible for prompt payment of that monthly bill, and all internal collection of the amounts due for sanitary sewer shall be the responsibility of RIVERBEND. 7. As a user of the system, RIVERBEND shall be subject to all CITY codes, ordinances, regulations and policies in effect and as are subsequently amended. Any unpaid utility bills are subject to assessment as per the City Code. 8. Prior to connection to CITY sanitary sewer utilities, RIVERBEND shall provide the CITY with plans and specifications for the connection which are subject to approval of the City Engineer and the Minnesota Pollution Control Agency. No work shall commence on the connection until the plans have been approved by both the City Engineer and Minnesota Pollution Control Agency and the CITY has received all required extension permits or other approvals and advance notification of the commencement of construction. 9. Pursuant to the procedures set out in City Code, CITY reserves the right to take steps to disconnect or discontinue the service to RIVERBEND in the event that any internal problems with the RIVERBEND system will detrimentally affect the overall CITY sanitary sewer or water utility systems until such internal problems are corrected. The CITY will make all attempts to notify RIVERBEND of any such problems and allow RIVERBEND an opportunity to remedy the situation; however, the CITY reserves the right to immediately shut off service in an emergency situation in order to protect public health safety and welfare. 10. RIVERBEND shall properly repair and maintain all internal sewer collection lines so that leakage does not occur or so that the condition of said sewer collection lines does not adversely affect the CITY sanitary sewer system. RIVERBEND shall periodically report to the CITY regarding the condition of its internal sewer collection system. 11. RIVERBEND shall hold harmless, defend and fully indemnify CITY from any and all claims, occurrences or causes of action related to the internal sewer collection lines or other sanitary sewer facilities within the Mobile Home Park, including actions or failures to act. 12. WASTEWATER shall not renew its existing NPDES permit for discharge into the Mississippi River from the TREATMENT FACILITY. WASTEWATER agrees to cooperate with CITY for transfer (quit claim) of any existing loads which would be beneficial to CITY and cooperate with the CITY in transfer of any loads benefiting the CITY in future expansions of the municipal sanitary sewer system, including, but not limited to, municipal wastewater treatment facilities. 13. RIVERBEND shall cooperate in terminating any current agreements or easements which would conflict with this Agreement. 14. CITY shall monitor sanitary sewer usage by RIVERBEND from a meter provided by CITY with installation paid for by RIVERBEND at the location as depicted on Exhibit C attached. RIVERBEND shall pay for any additional equipment on the meter required to read the meter at distance electronically. The meter shall be repaired, maintained and read M by CITY. The proposed meter is located within the property boundaries of the Mobile Home Park. RIVERBEND hereby grants to the CITY a perpetual right of entry and easement over, under and across the property described in Exhibit A to such extent as to allow CITY, it employees, agents, and contractors to enter upon the property for the sole purpose of reading said meter or repairing, maintaining, or replacing the meter, at the location set forth on the attached EXHIBIT C. At the time of execution of this Agreement, RIVERBEND shall also execute and deliver to the CITY the easement attached as EXHIBIT C. Any internal sewer collection line between the meter and the property boundary and connection with the CITY sanitary sewer system shall be the responsibility of RIVERBEND. 15. In the event that the CITY does not receive payment from DEVELOPER for bills received as the result of the CITY incurring expenses related to the drafting of this Agreement, including legal, planning or engineering costs related to the connection to the CITY sanitary sewer utility said costs may be assessed against the WASTEWATER PROPERTY for a period of one year at 7% interest. In regards to any of these unpaid CITY costs, DEVELOPER agrees to the assessment and waives any notice and hearing requirement, any irregularities in the procedure, and waives the right to appeal said assessments under Minn. Stat 429.081 or otherwise. 16. In the event that the CITY does not receive payment for sanitary sewer utility services delivered to RIVERBEND within thirty (3 0) days after billing, the CITY may assess the property for the unpaid utility billing with additional charges as set forth in No. 6 above along with other unpaid CITY utility billings. RIVERBEND, on behalf of its self and successors agrees to any such assessment for unpaid utility bills, and hereby waives any hearing requirements, irregularities in the procedure and any and all rights of appeal and all objections to such utility assessments. 17. This Agreement shall run with the land and shall bind any and all heirs, assignees and successors in title to the property. This Agreement shall be recorded against the title to the property described in EXHIBIT A and EXHIBIT B. 18. This Agreement along with the agreements referenced herein is the final agreement of the parties and supercedes any previous agreements whether written or oral. The Agreement shall be construed under the laws of the State of Minnesota, and any legal action related to this Agreement shall be venued in the District Court in Wright County, Minnesota. 19. In the event that a Court of competent jurisdiction shall determine that any separate provision or provisions of the Agreement are invalid or unenforceable, the Agreement shall be construed as close to its original intent as possible irregardless of the deleted provision. {Signatures appear on following pages} IN WITNESS WHEREOF, the CITY caused this Agreement to be duly executed in its name and on its behalf and its seal to be hereunto duly affixed, and RIVERBEND, WASTEWATER, and DEVELOPER have caused this Agreement to be duly executed on its behalf, on or as of the date first above written. DARKENWALD'S RIVERBEND COMPANY LLC By: Its DARKENWALD'S RIVERBEND WASTEWATER COMPANY LLC By: Its OTESEGO APARTMENTS, LLC By: Its CITY OF OTSEGO Jessica Stockamp, Mayor Tami Loff, City Clerk 7 County of Wright) ) ss State of Minnesota) Subscribed and sworn before me this day of , 2018 by the of Darkenwald's Riverbend Company, LLC with authority and on behalf of the company. NOTARY PUBLIC County of Wright) ) ss State of Minnesota) Subscribed and sworn before me this day of , 2018 by the of Darkenwald's Riverbend Wastewater Company, LLC with authority and on behalf of the company. NOTARY PUBLIC County of Wright) ) ss State of Minnesota) Subscribed and sworn before me this the authority and on behalf of the company. NOTARY PUBLIC day of , 2018 by of Otsego Apartments, LLC with County of Wright) ) ss State of Minnesota) Subscribed and sworn before me this day of , 2018 by Jessica Stockamp, Mayor and Tami Loff, City Clerk of the City of Otsego with authority. NOTARY PUBLIC DRAFTED BY: MACARTHUR LAW OFFICE LLC 3601 Thurston Avenue N. Suite 103 Anoka, MN 55303 763-231-5850 E EXHIBIT A- LEGAL DESCRIPTION OF MOBILE HOME PARK PROPERTY 10 EXHIBIT B- LEGAL DESCRIPTION OF WASTEWATER PROPERTY 11 EXHIBIT C- LOCATION OF METER ON RIVERBEND PROPERTY AND EASEMENT TO CITY 12