ITEM 4.4 Sewer Connection AgreementCITY O
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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
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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