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ITEM 3.5 KCS Assessment0 OtsTe F o MINNESOTA V 1121:7-11 Z-4 9 TlAk>t_1111111ki13i1: i7 ►i/e`ilI*]lk Request for City Council Action ORIGINATING DEPARTMENT: REQUESTOR: MEETING DATE: Planning City Planner Licht 22 September 2014 PRESENTER(s): REVIEWED BY: ITEM #: Consent Agenda City Administrator Johnson 3.5 — KCS Assessment AGENDA ITEM DETAILS RECOMMENDATION: City staff recommends approval of the request to assess the utility connection charges for the expansion of Kaleidoscope Charter School. ARE YOU SEEKING APPROVAL OF A CONTRACT? I IS A PUBLIC HEARING REQUIRED? Yes. I No. BAC KG RO U N D/J U ST I F I CATION: Kaleidoscope Charter School has received City approval for a 29,598 square foot expansion of its existing 43,015 square foot building that will allow for the education program to serve Kindergarten through 12th grade students. KCS Building Company, which owns the Kaleidoscope Charter School property and building, has requested assessment of the sewer and water connection fees due with the expansion of the building. City staff has calculated the utility connection charges due with the issuance of the building permit in accordance with Chapter 6, Section 1 of the City Code as follows: ■ Sewer: 24.2 RECs x $6,598.00/REC = $159,671.00 ■ Water: 24.2 RECs x $1,566.00/REC = -$ 37,897.00 ■ SUBTOTAL= $197,568.00 ■ Temp classrooms remaining credit: $ 29,529.00 ■ TOTAL- $168,039.80 The City Attorney has drafted an agreement for assessment of the utility connection charges for five years at 3.4 percent interest consistent with Section 6-4-5.D.2 of the City Code for special assessments for public improvements. SUPPORTING DOCUMENTS: ❑ ATTACHED ❑ NONE A. KCS letter dated 8/21/14 B. Assessment agreement C. Resolution 2014-61 POSSIBLE MOTION Please word motion as you would like it to appear in the minutes. Motion to adopt Resolution 2014-61 approving an agreement between the City of Otsego and KCS Building Company regarding payment and assessment of City utility connection charges. BUDGET INFORMATION FUNDING: BUDGETED: ❑ YES NA ❑ No kCTION TAKEN ❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes) COMMENTS: 8/21/14 Otsego City Council 13400 - 90th Street NE Otsego, MN 55330 Dear City Council Members, For the expansion project at 7525 Kalland Avenue, the Kaleidoscope Building Company respectfully requests the Otsego City Council to consider assessing the remaining WAC/SAC charges due. This would free up dollars in the construction budget to help us build a high quality school for the students in the community. We would appreciate the assessment be paid out over a seven year period or greater. Thank you for your consideration and for your efforts to date; working with the Kaleidoscope Charter School and Building Company to complete this project. Sincerely, Greg Buhl Kaleidoscope Building Company Chairman of the Board CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA AGREEMENT BETWEEN THE CITY OF OTSEGO AND KCS BUILDING COMPANY REGARDING PAYMENT AND ASSESSMENT OF CITY SAC AND WAC FEES THIS AGREEMENT made this day of September, 2014 between the City of Otsego, a Minnesota Municipal corporation ("CITY") and KCS Building Company, a Minnesota corporation ("KCS"). WHEREAS, KCS owns certain property located within the CITY and legally described as follows: Lot 1, Block 1 and Outlot A, DARA GLEN ADDITION according to the Plat on file and of record at the Office of the County Recorder, Wright County, Minnesota. WHEREAS, due to the need for the construction of classrooms and other facilities to accommodate additional students, KCS is required to incur additional charges for delivery of to municipal sanitary sewer and water facilities ;and WHEREAS, the CITY Sewer Connection Charge and CITY Water Connection Charge for the expanded facility, due immediately upon hookup, are (Sewer) 24.2 RECs x $6,598.00 per REC = $ 159,671.00; and (Water) 24.2 RECs x $1,566.00 per REC= 37,897.00. The total charges equal $197,568.80. KCS has a remaining credit of $29,529.00. Therefore, subtracting the credit, the total for Sewer connection charges and Water connection charges due is $168,039.80. WHEREAS, KCS has requested that said charges be assessed against the above described property in equal annual installments over a period of seven (7) years; and WHEREAS, CITY agrees to the request as modified below, contingent upon KCS executing this Agreement, which shall be recorded against the property. NOW THEREFORE IT IS AGREED BETWEEN THE PARTIES AS FOLLOWS; 1. CITY agrees to assess the principal amount of $ 168,039.80 against the above described property for a period of five (5) years in equal annual installments at an interest rate of 3.4% per annum. 2. KCS, on behalf of itself and its successors in title, hereby request the assessment above and agree that the above described property benefits in at least the amount of the assessment stated above, and that they waive any hearings, any irregularities in procedure, and any and all right of appeal under statute, Constitution, or case law, including the right of appeal under Minnesota Statute 429.081 or any rights under Minnesota Statute 444. 3. This Agreement shall run with the land, shall be recorded against the title to the property and shall be binding on all parties having any right, title or interest in the property their heirs, successors and assigns. 4. In the event that KCS, or its successors, fails to timely pay the assessments as they become due on the property the CITY, at its sole discretion, may demand immediate payment of the entire principal and interest due at the time and upon such demand KCS shall make such payment in full within thirty (30) days of the demand. 5. In the event that CITY must take action to enforce the terms and conditions of this Agreement related to prompt payment, KCS, or its successors, shall reimburse CITY for all costs incurred by CITY in enforcement, including reasonable attorney's fees. 2 CITY OF OTSEGO Jessica Stockamp, Mayor Tami Loff, City Clerk KCS BUILDING COMPANY By: Its STATE OF MINNESOTA) ) ss. COUNTY OF WRIGHT ) The foregoing instrument was acknowledged before me this day of September, 2014, by Jessica Stockamp, Mayor and Tami Loff, City Clerk of the City of Otsego, a Minnesota municipal corporation, on behalf of the City and pursuant to the authority of the City Council. NOTARY PUBLIC STATE OF MINNESOTA) 3 ) ss. COUNTY OF WRIGHT ) The foregoing was acknowledged before me this day of September, 2012 by the of KCS Building Company, a Minnesota corporation, with authority and on behalf of the corporation. NOTARY PUBLIC DRAFTED BY: MACARTHUR LAW OFFICE, LLC 3601 Thurston Avenue North Suite 103 Anoka, MN 55303 (763) 231-5850 rd CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO. 2014-61 RESOLUTION APPROVING AGREEMENT BETWEEN THE CITY OF OTSEGO AND KCS BUILDING COMPANY REGARDING ASSESSMENT OF UTILITY CONNECTION CHARGES WHEREAS, KCS Building Company has recently received City approval for an expansion of Kaleidoscope Charter School; and WHEREAS, the expansion requires the payment of $168,039.80 in sanitary sewer and water utility connection charges which are due at the time a building permit is issued; and WHEREAS, KCS Building Company has, by letter, requested that the City Council allow these utility connection charges to be assessed against the property; and WHEREAS, the City has presented to KCS the attached Agreement regarding assessment of the above mentioned utility connection charges; and WHEREAS, the Agreement sets forth the terms and conditions of the assessment against the property and remedies available to City in the event of failure to make payments as they become due, and other items. 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 and KCS Building Company Regarding Payment And Assessment Of City Utility Connection Charges is hereby approved. 2. The Mayor and City Clerk are hereby authorized to execute the Agreement on behalf of the City of Otsego. ADOPTED this 22nd day of September, 2014 by the City Council of Otsego. MOTION TO ADOPT the Resolution by Council Member and seconded by Council Member IN FAVOR: OPPOSED: CITY OF OTSEGO Jessica Stockamp, Mayor Tami Loff, City Clerk 7