09-10-97 WS09/10/1997 14:30 6124753159 LANDFORM ENGINEERING PAGE 01
,Pm'tandfo son
Commercld! Sc Recidrnri.,l
September 10, 1097
Site Plunning / 1'.sinceplotx
Development Servicr, 'tf tln�j City Counell
of Ot3ego
Kc: Fabian Sodowski Property
yotl were previously sent a letter addressing our concern about the apparent assessment rates
for trunk sanitary sewer and water. At a recent meeting your engineer revised his estimate to
.,; .t.. )t , per lot.
Ivc gave Frojected our other costs associated wi t developing the Sodowski Property and have
lo: 111iI that the project is not feasible with assessments in excess of $7,500 per acre. Above ti -.at
) clrl the project becomes too risky for the developer to pursue.
i 11t>, lot-, of an assessment rate may not sound feasible but we believe that if you readdress tht>
I'O,h-',Wssment policy it can be achieved. We offer the following suggestions:
• •isseSG all benefiting undeveloped properties with an extendod assessment period to ke+!p
: ,1 vm(nts low. By assessing all benefiting properties you will encourage development and
. ollect interest payments as you go rather than inflating the assessment rates to cover
III ry it Ig costs.
• As-;e,4s developed properties a small fee for the "insurance" that the system provides slid
1114.• ability to subdivide their properties at some point in the future. For example a $],01X1
1--essinent amortized over twenty years will have little impact on the typical budget, b, -it
t ill :iignificantly lower the overall assessment rate. Exi:ting property owners will berrL,it
,) rn the influx of tax base that development will bring.
• 11,1cc a connection fee of up to $2,500 on the building permit. Builders are used to payh 4.g
i, Ivt and can absorb the cost.
• ! 'onsider expanding the service boundary to other parcels if requested by the property
(Mr. Backes is interested in purchasing the Corbin property but this parcel is
'utsidt• of the service area.)
1'. 131' t•1tl,;ineer'S proposal to collect assessments t the time of platting is also objectionable. in
til ;sthvr vommunities where we have developed these assessment are collected at the time the
1, t •1d t I the buyer. The developer still pays the assessiiivjit he just doesn't have to borroW
Lip rront to do so.
It V-11 Ntrive to keep the trunk rates as low and equitable as possible you will have developer;,
j1 irr-huytIts and ultimately businesses knocking your doors down. If you continue down th.c
Latadform tirrvro rath of extremely high assessments collected solely from developers we believe th.it
Engineering a i!1 lu• disappointed in the results.
Company
926 Twelve oaks Center �)t1•.r rt'1v.
15500 Wayzata Uuulevard
Wayzata, MN 55391 I ANI )FORM ENGI EERING COMPANY
office: (612) 475-3272 l/ Q
'—/data: (611),37.5-11w J
landlimn.nct tilt' 4. 1` M. store P.F.
-tail: info(01andA)rn,.n,;r
09-10-1997 01:57PM FROM Radzwill & Couri Law Offi TO 4418823 P.02
,
i MEMORANDUM
1
TO: city council Members, City of Otsego
FROM:!; Andy MacArthur, RADZWILL & COU$I
DATE:; Septemb�r 9, 1997 j
RE.: Sewer TaXing Districts
The following `memorandum is provided to discuss aLs'sues related to
the possibility of establishing taxing districts or areas served
by the proposed sewer area. It will also disco s the possible
ramifications!of the already established urban -rural tax districts
on taxing certain areas of the City at a differen� rate.
The city has already established urban -rural taxixi�g districts. The
City'has divided the City into two separate areas based upon the
'urban" and !"rural" nature of the respective.; districts. The
district., is supposed to establish a ratio for taxation, purposes
between the add4ional benefit conferred upon., equally valued
properties due to the presence of urban services (sewer, water,
storm sewer, improved roads, police and fire (service, etc.).
obviously, at,this time there is not much of a difference between
those defined areas of the City based upon the available services
at this time. However, sanitary sewer and wateY4services would
provide the basis for a higher differential between the two areas.
While this would not directly link higher taxes inn the urban area
with the :proposed sewer plant, it would provide a mechanism wherein
the area morej directly benefited by the sewer and water services
would pay a higher proportionate share of the ove^all cost in the
event that the needed development did not occur.,,,
In tl,e event .that a Sanitary District was created as the governing
bodyof the area contemplated for sewer service under Minn. Stat.
115.1s et seq., such a district has taxing authority under Minn.
Stat. 115.33.11ncluded with that authority is the ability to, "In
the case wher4e a particular area within the district, but not the
entire dlstri;ct, is benefited by a system , works , or facilities
of the district, the board, after holding a public hearing as
providedby law for levying assessments on berg fited property,
shall by ordinance establish such area as a taxiZ subdistrict, to
be.diesignated by number, and shall levy special taxes on all the
taxAle propsrty therein..."
Thies authority only exists under the application of a Sanitary
Sewer districlt, which must be created through the .statutory process
as s!et forth 'by the MPCA.
MinA. Stat. 444 sets forth general municipality authority to build,
construct and finance (including service charges, fees, and
09-10-1997 01:57PM FROM Radzwill & Couri Law Offi TO
4418823 P,03
taxation) .it does not include a separate
mechanism for the
within the
estabL�shnuent of t do seforathe creation of iepargte storm sewer
zunicipality, te
as i
districts -
to establish
gave
n 1..996 the 149i6lature gave Cities the authorit limited period
special service districts without legislation or i section 3.
of time: Minnesota Laws 1996, chapter 471, Article s, allows
This provision, which will sunset in on June 30{, 2001j,
cities -to: establish a special service district o provide any
service at a' heightened level, within a specified area by
implementation -of an additional charge on the area to ba serviced.
The establishment of such a district involves a ra,her complicated
procedure,incl4ding petition of 25% of the affected properties and
appears'to be applicable primarily to commercial/industrial land.
The above' would appear to be the main available mechanisms far
limiting the taxes or charges for sewer service`, a particular
area.
i
TOTAL P.03
CITY OF OTSEGO
COL'i`iTY OF WRIGHT
NOTICE OF PUBLIC HEARING:
The Otsego Planning Commission will conduct a Public Hearing on Wednesdav,
October 1, 1997 at 8PM at the Otsego City Hall at 8899 Nashua Avenue NE, Otsego,
SIN., or as soon thereafter as time permits. The matter has been initiated by
ovv-ner,`applicant, Robert A. and Rachel A. Cullinan 7005 Odean Avenue NE, Otsego,
Mn. 55330. PID LI 18-500-283401 described as part of SE 1/4 of SW 1/4 of Sec 28, Tvvp
121, R23 etc. Request is as follows:
A. Conditional Use Permit to allow:
a. Detached accessory building in excess of
1,500 Square Feet
All interested parties are invited to attend the Hearings to express their questions and
concerns,"comments. If you would like further information regarding the above described
Hearing, please call the City of Otsego at 441-4414 in advance of the meeting.
dCITOF OTSEGO:
Elaine Beatty, Clert'Zonina dm.
Dated: 9;'10/97
Publish: Elk River Star News 9/ 17/97
Posted: 9/ 10/'97 Otsego City Hall 2 -Boards
Hearing: October 1, 1997 - 8PM - P.C. Meeting
October 13, 1997 - 6:30PM - C.C. Meeting
nwru �
1 ■`nl = �
■
t@ /
a-s.•� ti
- ��curs Rem
_.nw.
uumntw�
plQONiI �, /f
_ •- �� . ; � � .mss
.ilnnr+ltIIM-
lnlr_a.wwa ..0
—tlflllt � ��Igtr����
d
�
IM �I
a
� Ig �
1253104
Y
N.E. 70th STREET
1252101
R
b
7
12&34W
/254203
7400-30
7460-30
#2542M
1254201
1"34-=
1254303
7064-30
1254 w4
125J40 7020-30 - _
7005-
C.SAH. NO. 37
R
evaa-3o Y
1254102
NORTH LEGEND p
_ M�. {,� PLAT NUMBER #059
Assoc r■ . P.1.0. #037310 c
6S1~ 6A1—V"-= rz scxt ADORESS-LAST 2 3083-30
4a7-alW FAX 1•.,4.00 OIOfTS OF ZIP COOE PREPARED S
1
W
7350-30
1253103
Z
Q
7330-30
123+x2
77T. -30
�
O
72°2-30
Z
7200-30
#2542M
1254201
1"34-=
1254303
7064-30
1254 w4
125J40 7020-30 - _
7005-
C.SAH. NO. 37
R
evaa-3o Y
1254102
NORTH LEGEND p
_ M�. {,� PLAT NUMBER #059
Assoc r■ . P.1.0. #037310 c
6S1~ 6A1—V"-= rz scxt ADORESS-LAST 2 3083-30
4a7-alW FAX 1•.,4.00 OIOfTS OF ZIP COOE PREPARED S
DLr" . l l'1 . 1 77 f J ,77f I'I
Hakanson
Anderson
Assoc., Inc.
September 10, 1997
Elaine Beatty, Cleric
City of Otsego
8899 Nashua Avenue NE
Otsego, MN 55330
Re: Otsego Utility System Fi0ancing
Dear Elaine:
A question regarding financin
sewer collection system and t
1997 Council Workshop. Thi
tax -payers could face if devel
connections per year. ThrouE
prepared a general overview c
NQ. JJ7 P. 1/2
3601 Thurston Avenue
Anoka, Minnesota 55303
612/427-5860
Fax 612/427-34ft- 0620
of the Waste Water Treatment Facility, the sanitary
e potable; water system was raised at the August 27,
question: was related to the financial burden the City
�pment opcurred at a rate less than the 80 equivalent
i conversations with Gary Groen at the City, we have
this issue:
• The City portion of taxa generally accounts for 26-27% of the total tax burden
levied against propertiep in Otsego.
• The City operating bu get, supported by general taxation, is approximately
$806,000.
• The first years payment on the projected bond sale is as follows:
•
Waste Water Treat ent Facility $224,000
► Sanitary Sewer Coll ction System 172,360
► Water System 231,875
P. TOTAL
A City tax could be levi�d to cover the deficit in income from connections if less
than 80 Equivalent co nections per year were seen. The amount of any tax
would depend on the s�iortfall in connections and an the assessed valuation;
Engineers I Landscape Architects Surveyors
SEP.10.1997 3:39PM No.337 P.2i2
Elaine Beatty, Clerk
Page 2
September 10, 1997
The maximum percentage Increase is proportional to the potential shortfall verses the
City General Tax Receipts. On a sliding scale, the impact could be as follows:
Approximate
Actual Connections
80
60
40
20
0
Increase in Taxes
0%
5%
10%
15%
20%
The percentage increases is an overall estimate only. Any tax may be influenced by
tax law related to tax capacity and to a statutory maximum increase permitted in any
year.
Sincerely,
HAKANSON ANDERSON ASSOCIATES, INC.
n A. Harwood, PE
cc: Kevin P. Kielb, PE
Bob Kirmis, NAC
Andy MacArthur, Radzwill
Gary Groen, Finance Director
kel
a%7Q9.eb
Hakanson
Anderson
Assoc., Inc.
TRANSMITTAL
NORTHWEST ASSOCIATED CC NSULTANTS
5775 WAYZATA BOULEVARD, SUITE 555
ST. LOUIS PARK, MINNESOTA 554 1 6
PHONE (6 1 2 )595-9636
DATE:
8 September 1997
NUMBER
OF PAGES
TO:
INCLUDING
Elaine Beatty
COVER:
FROM:
Bob Kirmis
QUANTITY:
MATERIAL/DESCRIPTION:
DATED:
1
Cover Memo to Council
1
Workshop Outline
1
Memo re: Building Permits
1
Memo re: Sewer Questions
1
Memo re: Sewer Policies
VIA:
REMARKS:
MAIL
Please
provide the attached to the City Council, Gary Groen and
Judy Hudson for the 10 September workshop.
FAX
1-1
Please call if you have questions.
PICK UP
DELIVERY
PROJECT:
Otsego - Sewer Planning
JOB NUMBER:
176.08-96.19
NORTHWEST ASSOCIATED CONSULTANTS
INC COMMUNITY PLANNING - DESIGN - MARKET RESEARCH
MEMORANDUM
TO: Otsego Mayor and City Council
FROM: Bob Kirmis / David Licht
DATE: 8 September 1997
RE: Otsego - Sanitary Sewer Planning
FILE NO: 176.08 - 96.19
Attached please find the following items pertaining to the forthcoming 10 September City
Council workshop regarding sanitary sewer service to the eastern portion of the
community.
1. Meeting Outline
2. Single Family Residential Building Permit Survey
3. Response to City Council Questions (Revised)
4. Sanitary Sewer Policies (Revised)
The balance of requested information (i.e., trunk and treatment plant process outline,
financial assurances, taxing district implications, etc.) is to be addressed by other city
consultants who have not completed their work but anticipate having it available at the 10
September meeting.
In review of the attached material, please make specific note of the following:
City Council Questions. The previous 8/14/97 memorandum has been revised to
acknowledge the intent of the City of Dayton to participate in the sanitary sewer service
effort. Specifically, responses to Questions 17, 27, 28, and 29 have been modified.
5775 WAYZATA BOULEVARD, SUITE 555 ST. LOUIS PARK, MINNESOTA 554 1 6
PHONE 6 1 2-595-9636 FAX 6 1 2-595-9837
Sanitary Sewer Policies. The sanitary sewer policies have been refined to eliminate
possible interpretation problems. Specific changes have been made to the following
policies:
Policy
Page Number Issue
2 1.D Hook up to existing commercial/industrial uses
3 III. B Commercial/industrial capacity reservation
Based on past informal discussions, we believe a further refinement of Policy 11.1 (on page
3) regarding the Darkenwald property may be appropriate.
This material will be discussed at the forthcoming 10 September workshop.
PC: Elaine Beatty / Judy Hudson
Gary Groen
Kevin Kielb / John Harwood
Andy MacArthur
Ted Field / Tom Roushar
SANITARY SEWER / WATER PROJECT
CITY COUNCIL WORKSHOP
10 SEPTEMBER 1997
Unresolved Issues / Assumptions
A. Treatment Plant Ownership (see 9/3/97 MacArthur letter)
B. Darkenwald Property Policy
II. New and/or Updated Information
A. Process Outlines
1. Trunk (J. Harwood)
2. Treatment Plant (Bonestroo)
B. Area Building Permit Activity (NAC)
C. Treatment Plant Floodplain/Shoreland Issues (Not applicable based on
current site selection)
D. Financial Assurances (i.e., mill rate, etc.) (Hakanson Anderson)
E. Urban/Rural Taxing District Implications (MacArthur)
F. Time Schedule
III. Public Informational Meeting
A. Moderator
B. Presentation Outline
1.
Background Issues and Need (D. Licht)
2.
Study/Work to Date (D. Licht)
3.
Decision -Making Process/Time Schedule (D. Licht)
4.
Sewer Treatment System Plan (J. Harwood)
5.
Trunk System (J. Harwood)
6.
Water System (K. Kielb)
7.
System Finance (J. Harwood/G. Groen)
8.
System Policies (D. Licht/J. Harwood)
9.
Public Comment
C. Facility
and Set Up
IV. Other Issues
MEMORANDUM
NORTHWEST ASSOCIATED CONSULTANTS
COMMUNITY PLANNING - DESIGN - MARKET RESEARCH
TO: Otsego Mayor and City Council
FROM: Bob Kirmis / David Licht
DATE: 8 September 1997
RE: Otsego - Sanitary Sewer Planning Area: Building
Permit Activity
FILE NO: 176.08 - 96.19
As requested at the 27 August City Council meeting, we have assembled a summary of
single family residential building activity of various surrounding communities. This
information is provided in the following table.
SINGLE FAMILY RESIDENTIAL BUILDING PERMIT SUMMARY
City
1992
1993
1994
1995
1996
5 -Year
Average
Albertville
25
51
72
38
47
47
Buffalo
45
51
97
114
89
79
Big Lake
44
43
62
92
138
76
Dayton
NA
NA
24
18
11
18*
Delano
19
24
41
51
58
39
Elk River
107
122
157
173
209
134
Monticello
50
73
108
105
115
90
Rogers
16
79
66
59
105
45
St. Michael
44
64
25
53
100**
57
Otsego
71
112
38
17
25
53
5775 WAYZATA BOULEVARD, SUITE 555 ST. LOUIS PARK, MINNESOTA 554 1 6
PHONE 6 1 2-595-9636 FAX 6 1 2-595-9637
" Three year average
Includes former Frankfort Township permits from September through December
On average, the City of Elk River has issued the greatest number of single family
residential building permits in the 1992-1996 period, averaging 134 per year. The City of
Dayton, on the other hand, has issued the fewest number of building permits in the 1994-
1996 period, averaging 18 permits per year (1992 and 1993 information unavailable).
Hopefully, this comparative information will be of some aid in the City's consideration of
possible sanitary sewer service.
PC: Elaine Beatty/Judy Hudson
Gary Groen
Andrew MacArthur
John Harwood/Kevin Kielb
Tom Roushar/Ted Field
i•
NORTHWEST ASSOCIATED CONSULTANTS
INC COMMUNITY PLANNING - DESIGN - MARKET RESEARCH
MEMORANDUM - Revised
TO: Otsego Mayor and City Council
FROM: Bob Kirmis / David Licht / Kevin Kielb / John Harwood /
Andy MacArthur
DATE: 8 September 1997
RE: Otsego - Sanitary Sewer Planning: Policies
FILE NO: 176.08 - 96.19
As a result of discussions which took place at the 27 August City Council workshop
meeting, we have revised the various "position statement" policies pertaining to sanitary
sewer service.
It is anticipated that these policies will be made available to the public as part of the
forthcoming public information meeting scheduled for 15 September.
While the following list of policies is certainly changeable, the implementation of such
policies is strongly recommended to aid in the success of the sewer service effort.
For reference purposes, the following policies have been categorized by topical heading.
I. EXISTING DEVELOPMENT/ENVIRONMENTAL POLICIES
A. The sanitary sewer system shall not be extended to existing unsewered
development except if such sewer is requested or petitioned by property
owners. Public sewer may be extended as directed and ordered by the City
Council after specific public hearings on any extension.
B. Existing residences shall not pay any connection charges and that no
assessments against property will be levied for sewer benefit until and
unless their residences are physically connected to and actually served by
a public sewer.
5775 WAYZATA BOULEVARD, SUITE 555 ST. LOUIS PARK, MINNESOTA 55416
PHONE 6 1 2-595-9636 FAX 6 1 2-595-9837
C. To maintain the public health, existing septic systems shall be pumped a
minimum of every two years.
D. When directly available, sanitary sewer service hook up shall be required of
all developed commercial, industrial and institutional uses within the
immediate urban service area (sanitary sewer district).
E. On-site septic systems shall be required to comply with MPCA 7080 Rules
which establish minimum requirements for wastewater disposal (and
imposed by Wright County) at time of property sale.
F. In the event of failing on-site septic systems, the City shall consider
mandatory connection to available municipal services.
G. The City shall continue to monitor its ground water quality and construct
additional monitoring wells as deemed necessary for such monitoring effort.
II. FUTURE DEVELOPMENT POLICIES
A. Due to possible ground water contamination threats, future unsewered
residential development, where allowed, shall be limited to one dwelling unit
per ten acres of land or four dwelling units per forty acres of land.
B. Sanitary sewer service shall be required of all new development approved
after within the immediate urban service area (sanitary
sewer district).
C. Undeveloped land within the long range urban service area, which is guided
for single family residential development, shall be platted in accordance with
standards for sewered development and be partially deed restricted (in
accord with unsewered density requirements) until such time as sanitary
sewer service is available.
D. Boundaries of the immediate urban service area (sanitary sewer district)
shall be expanded in accordance with the Comprehensive Plan.
E. Urban growth (of lots 2.5 acres or less in size) shall be confined to the
immediate urban service area (sanitary sewer district).
F. The City shall periodically define the amount, type, and rate of growth which
must be absorbed to accommodate sanitary sewer demands.
2
G. Economic service delivery shall be pursued through the promotion of
concentrated development patterns within the sanitary sewer service district.
H. The clustering of unsewered dwelling units shall be encouraged. Such
clusters shall be connected to central sanitary sewer service when made
available.
Within existing MPCA permit limits, excess sewer capacity of the Riverbend
Mobile Home Park may be provided to lands in east of Highway 101 which
are under the ownership of the Darkenwald family. Excess capacity may be
extended to lands west of Highway 101 and owned by the Darkenwald family
upon demonstration of service capacity (to the satisfaction of the City) .
J. Land use consumption and sanitary sewer system use shall be subject to
periodic City review to determine the need for urban service area changes
or expansions.
K. Premature extensions of the City's sanitary sewer system and "leap frog"
development shall be avoided, unless the costs of extending utilities through
undeveloped property are funded by the developer.
III. ECONOMIC DEVELOPMENT POLICIES
A. An advantageous tax base shall be pursued through the promotion of
sewered commercial and industrial development.
B. A minimum of 30 percent of any waste water treatment plant capacity shall
be reserved for commercial or industrial development with a maximum of 60
gallons per day capacity reserved for the forthcoming 20 year planning
period (based on initial plant capacity).
C. The enhancement of tax base associated with commercial and industrial
development shall be a community priority to reduce the tax burden on
single family homes.
D. An expansion of the City's employment base shall be encouraged.
IV. FINANCING POLICIES
A. Sanitary sewer service shall be financed by those who receive such service.
3
B. Risk of payment for non-users of sanitary sewer shall be reduced through
utility phasing, the identification of potential user revenue sources, and the
establishment of realistic growth expectations.
C. Developers shall be responsible for costs associated with the extension of
municipal utilities to new developments.
D. Assessments associated with sanitary sewer service shall be imposed in
accordance with the assessment rules of the City which establish financing
methods for various City improvements, including, but not limited to trunk
mains and laterals for sanitary sewer and water.
PC: Elaine Beatty
Judy Hudson
Andy MacArthur
Kevin Kielb
John Harwood
51
N WA em** NORTHWEST ASSOCIATED CONSULTANTS
INC COMMUNITY PLANNING - DESIGN - MARKET RESEARCH
MEMORANDUM - Revised
TO: Otsego Mayor and City Council
FROM: Bob Kirmis / David Licht / Kevin Kielb /
John Harwood / Andy MacArthur
DATE: 8 September 1997
RE: Otsego - Sanitary Sewer Planning -
Informational Meeting Questions
FILE NO: 176.08 - 97.10
At the City Council's request, we have collaboratively attempted to respond to the various
questions recently submitted by Council person Wendel which relate to the City's sanitary
sewer planning efforts.
In addition to the various questions raised by Ms. Wendel, a number of additional
questions have also been included which have been raised at previous meetings.
The following is a listing of specific questions raised by Council person Wendel followed
by a staff response.
1. How much will the sewer plant cost and how long do we have to pay for it?
The sewer plant will cost 2.1 million dollars for initial construction. A 1.9 million
dollar plant expansion will occur in about ten years. Each expense will be paid over
20 years. Connection fees collected from new developments and existing
commercial/industrial properties are anticipated to generate enough money to pay
off the loans.
5775 WAYZATA BOULEVARD, SUITE 555 ST. LOUIS PARK, MINNESOTA 554 1 6
PHONE 6 1 2-595-9636 FAX 6 1 2-595-9837
2. How much will the trunk lines from the sewer plant cost and who pays for
them?
We have estimated that the initial trunk costs for the base system will be 1.395
million dollars. These costs are paid for in the same manner as treatment plant
costs.
3. How much do the lateral lines from the trunk lines cost and who pays for
them?
The cost depends on which properties will be served first. Part of the cost will be
trunk, paid by connection charge, and part will be paid by the developer or by an
assessment. Lateral lines will be paid for by future developers and existing
commercial/industrial/institutional properties. Costs will vary depending upon the
project.
The sewer study identified one potential initial system as costing $1,191,000 of
which $739,000 was trunk and $452,000 was lateral.
4. If the sewer line goes past my home and I don't want or need it, do I have to
pay something for the lines anyway? If not, who pays for them?
This is a policy decision that the City Council will have to make. The City has the
authority to decide to defer some assessments or charges until the property is
developed, or until the existing system is inadequate. The City Council has
previously indicated that existing residences will not be forced to connect to the
system. The proposed policy is that residential housing would pay for system costs
at the time of hookup. A funding program is being established with project costs
paid from a debt retirement fund. For new residential housing (i.e., new small lot
subdivision plats), the connection charge would become due at the time of plat
approval. This is similar to park fees, storm water impact fees, or like platting
related fees. For existing housing, the connection charge would be paid at the time
of connection.
5. Who pays if the developers that you are counting on change their minds and
don't build?
The planning of the City is based on assumptions and expectations of development.
The income from development is projected to meet debt retirement needs.
X
The City will borrow money from a State of Minnesota fund or will sell municipal
bonds. With this debt, there will be the risk that the debt may have to be paid back
through general funds. For this reason, the exhaustive analysis which we are
presently engaged in is undertaken in order to provide a conservative and realistic
projection of growth and development as the basis for a City Council decision.
Nothing is without risk, it is simply a matter of making a good faith effort to reduce
that risk as much as possible.
6. If I don't have the money to pay for the lines in front of my home, will it go on
my taxes?
If an amount is assessed against your property, you have a period of time, often a
period of months but not less than 30 days, in which to pay off the entire
assessment without interest. If you do not make full payment, the unpaid amount
is placed as an additional item on your property tax bill and is amortized out over
a period of years (usually 10, but it may be any other time period determined as
reasonably by the City Council), at an annual interest rate which is also determined
by the City Council. The charge could also theoretically be made part of the
connection charges that you must pay at the time you hook up to the system.
7. How many years do we have to pay this system off?
The entire system will be constructed over many years. Each time an improvement
is made, bonds will be sold. Each bond sale will be paid off over a 20 year period.
8. Who are we borrowing the money from and what kind of interest do we have
to pay?
A portion of the debt is proposed to be low interest loans from the State revolving
fund at approximately 4 percent interest. Some bonds may be general revenue or
public improvement bonds. These would likely have a higher interest rate. The
City fiscal and bond consultants will assist in developing the best bonding program.
It is very possible that different portions of the proposed project, especially if it
includes the proposed water system, may be paid from different sources including
grants, loans, bonds or any combination thereof. The City has authority to issue
bonds under Minnesota Statutes 429, if 20 percent or more of the project cost is
assessed to benefitted properties. The City also has authority to bond for sewer
and water works under Minnesota Statutes 444 without assessment for benefit.
Minnesota Statutes 475.58 is the general law for municipal debt. The statute
3
requires a vote or referendum of the population to incur municipal debt. The statute
also provides exceptions where referendum is not required.
It is the responsibility of the Financial and Bond Consultants to determine the best
combination of funding for the project and how the funding should be structured.
9. Who will be in charge of the sewer plant, Dayton or Otsego, or both together?
The sewer plant could be owned and operated solely by the City of Otsego. The
City could then enter into an agreement, if it so desired, with the City of Dayton (or
St. Michael) for delivery of sewer service. The cities could also enter into a joint
powers agreement under Minnesota Statutes 471. A joint agreement would set
forth the terms of ownership, control, delivery of services, and any other relevant
matter. It is also possible that the Cities of Otsego and Dayton could also establish
a sanitary sewer district.
10. What if the majority of the people don't want the sewer, will we go ahead
anyway?
The authority of the City of Otsego, as established by State Statute, requires the
City Council to make any decision ordering construction of a waste water treatment
plant or associated sewer utility. State Statutes do not allow this decision to be
made by a vote of the population. The decision whether or not to go ahead with the
project is a Council decision that can be made either way, notwithstanding what the
majority of people want, based upon the Council's informed decision as to what is
in the best interests of the City as a whole.
11. Will my taxes go up once I get hooked up with sewer because my property will
be worth more?
A house with public sewer and water is likely more valuable than the equivalent
house without to the extent that the value of the property increases because of the
improvement to the extent that the increased valuation will increase taxes.
12. Who will pay for fixing the landscape that gets ruined when installing the
lines?
Restoration is a part of the project cost. All project costs, including restoration, are
ultimately paid by the properties served.
12
13. Will the lines go down the middle of the road or on the side?
Sewer and water lines will be located in right-of-way or easement to minimize total
construction cost. The evaluation for least total cost will include review of road
damage and the cost of restoration. The exact utility location is a final design
decision. Depending on local conditions, it is at times best and least costly to install
the lines under the road. At other times and locations, the best alignment may be
in the road ditch or on an easement.
14. Will we be getting sewer and water at the same time?
It is the current plan to make sewer and water available at the same time.
15. When do we have to hook up?
A City policy is recommended whereby once public sewer is available, the
residence will be connected. Commercial property should connect immediately.
Connection to existing residences could be required either within an established
number of years or could occur when any on-site septic tank or system problem
develop. Once the City has a sewer and water system, everyone should plan on
connecting someday. That someday may be quite far in the future.
16. If our well is bad but not the sewer, can we hook up just to the water?
The City can adopt a policy of allowing only water hookup, or a policy of requiring
both sewer and water hookup.
17. What happens if Dayton doesn't want to go along? Do they have to pay their
share of the expense for the planning and engineering fees?
There is an allocation of fees set forth in the original agreement between Otsego,
Dayton, and Frankfort Township with the Bonestroo report. Each community paid
its share of the treatment study. At this point, it appears that the plant will be a joint
operation between the City of Otsego and the City of Dayton. The two cities will
have to proceed to either form a separate entity, like a sewer district to own and run
the plant, or to proceed under a joint powers agreement. At what point the joint
powers entity will come into existence has not yet been decided at this time. It is
possible to have one city own and run the plant and to guarantee to the other city
a certain amount of capacity by contract, or the land can be acquired, and the plant
5
can be constructed and operated entirely by a joint powers entity. This agreement
will set forth an equitable cost sharing arrangement between the two cities.
18. If sewer goes across my field and there are no homes there yet, will I be
assessed for the entire line?
Current planning is for costs to be incurred only upon connection. The City will
request easements across open fields but is not planning to place costs against
undeveloped property unless that property is served.
Any assessment will be based upon the assessment ordinance and policy which is
now being reviewed to consider current sewer planning, and whether your land is
enrolled in the "green acre" or agricultural preserve program. The adopted
assessment policy will be a City Council decision. Deferments can be granted if
that appears to be equitable and they are granted in an even handed manner.
Lands enrolled in the green acres program are allowed to defer assessments, while
assessments upon lands enrolled in the agricultural preservation program cannot
be levied due to "benefit" from sewer and water availability.
19. Who will pay if we don't have enough new development coming in each year?
If bond payments cannot be made by anticipated fees, it is likely that any deficit
would have to come out of the general fund as a general obligation of the City.
20. Will this plant ever go City-wide?
It is not likely that sanitary sewer will ever be constructed or extended to serve the
entire City. However, it may not be prudent to say that the plant will "never" provide
service to the entire City.
21. Will there be two separate sewer plants, one in the eastern end and one in the
western end?
To date, there has been no formal policy direction in regard to accommodating
development in the western portion of the community (as evidenced in the existing
Comprehensive Plan). It is the strong recommendation of staff that development
not be allowed in areas outside the immediate urban service area until such time
as the financial solvency of the eastern sanitary sewer system can be
A
demonstrated. Subsequently, sewer service in the western portion of the City can
be evaluated.
22. Will the Comprehensive Plan be changed to the western part can develop
once they have sewer?
There have been no formal direction has been given by the City Council as to
whether the City's existing development policies in the western portion of the
community should be changed. It is staffs recommendation that sanitary sewer
service and related development densities not be allowed outside of the immediate
urban service area until the financial solvency of the "east side" sanitary sewer
service can be demonstrated. Until such time, staff recommends that a continuation
of agricultural uses be encouraged in areas outside of the immediate urban service
area. Ultimately, decisions regarding the allowance of development in the western
portion of the City must be made by the City Council and should be addressed as
part of the Comprehensive Plan Update.
23. If I live in the eastern part of the City but not in the sewer area yet and my
system goes bad, can I put in a new septic system or will I be forced to hook
up?
Repair and reconstruction of existing septic tanks and drain fields will be controlled
by policies that have yet to be fully adopted. The sewer system has been laid out
and evaluated as if some day every residence in the sewer study area, which is the
east portion of the City, will be hooked up to public sewer. Until the sewer is
physically in place in front of a residence, some level of repair to failed systems
must be permitted. Once a public sewer system is in place, septic tank and drain
field repair or replacement should be prohibited. When on-site systems fail,
connection to the public system should be required. If a property has a public
sewer available, the property should not spend thousands of dollars maintaining or
repairing a septic tank or drain field system.
24. If I have to hook up because of a bad system, and the line has to run past my
neighbors, do they have to hook up or pay for the line even if they don't need
it yet?
Any future extension of sewer or water into a neighborhood will require specific
public hearings with the official steps and actions required by Statute. The property
owners and a future City Council will make decisions based on public need and on
conditions existing at that future time. The bottom line is that some day every
f1
property will be served and will pay its share of system costs. It could be that
construciton of a sewer system will occur when most properties have gotten full use
out of their original private, on-site system and are facing increasing costs to
maintain or repair the aging system. At the time, the availability of public sewer
may be of extreme value to the property.
25. Will water be installed at the same time?
It is the current intention to install public water along with public sewer. The goal
is to address the health and safety aspects of public utilities by making both sewer
and water available. For new small lot developments, both sewer and water will be
extended with platting. For the existing developed area within the City, both sewer
and water are seen as being made available to meet a current or future need.
26. What will you charge monthly for water and sewer, a flat fee or will it be
metered for the monthly cost?
There will be monthly or quarterly user fees for sewer and water treatment. A rate
structure has not yet been established. Normally, water is metered and sewage is
not. Many communities establish a minimum charge per quarter and charge more
than the minimum only for higher usage.
The following is a listing of charges for sewer and water service in neighboring
communities:
City
Sewer Charge
Water Charge
Rogers
$1.15 per 1,000 gallons
95¢ per 1,000 gallons
Elk River
$2.82 per 1,000 gallons (based
$44 per month plus $11.11 per
Residential
on avg. water consumption for
1,000 gallons
Nov. -Mar.)
Elk River Commercial
Same as residential
$7 to $85 per month depending
on pipe diameter
Albertville
$39.20 per quarter (up to 15,000
$17.60 per month (up to 10,000
gallons)
gallons)*
" Joints Powers charge
n.
27. Will only Old Town Dayton be in the sewer system?
At this time, Dayton appears to consider Old Town Dayton as their primary service
area. However, future expansion of the plant may be partially driven by Dayton's
desire at some point to serve areas beyond the Old Town. The mechanism for
making decisions regarding service areas and future expansion of the plant will be
contained within an agreement between the two cities.
28. What if they want to expand their part of the sewer system, will they be able
to do so?
The proposed plant can be expanded to accommodate both Otsego and Dayton.
The mechanism for expansion and cost sharing related to expansion will be set
forth in the joint powers or other agreement between the two cities.
29. Who will own the sewer plant?
At this point, it would appear that there will be joint ownership of the plant by both
Otsego and Dayton. It is still possible for the cities to determine that Otsego would
own the plant and that Dayton would receive capacity by contract. The terms and
conditions of plant ownership, whether joint or otherwise, will be contained in an
agreement between the City of Otsego and the City of Dayton. The issue of what
entity owns the plant will have to be decided prior to submittal of the facility plan to
MPCA.
30. How many years can you build new homes in the present sewer area before
you run out of land and you have to expand to other areas of the City?
The Phase I sanitary sewer service area is basically along the TH 101 corridor.
There is "room" within the corridor, on currently undeveloped land, for an estimated
2,600 residential connections along with over 300 acres of commercial/industrial
development. The 20 year projected growth of the City will fill in only about one-
third of this development potential.
31. When will the City Hall have to hook up?
The City Hall is not located within the sanitary sewer service area as identified in
the sewer plan. It is unknown when City Hall would have to "hook up". Service to
the City Hall would likely coincide with one of two events: 1) request for or need to
A
service nearby development (i.e., Bulow Estates); or 2) future inclusion of the City
Hall property within the sanitary sewer service district. Such district inclusion would
likely occur only after the eastern portion of the community has been fully
developed. In this regard, it is anticipated that City Hall hook up would be more
than 20 years away.
The following is a listing of additional questions considered highly pertinent to this matter:
A. Will the City Council confine development to the sanitary sewer service area?
While the City Council has historically not been consistent with the intent of the
Comprehensive Plan (by allowing development outside of the "immediate urban
service area"), it is believed by staff that development confinement is necessary so
as not to dilute the community's housing market and the ability to finance sanitary
sewer.
B. What happens if sanitary sewer service is not provided?
Should the City choose not to pursue sanitary sewer service to the community, it
would be staff's recommendation to establish maximum development densities of
four dwelling units per forty acres of land throughout the community.
Regardless of whether such service is pursued, it is further staff's recommendation
that mandatory septic tank pumping be required (i.e., every two years).
If sanitary sewer (and water) is not pursued, the City can only expect to attract dry
industries which typically do not contribute significantly to a community's tax base.
Additionally, the rate of commercial/industrial development would likely be less than
if sanitary sewer were provided.
C. What impact will sanitary sewer service have upon property values?
Based on input from area developers, raw law with sanitary sewer and water
availability brings between $10,000 and $15,000 per acre. Conversely, land without
such service brings approximately $3,000 to $6,000 per acre in today's
marketplace.
10
Hopefully, the aforementioned will aid the City Council in their consideration of this matter.
It is anticipated this material will be discussed at the forthcoming 19 August City Council
workshop.
pc: Elaine Beatty
Judy Hudson
11