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06-08-09 PHFA Michael C. Couri- Andrew J. MacArthur Robert T. Ruppe— •Also licensed in Illinois "Also licensed in California June 8, 2009 City Council Members City of Otsego c/o Tami Loff, City Clerk 8899 Nashua Avenue NE Otsego, MN 55330 RE: Mississippi Riverwood Dear Council Members: COURT, MACARTHUR & RUPPE, P.L.L.P. Attorneys at Law 705 Central Avenue East PO Box 369 St. Michael, AN 55376-0369 (763) 497-1930 (763) 497-2599 (FAA) www.courimacarthur.com Kyle R. Hartnett Sarah E. Schwarzhoff City staff met with representatives of Mississippi Riverwood last Thursday regarding the sewer and water assessment and proposed Agreement for payment of both that assessment and the City SAC charge. The original agreement which I drafted and sent to Mississippi Riverwood called for an initial payment of $200,000.00 and two years monitoring of actual usage with a cap at $247,000.00. The $247,000.00 was based upon the City Engineer's high end estimate of use. The Agreement was initially rejected by Mississippi Riverwood based upon their belief that the actual usage should be calculated differently, as well as their belief that the assessment should be $65,000.00 rather than $87,000.00. The compromise reached was to maintain the assessment at $87,000.00 but to use their proposed SAC amount of $135,000.00 as the cap for a SAC charge. Therefore, the Agreement requires them to pay the City $200,000.00 in cash by June 1 of next year and to pay an additional amount up to $223,000.00 or receive a refund after two years of monitoring actual use. The odds are strong that Mississippi Riverwood will have to pay an additional amount at the end of the two years. I presented the Agreement to Mississippi Riverwood's attorney Ron Black and he has requested some minor changes to the text as set forth in his fax received this morning. I will be available to further discuss this matter at the meeting this evening. Letter to Otsego City Council June 8, 2009 Page 2 Very truly yours, Andrew J. MacArthur COURI, MACARTHUR & RUPPE, PLLP cc: Ron Wagner, City Engineer Ron Black, Attorney Dan Licht, City Planner riot tiol LCJCJ'7 11:42 rbJ-497-2599 COURIMACARTHURRUPPE FACSIMILE PAGE 02103 NX j6j.94L09D! ORIQINAL: Sent via U.S. Mail WAmb Sent via Ovemight Matt .. Not Mailed -uaaKed N"M Under Raffle u4 DATE; 67 Sr�? TO: Anameys at taw Ramdd G. e1wk FACSIMILE: 4 9 7 — Ebabeth K Moom lameak Bum Wbar FROM: Rhonda j Wpu mn Ethrm 0. Hidro NUMBER of PAGES, INCLUDM COYER SHEET: �`z-- QuimoPhW ).Johnson IF TRANSMISSION PROBLEMS OCCUR, OR YOU ARE NOT THE INTENDED RECIPIENT, PLEASE CALL (768) "1.7M. MESSAGE First National Finandd Center - t1 -a tl /�7C� Ei Gl rr 4 i e' t? ti'12 Mahn Street - - C1 -f Suite aoa 10k itiw, MN 55330 Phots 76344L704o NX j6j.94L09D! ORIQINAL: Sent via U.S. Mail WAmb Sent via Ovemight Matt .. Not Mailed -uaaKed N"M Under Raffle u4 0bl0SI2009 11:42 763-497-2599 COURIMACARTHURRUPPE PAGE 03103 6. MISSISSIPPI RIVERWOOD agrees to hookup to the municipal sanitary sewer system by Depember 31.2009. MISSISSIPPI RIVERWOOD must apply for a permit to hookup to the system and comply with all exis ft standards, re&Watlons and rules regarding the System and discharge into the system. Prior to hookup MISSISSIPPI RIVERWOOD Shall demonstrate to the satisftetion ofthe - ley err. t . . abow constructed in accordance with all s¢�-�► vN� -d applicable rubes, standards and reguLWons related to such construction including the CITY Engineeft Manual and CEAM and . UkS= S MISSISSIPPI RNERWOOD gre a to inspection ofthe system by the City Engineer during construction. As long as MISSISSIPPI RFVERWOOD meets these requirements the CITY shalll issue a p=ak for hookup to the municipal system. 7. MISSISSIPPPI RIVERWOOD agrees to regularly service, maintain and repair its internal system to remain in compliance with all applicable rules and regulations regarding the system. 8. MISSISSIPPI RIVER WOOD shall withdraw its objection to the proposed public improvement assessment 9. The CITY shall Ununate ongoing asseeement procedures and sball not proceed with the assessment so long as they receive the payment as set forth in this Agreement, said payment to be made by June 1, 2010. 10. tt is the nyi :nn ,.fA, ()UW C MMa&6*Ttk project and the cost of the project does not in�e the market v&lue of 1v11SSISSIPPI RNERWOOD's Property 11. The project and the cast of the project arc intended to preserve a aafe environment for the users of MISSISSIPPI RFVERWOOD's property. Dated- MMSSEPPI RIVERWOOD ASSOCIATION, INC. BY; Its MV OF OTSE00 DRAFT- June 5, 2009 CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA AGREEMENT BETWEEN THE CITY OF OTSEGO AND MISSISSIPPI RIVER WOOD ASSOCIATES, INC. REGARDING ASSESSMENT FOR PUBLIC IMPROVEMENTS AND HOOKUP FEES FOR DELIVERY OF PUBLIC SERVICES WHEREAS, MNDOT has recently reconstructed portions of Quantrelle Avenue and the CITY OF OTSEGO has added sanitary sewer, storm water and water service improvements; and WHEREAS, MISSISSIPI RIVERWOOD ASSOCIATES, INC. (MISSISSIPPI RIVERWOOD) is located along the Mississippi River at the end of that portion of Quantrelle Avenue recently improved; and WHEREAS, MISSISSIPPI RIVERWOOD operates under a conditional use permit from the CITY OF OTSEGO and which was originally approved by Wright County prior to OTSEGO assuming jurisdiction; and WHEREAS, MISSISSIPPI RIVERWOOD currently treats wastewater through a large Individual Treatment System that lies below the one hundred year flood elevation and has been used without significant improvement for the last twenty (20) years; and WHEREAS, the CITY OF OTSEGO has notified MISSISSIPPI RIVERWOOD that it would be assessed for the improvements constructed within Quantrelle Avenue; and WHEREAS, the CITY OF OTSEGO had proposed an Agreement with MISSISSIPPI RIVER WOOD regarding Sewer Availability Charges (SAC) in which the CITY agreed to substantially reduce the charges to MISSISSIPPI RIVERWOOD and allowed for assessment of both public improvements and SAC charges over time; and WHEREAS, the CITY scheduled opened and continued a public hearing regarding the assessment for public improvements; and WHEREAS, MISSISSIPPI RIVERWOOD has filed a written objection to the assessment for public improvements; and WHEREAS, the OTSEGO City Council has directed CITY staff to try and arrive at an Agreement with MISSISSIPPI RIVERWOOD based upon actual usage of the CITY system as determined by monitoring over a period of two years. NOW, THEREFORE, the Parties agree as follows: 1. The CITY will accept $200,000.00 cash as payment for both assessment of public improvements and SAC charge for hookup to City sanitary sewer services, subject to a two (2) year period of monitoring to determine actual use of the system. 2. The CITY will not require MISSISSIPPI RIVERWOOD to hookup to available City water services nor make payment of CITY Water Availability Charges (WAC) until such time as the Minnesota Department of Health determines that the existing water wells servicing MISSISSIPPI RIVERWOOD are non- compliant. MISSISSIPPI RIVERWOOD will pay the CITY Water Availability Charge (WAC) rate in effect at the time that they connect to CITY water. 3. The CITY has determined a SAC charge for the facilities of $135,000.00, or a lesser amount as determined by monitoring. 4. At the end of the two year period, the SAC charge will be adjusted based upon actual usage. In the event that actual usage, as calculated below, is less than the initial payment for SAC ($113,000.00) CITY will refund to MISSISSIPPI RIVERWOOD any amount below that number, not to exceed $23,000.00 total. In the event that actual usage requires additional payment above the initial SAC payment of $113,000.00, MISSISSIPPI RIVERWOOD shall pay to the CITY any additional amount, but not to exceed a total payment to CITY for both the assessment and SAC charge of $223,000.00. MISSISSIPPI RIVERWOOD may request that the CITY specially assess any additional SAC charge over a period of years not to exceed seven (7) years at an interest rate no more than I% above the then current rate for municipal bonding. 5. The system will be monitored and usage determined as follows: Sewage usage per year will be determined by a meter to be installed with measurement in gallons per season with a season being 210 days. Number of gallons per day divided by 175 gallons per day per REC= Total number of RECS Total number of RECs times $6,575.00 per REC divided by 2= Total SAC Charge The parties acknowledge that the calculation for SAC above is a specific deviation from normal City guidelines for calculation of SAC charges and a discount provided to MISSISSIPPI RIVERWOOD by the Otsego City Council due to the circumstances of this particular project and the unique characteristics of the MISSISSIPPI RIVERWOOD facility. 2 6. MISSISSIPPI RIVERWOOD agrees to hookup to the municipal sanitary sewer system by December 31, 2009. MISSISSIPPI RIVERWOOD must apply for a permit to hookup to the system and comply with all existing standards, regulations and rules regarding the system and discharge into the system. Prior to hookup MISSISSIPPI RIVERWOOD shall demonstrate to the satisfaction of the City Engineer that its internal system has been constructed in accordance with all applicable rules, standards and regulations related to such construction including the CITY Engineering Manual and CEAM and 10 State Standards. MISSISSIPPI RIVERWOOD agrees to inspection of the system by the City Engineer during construction. As long as MISSISSIPPI RIVERWOOD meets these requirements the CITY shall issue a permit for hookup to the municipal system. 7. MISSISSIPPPI RIVERWOOD agrees to regularly service, maintain and repair its internal system to remain in compliance with all applicable rules and regulations regarding the system. 8. MISSISSIPPI RIVER WOOD shall withdraw its objection to the proposed public improvement assessment. 9. The CITY shall terminate ongoing assessment procedures and shall not proceed with the assessment so long as they receive the payment as set forth in this Agreement, said payment to be made by June 1, 2010. 10. It is the opinion of the Otsego City Council that the project and the cost of the project does not increase the market value of MISSISSIPPI RIVERWOOD's property. 11. The project and the cost of the project are intended to preserve a safe environment for the users of MISSISSIPPI RIVERWOOD's property. Dated: MISSISSIPPI RIVERWOOD ASSOCIATION, INC. By: Its Dated: CITY OF OTSEGO 3 Jessica Stockamp, Mayor Tami Loff, City Clerk