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
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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