ITEM 3.8 Agreement between Otsego and WFC IIP
OtsTe F o
MINNESOTA g
DEPARTMENT INFORMATION
Request for
City Council Action
ORGINATING DEPARTMENT:
REQUESTER:
MEETING DATE:
Legal
Andy MacArthur, City Attorney
December 14, 2015
PRESENTER(s):
REVIEWED BY:
ITEM #:
Consent Agenda
Lori Johnson, City Administrator
3.8
AGENDA ITEM DETAILS
RECOMMENDATION:
Staff recommends that the attached agreement be approved between the City and WFC III, LLC that
sewer and water connection fees be assessed against the property.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
I
No.
No.
BACKGROUND/JUSTIFICATION:
WFC III, LLC recently constructed an office building on Lot 2, Block 1 OTSEGO WATERFRONT EAST FIFTH
ADDITION. Due to its Agreement with its Lender, WFC III, LLC is requesting that the charge for City sewer
and water connection fees be assessed against the property over a period of years at an interest rate
established by the City. The City has previously approved such requests for commercial buildings.
The utility connection fees for the office building were determined based on the number of residential
equivalent connections (RECs) calculated using the Metropolitan Council Environmental Services SAC
schedule as 11.6 RECs. Based on the 2015 fee schedule the total utility connection charges due for the
office building equal $97,173.20. City staff has drafted an agreement to be executed by WFC III, LLC to
assess the utility connection charges for a period of seven years at 3.25 percent interest per annum.
The first payment would be made with the property taxes payable in 2017, although interest will be
calculated based upon the date the building permit was issued on May 6, 2015.
SUPPORTING DOCUMENTS: x ATTACHED ❑ NONE
A. Agreement
MOTION: (Please word motion as you would like it to appear in the minutes.)
Motion to approve the proposed agreement between the City of Otsego and WFC III relative to
assessments for water and sewer connection fees.
BUDGET INFORMATION
FUNDING: BUDGETED: ❑ YES
NA o NO
ACTION TAKEN
❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes)
COMMENTS:
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
AGREEMENT BETWEEN THE CITY OF OTSEGO AND WFC III, LLC
REGARDING UTILITY FEES FOR FACILITIES AT 9000 QUANTRELLE
AVENUE NE, OTSEGO
AGREEMENT entered into this day of December, 2015 between the City of
Otsego (CITY), a Minnesota municipal corporation and WFC III LLC, a
Minnesota Limited Liability Company, (OWNER).
WHEREAS, OWNER applied for a building permit on May 6, 2015 and has
constructed an office building at 9000 Quantrelle Avenue NE within CITY; and
WHEREAS, OWNER has substantially completed construction of the building;
and
WHEREAS, CITY currently has in place Utility Fees which include Water
Availability Charges, Water Connection Fees, Sewer Availability Charges and
Sewer Connection Fees which are charged to users based upon Residential
Equivalent Connections (RECS) as determined by CITY as provided for by
Chapter 6, Section 1 of the Otsego City Code; and
WHEREAS, OWNER has paid for the water and sewer availability fees upon
execution of the Developer's Agreement between CITY and OWNER; and
WHEREAS, CITY has calculated total connection fees at current rates for the
building as 11.6 RECs, including a water connection fee of 11.6 RECs x $1,581.00
per unit = $18,339.60 and a sewer connection fee of 11.6 RECs x $6,796.00 per
unit = $78,833.60 for total connection fees of $97,173.20.
NOW, THEREFORE IT IS AGREED BETWEEN THE PARTIES as follows;
1. CITY agrees that at the time a building permit was issued the utility
connection fees for the office building will be 11.6 RECS, in the total
amount of $97,173.20 for applicable Connection Fees.
2. OWNER hereby petitions the CITY to assess the above listed Connection
Fees in the principal amount of $102,466.47 against the property at 9000
Quantrelle Avenue NE (Lot 2, Block 1, OTSEGO WATERFRONT EAST
FIFTH ADDITION) for a period of seven (7) years at an interest rate of
3.25% per annum commencing with taxes payable in 2017, as per the
attached amortization schedule. The amount above includes interest from
the date of issuance of the building permit, May 6, 2015.
3. OWNER on behalf of itself, its heirs, assignees or successors in title does
hereby waive any and all hearings, irregularities in procedure and any right
of appeal of any nature, including the right to appeal the assessment under
Minnesota Statute 429.081, common law or the Minnesota Constitution.
OWNER agrees that the property is benefited in at least the amount of the
assessment.
4. OWNER does hereby waive any and all claims or causes of action against
the CITY, of whatever nature, related to this Agreement unless caused by
the willful, wanton or intentional misconduct of the CITY or anyone acting
on behalf of the CITY.
5. To the fullest extent permitted by law, OWNER agrees to defend,
indemnify and hold harmless CITY, and its employees, officials, and agents
from and against all claims, actions, damages, losses and expenses,
including attorney fees, arising out of OWNER'S performance or failure to
perform its obligations under this Agreement. OWNER agrees this
indemnity obligation shall survive the completion or termination of this
Agreement.
2
6. This Agreement may not be amended except by written Agreement of all
parties.
7. In the event that any portion, sentence, paragraph or clause of this
Agreement is held to be invalid by a court of competent jurisdiction the
remainder of the Agreement shall be modified and interpreted to be as close
as possible to the original intent of the Parties.
Dated:
CITY OF OTSEGO
Jessica Stockamp, Mayor
Tami Loff, City Clerk
Dated:
WFC III LLC
By:
Its
3
City of Otsego
Special Assessments
Amortization Schedule
9000 Quantrelle Ave NE
Year
Interest
Assessed Accrual
2015
97,173.20 2,067.93
2016
- 3,225.34
2017
- -
2018
- -
2019
- -
2020
- -
2021
- -
2022
- -
2023
- -
Principal
Payment
Interest
Total
Balance
-
-
-
99,241.13
-
-
-
102,466.47
14,638.07
3,330.16
17,968.23
87,828.40
14,638.07
2,854.42
17,492.49
73,190.33
14,638.07
2,378.69
17,016.76
58,552.26
14,638.07
1,902.95
16,541.02
43,914.19
14,638.07
1,427.21
16,065.28
29,276.12
14,638.07
951.47
15,589.54
14,638.05
14,638.05
475.74
15,113.79
-
102,466.47
13,320.64
115,787.11
Resolution Date 5/6/2015
Year End 12/31/2015
Interest Days
239
U:\Taxes & Assessments\Special Assess ments\2016\WFCI I WAC & SAC - Amortization Schedule Template