ITEM 3.4 Utility ConnectionsF Otsezo
MINNESOTA CO
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Administration
Adam Flaherty, Finance Director
October 24, 2016
PRESENTER(s):
REVIEWED BY:
ITEM #:
Consent Agenda
City Administrator Johnson
3.4
AGENDA ITEM DETAILS
RECOMMENDATION:
It is recommended by staff that the City Council approve the attached resolution adopting the
assessment roll of utility connection charges on Lot 2, Block 1 in Otsego Waterfront East 5th Addition.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
No I No
BACKGROUND/JUSTIFICATION:
During 2015, WFC III, LLC constructed an office building on Lot 2, Block 1 located in Otsego Waterfront
East 5th Addition. The utility availability charges were paid in full upon execution of the developer's
agreement. The owner of the property petitioned the City to consider assessment of the utility
connection charges.
The City Council considered this petition at their meeting on December 14, 2015. The City Council
approved an agreement where the utility connection charges would be assessed for a period of 7 years
at an interest rate of 3.25%. An amortization schedule is attached for reference as well.
Given the timing of the petition last December, the assessment had to wait to be certified to the County
for taxes payable 2017. The attached resolution is formally adopting the assessments that were
approved within the agreement last December.
SUPPORTING DOCUMENTS: ATTACHED NONE
• Exhibit A — Utility Connection Charges Assessment Roll
• Signed Agreement — City of Otsego and WFC III, LLC
• Amortization Schedule
• Resolution 2016-88
POSSIBLE MOTION
Please word motion as you would like it to appear in the minutes.
-Motion to approve Resolution 2016-88, adopting the assessment roll of utility connection charges on
Lot 2, Block 1 in Otsego Waterfront East 5th Addition.
BUDGET INFORMATION
FUNDING: BUDGETED:
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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 'f 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 awater 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 I I.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, Bloch 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: q- l5
CITY OF OTSEGO
Jes ica Stockamp, Mayor
�CUCyv`�Yv�.
Tami Loff, City Clerk
Dated:
WFC III LLC
By:
Itsv�U��`
City of Otsego
Special Assessments
Amortization Schedule
9000 Qua ntrelle Ave NE
Water Connection Charges
Interest Payment
Year Assessed Accrual Principal Interest Total Balance
2015 18,339.60 390.28
-
-
18,729.88
2016 - 608.72
-
-
-
19,338.60
2017 -
2,762,66
628.50
3,391.16
16,575.94
2018
2,762.66
538.72
3,301.38
13,813.28
2019
2,762.66
448.93
3,211.59
11,050.62
2020
2,762.66
359.15
3,121.81
8,287.96
2021
2,762.66
269.36
3,032.02
5,525.30
2022
2,762.66
179,57
2,942.23
2,762.64
2023 -
2,762.64
89.79
2,852.43
-
19,338.60 2,514.02 21,852.62
Sanitary Sewer Connection Charges
Interest Payment
Year Assessed Accrual Principal Interest Total Balance
2015 78,833.60 1,677.64
-
80,511.24
2016 - 2,616.63
-
-
-
83,127.87
2017 -
11,875.41
2,701.66
14,577.07
71,252.46
2018
11,875.41
2,315.70
14,191.11
59,377.05
2019
11,87S.41
1,929.75
13,805.16
47,501.64
2020
11,875.41
1,543.80
13,419.21
35,626.23
2021
11,875.41
1,157.85
13,033.26
23,750.82
2022
11,875.41
771.90
12,647.31
11,875.41
2023 -
11,875.41
385.95
12,261.36
-
83,127.87 10, 806.61 93,934.48
,. . _
Total
Interest Payment
Year Assessed Accrual Principal Interest Total Balance
2015
97,173.20 2,067.93
99,241.13
2016
- 3,225.34 -
-
-
102,466.47
2017
- 14,638.07
3,330.16
17,968.23
87,828.40
2018
14,638.07
2,854.42
17,492.49
73,190.33
2019
14,638.07
2,378.69
17,016.76
58,552.26
2020
14,638.07
1,902.95
16,541.02
43,914.19
2021
14,638.07
1,427.21
16,065.28
29,276.12
2022
14,638.07
951.47
15,589.54
14,638.05
2023
14,638.05
475.73
15,113.78
-
102,466.47
13, 320.63
115,787.10
Resolution Date 5/6/2015
Year End 12/31/2015
Interest Days 239
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2016-88
ADOPTING ASSESSMENT ROLL FOR UTILITY CONNECTION CHARGES
ON LOT 2, BLOCK I - OTSEGO WATERFRONT EAST 5Tx ADDITION
WHEREAS, WFC III, LLC is the owner of parcel 118-282-001020 described as Lot 2, Block 1
of Otsego Waterfront East 5th Addition; and
WHEREAS, the owner petitioned the City of Otsego for the assessment of water utility
connection charges in the amount of $18,339.60 plus accrued interest of $999.00; and
WHEREAS, the owner petitioned the City of Otsego for the assessment of sanitary sewer utility
connection charges in the amount of $78,833.60 plus accrued interest of $4,294.27; and
WHEREAS, the City of Otsego approved an agreement where the utility connection charges
would be assessed against the respective parcel on December 14, 2015.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
OTSEGO, MINNESOTA:
1. Such assessment roll, attached hereto as Exhibit A. is hereby accepted and shall
constitute the special assesment against the properties named therein and that the tract of
land therein included is hereby found to have received and not paid for City utility
services provided.
2. The owner of any property so assessed may at any time prior to the certification of the
assessments to the Wright County Auditor pay the entire assessment to the City. Such
payments must be made by the close of business on November 15, 2016 or interest will
be charged through December 31 of the succeeding year.
3.1 Such assessment shall be payable with property taxes levied in 2016 for collection in
2017, in seven annual installments with an interest rate of 3.25% per annum.
4. The Finance Director shall forthwith transmit a certified copy of this assessment to the
Wright County Auditor to be extended on the property tax lists of the County. Such
assessments shall be paid over in the same manner as other City property taxes.
ADOPTED by the Otsego City Council this 24th day of October, 2016.
ATTEST:
CITY OF OTSEGO
Jessica Stockamp, Mayor
Tami Loff, City Clerk
MOTION made by Council Member and SECONDED by Council Member
IN FAVOR:
OPPOSED: