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redirected to the City of Rosemount to be applied toward projects detailed in the City's
Capital Improvement Plan (CIP).
b. The SKB Trust Fund will make a one -time donation of $500,000 to the City, following
the transaction closing on the property, to help pay for the cost of land acquisition for a
Dakota County branch library in Rosemount.
c. The City will allow the SKB Trust Fund to increase annual community distributions
based on the Consumer Price Index or percentage population growth in Rosemount,
whichever is greater.
In addition, SKB Environmental is seeking relief from the Enhanced End Use Plan that
was included as part of the March 2003 IUP approval. The intent of the Enhanced End
Use Plan was to provide aesthetically appealing landscaping when facility closure occurs.
The facility is located in the midst of the City's heavy industrialized east side. The benefit
to the community, in terms of developing a passive recreation or natural area open space,
in an area that is surrounded by the likes of the FHR Pine Bend Refinery, Endres
Processing, Spectra- Alloy, trucking, and other non - residential, non - recreational users is
marginal at best. SKB Environmental seeks to have the end use plan be reverted to the
standard end use plan that must comply with cover and closure requirements in State
regulations for similar facilities.
A provision of the March 2003 IUP related to the Enhanced End Use Plan indicated that at
some time in the future, if the City Council determined that such an enhanced end use
was not required, SKB would provide monetary compensation to the City that represented
the difference between the costs of regulated closure end use and the enhanced end use
in the March 2003 IUP. SKB is concerned that the costs assigned to the various end use
proposals are speculative and indefinable at this time, and could lead to litigation in the
future should the City and SKB disagree on the closure cost stipulations.
The cost estimates in the March 2003 approval assigned costs based on an estimate of
what closure would cost at that point in time. In other words, if the facility was prepared
for end use immediately and at once, the costs would be incurred for purchasing fill,
grading and landscaping, tree planting, etc. SKB has indicated that closures over time will
have marginal direct costs because SKB continually partners and negotiates with various
contractors to dump fill on the site at no or little cost to SKB, or that the cost of fill is
sometimes built into the pricing structure of negotiated contracts with facility users. Using
that as the basis of cost analysis, it can be argued that the remaining significant expense
that differentiates the Enhanced End Use Plan from standard closure end use is the
planting of trees that were planned for aesthetic purposes.
The MOU proposes to have SKB pay to the City the amount of $25,000 annually for the
next ten years. The payment was determined on the assumption that the Enhanced End
Use Plan would have 1,000 trees and the cost of those significant trees would be $250
each. The total of $250,000 would be contributed to the City over a ten year period to
provide for tree planting, landscaping, and natural resource projects. This contribution
from SKB Environmental would absolve them of the differential cost commitment between
the Enhanced End Use Plan and the regulated closure end use.
2
SUMMARY
The SKB Trust Fund Board has approved the MOU committing to amend the Trust Fund
distribution formula and providing for a significant one -time contribution to assist the City with
library land acquisition, contingent upon the City's amendment of the March 2003 IUP
providing relief from the Enhance End Use Plan.
3
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MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING is made this T day of
2004, made by and between the City of Rosemount, a Minnesota municipal
corporation (hereinafter the "City"), and SKB Environmental, Inc. (hereinafter "SKB ").
I. Background
1.1. On , 2003, the City and SKB entered into an agreement entitled
Interim Use Permit Agreement, Reissuance to SKB, Inc., Minnesota Industrial
Containment Facility (the "IUP Agreement ").
1.2. Section 21 of the IUP Agreement provides that SKB and the City are to re- evaluate
the terms of the Development Commitment, attached as Exhibit D to the IUP
Agreement, to determine whether the Community Trust Fund and the terms of the
documents creating and governing the trust (the "Trust Documents ") continue to be
reasonable and appropriate to the needs of the community.
1.3. In accordance with this process of re- evaluation of the Trust Documents, it was
determined by the parties that there are changes that could be made to the Trust
Documents that would better serve the City of Rosemount.
1.4. The parties further determined that, in consideration of the changes proposed to the
Trust Documents, it was reasonable and appropriate to make certain changes to the
IUP Agreement that were requested by SKB.
2. Amendment to the Trust Documents
The parties agree to use their best reasonable efforts to accomplish amendments to the Trust
Documents to accomplish the following:
2.1. Commencing with revenue received from SKB in the year 2004, 50 % of annual
payments to the Trust will be contributed each year by the Trust to the City for
capital projects listed in the City's Capital Improvement Program ( "CIP" ).
2.2. The Trust will make a one -time contribution of $500,000 to the City for the
acquisition of land for a library in the City. The Trust may make additional
contributions to the City, from time to time, for other special projects meeting the
criteria of the purposes of the Trust stated in Section 1 of the Trust Document. The
contributions described in this Section 2.2 will be in addition to contributions
described in Section 2.1 of this Memorandum and will be authorized
notwithstanding any other limitations on distributions contained in the Trust
Documents.
CLLr245068v3 1
RS220 -36
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2.3. The maximum amount of annual community distributions from the Trust will not be
more than $100,000 for the year 2004. The maximum amount of the annual
contribution will increase annually thereafter each year in accordance with the
percentage increase for the previous year of the Consumer Price Index, all urban
consumers, Midwest urban-all items, of the United States Department of Labor,
Bureau of Labor Statistics or the percentage increase of Rosemount population for
the previous year using the certified annual population estimate of the Metropolitan
Council, whichever is greater. However, the Trust will not be required to make
annual contributions in such amounts specified in this paragraph 2.3, if. 1) the Trust
does not receive requests for contributions in at least such amount for projects that
are deemed by the Trustees to be reasonable, suitable and qualified for contributions
according to the Trust documents, or 2) total contributions for that year exceed the
income of the Trust for that year.
3. Amendments to the ]UP Agreement
If the changes to the Trust Documents described in Section 2 of this Memorandum are
made, the City and SKB agree to the following changes to the ]UP Agreement:
3.1. SKB will not be required to conform the facilities, upon closure, to the Proposed
Landscape Plan, dated October 2001, updated January 2003, prepared by the
University of Minnesota Extension and Dakota County Master Gardeners and
attached as Exhibit E of the ]UP Agreement. Specifically, the IUP Agreement will
be amended as follows:
3.1. L The following phrase will be deleted from Section 1 of the IUP Agreement:
"by the "PROPOSED LANDSCAPE PLAN" dated October, 2001, updated January
2003, prepared by the University of Minnesota Extension and Dakota County Master
Gardeners (Exhibit E of this Agreement), ".
3.1.2. The second paragraph of Section 18 of the ]UP Agreement will be amended
to read:
"Closure under previously approved plans would have required
expenditure of approximately three to four million dollars (expressed
in 2003 dollars). Because the closure plans approved by this
Agreement will be substantially less expensive and of less benefit to
the City, the Development Commitment is amended to provide for
the payment to the City of an additional payment of $25,000 per year
for 10 years commencing on July 1, 2004, to be used by the City for
landscaping and natural resource projects."
3.1.3. Section 20 of the IUP Agreement will be amended to read as follows:
"Financial Assurances. SKB shall comply with the financial
assurance requirements of the MPCA and DC. No reduction in the
CLL-245068v3 2
RS220 -36
financial assurance requirements may be made without the written
approval of the City Administrator."
3.1.4. Exhibit E to the current ]UP Agreement as it relates to finished design and
landscaping will be replaced with � -& the IUP Agreement of Peee
3.2. The current Development Commitment, attached to the IUP Agreement as Exhibit
D, with the attached copy of the SKB Trust Agreement as amended, all as amended
in accordance with Section 4.1 of this Memorandum, will remain in effect without
amendment required by the City for at least 15 years from the date of the amendment
of the ]UP Agreement. The ]UP Agreement will be amended by adding the
following sentence at the end of Section 21: "Notwithstanding any provision of
Section 2 of this Agreement, the City will not require any amendment of the
Development Commitment for 15 years from the date of this Agreement."
4. Amendments to the Development Commitment
4.1. The Development Commitment will be amended by addendum adding new Section
10 g. as follows: "SKB will pay to the City the amount of $25,000 per year for 10
years commencing on July 1, 2004, to be used by the City for landscaping and
natural resource projects."
CITY OF ROSEMOUNT
By:
Its: Mayor
And by:
Its: Clerk
SKB ENVIRONMENTAL, INC.
v By:
Its:
CLL- 2450680
RS220 -36
4 -6 -04 copy of motion made at the SKB Environmental Rosemount Community Trust Board of Trustee
Meeting.
Matt Kearney moved, Steve Casey seconded motion to approve the following changes to the Trust
Agreement with the City of Rosemount contingent upon the approval of the Rosemount City Council of
the trust agreement and IUP to the satisfaction of SKB Inca as recorded and amended in the Memorandum
of Understanding dated 4 -6 -04
2.1 Commencing with revenue received from SKB in the year 2002, 50% of annual payments to the trust
will be contributed each year by the trust to the city for capital projects listed in the City' Capital
Improvement Program (CIP" ).
2.2 The Trust will make a one -time contribution of $500,000 to the City for the acquisition of land for a
library in the City upon the successful closing of the acquisition. The Trust may make additional
contributions to the City, from time to time, for other special projects meeting the criteria of the purposes of
the Trust stated in Section 1 of the Trust Document. The contributions described in this Section 2.2 will be
in addition to contributions described in Section 2.1 of this Memorandum and will be authorized
notwithstanding any other limitation on distributions contained in the Trust Documents.
2.3 The maximum amount of annual community distributions from the trust will not be more than
$100.000 for the year 2004. The maximum amount of the annual contribution will increase annually
thereafter each year in accordance with the percentage increase for the previous year of the Consumer Price
Index, all urban consumers, Midwest urban -all items, of the United States Department of Labor, Bureau of
Labor Statistics or the percentage increase of Rosemount population for the previous year using the
certified annual population estimate of the Metropolitan Council, whichever is greater. However, the Trust
will not be required to make annual contributions in such amounts specified in this paragraph 2.3,if: 1) the
Trust does not receive requests for contributions in at least such amount for projects that are deemed by the
Trustees to be reasonable, suitable and qualified for contributions according to the Trust documents, or 2)
total contributions for that year exceed the income of the Trust for that year.
Motion carried unanimously.