HomeMy WebLinkAbout8.f. STAC Fees Increase WaiversCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: March 19, 1991
AGENDA ITEM: STAC Fee Increase Waivers
AGENDA SECTION:
New Business
PREPARED BY: Ron Wasmund
AGENDA Nq TEM #
Public Works Director
8F
ATTACHMENTS: (3) Memorandums
APP OVE BY
Utility Commission Minutes, Letter
Attached is my memorandums dated February 7th, March 7th and March
15th regarding storm sewer charge increase waiver for five single
family homes and the Cimarron Village Townhouse Development. As the
memo indicates, the single family home purchase agreements had been
executed prior to the fee increase and the application for building
permit for Cimarron Village was received prior to the fee increase. I
believe the circumstances warrant Council consideration. The Utility
Commission approve the 1991 fee increase waivers at their March 11,
1991 Regular meeting.
RECOMMENDED ACTION: Motion to allow
fee increase waivers as identified in
memorandum dated March 7, 1991.
COUNCIL ACTION:
Approved.
1
the storm sewer connection charge
the Public Works Director's
TO: UTILITY COMMISSION
FROM: RON WASMUND, PUBLIC WORKS DIRECTOR 011(
DATE: MARCH 7, 1991_
RE: STORM SEWER AVAILABILITY CHARGE INCREASE
The January 15, 1991 adoption of the new Storm Sewer Availability
Charge (STAC) with immediate implementation has caused some
problems and complaint from the building community.
The increased rates were collected without a prior notification
which caused some builders to pay the additional $768.00 out of
their own pockets. These cases resulted from builders having pre
sold homes and not obtaining the permits for construction until.
after January 15, 1991.
There are approximately 5 permits that have been affected this way.
I have had conversation with each of them.
A notice of rate increase was mailed out to all builders on
February 7, 1991. Since that time all builders have been able to
include the increase in their purchase agreements.
I would like to recommend and ask the Commissions consideration for
a refund of the difference between the new rate and the 1990 rate.
The refund would be considered only in the cases where a builder
presents an original copy of a purchase agreement bearing a date
prior to the notice of increase. If the 5 cases I'm aware of
produce the proper documentation it would cause a total refund of
$3,840.00 from the Storm Sewer Core Fund.
I will be available for further discussion and answer any questions
you may have at the meeting.
osemouni
6?ityof
P O. BOX 510
2875 -145TH ST W
ROSEMOUNT. MINNESOTA 55068
612-423-4411
MEMORANDUM
TO: Dean Johnson, Director Community Development
Stephan Jilk, City Administrator
FROM: Ron Wasmund, Building Official
DATE: February 7, 1991
SUBJ: Storm Sewer Availability Charge Increase
As you may or not be aware of, since the January 15th adoption of
the new STAG rate there has been insufficient notice to the
building community.
This has angered some builders and caused out of pocket expense for
some. I have met with 3 builders to date and have a meeting
established with a fourth to discuss the fee increase.
The three builders I have met with have shown me purchase
agreements documenting sales contracts executed prior to the
adoption of the increase. Due to lack of any notice of increase
the $784.00 difference between last years rate and this years rate
cannot be passed along. This reduces the builders profit margin
and creates additional burden.
As a gesture of compromise, I would like to suggest that we not
collect the full amount of STAG from builders that have Purchase
Agreements executed prior to the 1/15/91 adoption date.
We issued five (5) single family dwelling permits in January that
were affected by the rate increase. As mentioned above, 2 of those
builders have documented purchase agreements prior to adoption.
To them I suggest a refund. As for the other three builders, the
same compromise would be extended to them if they un -solicitously
submit a purchase agreement.
The two refunds total $1536.00. If all 5 permits were refunded
that would amount to $3840.00.
I would like to meet with each of you at your convenience to
discuss this situation.
P. S. A letter of notification will go out to the contractors today.
TO:
FROM:
DATE:
RE:
MAYOR NAPPER
COUNCIL MEMBERS:
MEMO
KLASSEN
OXBOROUGH
WILLCOX
WIPPERMANN
RON WASMUND, PUBLIC WORKS DIRECTOR A.%)
MARCH 15, 1991
STAC FEE INCREASE WAIVERS
The attached memorandums to Staff and the Utility Commission pretty much
sum up my position and the request I am making to you regarding builders of
single family dwellings. I feel it is only fair to these business people
to allow them an opportunity to plan and budget their projects based upon
known fees. While the increase on each single family unit seems
insignificant ($768) in comparison to the total cost of $80,000 to $150,000
it does take a bite out of builders profit.
The consideration I'm asking Council for applies only to those builders
with purchase agreements pre -dating the adoption date of 1/15/91. The
total amount of storm sewer rebate to these qualifying builders is
$3,840.00.
The other consideration I am asking Council for regards the proposed
Cimarron Village Townhouse development.
There was considerable interaction between the General Contractor, for this
development, and the Building Department last fall, leading to submission
of permit application, plans, and specifications in November of 1990. At
that time the STAC fee was computed at the 1990 rate of $900/acre x 3.71
acres for a total of $3,339.00. Due to plan corrections for code
compliance their permit could not be issued at that time. Since that time
the corrections have been made and permits are near ready for issuance and
the developer has been informed of the new 1991 STAC fee, which totals
$18,216.10. The parcel size remained the same. The difference between
their budgeted amount of 1990 rate and the 1991 rate is $14,877.10.
This is a significant amount of increase which is difficult to recoup with
rents fixed at fair market rates. The financing for this project is HUD
guaranteed and there is little or no chance to get additional funding from
them to cover the increase in fees.
Since the permit application was submitted prior to the increase and Staff
involved with the project to date were unable to inform the developer of
any new rates, I do feel this is cause for consideration of waiving the
increase in fees and collect for this project at the 1990 rate.
I do not feel that the Storm Sewer Availability Charge funds will be
adversely affected by the waiver and rebates under consideration. The
gesture of cooperation extended by favorable consideration will benefit the
City much more greatly by sending a message to the builders saying "We do
recognize your concerns".
I will be available if you have any questions.
CIMARRON VILLAGE TOWNHOUSES
A MINNESOTA LIMITED PARTNERSHIP
February 15, 1991
Mr. Mike Wozniak
City of Rosemount
2875 145th Street West
P.O. Box 510
Rosemount, Minnesota
RE: Cimarron village Townhouses
Rosemount, Minnesota
Dear Mike:
I am writing as a follow-up to our phone conversation
...a ti � .. L a t, f
regarding the Cit ices and charges our pro-ect..
Recently, we were informed by our contractor that the total
amount of permit, plan review, S.A.C. and park dedication
was in excess of $103,000 or 2,860 per unit.
These are the highest fees we have ever encountered for an
affordable rental housing project.
We were dismayed to learn that these costs may further
increase by over $14,800 for a City S.T.A.C. fee. If this
is the case, the financial feasibility of this rental
development is seriously threatened. City fees will
actually be higher than the land value calculated by FHA!
Our project simply cannot handle these kind of costs and
still provide high-quality design at an affordable rent.
Mike, as you know, we have not asked the City for any
financial assistance for this project. We have attempted
to affirmatively provide design solutions for each of the
City's planning concerns and we were pleased to do so. In
this situation, however, we need the City to reconsider the
costs and charges it will levy on this project.
Please let me know what kind of relief is possible. We
greatly appreciate your assistance.
Sincere ;
fi4ic ael W. Conlan
President
Rosemount Housing Partners, Inc.
C.C. Ron 6 a smund
Peter Donnino
PO BOX 510
city 0 28'5 -145TH ST W
ROSEMOUNT. MINNESOTA 55068
OsemOun 612-»23 »11
Pursuant to due call and notice thereof the Regular Utilities Commission
Meeting of the City of Rosemount was duly held on March 11, 1991 at 6:33
p.m. in the Council Chambers of the City Hall. President Walsh called
the meeting to order with Commission Members Mulhern, Werner, City
Administrator Jilk, Public Works Director Wasmund, Council Member
Klassen and Recording Secretary Dorniden present.
President Walsh added item 4d. - Valley Oak Pond Update. There were no
other additions.
MOTION by Werner to approve the minutes of the February 11, 1991 Regular
Utility Commission meeting. SECOND by Walsh. Ayes: 3. Nays: 0.
Administrator Jilk handed out various scenarios of the water and sewer
rates. First he led the Commission in a discussion about the present
rates that were adopted. With the rates as they are the actual fixed
cost is only recuping 55% of the operational fund for 1991. The
alternatives presented were:
1. Eliminate fixed cost and raise rates.
2. Adopt lower fixed rate and maintain overall rate and charge
user rate on all metered usage.
3. Adopt increasing rate scale.
This of course has no emphasis on conservation of water. President
Walsh added a fourth alternative which would be to add all the budgeted
items and assess each number of user equally for the budgeted amount and
then charge the usage. One other alternative is to have a fixed rate
and then so much per thousand after the fixed rate. One way to look at
it would be to decrease the minimum rate to $11.00 versus $18.00 and
reduce the rate per thousand to 50 cents.
President Walsh said none of the alternatives are thrilling but the
people have to realize it cost money to operate a system.
Administrator Jilk asked the Commission if possibly they would like to
combine Alternative 2 and 3. That way you maintain security however
people would still be conservation wise.
Commission Member Mulhern thinks that the customers are just unaware of
what the fixed charges are covering and we need to educate the people,
especially to the AWWA Standards in regard to testing.
Commission Members showed concern for those who have swimming pools.
Public Works Director Wasmund implied that a water use permit could be
implemented for such a thing.
Mr. Matt Huerta, a resident of Rosemount for over 35 years, was present
to protest the new fixed rate. He feels that the rates should be raised
and no fixed minimum. People should just have to pay for what they use.
His rates will be going up 305%. If he has to he will just let his
UTILITY COMMISSION MINUTES
MARCH 11, 1991
PAGE 2
water run. He's always been one to save energy and conserve water, but
if we stay with this fixed charge he will let it run.
President Walsh asked that something be built into the scenario to
protect the fixed cost. Administrator Jilk will prepare some quattro
spreadsheets for the next regular meeting.
Council Member Klassen stated that the Council had expressed some
concerns at their last meeting. The Mayor had indicated he had several
calls complaining about the fixed charges. Council Member Wippermann
had indicated he's worried about the conservation aspect of the billing.
Council Member Klassen feels that the letter that went out should have
been worded differently with more explanation as to why the fixed charge
was being implemented. She feels an educational campaign needs to be
started.
Steve Klein was in the audience and asked if we had a provision for
hardship cases and if so how they are handled. There is not a provision
and it was felt because of the pride factor a lot of cases wouldn't come
forward anyway.
Commission Member Mulhern asked how our hook-up charges compare to the
surrounding areas. Administrator Jilk stated we are now the highest in
the County, however in the past we were low.
A lot of Rosemounts' problem seems to be in demographics. We just don't
have the population like the other cities to handle the operating cost
of our system.
Public Works Director Wasmund presented the consultant services that Mr.
Dave Tkachenko will supply in respect to Well #7 refurbishing and
repairs. The Public Works Supervisor, Mike Widstrom, and our other
water operators will work with Mr. Tkachenko and be involved in the
project. The estimated cost of the service will be around $800.00. It
should only fluctuate $200.00 either way. Commission members wanted to
make sure it wouldn't exceed $1,000.
MOTION by Walsh to authorize hiring Mr. Tkachenko as a consultant in the
inspection and pulling of Well n7 casing as per Public Works Director
Wasmunds memo. SECOND by Werner. Ayes: 3. Nays: 0.
Steve Klein, our representative from Barr Engineering, led the
discussion on the Storm Sewer Utility. He handed out the preliminary
UTILITY COMMISSION MINUTES
MARCH 11, 1991
PAGE 3
report of the Financing Storm Water Projects Using a Surface Water
Management Utility. He went over the 5 year CIB referenced on page 11
and then went on to explain how the figures were arrived at. The core
was basically figured on the west 1/3 of the City. The east 2/3 of the
City is hard to figure because of the different status of land.
The Commission had questions regarding the run-off figures. Public
Works Director Wasmund was concerned about farm tiles and how that
effected run-off. Mr. Klein said the tiles are 10-12' below so it
really doesn't have that great an impact.
Mr. Klein apprised the Commission that a short report would accompany
the documents with the logics of the system and flags of the questions
that may come up in the next 5 years. This would help any other people
just coming on board know what is going on.
The next step to the program would be public awareness. All the
Commission agreed the brochure angle was a good way to go. The City of
Eagan had a very well executed brochure. No one was excited about doing
a questionnaire.
Mr. Klein received the Commissions consent to prepare the entire
document and then they will invite the Council and other Committees to
an informational meeting. The Commission does feel that there needs to
be something to cover hardship cases otherwise the numbers seem logical.
Council Member Klassen was concerned with the way the Rural Residential
figures added up to. Why should Rural Residential have to pay for water
that is draining into their own ponds? She feels that should be looked
into for exemptions. The Commission assured Council Member Klassen her
reservations would be addressed.
The Commission wants Mr. Klein to redo Item C on page 21.
MOTION by Walsh to hold a Special Utility Commission meeting on March
25, 1991 regarding the Storm Sewer Utility. SECOND by Mulhern. Ayes:
3. Nays: 0.
Public Works Director Wasmund, City Administrator Jilk and Steve Klein
will meet prior to this meeting to set up a tentative schedule for this
Utility.
UTILITY COMMISSION MINUTES
MARCH 11, 1991
PAGE 4
President Walsh had added the Valley Oak Pond Update to the agenda. He
had been at the Council meeting and heard about the project so he felt
the Utility Commission was being left out in the cold. This is a storm
sewer project and should have been addressed by the Utility Commission
for their input before going to Council. Public Works Director Wasmund
apprised the Commission that the project will create a "wet pond" and
that Ducks Unlimited found a sponsor, Koch Refining, to pick up the cost
to make this a "wet pond". Commission supported the project however had
questions regarding the maintenance of the "wet pond". Public Works
Director Wasmund informed the Commission that natural prairie grass will
be used and the only time there might be a problem would be if large
rains extended the water area. Then the City would have to reseed.
This is a new concept for Rosemount and the first in an urban setting
for Ducks Unlimited.
Public Works Director Wasmund spoke to the Commission regarding the STAC
fees which were adopted January 15, 1991. Some contractors were caught
unaware of this increase from $212.00 to $980.00, the difference being
$768.00. We are aware of five purchase agreements which were made
before this amount went into effect, however the contractors had to pay
the higher because the permits were pulled after. Public Works Director
Wasmund has always felt that increases should not go without
notification. Also within this period, the Cimarron Village plat was
approved and the building permit application was submitted in December
so therefore it is felt they should pay the 1990 fees. If these fees
weren't allowed the City doesn't know what the legal ramifications could
be.
MOTION by Walsh to recommend to the City Council reimbursing the
difference between the 1990-1991 STAC fees to cases with purchase
agreements before the adoption date. SECOND by Mulhern. Ayes: 3.
Nays: 0.
MOTION by Walsh to approve the payment of $2,136.00 to Barr Engineering
for work done on the Storm Sewer Utility to be paid out of the Storm
Sewer Core Fund. SECOND by Werner. Ayes: 3. Nays: 0.
President Walsh was upset that the Utility Commission had no knowledge
of the Diamond Path/145th Street Project seeing how the Diamond Path
portion especially would be involved in major storm sewer construction.
Administrator Jilk wasn't aware that the Commission didn't know about
the project and assured them that once the plans and specifications were
complete he would have Bud Osmundson from OSM and Steve Klein from Barr
UTILITY COMMISSION MINUTES
MARCH 11, 1991
PAGE 5
Engineering make a presentation on the project before they go to
Council.
President Walsh acknowledge Ron Wasmund as the new Public Works Director
to the rest of the Commission.
MOTION by Walsh to adjourn. SECOND by Werner. Ayes: 3. Nays: 0.
Meeting adjourned at 9:06 p.m.
Respectfully submitted,
Cindy Dorniden
Public Works Secretary