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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