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City Council Minutes 07-25-2005 SpecialMINUTES SPECIAL MEETING- MONTICELLO CITY COUNCIL Monday July 25, 2005 - 5 p.m. Members Present: Clint Herbst, Wayne Mayer, Tom Perrault, Glen Posusta and Brian Stumpf. Members Absent: None 1. Call to order. Mayor Herbst called the workshop to order at 5 p.m. 2. Review and discussion of trunk fee study. Brett Weiss and Justin Messner from WSB & Associates were present to review the trunk fee study with the Council. The City first collected sanitary sewer trunk charges in 1990, added water main trunk charges in 1994 with storm sewer trunk charges added in 1997. The purpose of the trunk fund is to allow the City to accumulate funds in order to build trunk lines and other trunk facilities needed for development to occur. The City adjusts the trunk fee annually by about 4%. The City has about 245 housing units per year. In looking at how much land would be developed over the next few years it is estimated that 5100 housing units would be available. The report also included a listing of trunk capital improvements that the City would need over the next years. Depending on the rate of growth some of the improvements could be delayed. Brian Stumpf questioned the 16" line from 90" Street and Chelsea Road and asked if that was the segment that was being done now. Bret Weiss noted that Hidden Forest was shown as a credit since the developer is putting in the needed trunk facility and would get credit for that. Bret Weiss reviewed the cash flow analysis done for the trunk funds that included sanitary sewer, the wastewater treatment plant and water main. Storm sewer was not included in the analysis. Bret Weiss noted that according to the bond counsel, the City was not going to use cash reserves to build down the bond indebtedness. $2,350,000 is the current balance in the sanitary sewer fund. A-3)% inflation factor was added to the expenditures. $2,238 rate for trunk sanitary sewer and $3,656 is the SAC charge. 30% of this charge goes back into the sanitary sewer trunk fund. Bret Weiss noted that splitting the SAC charge into funds may change in the future. One item for discussion was whether the City would want to go to a unit charge rather than base the trunk charges on acreage. Glen Posusta questioned why that was not done when the City originally started collecting the trunk charges. Bret Weiss stated that most cities go on an acreage basis. Wayne Mayer asked if the multiplier is reviewed and Bret Weiss responded they have done so periodically. Bret Weiss said there are special fees charged to developments, such as Meadow Oaks development, for improvements to enhance the infrastructure such as lift Special Council Meeting Minutes - 7/25/05 stations. Since Hidden Forest, Sunset Ridge, Jefferson at Monticello are further away from existing City utilities it will cost more to extend the utilities. The cash flow analysis for the wastewater treatment plan was then reviewed. Bret Weiss believes the wastewater treatment plant funds should be separate from the sanitary sewer trunk funds. Bret Weiss noted there is a point where this is negative balances in the trunk funds. The question is how much of a negative balance would the Council feel comfortable with. The present SAC charge fee would be okay if it was all classified in the WWTP fund instead of 30% to the sanitary sewer trunk fund. There was some discussion on improvements to the WWTP and the estimated cost for these improvements. 2010 is the date proposed for the next WWTP improvement to increase capacity which would include constructing another SBR tank. The water main improvements were reviewed and it was noted that in 2016 it was proposed to construct a water treatment plant to take care of the iron and manganese in the water. The treatment plant would be located at the water reservoir site. It is important to start planning for the water treatment facility now. For residential density it was assumed three units per acre. Glen Posusta felt it was not fair for commercial developers who have something like a warehouse building to be charged on acreage the same way a townhouse development is charged on acreage. Fred Patch noted that trunk fees are based on the developed acreage until 75% of the parcel is developed. Bret Weiss then reviewed the adjusted rates. This calculation was based on 5100 units. Bret Weiss also did the calculation based on delaying the Heritage development (Jefferson at Monticello). This delay does not seriously impact the water trunk funds. Sanitary sewer is significantly impacted by the Heritage development. Bret Weiss said any area that requires significant trunk expenditures like the Heritage development, Koch property or Hidden Forest will have considerable impact on the trunk fee. WSB provided worksheet analysis that were based on 5,100 units, 4,000 units and 3,000 units. Bret Weiss stated the questions that need to be identified are what is the growth rate and how many units coming in,.. How much you increase and how quickly you increase the fees has to be considered.. Heritage development indicated the build out for their development would be over 15 years. Bret Weiss stated it is difficult to estimate the number of units that would be developed. Bret Weiss felt the City could get up to 400 units a year. Glen Posusta asked about the impact of commercial (big box stores) development. Mike Moriarity of Heritage development replied that it has an impact on their development but it is not a barometer to measure by. Heritage development anticipates that they would up front some of the costs. He added there is a point where the amount of fees charged up front is detrimental to development. Bret Weiss said if the City is only getting 300 units per year they have to be careful where they these units are located and should try to infill in the area of existing trunk lines. Bret Weiss said for Monticello 4000 units over 10 year is a modest estimate. John Simola said the City also need to look at staff to see whether existing staff can handle the number of units coming in. Bret Weiss said one suggestion would be that credits would be 2 Special Council Meeting Minutes - 7/25/05 given at later point. If the credit is given up front the units coming in at first are not contributing to the trunk fund balance because of credits given. There was discussion on the credits and when they should be given as well as discussion on allowing fringe development to take place unless the development up fronts the cost of trunk improvements. It was stated that development needs to take place from where the pipe ends. It was recommended that 4000 units over ten yeas was the number to plan for. If the Heritage development comes in the City has to increase their trunk fee or Heritage has to directly fund some of the trunk costs. Bret Weiss noted the need to balance the fees with the number of units. Acreage or unit charge - The Council is interested in WSB looking at the pros and cons of each and bringing something back to the Council on this. The WWTP improvements schedule and fees were acceptable but John Simola stated that the WWTP costs do not take into consideration any changes in regulations from the PCA relating to water quality. Fund balance - $3,000,00 per fund is the lowest negative fund balances the Council would go with. 4,000 housing units over ten years. are in line. Bret Weiss said the SAC fees should be able to pay for treatment costs of the sewage. John Simola felt the most volatile item is the WWTP. There is nothing to cover replacement costs. Operating receipts takes care of maintenance but not replacement costs. Replacement costs is the purpose of trunk fees. As trunk facilities increase are there funds in the operating revenue to cover the cost of the maintenance for these added facilities. There are 2,044 preliminary platted lots at the present time. Does the City want to provide trunk credits on the front end or back end of development or should it be decided on case by case basis. Assessment -vs- pay up front was discussed. In the past the City has allowed assessment of trunk fees. Should this be stopped and the trunk fees collected at the time of final plat? Bret Weiss noted there are not a lot of communities that assess these costs. If the cost for trunk fees is paid at the time of final plat, it may restrict how big final plats will be as developers will not plat more than they can sell in a short time. Bret Weiss is assuming when a house is closed the assessment is paid off. Rick Wolfsteller suggested that you could pre -pay a percentage of the trunk costs and assess the rest. Clint Herbst felt the City had to provide some options for the developer. Storm water ponding - Because the land cost is so high they were proposing a trunk program for the storm sewer piping and a separate trunk fund is for the storm water ponds. A ponding fee would be less expense to the developer than having a pond on site. Also developers could get a credit if they overdesign the pond to accommodate additional runoff. Miscellaneous Fees - Park dedication fee has to be looked at as well as other fees. Fred Patch will update the trunk fee survey. Fred Patch noted the difficulty with the survey is that there are many variances of what each city includes in their trunk fee. Jeff O'Neill asked about extra costs for freeway and working around the power line corridors. John Simola talked about rebuilding some ponds in the Meadow Oak area and the cost to do that. He said the City will Special Council Meeting Minutes - 7/25/05 have to look at rebuilding other ponds throughout the City which is very costly project. Glen Posusta asked why the City is responsible for upgrading or rebuilding the ponds. John Simola stated the City is adding more storm water ponds which will need to be maintained and eventually rebuilt. An updated report and recommendations will be brought back to the Council at a future meeting. The workshop adj ourned at 6: 3 0 p. in. Recording Secretary 11