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HomeMy WebLinkAbout10C - Annexation Agreement MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: CITY COUNCIL AGENDA REPORT July 21, 2003 ~ 10C Frank Boyles, City Mana~ CONSIDER APPROVAL OF ORDERLY ANNEXATION RESOLUTION WITH SPRING LAKE TOWNSHIP. History: In 1972 the City entered into an orderly annexation agreement with Spring Lake Township. Since the adoption of the 1972 OAAand an amendment in 1991, circumstances have changed which require a new Orderly Annexation Agreement. The City Council directed that a subcommittee (Mayor Haugen and Councilmember Petersen) negotiate a new agreement. They, together with members of the staff, have been meeting with Township Board member Steve Pierson for several months. Councilmembers will also recall that a joint public hearing was conducted on this subject. The minutes from that meeting are attached. Current Circumstances: A new orderly annexation agreement has now been negotiated which addresses the concerns of the Township and needs of the City. The new OAA is attached. The key elements are as follows: 1. Approximately 3000 acres are contemplated for annexation by 2024. 2. The property to by annexed is generally south of Howard Lake, east of CSAH 79, north of 180 to Vergus and then on either side of TH13 to Mushtown Road. This excludes some areas, which were in the previous agreement, and adds new areas outside of the previous agreement. 3. The agreement specifies dates upon which sub-areas are to be annexed. Annexation occurs upon the date specified for each sub-area provided that the subOarea has sewer and water available within 150 feet of its boundary. If so, the City Council adopts a resolution, which is sent to Municipal Boundary Adjustment for review and comment. 4. To be annexed, an area must have sewer and water available within, 150 feet of the area boundary. If sewer and water is not available, then annexation of the area will not take place until this criteria is met. If this criteria is not met within 8 years of the originally contemplated date of annexation, then the sub-area is deleted from the agreement. 5. Prior to annexation of any sub-area, the County Comprehensive Plan and Zoning Ordinance apply. After the annexation agreement is approved and before an area is annexed, the Three Person Board administers county land use and zoning ordinances. Once annexed, all city ordinances apply to the area. 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER Page 1 6. Taxpayers living in areas to be annexed on or before 2007 will have their taxes feathered over four years. 7. Areas annexed between 2008 and 2014 will receive no tax feathering but the Township will receive two times the property taxes levied in that area in the year prior to annexation, exclusive of special levies. 8. For areas annexed in 2024, the City will provide neither tax feather nor the two times provision. 9. The agreement addresses deferral of special assessments, credits for septic systems, and deferral of hook up. 10. The City agrees to develop two parks (Raymond Avenue and South Shore Drive) within five years of execution of the agreement if the Township conveys the title to the property to the City at that time. Conclusion: A copy of the Agreement is attached to this memo. The City Council should consider whether it wishes to adopt this agreement. ISSUES: Unlike the 1972 OAA both parties have attempted to bring more certainty to this OAA. Specific dates for annexation are included as are specific criteria for annexation. The issues the council may wish to consider are: (a) The OAA provides for a payment by the city of two times the townships most recent levy as compensation for lost revenues. We have a good idea of that number today, but it is somewhat more nebulous in the future. (b) The OAA requires the city to extend sewer and water to within 150 feet of the property boundary of each area in order for annexation to take place. If the economy remains robust it is likely that sewer and water will be extended in a timely fashion. If the economy falters or particularity uncooperative property owners become active, the schedule could be affected. (c) Tax feathering for properties scheduled for annexation in 2007 and before will reduce City revenues for four years even though City services have to be provided from the date of annexation. (d) Two parks will be installed and maintained at City cost within five years of execution of this agreement. The estimated cost for improvement is $120,000, which would be paid for out of operating funds. (e) The additional 3000 acres will provide additional areas for development within the city. We estimate that once the area has been developed, that an additional population of 10,000 - 15,000 will be added to our projected population of 28,000 by 2024. (f) Once the area is fully developed it is expected to create substantial valuation and therefore tax revenue to support the services delivered to the area. (g) The addition of this area will create infrastructure demands including roadway, park, civil defense, police and fire. (h) The annexation area includes property which is adjacent to major roadways, including CSAH 17, TH 13, CSAH 282, all of which have potential for commercial, retail, or business development. Page 2 ALTERNATIVES: (1) (2) Adopt the Orderly Annexation Resolutions presented. Request additional Information and take no action at this time. RECOMMENDED MOTION: Alternative (1). If the Council elects to execute the Agreement, the remaining process includes the following steps: (1) The Township Board will adopt and execute the agreement; then (2) the Agreement is sent to Municipal Boundary Adjustment for review and comment; (3) at the expiration of the 3D-day comment period or thereabout, the Agreement becomes effective. Each year the Council would adopt a resolution annexing the appropriate sub-areas. In the meantime, the staff will be reviewing the plans and specifications for sewer and water extension to the Vergus area since these pipes become the City's responsibility to maintain and operate before and after annexation of the Vergus area. Once plans are approved, the Vergus Construction and Maintenance Agreement will be submitted to the City Council for approval (likely on August 1ffh). The Township Board would then approve the agreement and initiate the improvement project. Page 3 A JOINT RESOLUTION AMENDING THE ORIGINAL ORDERLY ANNEXATION AGREEMENT DOCKET #A-2148(OA)-2 AND PROVIDING FOR THE ORDERLY ANNEXATION OF CERTAIN AREAS WITHIN SPRING LAKE TOWNSHIP TO THE CITY OF PRIOR LAKE Spring Lake Township Resolution No. City of Prior Lake Resolution No. Recitals Whereas, on November 20, 1972 Spring Lake Township, located in Scott County, Minnesota (the "Township") and the City of Prior Lake located in Scott County, Minnesota (the "City") entered into an Orderly . Annexation Agreement ("1972 OAA") pursuant to Minnesota Statues Chapter 414 for the Orderly Annexation of that certain land within the Township described in the 1972 OM, which is attached hereto and incorporated herein as Exhibit 1 ; and Whereas, in April 1991 , the 1972 OM was amended to apply to one property; and Whereas, during the pendency of the 1972 OM certain lands have been annexed into the City of Prior Lake; and Whereas, circumstances and conditions have changed during the time that has elapsed since the adoption of the 1972 OM; and Whereas, the Township and City have met to discuss the changed circumstances and conditions and pursuant to said meetings have determined that the 1972 OM no longer serves the best interests of the residents of the Township and City; and Whereas, the Township and City desire to terminate the 1972 OM and pass a Joint Resolution, pursuant to Minnesota Statute Section 414.0325 Subdivision 1 (g) adopting a new Orderly Annexation Agreement; and Whereas, the Township and City desire to set out the terms and conditions that will govem the new Orderly Annexation Agreement. Now Therefore be it Jointly Resolved by the Spring Lake Township Board of Supervisors and the City of Prior Lake City Council that: 1. Recitals. The Recitals set forth above are incorporated herein and made part of this Joint Resolution. 2. Oesianated Land. This Joint Resolution is intended to establish an Orderly Annexation Agreement between Spring Land Township and the City of Prior Lake (hereinafter "OM"). The OM consists of the land designated in Exhibit 2 and legally described in Exhibit 3, which Exhibits are incorporated herein and made part of this Joint Resolution ("Orderly Annexation Area"). This Joint Resolution provides for the terms and conditions applicable to the Orderly Annexation of said land and the OM. Page 1 of 9 3. Director of the Office of Strateaic and Lona Ranae Plannina. This Joint Resolution is adopted by the Township and City pursuant to the provisions set out on Minnesota Statutes Section 414.0325 (g) which limits the role of the Director of the Office of Strategic and Long Range Planning or its successor agency to review and comment on an orderly annexation. No consideration by the Director of the Office of Strategic and Long Range Planning or its successor agency is necessary in order for any boundary adjustment to occur within the Orderly Annexation Area pursuant to this Joint Resolution. The Director of the Office of Strategic and Long Range Planning or its successor agency may review and comment, but shall, within 30 days, order an annexation in the accordance with the terms of this Joint Resolution. 4. Reasons Land Desianated is in Need of Orderlv Annexation. The land designated in Exhibit 2 is in need of Orderly Annexation because: a. The owners of property within the 1972 OAA have been subject to uncertainty since 1972 over when their property would be annexed into the City. b. The OAA describes with particularity and certainty the terms, conditions and timeframe property will be annexed into the City. c. The designated area is now or about to become urban or suburban in character and the City is capable of providing the services required by the area within a reasonable time. d. The annexation will be in the best interest of the designated area. e. The designation is consistent with the findings of the legislature as set forth in Minnesota Statute Section 414.01 Subdivision 1 a (1) - (4). 5. Phasina of Annexation of Land within Desianated Area. The land within the designated area is divided into sub-areas. The sub-areas are depicted on Exhibit 2. The land identified in each sub-area (legal descriptions of which are provided as Exhibit 3) shall be annexed to the City according to the timetable identified below: a. Area within 3.1 shall be annexed upon the effective date of this Agreement. b. Area within 4.1- 4.4 shall be annexed to the City in 2004. c. Area within 6.1 and 6.2 shall be annexed in 2006. d. Area within 7.1 shall be annexed in 2007. e. Area within 8.1, 8.2 and 8.3 shall be annexed in 2008. f. Area within 10.1, 10.2 and 10.3 shall be annexed in 2010. g. Area within 12.1 shall be annexed in 2012. h. Area in 14.1 and 14.2 shall be annexed in 2014. i. Area in 24.1 shall be annexed in 2024. j. Area 24.2 shall be annexed in 2006, unless the Township enters into a Sewer and Water Construction and Maintenance Agreement ("SWCMA") with the City by November 15, 2005. The terms and conditions of the SWCMA shall be similar to the Sewer and Water Construction and Maintenance Agreement for South Shore Drive as amended, attached hereto and incorporated herein as Exhibit 4. k. Area 24.3 shall be annexed in 2024. This is Spring Lake (DNR ID:70-54P) below the 912.8 ordinary high water mark. 5.1 Exceptions. The year of annexation for all Areas set forth above shall be extended if sewer and water service is not within 150 feet of any boundary to the legally described Area. The extension shall be effective until the latter of the following two situations occurs: (1) sewer and water service Page 2 of 9 is within 150 feet of the Area, or (2) eight years has elapsed. If 8 years elapses and sewer and water is not within 150 feet of the area, the area will, without further action by the Township or City, be eliminated from this OAA. 5.2 Resolution of City to Annex DesiQnated Areas. To annex land within Areas 4.1 -4.4, 6.1 - 6.2, 7.1,8.1 - 8.3,10.1 -10.3, 12.1, 14.1 and 14.2, and 24.1 - 24.3 as depicted in Exhibit 2, the City shall pass a resolution. Area 3.1 shall be annexed upon the effective date of this OAA. The resolution adopted by the City Council pertaining to the annexation shall state that: a. No action by Spring Lake Township or consideration by the Director of the Office of Strategic and Long-Range Planning or its successor agency is required to effectuate the annexation; and b. The Director of the Office of Strategic and Long Range Planning or its successor agency may review and comment, but shall, within 30 days, order the annexation in accordance with the terms of the resolution. 6. Township I City Property Taxes Applicable. 6.1 Property Taxes. Property taxes payable on the annexed land shall continue to be paid to the Township for the year in which the annexation becomes effective. 6.2 Property Tax Phasina. If the annexation becomes effective on or before August 1st of a levy year, the City will levy on the annexed area beginning with that same levy year. If the annexation becomes effective after August 1st of a levy year, the Township will continue to levy on the annexed area for that levy year, and the City shall not levy on the annexed area until the following levy year. 6.3 Application of Property Tax Phasina. In the first year following the year when the City can first levy on the annexed area, and thereafter, property taxes on the annexed land shall be paid to the City in accordance with the formula set out below: a. In the first year, the property owner shall receive a 50% property tax rate reduction in the City taxes. b. In the second year, the property owner shall receive a 33% property tax rate reduction in City taxes. c. In the third year, the property owner shall receive a 17% property tax rate reduction in City taxes. d. In the fourth year and thereafter, the property owner shall pay full City taxes. 6.4 Any property within the Orderly Annexation Area which is subdivided after the effective date of this OAA, but before the date of annexation as set forth in Paragraph 5, shall not benefit from the City tax phasing provisions in Paragraph 6 above, nor shall the City be responsible for any payment to the Township pursuant to Paragraph 6.6. 6.5 Areas scheduled for annexation between 2004 and 2007 will be subject to phasing regardless of the year of annexation. All Areas scheduled for annexation in 2008 or after shall not be subject to the phasing schedule. 6.6 Payment by the City to the Township for Property Annexed in Years 2008,2009,2010,2011,2012, and 2014. The City shall make a cash payment to the Township for land designated for annexation in 2008, 2009, 2010, 2011, 2012 and 2014. The amount of the payment shall be two times the Page 3 of 9 amount in taxes that Spring Lake Township levied against the property in the designated annexed area in the preceding year, exclusive of debt service and special levies. The payment is being made in consideration of tax revenues lost by the Township as a consequence of the annexation. The amount payable to the Township applies only to the area annexed within a given year. The City shall remit payment in two equal payments, the first payment is due by December 15th in the year the area is annexed and the second payment is due by December 15th in the year following annexation. If an area designated for annexation in 2008, 2009, 2010, 2011, 2012 or 2014 is not annexed in the year designated because sewer and water is not within 150 feet of the annexed area, the payment pursuant to paragraph 6.6 herein shall not occur until the year the annexation occurs. The amount of the payment shall be based on the taxes the Township levied, exclusive of debt service and special levies, in the year the annexation occurs, rather than the year designated for the annexation to occur. 6.7 Certain Earlv Annexations. The City shall reimburse the Township for lost .property tax revenue pursuant to the provisions set forth herein for any property within an area designated for annexation pursuant to Exhibit 2, where the property owner petitions for and annexation occurs prior to the year designated in Exhibit 2. (a) Subdivisions. Property annexed into the City prior to the year designated in Exhibit 2 shall, upon subdivision, pay a fee to the City in the amount of two times (2x) the amount of taxes the property owner would have been responsible for paying to the Township. (b) Developer Responsible for Payment to Township. Pursuant to the City's Subdivision Ordinance, all plats are subject to certain standardized charges. Those charges are set out in a Development Agreement between the City and developer or property owner or both. Development Agreements for subdivisions that occur pursuant to Paragraph 6.7 shall include the fee provided for in Paragraph 6.7(a). (c) Pass- Throuah Fee to Township. The fee required by Paragraph 6.7(a) and collected pursuant to 6.7(b), shall be paid to the Township within thirty (30) days of receipt by the City. 7. Special Assessments for Sewer and Water. The City will extend sewer and water to annexed areas. The amount of the special assessment shall not exceed the special benefit a property receives from having municipal sewer and water. The costs to construct the facilities will be specially assessed against benefiting properties. Special benefit is the fair market value of property before and after the improvement. The property owners will also be responsible for paying any development related fees and/or area charges which may be due. 7.1 Deferred Special Assessments: Pursuant to the "City of Prior Lake Assessment Policy", all parcels within a sewer and water utility improvement area shall be levied an area assessment charge as determined by the Prior Lake City Council. For unplatted property that can be developed at a greater density than its present use, a maximum of 2.5 acres shall be assessed at the time of the improvement. The remaining acreage assessment may be deferred for five years. Large tracts of land shall be assessed a maximum front footage of 150 feet at the time the improvement is Page 4 of 9 constructed. Any remaining frontage in excess of 150 feet may be deferred for a period of five (5) years to allow for planned and orderly development of the property. During any deferral period, simple interest will accrue subject to the interest rate established at the improvement project special assessment hearing. If the parcel is subdivided during this time period, the deferred assessments including accrued interest, will automatically be called down and currently certified on the property tax rolls upon final plat approval by the Prior Lake City Council. In additional to the payment for deferred assessments, the property shall be subject to all applicable development fees that would be incorporated into the context of a developers agreement. The City assessment policy is subject to change as determined by the Prior Lake City Council. 7.2 Credit to Special Assessment for Certain Septic Systems. Properties with septic systems will be eligible for a septic system credit. For the purposes of this OAA, the average cost of a septic system (regardless of whether the system is a mound system or other type of system) is deemed to be Fifteen Thousand ($15,000) and the average life of a septic system is deemed to be twenty (20) years. In order to be eligible to receive a septic system credit, the property owner must provide the City with a document from an independent inspector acceptable to City and qualified to inspect septic systems, "certifying" that the property owner's septic system falls within one of the following three categories: a. compliant with Scott County ordinances and any applicable state regulations in effect at the time of the inspection; non-compliant but functioning; or failinq or failed. b. c. The certification for a septic system credit must be submitted to the City Council before or at the time of the special assessment hearing date required pursuant to Minnesota Statutes Chapter 429. 7.2.1 Septic System Credits. A septic system credit is the amount a special assessment will be reduced. The age of the septic system at the time of the special assessment hearing shall be utilized for purposes of calculating the credit. All septic systems older than twenty (20) years shall not be eligible for a credit. The credit for a compliant septic system will be calculated based on 100% of Fifteen Thousand ($15,000) amortized over twenty (20) years. The credit for a non-compliant but functioning septic system will be calculated based on 50% of Fifteen Thousand ($15,000) amortized over a period of twenty (20) years. A failing or failed septic system is not eligible for a septic system credit against a special assessment for sanitary sewer. A property owner may not re-build a septic system in order to be eligible to qualify for a septic system credit. Septic system assessment credits for a compliant system shall be calculated accordin to the followin table: Septic System Age Assessment Credit I $15,000 2 $14,250 3 $13,500 4 $12,750 5 $12,000 6 $11,250 7 $10,500 8 $9,750 9 $9,000 10 $8,250 7.2.1.1 Page 5 of 9 Septic System Age II 12 13 14 15 16 17 18 19 20 Assessment Credit $7,500 $6,750 $6,000 $5,250 $4,500 $3,750 $3,000 $2,250 $1,500 $750 7.2.1.2 Septic system assessment credits for a non-compliant system shall be calculated according to the following table: Septic System Age Assessment Credit Septic System Age Assessment Credit ] $7,500 ]] $3,750 2 $7,]25 ]2 $3,375 3 $6,750 ]3 $3,000 4 $6,375 ]4 $2,625 5 $6,000 15 $2,250 6 $5,625 i ]6 $],875 7 $5,250 .../. 17 $1,500 8 $4,875 ....... 18 $],] 25 9 $4,500 ]9 $750 ]0 $4,]25 20 $375 7.3 Deferral of Hook-Up to Certified Septic Systems. Special assessments for the construction of a municipal sewer and water system are due and payable pursuant to the terms and conditions adopted by the City Council and certified to the County Auditor. Notwithstanding the foregoing, all property owners must either connect to the municipal sewer system or provide certification by an independent inspector pursuant to the provisions set forth in 7.2 above. Compliant septic systems shall be re-certified every 36 months from the original date of certification in order to continue to defer hook-up. A property owner who fails to provide any timely certification to the City shall be responsible for immediate hook-up within six months and for payment of all connection fees in effect at the time of hook-up to the municipal sewer system. 7.4 Deferral of Payment of Special Assessment. A qualifying property owner may apply for a deferral of special assessments. The City Council has adopted a special assessment deferral policy applicable to hardship situations. The policy, which is subject to change at the discretion of the City Council, provides eligibility criteria for the hardship deferral of special assessments. The decision whether to grant a special assessment is solely within the discretion of the City Council. 7.5 Properties with Existinq Wells. Annexed properties must connect to municipal sewer and water within one (1) year of its availability subject to paragraphs 7.2 and 7.3 above. Annexed properties with existing wells which are in compliance with all applicable state regulations may continue to use the well for outside, non-domestic use, including but not limited to lawn sprinkling, filling swimming pools, washing cars and other non-domestic uses. Cross-connection with the municipal water system is prohibited. 8. Plannina and Land Use Control Within the New Orderly Annexation Area. Pursuant to Minnesota Statutes Section 414.0325, subd. (a) and (b), this Joint Resolution establishes, a three-person board to exercise planning and land use control authority for the land depicted in Exhibit 2 and legally described in Exhibit 3. The three-person board shall make determinations as to land uses for those properties included in the new Orderly Annexation Area prior to the actual year of annexation. The three-person board shall operate in a manner prescribed by MN Stat. Section 471.59, subd. (2)-(8), inclusive, and administer the Comprehensive Plan and Zoning regulations of the County, given the understanding that the County ordinance will be amended as to all Areas except areas 24.1 to 24.2 (the 2024 annexation Area) to provide for one (1) housing units per forty (40) acres, with no bonus density provided for clustering. The composition of the three-person board shall consist of one (1) elected representative from the County, one (1) elected representative from the City, and one (1) elected representative from the Township. Page 6 of 9 8.1 Applicable Zonina Ordinances. Prior to the annexation of an area, the provisions of the Scott County laws, regulations and ordinances shall apply within an OM area. Subsequent to the annexation of an OAA area, the Prior Lake laws, regulations and ordinances shall apply. 8.2 Exception: South Shore Drive and Verqus Avenue. The development and use of land subject to the South Shore Drive and Vergus Avenue "Construction and Maintenance Agreement for Sanitary Sewer and Water" are subject to the development provisions set out in the respective agreements. 9. Miscellaneous Provisions. This Joint Resolution is intended to establish a new Orderly Annexation Agreement between the Township and City and further intended to supercede any previous Orderly Annexation Agreements between the parties hereto. 10. Municipal Board to Relinquish Jurisdiction. Passage of this Joint Resolution shall be deemed a request by the Township and City to the Municipal Board to relinquish jurisdiction over that portion of land within the 1972 OM. The land subject to the new Orderly Annexation Agreement is depicted in Exhibit 2 and described in Exhibit 3. 11. Urban Expansion Area. The City supports the re-zoning of the Urban Expansion Area that lies east of Vergus Avenue and is outside of this OAA, to Rural Residential and encourages the County to revise its Comprehensive Plan and Zoning Ordinance promptly in 2005 to reflect this change. For properties located outside this OM which become adjacent to the City's boundary by virtue of annexation, the Township Board will support any annexation petition by the property owner. 11.1 Verqus A venue. The City agrees it will not initiate an annexation of property that lies south of TH 13 and east of Vergus Avenue. 12. SprinQ Lake Township Parks. As part of this OAA, the City agrees to develop the parks located on Raymond Avenue and South Shore Drive at its cost. Each park shall contain a play structure and a picnic shelter. The City shall include these park improvements in its Capital Improvement Program. The park improvements, weather permitting, will be completed by December 31, 2009. Upon notice from the City that the City. Council has approved plans and specifications and authorized advertisement for bids, the Township will transfer to the City title to the property at no cost to the City for the property acquisition. In order to comply with the public purpose document, before the City lets a contract for the construction of the park, the City must hold title to the property. The City will assume all costs associated with transferring title. 13. Termination. This OM terminates on December 31, 2025. 14. Severabilitv. The provisions of this Orderly Annexation Agreement are severable. If any provision herein is, for any reason, held by a court of competent jurisdiction to be invalid, contrary to law, or unenforceable, such decision shall not affect the remaining provisions of this Orderly Annexation Agreement. 15. Amendments. Any amendment to this Joint Resolution shall be adopted pursuant to the process and laws governing and applied to the adoption of this Joint Resolution. This Joint Resolution may not be unilaterally amended by action of the governing body of either the Township or the City. Amendment of this Joint Resolution will require an approval of each governing body. 16. HeadinQs. Headings are included solely for the purpose of reference. The language in a heading shall not be interpreted as a substantive provision of this OAA. Page 7 of 9 Adopted by the City Council of the City of Prior Lake, Scott County, Minnesota this day of ,2003. MOTION BY: SECOND BY: YES NO Haugen Hauqen Blomberq Blomberg LeMair LeMair Petersen Petersen Zieska Zieska Frank Boyles, City Manager Adopted by the Board of Supervisors of Spring Lake Township, Scott County, Minnesota this day of ,2003. MOTION BY: SECOND BY: YES NO Berens Henschel Pierson Chair, Spring Lake Township Board This instrument was drafted by: City of Prior Lake 16200 Eagle Creek Avenue SE Prior Lake, MN 55372 Page 8 of 9 EXHIBITS Exhibit 1 - Orderly Annexation Agreement dated November 20, 1972 by and between Spring Lake Township and the City of Prior Lake, Exhibit 2 - Map of land areas to be annexed to the City of Prior Lake and the dates of annexation pursuant to this agreement. 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