HomeMy WebLinkAbout8F - Fee Justification Report
AGENDA ITEM:
JUNE 7, 1999
SF
GREG ILKKA, DIRECTOR OF PUBLIC WORKS/CITY
ENGINEER ,
CONSIDER APPROVAL OF RESOLUTION 99~ S:(;I
AUTHORIZING WSB & ASSOCIATES, INC. TO PREPARE (l)
A STORM WATER TRUNK FEE JUSTIFICATION
REPORT.
DATE:
AGENDA #:
PREPARED BY:
DISCUSSION:
HISTORY
As part of the subdivision (land development) process the
City previously collected a storm water fee of 16.8 cents per
square foot for R-1, R-2, and R-4 developments; 19.5 cents
per square foot for R-3 developments; and 20.3 cents for B-
1, B-2, B-3, 1-1 and 1-2 developments. Proceeds from these
fees were deposited in the City's Trunk Reserve Fund. The
costs for storm water facilities for the property were
reimbursed to the Developer from this fund.
In 1998, the City changed its policy to provide for a Storm
Water Trunk Fee and established the fee at $3,180 per acre.
Under the trunk fee policy, the City only participates in the
cost of the storm sewer in any given development on an
oversizing (trunk) basis. If we require larger pipes or ponds,
to accomodate the trunk system, than the development itself
would require under current regulations, the oversizing cost
will be funded by the Storm Water Trunk Fee. The
development pays all costs associated with its own storm
drainage needs.
CURRENT CIRCUMSTANCES
The current policy seems to have addressed issues
surrounding the reimbursement of the Developer for storm
water improvements and has streamlined staff review of this
aspect of proposed developments. It would be appropriate at
this time to conduct a fee justification report for the Storm
162~!ikl Creek Ave. S.E.. Prior Lake. Minnesota 55372-1714 I Ph. (612) 447-4230 I Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
Water Trunk Fee to provide a rational basis for collection of
the fee and to assure that the funds are commensurate with
the stormwater system required to serve the community at
build-out.
As part of the study, a City trunk storm sewer system will be
identified in the context of the local surface water
management plan that is a part of the 2020 Comprehensive
Plan. Issues that Staff feels require additional policy debate
will be brought to the Council for direction.
ISSUES
As Council is aware, the City is in the process of evaluating
the fees the City currently charges for development. In
order to evaluate the Storm Water Trunk Fee the City needs
to do an engineering study that will identify a trunk storm
sewer system and develop an estimate of cost associated
with constructing the system. As a professional service, this
study is not subject to competitive bidding requirements.
Staff requested proposals (attached) from WSB &
Associates, Inc., and OSM & Associates, Inc., both
consulting engineering firms, to prepare a Storm Water
Trunk Fee Justification Report for the City. Evaluation
criteria for the proposal included: Similar projects;
Understanding of the scope of work; Staff expertise,
Schedule, and price.
After evaluating each proposal, Staff recommends WSB &
Associates, Inc. due to their similar experience in both
Shakopee and Monticello, their staff expertise, and lastly
their fee of $18,560 versus OSM & Associates fee of
$26,000. WSB & Associates has verified that the $18,560
not to exceed fee that was quoted in 1998, is still valid. In
addition, they have assured staff that the cost to update the
report in three years is less than $5,000.
We have discussed the study with the Twin City Builders
Association who is in the process of evaluating fees
imposed in four specific cities. We believe the purpose of the
Association's evaluation may be to challenge those fees
similar to the collector street fee challenges. We have
agreed that while the City is the client for the study, that a
small committee consisting of the attorney and two staff plus
three Association members should oversee the study.
TRKFEE.DQC
FINANCIAL IMPACT:
ALTERNATIVES:
RECOMMENDED
MOTION:
REVIEWED BY:
TRKFEE,DQC
Oversight does not mean setting or influencing the fee but
instead providing input to the consultant with respect to
Study methodology. The Association has agreed to pay up
to $9,000 in study costs. This study is likely to become the
template for those used in other communities to justify their
fees.
The City's half of the funding for the proposed study would
be from the Trunk Reserve Fund which had a balance of
$1,640,102.83 as of April 1, 1999. The cost of the study will
be included as part qf the cost to construct the City trunk
storm water system, and therefore will be recovered through
the Trunk Fee over time.
The alternatives are as follows:
1. Approve Resolution 99-XX authorizing WSB &
Associates, Inc. to prepare a Storm Water Trunk Fee
Justification Report.
2. Table this Agenda item for a specific reason.
3. Deny this Agenda item for a specific reason.
Motion and second to adopt Resolution 99-XX authorizing
WSB & Associates, Inc. to prepare a Storm Water Trunk Fee
Justification Report for a fee not to exceed $18,560.00 to be
paid from the Trunk R serve Fund.
RESOLUTION 99-8 5y
AUTHORIZING WSB & ASSOCIATES, INC. TO PREPARE A STORM WATER
TRUNK FEE JUSTIFICATION REPORT
MOTION BY:
SEpOND BY:
WHEREAS, the City Council of Prior Lake has adopted an interim Storm Water Trunk
Fee to be collected from developers within the City limits, and
WHEREAS, the Storm Water Trunk Fees collected will be used to construct the storm
water trunk facilities required to be built in the course of development of
the City, and
WHEREAS, it is the City Council's desire to have a rational basis on which to justify
established development fees. _
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA, WSB & Associates, Inc., is hereby authorized to prepare a Storm Water
Fee Justification Report for a fee not to exceed $18,560.00.
BE IT FURTHER RESOLVED, that the Mayor and City Manager are authorized to
execute the City's Standard Professional Services Contract to complete this project.
BE IT FURTHER RESOLVED, funding for this justification report will be from the Trunk
Reserve Fund.
Passed and adopted this 17th day of May, 1999.
YES
NO
Mader
Kedrowski
Peterson
Schenck
Wuellner
Mader
Kedrowski
Peterson
Schenck
Wuellner
162e()cQiaglle Creek Ave. S.E., Prior Lake. Minnesota 55372-1714 I Ph. (612) 447-4230 I Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
...
WSB
& Associates, Inc.
350 Westwood Lake Office
8441 Wayzata Boulevard
Minneapolis, MN 55426
612-541-4800
FAX 541-1700
B.A. Mittelsteadt, P.E.
Brec A. Weiss, r,E.
Peter R. Willenbring, P.E.
Donald W. Sterna, P.E.
Ronald B. B"y. P.E.
Memorandum
To:
Greg Ilkka, P.E., City Engineer
Lani Leichty, Water Resource Coordinator
City oj Prior Lake
From:
Peter R. Willenbring, P.E.
WSB & Associates, Inc.
Date:
April 3, 1998
Re:
Proposal to Prepare Storm Water Trunk Fee Justification Report
WSB Proposal 024.98
Please find outlined below a work plan associated with preparation of a trunk fee justification report.
This report will be utilized to document and justifY storm water trunk fees that are anticipated to be
charged against developing land within the City in the future. In addition, it is understood this report
will attempt to develop costs and fees in a manner similar to that utilized as part of the development
of the trunk sanitary sewer charges. The City's approach relative to design standards, property
acquisition, staging and other related activities rnust also be finalized.
Below, please find an outline ofthe tasks that need to be undertaken as part of the completion of the
justification report along with a proposed schedule and estimate of cost.
Task 1: Complete analysis necessary to develop design standards andfinalize outlineJor
justification report with assistance oj City Staff and Attorney
As part of the development of this work plan, the following must be developed:
A. What storm water improvements must be covered (property acquisition, ponding
construction, trunk system construction, lateral system construction, etc.).
B. Define City's intentions relative to the number of fee districts needed.
C. Define the level of detail required to adequately defend the proposed rates.
D. Identify anticipated future sources of revenue that could be applied against the
anticipated costs.
E. Discuss approach to project phasing and land acquisition.
Infrastnlcture Engineers Planners
EQUAL oprORTUNln E"IPLOYER
F;\ WPWIN\PROPOSAL\024.981,04039S_gi
Greg Ilkka, P.E.
Lani Leichty
City of Prior Lake
March 19, 1998
Page 2
D. IdentifY anticipated future sources of revenue that could be applied against the
anticipated costs.
E. Discuss approach to project phasing and land acquisition.
F. Review considerations outlined hi,- City's Cornprehensive Storm Water
Management Plan.
G. Review considerations outlined on Attachment A.
H. Review considerations relative to what would be defined as the acreage to be
utilized in the computation for the trunk sewer charge.
Note: As part of this task, the issues outlined in the attached memo must be defined.
Task 2: Complete hydrologic analysis of City to the extent necessary to allow for the sizing
of proposed lateral and trunk conveyance systems, as well as storm water storage
and treatmentfacilities
Specific efforts associated with this activity include:
A. Utilize existing comprehensive storm water management plan to assist in sizing
future lateral and trunk conveyance system.
B. Refine hydrologil: analysis of City to extent necessary to estimate the extent of
excavation required to develop storm water storage in City.
Task 3: Develop estimate of cost associated with constructing the system outlined in
Task 2
The breakdown of costs associated with the system implementation would include the
costs associated with:
A. Land acquisition for retention and treatment facilities.
B. Land acquisition associated with the conveyance system construction.
C. Costs associated with constructing retention area.
F:\ WPWIN\PROPOSAL\024.98\040398-gi
Greg Ilkka, P.E.
Lani Leichty
City of Prior Lake
March 19, 1998
Page 3
D. Costs associated with constructing treatment area.
E. Costs associated with construction of trunk conveyance system.
F. Legal, engineering, and administrative costs.
Task 4: Provide analysis concerning projected development schedules and needs for
downstream improvement projects so that cash flow projections can be defined.
Analysis activities may include:
A. Develop a plan that predicts which parcels of land will develop first, second, third,
etc.
B. Develop information predicting short and long-term drainage needs for these
parcels.
C. Develop a plan that would maximize the ability of the City to defer construction
of drainage system improvements until such time as property along the drainage
system develops.
Task 5: Submit draft report/Final Report
As part of this task, the following activities will be undertaken:
A. Draft report will be prepared and submitted to City Staff and legal counsel for
review and comment.
B. Appropriate revisions to the document will be completed.
C. Document will be reviewed with council members and submitted for adoption.
nmflv
F:\ WPWIN\PROPOSAL\024.98\040398_gi
City of Prior Lake - Storm Water Trunk Fee Report
Project Schedule
WORK TASK
DESCRIPTIONS
1. COMPLETE ANALYSIS
TO DEVELOP DESIGN
STANDARDS
2. COMPLETE
HYDROLOGIC
ANALYSIS TO
DETERMINE SIZING
OF CONVEYANCE
SYSTEMS
3. DEVELOP COST
ESTlf',IATE FOR
CONSTRUCTING
SYSTEM FROM TASK 2
4. PROVIDEANALYSIS
FOR DEVELOPMENT
SCHEDULES AND
NEEDS FOR
DOWNSTREAM
IMPROVEMENT
PROJECTS
5. SUBMIT DRAFT
REPORT
APR MAY JUNE JULY AUG SEPT OCT
.1
DEC
I
I
i
I
I
--
F:\ WPWIN\Proposal\024.98\PS.Il
Estimated Cost to Prepare Storm Water Trunk Fee Justification Report
Task 1 Complete analysis necessary to develop design standards and $2,340.00
finalize outline for justification report with assistance of City
Staff and Attorney
Task 2 Complete hydrologic analysis of City to the extent necessary $6,490.00
-
to allow for the sizing of proposed lateral and trunk
conveyance systems, as well as storm Water storage and
treatment facilities
Task 3 Develop estimate of cost associated with constructing the $3,890.00
system outlined in Task 2
Task 4 Provide analysis concerning projected development $1,860.00
schedules and needs for downstream improvement projects
so that cash flow projections can be defined.
-
Task 5 Submit draft reportlFinal Report $3,980.00
Total $18,560.00
F:\\vPWI!'I.'\PROPOSAL\024.98\eSf
Attachment A
Areas Needing Finalization
I. Pond Design Standards
. Rate control standards
. Treatment standards
. Benching/safety design standards
. Wetland creation considerations
. Outlet structure design configuration
. Philosophy toward pumping or use of gravity outlets
II. Property Acquisitionfor Ponding Areas
. Easement acquisition
. Outlot dedication
. Considerations regarding property purchase
. Development of temporary versus outlet measures
III. Trunk System Design Standards
.
Design standard (i.e. 5-year, 10-year or maximum peak flow reduction)
Minimum flow rate
Utilization of open ditch versus pipe
.
.
IV. Property Acquisition for Trunk System
. Easement acquisition
. Outlet dedication
. Considerations regarding property purchase
V. Lateral System Design
. Design standard (i.e. 5-year, 10-year or maximum peak flow reduction)
. Minimum flow rate
. Utilization of open ditch versus pipe
VI. Property Acquisitionfor Lateral System
. Easement acquisition
. Outlot dedication
. Considerations regarding property purchase
VII Engineering, Legal, Administrative Costs, Permits
F:\ WPWIN\PROPOSAL\024.98\040398-gi
Attachment A
Areas Needing Finalization
VIII. Maintenance Activities
IX Cost Associated with Replacement of Deteriorated Systems
X Funding Mechanisms
. Storm water utility
. Trunk fees
. Assessments
. Other
F:\WPWlN\PROPOSALl.024.98\040398.gi
& Associates
Engineers
Archltec.ts
Planners
Surveyors
ZOO~
May 10, 1999
Mr. Lani Leichty, P.E.
Water Resources Coordinator
City of Prior Lake
16200 Eagle Creek Ave. SE
Prior Lake, MN 55372
RE: Proposal for
Storm Water Trunk Impact Fee Justification Report
Dear Mr. Leichty:
Orr-Schelen-Mayeron & Associates, Inc. (OSM) is pleased to present this
Proposal (RFP) for the preparation of a Storm Water Trunk Impact Fee
Justification Report.
Your RFP for proposal lays out five tasks:
Task One: Complete analysis necessary to develop design standards
and finalize outline for justification report with assistance
of City Staff and Attorney.
Task Two: Complete hydrologic analysis of the City to the extent
necessary to allow for the sizing of proposed lateral and
trunk conveyance systems, as well as storm water storage
and treatment facilities.
Task Three: Develop estimate of cost associated with constructing the
system outlined in Task Two.
Task Four: Provide analysis concerning projected development
schedules and needs for downstream improvement projects
so that cash flow projections can be defined.
Task Five: Submit draft/final reports.
The primary goal of Task One is to develop a work plan for the remaining
four tasks. It is our understanding that much of Task One has been
completed by the City. Nevertheless, the following issues remain to be
addressed under the scope of Task One:
(1) IdentifYing improvements to be covered by the Storm Water Trunk
Impact Fee.
(2) Quantifying the number of distinct storm water fee districts which
are necessary.
(3) Establishing a level of detailed analysis necessaiy to defend the
proposed rates.
(4) Identifying anticipated revenue sources that could be applied to
offset anticipated storm water infrastructure costs.
300 Park Place East
5775 Wayzata Boulevard
Minneapa6s, MN 55416-1228
612-595-5775 FAX 612-595-5773 1-800-753-5775
'JOSSY ~ WSO &LLSS6SZ19 XYd &&:tl 66/01/S0
(5)
(6)
(7)
(S)
Mr. Leichty
May 10, 1999
Page 2
Deveioping an approach to project phasing and land acquisition.
Reviewing the City's Comprehensive Storm Water Management
Plan.
Evaluating pond, and trunk and lateral system design standards;
identifying property acquisition issues; estimating administrative,
legal, and engineering costs; determining permit requirements;
projecting maintenance activities and replacement costs; and
completing a review of existing funding mechanisms.
Quantifying the acreage to be used in the computation of the trunk
sewer charge.
.
The remainder of this proposal will define the proposed scope of services
OSM recommends for the appropriate completion of Tasks Two through
Five. Specific items to be outlined include, but are not limited to:
. An outline OSM's approach to this project by discussing the
background of development impact fees (DIF's), defining the data
gathering and needs assessment approach to this project, presenting
DIF calculation methodologies, and discussing our
recommendations for the elements of your Storm Water Trunk
Impact Fee Plan.
o A brief summary of OSM's proposed project personnel.
. An outline of OSM's proposed project fee.
OSM Approach
Background
The use of DIFs to finance facilities necessary to accommodate new
growth is a concept that has gained acceptance in recent years. The
rationale for charging impact fees is based on the premise that new
development should pay the costs associated with increasing storm
drainage volumes driven by growth. Conversely, the existing residents
should only bear the costs of improving existing services.
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Mr. Leichty
May 10, 1999
Page 3
Data Gathering and Needs Assessment
Before beginning the Storm Water Trunk Impact Fee calculation process,
we need to collect reliable information on what the City will look like in
the future (20 or more years) or at theoretical build-out.
The list of projects to be financed with impact fees will be derived from
the information sources, including the following:
o General dr comprehensive plans, including updates.
o Zoning maps.
o Master plans including the City's Storm Water Management Plan.
o Master facilities' plans.
. Capital improvement plans.
Planning statistics on the future population, ultimate land use, undeveloped
parcels, and sizes of parcels will be used to determine the amount of
growth to be anticipated. Existing land-use and zoning data will provide
a basis for evaluating the current situation. ~
Master plans, such as the City's Stormwater Management Plan, that
address the methods of providing service to future residents will provide
the foundation for constructing a storm water capital improvement plan
(CIP) which should ideally extend to the ultimate build-out condition of
the City.
Each proposed storm water improvement project proposed in the CIP will
be identified. The projects should contain a cost estimate, schedule,
priority, and location. An allocation of the relative benefit between existing
users and future users will also be prepared for each proj ect.
Impact Fee Methodology
There are two distinct yet equally valid methodologies for calculating
impact fees; inductive and deductive. These will be discussed in detail
with City staff to evaluate and determine a most effective method of
determining Prior Lake's storm water impact fees.
The deductive method requires a greater level of detail than the inductive
method of computation. Deductive calculations require planning data for
the entire City, for both developed and undeveloped properties.
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Mr. Leichty
May 10, 1999
Page 4
The advantage of the deductive calculation of the impact fee is the ability
to accommodate the uniqueness of each City. The service areas are not
merely a homogeneous collection of average service areas. The deductive
calculation requires pro-active planning and estimating and may be subject
to frequent updating due to changes il,l density, land use, and other factors.
Either method would relate the needs and service levels of the City
necessary to retain inherent validity. However, the deductive method would
result in an impact fee capable of providing facilities specific to the City's
needs.
Recommended Elements of the Storm Water Trunk Impact Fee Plan
OSM proposes a study to determine reasonable and equitable Storm Water
Trunk Impact Fees which will contribute financing to provide the public
facilities necessary to accommodate future growth in the City. The impact
fees should accommodate the growth envisioned in the City's approved
comprehensive plan. Changes in those growth projections should spawn
changes in the plan.
Following is a general discussion of key project elements we recommend
for the successful development of a Storm Water Impact Trunk Fee Plan
for the City. Further procedural refinement of this process is anticipated
in the Task One of this project.
. Determine capital improvement needs through build-out.
. Identify all capital improvement needs, including those not being
fmanced with impact fees.
. Develop long-range financing strategies for projects not financed
with impact fees.
. Produce a comprehensive impact-fee report, including rationale and
calculations.
. Use the deductive method of calculating impact fees.
Anticipated Cost Determinations
This section of our proposal briefly outlines our anticipated methodology
of determining infrastructure costs necessary to determine storm water
impact fees. Following is a general discussion of the storm water
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Mr. Leichty
May 10, 1999
Page 5
infrastructure we recommend as a basis for determining the impact fees for
this project.
Subtrunk Systems
Subtrunk storm sewers would be" located in sub-basins of the 12
sub watersheds identified in the City's Storm Water Management Plan with
a minimum hypothetical pipe length which will be determined in this
study. Locations of subtrunks would be based on general watershed
characteristics such as slope, length, and natural drainage patterns. Cost
estimates would be based on an average design flow (e.g.IO-year) rate for
the watershed and pipes sized appropriately (e.g. full flow).
Trunk Systems
Trunk storm sewer systems would be assumed to be constructed where
there are no Minnesota Department of Natural Resources protected waters _
or existing trunk systems. Trunk sizes would be estimated using the
greater of design (e.g. 100-year) discharges from existing or proposed
ponds or the average design flow from the sub-watersheds. Manholes
would be assumed at regular intervals determined in this project. These
calculations will not be suitable for use as final designs.
Appurtenant Costs
The cost estimates would approximate the anticipated construction imd land
acquisition costs for stormw!lter management systems within an individual
District. These estimates would include the proposed costs for subtrunks,
trunks, channel easements, boulevard and street restoration, pond and
channel excavation, and land acquisition for storm water detention ponds
and channels as appropriately identified in this study. Cost estimates for
proposed stormwater detention ponds would include excavation, land
purchase and restoration costs. Estimates for the value of wetlands
identified on the National Wetlands Inventory would be added to each
District.
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Mr. Leichty
May 10, 1999
Page 6
Finally, it is important that the City plan to update the impact fees
periodically. Impact-fee calculations should be updated regularly to ensure
that the assumptions are still valid. The projected growth of the City, the
Storm Water Tlllnk Fee District needs, and the associated coSts should be
verified. Reviewing the impact-fee calculations together with the capital
improvement plan or budget woulq be ideal. At a minimum, the impact
fees should be reviewed at regular intervals, or whenever a major change
occurs (e.g., major annexation or general plan revision) in the community.
Project Management
The successful completion of this work scope will primarily be dependent
on the approach of the project staff assigned. Technical competency is
critical; however, equally important is the project team's skill in the
selection of techniques appropriate to an individual project and their ability
to effectively plan, manage, and execute their work product. OSM's
organization, internal controls, and QNQC program are all in place to
assure a successful project.
Our project team will be led by Jim Jacques who will be responsible to the
City for the timely and successful completion of each item identified in the
project scope. Greg Stonehouse will provide technical assistance to ensure
the work product you demand.
Fee and Schedule
OSM proposes to initiate this project immediately upon your authorization.
We will meet with City project representatives to first develop a project
schedule to complete the project prior to the end of this calendar year.
Based on the information presented here, OSM estimates a fee of $26,000
for the work described in this proposal, broken down as follows:
. Task One $ 3,000
. Task Two $ 10,000
. Task Three $ 5,000
. Task Four $ 3,000
. Task Five $ 5,000
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CLL9969Z19 XVd 9C:~1 66/01/90
Mr. Leichty
May 10, 1999
Page 7
Our proposal assumes:
(I) Four meetings with City staff.
(2) The bulk of Task One has been accomplished by the City.
(3) The hydrologic modeling and analysis presented in the
City's Storm Water Management Plan are available and
useful as a basis for/Task Two of this project.
(4) The bulk of Task Four has been accomplished by the City.
Because of the nature of this project and the number of unknowns involved
in its completioIl, OSM proposes to conduct this project on a time and
material's basis. IT conditions arise which affect this estimate, you will be
contacted immediately and before we commit resources beyond the fee
presented herein.
OSM sincerely appreciates the opportunity to provide a proposal for
services to the City of Prior Lake. If you have any questions regarding our
proposed scope of services, please call Jim Jacques at 612-595-5738.
Sincerely,
ORR-SCHELEN-MA YERON
& ASSOCIATES
J-(~
James E. Jacques, PE
Project Manager
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Dale Tranter
Vice President
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