HomeMy WebLinkAbout9J - Water & Sewer Connect Fees
INTRODUCTION:
DISCUSSION:
STAFF AGENDA REPORT
APRIL 1,2002
9J
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL OF AN ORDINANCE AMENDING
PRIOR LAKE CITY CODE SECTION 704.403 AND 705.502 TO
CHANGE ALLOCATION OF FUNDS FOR WATER AND
SEWER CONNECTION FEES
The purpose for the proposed ordinance change is to allocate the
entire portion of the city's water and sewer connection fees collected
upon the building permit into the City's Trunk Reserve Fund, as
opposed to the current appropriation method of splitting these
connection fees on a 50/50% basis into the City's Trunk Reserve
Fund and into the Enterprise Fund.
The City presently collects a water availability connection (WAC)
fee of $600.00 and a similar sewer availability connection (SAC) fee
of $600.00 upon the building permit for a total connection charge of
$1200.00 for each new construction unit. Asper City Code Section
704.403 and 705.052 "One-half(~) ofthefees shall be placed in the
Sewer and Water Fund as revenue to offset operational expenses. "
The remaining portion is deposited in the City's Trunk Reserve
Fund.
Under the proposed change in the attached ordinance, the entire
connection fee would be placed in the Trunk Reserve Fund. The
reason for the change is basically twofold:
1. The connection charge is really intended to provide funding
for capital expenditures that are necessitated as a direct
result of growth. Therefore the fee that should be expended
upon Municipal System improvements (i.e., wells, lift
stations, watem1ain loopings, force mains etc.) that are
required and supported by new development only.
Operational expenditures are financed through utility rate
billing in the Sewer and Water Fund.
2. Equally important is that the City must generate sufficient
revenue to complete the build-out of the municipal water,
sanitary sewer and storm sewer system. The City's CIP
(Capital Improvement Plan) identifies nearly 4.5 million
dollars of trunk system expenditures which are financed by
development acreage charges and the above referenced
connection fees collected at time of building permit
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16200 Eagle Creek Ave, 5.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
application. All of this revenue is dedicated to the Trunk
Reserve Fund for exactly such purposes.
In order that we have adequate fl4}ding for those capital
improvements associated with the municipal system, it is both
equitable and necessary for the entire connection fee to be
appropriated to the City's Trunk Reserve Fund and that maintenance
costs be funded exclusively by the water and sewer enterprise fund.
Also included in the ordinance amendment is the provision that the
connection fee amount be "as determined by the City Council" as
opposed to stipulating the $600.00 amount in each section thereby
reducing the requirement of an ordinance amendment for changing
future fee amounts. A fee amount change would be made by
amending the City's official fee schedule.
This change, in and of itself will not require any change in sewer or
water usage fees in 2002. Later this year we will conduct an analysis
of our sewer and water rates and trunk acreage fees to assure they
are adequate to meet our short term and long term operating and
capital needs. This analysis may reveal the need for adjustments in
our various fees.
RECOMMENDATION: Staff would recommend adoption of An Ordinance Amending Prior
Lake City Code Section 704.403 and 705.502 to Change Allocation
of Funds for Water and Sewer Connection Fees.
ACTION REQUIRED:
REVIEWED BY:
Attachments:
1. An Ordinance Amending Prior Lake City Code Section 704.403
and 705.502 to Change Allocation of Funds for Water and Sewer
Connection Fees
H: IASSESSlAgendaconnectionfee,DOC
CITY OF PRIOR LAKE /"V /
ORDINANCE NO. 02~ U7
AN ORDINANCE AMENDING SECTION 705.502 AND 704.403 OF
PRIOR LAKE CITY CODE TO CHANGE ALLOCATION OF FUNDS FOR
WATER AND SEWER CONNECTION FEES
The City Council of the City of Prior Lake does hereby ordain:
1. Section 704.403 of the Prior Lake City Code is hereby amended in its entirety as set forth below:
704.403:
705.502
CONNECTION PERMITS. A connection fee in an amount to be determined annuall~ b3
~~~~~:~oc~~n;~~u~~~~U;sd~te~~~ (~~O~h~O~~'~o~~ta~:; (~~)~~~~: ~e~
collected as unit connection charges under this subsection shall be applied towards the
maintenance, building, construction, reconstruction repair, enlargement or improvement
of the Municipal system. "The Municipal system" shall mean waterworks systems,
including mains, valves, hydrants, service connections, wells, pumps, reservoirs, tanks,
treatment plants, and other appurtenances of a waterworks system, sewer systems,
sewage treatment works, disposal systems, and other facilities for disposing of sewage,
industrial wastes, or other wastes, and storm sewer systems, including mains, holding
areas and pods, and other appurtenances and related facilities for the collection of
disposal of storm water. The remaining one half (1/2) shall be placed in the Sewer and
Water Fund as revenue to offset operational expenses.
o be det
e
collected as unit connection charges under this subsection shall be applied towards the
maintenance, building, construction, reconstruction repair, enlargement or improvement
of the Municipal system. "The Municipal system" shall mean waterworks systems,
. including mains, valves, hydrants, service connections, wells, pumps, reservoirs, tanks,
treatment plants, and other appurtenances of a waterworks system, sewer systems,
sewage treatment works, disposal systems, and other facilities for disposing of sewage,
industrial wastes, or other wastes, and storm sewer systems, including mains, holding
areas and pods, and other appurtenances and related facilities for the collection of
disposal of storm water. The remaining one half (1/2) shall be placed in the Sewer and
Water Fund as revenue to offset operational expenses.
This ordinance shall become effective upon its passage and publication.
Passed by the City Council of the City of Prior Lake this April 1, 2002.
ATTEST:
City Manager
Mayor
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16200 Eagle Creek Ave. 5.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245
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