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HomeMy WebLinkAbout04 21 2014 EDA Report 4B Attach1 C:City of Prior LakeN.13M002-1 OMMUNITYO CA:4646 Dakota St SE Prior Lake, MN 55372 OMMUNITY DDRESS CP:Jerilyn Erickson, Finance Director ONTACT ERSON C-WSACDA:80% OMMUNITYIDE EFERRED MOUNT C-WSACDP:Five(5) Years OMMUNITYIDE EFERMENT ERIOD PM():July & December AYMENTONTHS MASTER SAC DEFERRAL AGREEMENT THIS MASTER SAC DEFERRAL AGREEMENT (“Agreement”)is entered into by and between the Metropolitan Council, a public corporation and political subdivision of the State of Minnesota, with business offices at 390 Robert Street North, Saint Paul, Minnesota 55101 (“Council”), and the local government unit identified above as the “Community.” Recitals 1.The Council owns and operates the metropolitan disposal system. Under Minnesota Statutes section 473.517, subdivision 3, the costs of acquisition, betterment and debt service associated with the “reserve capacity” of the system must be allocated among and paid by the respective local government units in the metropolitan area through a sewer availability charge (“SAC”) for each new connection or increase in capacity demand to the metropolitan disposal system within each local government unit. 2.Individual propertyor businessownerswhose properties are either newly connectedor increase capacity demand to the metropolitan disposal system do not pay SACto the Council. However, local government units that pay SAC to the Councilfor new connections or increased capacity demands typically pass on those costs to property and business ownersby assessing property and business owners a “Local SAC” which sometimes includes local add-on charges. 3.Minnesota Statutes section 473.517, subdivision 6 authorizes the Council to provide for the deferment of payment of all or part of the allocated costs which are allocated by the Council to a local government unit in any year pursuant to section 473.517, subdivision 3. The deferments are repayable at such time or times as the Council shall specify, with interest. 4.At its November 28, 2012 meeting, the Council adopted changes to its SAC program including a small business SAC deferral program. The changes became effective January 1, 2013. At its January 22, 2014 meeting, the Council adopted changes to the SAC deferral program that became effective immediately upon adoption. 5.The Council wants to encourage and help communities promote business development by deferringcommunitySAC payment obligations pursuant to Minnesota Statutes section 473.517, Met. Council N.13M002-1 O subdivision 6, so participating communities may pass through to businesses the benefits of deferred SAC paymentsby the communities. The Council’s Sewer Availability Charge Procedure Manual(January 2014) states that communities that want to participate in a SAC deferral program must execute a standard master SAC deferral agreement with the Council. 6.To obtain a deferment of a SAC payment obligation and provideassistanceto businesses, communities will submit to the Councila signed master SAC deferral agreement.For the term of the master agreement, communities will have the option to noteontheir monthly SAC reporting, on forms as provided by the Council, the eligible SAC liabilities for which the communities are requesting a SAC payment deferment from the Council.For each suchsubject SAC liabilitythe deferment will be effective as of the first day of the subsequent month (e.g., for an April building permit that is reportedfor SACin May, thedefermentwill be effective as of June 1). 7.In order to define the rights and obligations of theCommunityand theCouncil and the relevant SAC deferral arrangements, theCommunity and the Council agree as follows: Article 1 -Definitions 1.1Definition of Terms. Unless otherwise providedor indicated by the context, the terms defined in this article have the meanings given them in this article. Capitalized terms or phrases used in this Agreement have the meanings given them in the most recent version of the Council’s Sewer Availability Charge Procedure Manual(the “SAC Procedure Manual”). Community. (a)“Community” means a “Community” or “Customer Community” as those terms are defined in the SAC Procedure Manual. Determination. (b)“Determination” has the meaning ascribed to that term in the SAC Procedure Manual. Regional Portion of Local SAC. (c)The “Regional Portion of Local SAC” means that portion of the Community’s SAC payment obligations to the Council that the Community passed on to properties within the Community’s jurisdiction and does not include any local add-on charges. SAC Deferred Amount. (d)“SAC Deferred Amount” means the amount of the Community’s SAC obligation under Minnesota Statutes section 473.517, subdivision 3 that has been deferred pursuant to Minnesota Statutes section 473.517, subdivision 6 and the terms and conditions of this Agreement. Business. (e)“Business” means a property or business for which the aggregate SAC Determination results in a liability of twenty-five (25) SAC units or less, before application of any Credits available on the Site. Business does not include any typeof “Residential Property” or “Publicly Assisted Housing” as those terms are defined in the SAC Procedure Manual; nor does it include motels, hotels, camps, nursing homes, senior housing or prisons. Business includes “Commercial Properties,” as that term is defined in the SAC Procedure 2 Met. Council N.13M002-1 O Manual, but only when the aggregate SAC Determination for a Commercial Property is twenty-five (25) SAC units or less, before any applicable Credits. Article 2–SAC Deferred Amount; Interest; Payments 2.1SAC Deferred Amount. Subject to the terms and conditions of this Agreement and applicable law, the Council will allow the Communityto defer payment on the Community’s SAC obligations for Business properties within the Community’s jurisdiction in an amount not to exceed eighty percent (80%)of the SAC due for the properties that are either newly connectedor increase capacitydemand to the metropolitan disposal system. The percentage by which the Community elects to defer payment on the Community’s SAC obligations must be applied on a community-wide basis to all participating Businesses within the Community’s jurisdiction. The “Community-Wide SAC Deferred Amount” is stated as a percentage on Page 1 of this Agreement. The deferment is available only to properties for which the aggregate Determination is twenty-five (25)SAC unitsor less. In each instance in which the Community exercises this deferment option, the SAC amount that is not deferred is due and payable at the time the SAC liability is incurred by the Community. Payments on the non-deferred amounts are due with the regular SAC reporting to the Council, pursuant to the SAC Procedure Manual. The deferred SAC liability begins accruing interest on the first day following the regular SAC reporting. 2.2Interest. Annually at each calendar year-end,theCouncil will determine the average rate on its wastewater bonds, pursuant to Minnesota Statutes section 473.517,subdivision 6. All new SAC defermentsduring the following calendar year will be subject to that interest rate,but that interest rate will be fixed for the duration of the deferment period for each deferral originated in that calendar year. Interest on unpaid SAC Deferred Amount balanceswill be computed in whole months, however, payments to the Council can be annual. 2.3Payments. When the Council invoices the Community for payments on its SAC Deferred Amount, the Council will provide the Community with a payment schedule that amortizes the SAC Deferred Amount and interest on that deferred amount over the term of the deferment period. The Community’s payment schedule will list the Business properties for which the Community elected to defer payments on the Community’s SAC obligations to the Council. The Communitywill make payments totheCouncil at least annually.The Community may elect to make payments semi-annuallyor morefrequentlyto correspond with the Community’s Local SAC collections, assessmentsor other payments from Businesses, but the same payment schedule must apply to all Community SAC Deferred Amounts.The month(s) the Community elected to make its SACpayments to the Councilunder thepayment schedule are identified on Page 1 of this Agreement as the “Payment Month(s).” The Community may repay or prepay the Council the unpaid balance of a SAC Deferred Amount at any time prior to the end of the deferment period. Any repayment or prepayment made by the Community shall be without penalty to the Community. The Community’s payment schedule will be recalculated during the term of the deferment period to reflect: (a) repayments or prepayments by the Community; (b) the Community’s election (if any) to discontinuemaking payments on its SAC Deferral Amount for a Site pursuant to Section 4.2(b); (c) any Community payments to the Council pursuant to Section 4.1(b);or (d) the addition of new Business properties for which the Community elects to defer payment on the Community’s SAC obligations to the Council. 3 Met. Council N.13M002-1 O 2.4Local SAC Payments from Businesses. Subject to the limitation stated in Sections 3.2 and 4.1, the Community may enter into a payment or other agreement with each Business for payment of Local SAC to the Community on terms and conditions agreed to by the Community and the Business. Except as described in Section 4.2, failure of a Business to make its Local SAC payments to the Community or the Community’s failure (or choice) not to assess or collect Local SAC from a Business shall not relieve the Community of its obligation to pay the Council any unpaid SAC Deferred Amount, plus interest, or otherwise meet its SAC payment obligations under Minnesota Statutes section 473.517, subdivision 6 or other law. Article 3 -Term of Deferments 3.1Term of Agreement. Unless otherwise terminated pursuant to this Agreement, this Agreement shall remain in force and effect until the term of the last deferment period expires for Business properties listed on the Community’s payment schedule. The Council reserves the right to cancel, suspend or modify its SAC deferral program at any time and for any reason upon thirty (30) calendar days written notice to the Community. If the Council cancels, suspends or modifies its SAC deferral program it will honor all existing SAC deferrals which the Community elected to make under this Agreement prior to the cancellation, suspension or modification. The Community is responsible for giving timely notice to the Community’s participating Businesses or prospective participant Businesses of any cancellation, suspension or modification of the Council’s SAC deferral program that may affect the Community’s local SAC deferral program. 3.2Term of Deferment. The Community elects the term of the SAC deferments between the Council and the Community, but the maximum term of a Community’s SAC deferment shall not exceed ten (10) years. The Community may have only one SAC deferment period and must have the same SAC deferment period for all Business properties covered by this Agreement. The Community’s “Community-Wide SAC Deferment Period” is identified on Page 1 of this Agreement. Article 4 –Local SAC Deferrals 4.1Local Terms and Conditions. TheCommunitywill be responsible for identifying property and businessowners that qualify for the Community’s SAC deferral program pursuant to any Community terms or conditions.The Council will disapprove a Community deferment request only ifa property or business owner does not qualify as a Business as defined in this Agreement. Because the Council’s SAC deferral program is intended to benefit Businesses, the Community must administer its local SAC deferral program in a revenue-neutral manner. The Community agrees its SAC payments to the Council will not be less than the Regional Portion of Local SAC payments the Community receives from participating Businesses. Local Deferment Period. (a)The Community agrees it will not allow a Business a less generous deferment period (i.e., a shorter deferment period) for payment ofthe Regional Portion of Local SAC than the term of the Community’s Community-Wide Deferment Period. This Agreement is not intended to govern the payment or deferment of any local add-on charges by the Community (if any) for Business properties. 4 Met. Council N.13M002-1 O Local Deferred Amount. (b)The Regional Portion of Local SAC deferred by the Community for a Business’s benefit shall not be less than the Community’s SAC Deferred Amount. If a Business elects to prepay the Community some or all of the Regional Portion of Local SAC deferred by the Community, the Community must make a like payment to the Council to cover the Community’s SAC obligations to the Council for the Business property. If a Business elects to prepay some of the Regional Portion of Local SAC deferred by the Community the Council will recalculate the Community’s payment schedule. 4.2Unpaid Local SAC. If a Business ceases operations or moves from the Site and does not require the incremental wastewater capacity represented by the SAC deferral, the Community may exercise one of the following two options: Continue SAC Payments. (a)The Community may continue to make its payments to the Council under the payment schedule. If the Community elects this option it will accrue SAC Credits for the Site in accordance with the SAC Credit provisions of the SAC Procedure Manual. Discontinue SAC Payments. (b)The Community may discontinue making its payments to the Council on the Community’s SAC Deferral Amount for the Site.The Community must notify the Council if the Community elects this option and it must certifyto the Councilthat the incremental capacity no longer is needed at the Site.The Community is responsible for making all SAC payments on the SAC Deferral Amount that were due prior to the notice. The Site will not be credited with the portion of the wastewater capacity not paid (for future SAC Determinations), but will receive Credit for actual SAC paid (including partial units). No Community SAC deferral payments to the Council will be refunded.Net Credits will be available to the Community for Community-Wide Credits only if a new SAC Determination establishes a permanent reduction of capacity demand. 4.3LateCommunity Payments. If the Communitymakes a late SAC deferral payment to the Council, an additional administrative charge oftwo percent (2%) of the unpaid balance of the SAC Deferred Amount per month(or such higherinterestrate allowable under law)will be applied. Article 5-Notices 5.1Written Notices. Any notice, request, demand and other correspondence required by or made in accordance with this Agreement shall be in writing and delivered: To the Council:Metropolitan Council Attn: MCES Finance Director 390 Robert Street North Saint Paul, Minnesota 55101-1806 To the Community:The Community’s “Contract Person” identified on Page 1 At the “Community Address” identified on Page 1 5 Met. Council N.13M002-1 O 5.2Notice Delivery. Any notices or other correspondence shall be deemed to have been received: (a) three (3) calendar days after the date on the notice if the notice is sent by U.S.Mail; or (b) the next business day from the date on the notice if the notice is sent by facsimile or by e- mail. Article 6-Defaulting Liabilities 6.1Liability. To the extent permitted or authorized by law, the Communitywill hold the Council harmless and indemnify the Council against any actions, charges, claims, costs, damages, demands, expenses, liabilities, losses and proceedings which the Council may suffer or be subject to as a result of any default byaBusiness or the Community of the Community’s SAC payment obligations under this Agreement or under applicable law. A Business’s failure to pay Local SAC shall not relieve the Community of its obligation to pay the Community’s SAC obligations to the Council. Nothing in this Agreement shall be interpreted as a waiver of any liability limitations or immunities granted to the Council and the Community by Minnesota Statutes chapter 466 or byother applicable state or federal law. 6.2Survival of Terms. Notwithstanding any other provision of this Agreement, the validity of this Articleand the Community’s obligation to pay its SAC obligations shall survive the expiration or termination of this Agreement. Article 7-Miscellaneous 7.1Dispute Resolution. Any dispute arising under this Agreement shall be settled through consultations between theCouncil’s and the Community’s representatives. If an agreement regarding adispute cannot be reached within thirty (30)days uponnotice of a dispute from the Council or the Community, either party is then entitled to bring such dispute before the courts of this state or take such action as otherwise allowed by law. 7.2Exercise of Rights. Any rights, powers and remedies granted totheCouncil and the Communityby this Agreement shall not preclude or limit any other rights, powers and remedies available tothe Council or the Communityin accordance with law and other provisions of this Agreement. The exercise of any rights, powers and remedies bythe Council or the Community shall not precludethe Council or the Community from exercising any other rights, powers and remediesavailable to the Council or the Community.No failure or delay bythe Council or the Communityto exercise any oftheir respectiverights, powers and remedies under this Agreement or in accordance with applicable laws shall be construed as a waiver of such rights, powers, and remedies. The waiver of any right, power or remedy, in whole or in part, shall not preclude the Council or the Community from exercising any of their other respective rights, powers or remedies. 7.3Severability of Provisions. Each provision in this Agreement shall be severable from and independent of the other provisions. If one or more provisions are held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected and shall remain in force and effect. 6 Met. Council N.13M002-1 O 7.4Amendments and modifications. Any amendments or modifications to this Agreement shall be in writing and shall become effective only upon execution of the amendment by the Council’s and the Community’s authorized representatives. 7.5Assignment. TheCommunityshall not assign any of its rights or obligations under this Agreement to any third party, even if the Site which was the subject of the SAC liability is removed from the jurisdiction of the Community.The Community may not barter, trade, sell or otherwise treat any SAC payment obligation deferments or SAC Credits as a commodity and the Council will not honor any agreements between the Community and any third parties that purport to barter, trade, sell or otherwise treat any SAC payment obligation deferments or SAC Credits as a commodity. 7.6Successors. This Agreement shallbe binding on the legal successors of the Council and the Community, whether by operation of law or otherwise. 7.7Warranty of Legal Capacity. The individuals signing this Agreement on behalf of the Community and the Council represent and warrant on the Community’s and the Council’s behalf respectively that the individuals are duly authorized to execute this Agreement on the Community’s and theCouncil’s behalf respectively and that this Agreement constitutes the Community’s and the Council’s valid, binding and enforceable agreement. IN WITNESS WHEREOF , theCommunity and the Council have caused this Agreement to be executed by their duly authorized representatives. This Agreement is effective on the date of final execution by the Council. CITY OF PRIOR LAKEMETROPOLITAN COUNCIL By: By: Print Name: JasonWillett MayorDirector,MCESFinance Date: Date: By: CityManager Date: 7