HomeMy WebLinkAbout9A Amend Fee Deferral Policy and Approve SAC Agreement with Met Council 0 P R/0
U rn 4646 Dakota Street SE
Prior Lake, MN 55372
4 INNESOl P
CITY COUNCIL AGENDA REPORT
MEETING DATE: May 27, 2014
AGENDA #: 9A
PREPARED BY: CASEY MCCABE, COMMUNITY DEVELOPMENT SPECIALIST
PRESENTED BY: DAN ROGNESS, COMMUNITY & ECONOMIC DEVELOPMENT DIRECTOR
AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AMENDING THE SEWER AND
WATER FEE DEFERRAL PROGRAM POLICY AND APPROVING A MASTER
SAC DEFERRAL AGREEMENT WITH THE METROPOLITAN COUNCIL
DISCUSSION: Introduction
The purpose of this agenda item is to consider amendments to the City of Prior
Lake Sewer and Water Fee Deferral Program Policy and authorizing the Mayor
and City Manager to enter into a revised Master SAC Deferral Agreement with
the Metropolitan Council. This agenda item presumes that the city council
approved Agenda Item 7A above.
History
On February 11, 2013 the Prior Lake City Council adopted the Metropolitan
Council SAC Deferral Program (SAC refers to Sewer Availability Charge) which
allowed for the deferment of SAC fees for small businesses that receive SAC
determinations of 10 units or less. On February 11, 2013, the City Council also
approved the City of Prior Lake Sewer and Water Fee Deferral Program Policy,
which amended the city's previous sewer and water fee payment program to
mirror the Metropolitan Council program, and approved an ordinance (Ord. 113-
04) amending sections 704.500, 705.600 and 705.1002 of the City Code relating
to deferral of certain water connection, sewer connection, water tower charges
and Metropolitan SAC charges for economic development purposes.
On May 27, 2014 the City Council considered an ordinance amending
Subsections 704.500 and 705.600 of the City Code earlier in this meeting under
agenda item 7A.
Current Circumstances
During its January 22, 2014 meeting, the Metropolitan Council adopted changes
to the SAC deferral program in an effort to encourage and help communities
promote business development. The revised agreement language will allow
businesses with a SAC determination of 25 units or less, before application of
credits, to be eligible for the program. The previous SAC deferral program
language only allowed those businesses with a SAC determination of 10 units
or less.
The Met Council also amended the definition of "Business" to mean 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 type of 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 Manual, but only when the aggregate SAC determination for a
commercial property is twenty -five (25) SAC units or Tess, before any applicable
credits.
Attached is a copy of the City of Prior Lake Sewer and Water Fee Deferral
Program Policy which was adopted by the Prior Lake City Council on February
11, 2013. If the city's sewer and water fee deferral program is to mirror the
revised Master SAC Deferral Agreement language, the current City of Prior Lake
Sewer and Water Fee Deferral Program Policy language will need to be
amended.
The EDA also discussed this program and its budget implications on May 19,
which resulted in a motion to have staff establish a funding source other than
the EDA budget. Their rationale is that if the program is larger based on
allowable SAC units, then the limited EDA budget may not fully support future
demand. The EDA felt that the corresponding sewer and water trunk funds
should bear the responsibility of program support. Therefore, the amended
policy removes some references to the EDA, even though it will continue to have
overall administrative responsibilities. To address future funding limitations, a
policy amendment includes the sentence, "The City reserves the right to
approve or reject specific Local Program funding requests based on the
availability of funding."
Conclusion
To date, the City of Prior Lake has entered into two sewer and water fee deferral
agreements; one with Artisan Coffee Bistro and one with Honest -1 Auto Care.
Staff anticipates that extending the maximum SAC unit determination of 10 units
to 25 units may result in additional applications or larger projects which would
require additional program funding.
ISSUES: The local sewer and water fee deferral program has been designed to facilitate
business development. For that reason, deferral of SAC units Tess than three is
not part of the program. A typical home would be assessed one unit. The EDA
will monitor the effectiveness of this program over time.
FINANCIAL As noted previously, City staff will evaluate the best funding method to sustain
IMPACT: this economic development program. Additional information related to program
funding may be presented to the City Council at a later date.
ALTERNATIVES: 1. Motion and a second to approve amendments to the City of Prior Lake
Sewer and Water Fee Deferral Program Policy, as proposed or as may be
amended.
2. Motion and a second to approve the Master SAC Deferral Agreement with
the Metropolitan Council.
3. Motion and second to table this item to a date certain.
RECOMMENDED Alternatives #1 and #2.
MOTION:
ATTACHMENTS: 1. City of Prior Lake Sewer and Water Fee Deferral Program Policy (redline)
2. Master SAC Deferral Agreement
2
O. PRIP
U
4646 Dakota Street SE
4 INxEsoV Prior Lake, MN 55372
RESOLUTION 14 -xxx
A RESOLUTION AMENDING THE SEWER AND WATER FEE DEFERRAL PROGRAM POLICY AND
APPROVING A MASTER SAC DEFERRAL AGREEMENT WITH THE METROPOLITAN COUNCIL
Motion By: Second By:
WHEREAS, The City of Prior Lake allows a deferment of sewer and water fees in City Code Subsections
704.500 and 705.600; and
WHEREAS, The Metropolitan Council approved a SAC Deferral Program for small businesses effective
January 1, 2013; and
WHEREAS, At its February 11, 2013 meeting, the City Council of the City of Prior Lake approved the City of
Prior Lake Sewer and Water Fee Deferral Program Policy and authorized the Mayor and City
Manager to enter into the Master SAC Deferral Agreement with the Metropolitan Council; and
WHEREAS, At its January 22, 2014 meeting, the Metropolitan Council adopted changes to its SAC Deferral
Program that became effective immediately upon adoption; and
WHEREAS, The City of Prior Lake desires to participate in the Metropolitan Council's SAC Deferral
Program and to amend the City of Prior Lake Sewer and Water Fee Deferral Program Policy to
mirror the revised Metropolitan Council SAC Deferral Program; and
WHEREAS, To participate in the regional deferral program and to establish a local program, the City
Council must authorize participation in the regional program through adoption of the Master
SAC Deferral Agreement; and
WHEREAS, To maintain a local program and guidelines consistent with the regional program, the City of
Prior Lake has amended its Sewer and Water Fee Deferral Program Policy describing the
program implemented by the City and its Economic Development Authority.
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. The City of Prior Lake Sewer and Water Fee Deferral Program Policy is hereby amended.
3. The Master SAC Deferral Agreement with the Metropolitan Council is hereby approved.
4. The Mayor and City Manager are hereby authorized to execute the Master SAC Deferral Agreement.
PASSED AND ADOPTED THIS 27th DAY OF MAY, 2014.
VOTE Hedberg Keeney McGuire Morton Soukup
Aye ❑ ❑ ❑ ❑ ❑
Nay ❑ ❑ ❑ ❑ ❑
Absent ❑ ❑ ❑ ❑ ❑
Abstain ❑ ❑ ❑ ❑ ❑
Frank Boyles, City Manager
Sewer and Water Fee Deferral Program Policy
City of Prior Lake, Minnesota
Adopted February 11, 2013
Amended , 2014
DRAFT — D ' ,s and Additions Shown
Sections I through VII of this document govern the use of two programs, including the Metropolitan
Council's "SAC Deferral Program" for certain sewer fees ( "Regional Program ") and the City of Prior
Lake's "Payment of Permit Fees" for certain sewer and water fees ( "Local Program "). Hereinafter, the
City of Prior Lake is referred to as the "City ".
SECTION I - PURPOSE.
The purpose of this policy is to establish procedures to regulate, coordinate, and facilitate the approval
of certain sewer and water fee deferrals for eligible businesses or properties. Eligible businesses or
properties can apply for the deferral of a portion of one or more sewer /water fees, including:
1. Metropolitan Council Sewer Availability Charge (SAC) — Regional Program sewer fee;
2. Prior Lake Sewer Connection Charge — Local Program sewer fee;
3. Prior Lake Water Connection Charge — Local Program water fee; and
4. Prior Lake Water Tower Charge — Local Program water fee.
For any SAC deferral between a minimum of three (3) and a maximum of tcn (10) twenty -five (25) units,
this policy provides for more consistency between the Regional Program and the Local Program related
to eligibility, terms and conditions. The 3 -unit minimum and the 10 unit 25 -unit maximum are
determined before application of any credits on the site. The Local Program also allows anyone to apply
for a deferral of sewer /water fees when the SAC determination is greater than tcn (10) twenty -five (25)
units, before application of any credits on the site.
SECTION II - AUTHORIZATION AND FUNDING SOURCES
On November 28, 2012 (based on Minnesota Statutes 473.517, Subd. 6), the Metropolitan Council
adopted changes to its SAC program to include a small business deferral program. The Regional
Program became effective on January 1, 2013, and later amended, which allows a deferment of SAC fees
up to ten (10) years at a low annual interest rate based on Metropolitan Council Environmental Services'
(MCES) average cost of debt per statute and applied to all new deferrals originating in that particular
year.
Prior Lake City Code Sections 704.500 and 705.600 allow any business or property owner who qualifies
to defer a portion the City's water and sewer fees. These Sections are to be amended into two (2)
categories, including:
1. "Local Program A" allows eligible small businesses or property owners to apply for a City
sewer /water fee deferment for SAC unit determinations between three (3) gross units and t-eR
{10) twenty -five (25) gross units to match the terms and conditions of the Regional Program.
2. "Local Program B" allows any business or property owner to apply for a City sewer /water fee
deferment for SAC unit determinations above tcn (10) twenty -five (25) gross units, before
credits are applied. Note: The Regional Program is not available for businesses or property
owners that are eligible for Local Program B.
City of Prior Lake
Sewer and Water Fee Deferral Program
1
- - _ - •- - ' • • - _ - - - _ • - - - - - - 9- _ - - - I. -: 11' '
The Cit reserves the ri: h o a ''rove or re'ect s•ecific Local Pro: ram fundin: re• ests based on the
availability of funding. Funding for the Regional Program is not required due to the Metropolitan
Council's deferral of its revenue for up to ten (10) years. The EDA will provide the Local Program
dcfcr nt —The EDA will then be responsible for collecting all Local Program deferred funds from the
business or property participating in the Local Program.
SECTION III - PROGRAM OBJECTIVE
The Metropolitan Council's stated objective is to encourage and help communities promote small
business development by deferring SAC payment obligations. The City of Prior Lake has an objective in
its 2030 Comprehensive Plan to encourage a diversified economic base and a broad range of
employment opportunities.
SECTION IV - ELIGIBILITY
For the Regional Program and Local Program A, an eligible applicant is a "small business" as defined in a
Master SAC Deferral Agreement between Prior Lake and the Metropolitan Council. Small business
means a property or business for which the aggregate SAC determination by the Metropolitan Council
results in a liability of ten (10) twenty -five (25) SAC units or less, before application of any credits
available on the site. For the Regional Program and Local Program A, the City has chosen to also exclude
small businesses that have a SAC unit determination less than three (3), before application of any credits
available on the site. For Local Program B, any business or property owner is eligible to apply if they
have a SAC determination resulting in over ten (10) twenty -five (25) units, before application of any
credits available on the site.
SECTION V - DEFERRAL STRUCTURE
The structure of the Regional and Local Program deferrals include the following provisions:
1. The deferral amount can equal up to eighty percent (80 %) of the total sewer and /or water fees
due.
2. The deferment term is five (5) years.
3. Each deferment liability will be effective the first day of the subsequent month (e.g., for an April
building permit that is due and typically reported in May, interest will begin accruing June 1).
4. Interest for the Regional Program and Local Program A is determined using the Metropolitan
Council's SAC Deferral Program rate, which is determined annually and set for the deferment
period. Interest is amortized over the term of the deferment period using whole months.
5. Interest for Local Program B is determined using a rate of two (2) percentage points higher than
the net interest cost of the most recent bonds sold by the City.
6. For the Regional Program, payments are made by the business or property owner to the City
using a city automated system; a late payment fee of two percent (2 %) of the unpaid amount
will be charged upon ten (10) days past due, subject to written notice by the City.
7. For the Local Program, payments are made by the business or property owner to the EDA City
using a city automated system; a late payment fee of two percent (2 %) of the unpaid amount
will be charged upon ten (10) days past due, subject to written notice by the EDA.
8. In the event of a default of payment that is at least sixty (60) days past due, the City or EDA shall
assess the unpaid balance upon the fee owner's property taxes the following taxable year
subject to the same interest rate applied to the deferred amount. The fee property owner shall
sign a waiver of notice of hearing of assessment at the time of application. At the discretion of
City of Prior Lake
Sewer and Water Fee Deferral Program
2
the City, the City may terminate any amount due related to assessments for the Regional
Program, resulting in a SAC unit credit for only the amount paid by the small business or
property.
9. A "Payment Agreement" will be executed between the eligible business, the fee property
owner, and the City stating all conditions and requirements of the parties for the Regional and
Local Programs. This document shall be recorded.
SECTION VI - INELIGIBLE CONDITIONS
The following conditions create ineligibility for a business or property to apply for the Regional or Local
Programs:
1. The fee owner's property taxes are delinquent.
2. The business is not in good standing with the State of Minnesota, or is in violation of a Prior Lake
City Code.
3. The SAC determination (before credits) is less than three (3) units.
4. The small business does not meet the definition of eligible commercial properties in the
Metropolitan Council's SAC Deferral Program (for the Regional Program and Local Program A).
5. The property is not located within the City of Prior Lake.
6. The property is located on tribal lands.
SECTION VII - ADMINISTRATION
The City of Prior Lake is responsible for administering the Regional Program on behalf of the
Metropolitan Council. Once the Master SAC Deferral Agreement has been executed by the City and the
Metropolitan Council, the City is responsible for all loan deferral collections from the eligible small
business or properties participating in the Regional Program. The City is responsible for making
payments of the required SAC deferment amount, plus interest, to the Metropolitan Council on an
annual basis. The Prior Lake EDA is responsible for administering the Local Program on behalf of the
City. No administrative fees or charges are made in connection with the Regional or Local Programs.
City of Prior Lake
Sewer and Water Fee Deferral Program
3
COMMUNITY: City of Prior Lake No. 13M002-1
COMMUNITY ADDRESS: 4646 Dakota St SE Prior Lake, MN 55372
CONTACT PERSON: Jerilyn Erickson, Finance Director
COMMUNITY -WIDE SAC DEFERRED AMOUNT: 80%
COMMUNITY -WIDE SAC DEFERMENT PERIOD: Five(5) Years
PAYMENT MONTH(S): July & December
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 property or business owners whose properties are either newly connected or
increase capacity demand to the metropolitan disposal system do not pay SAC to the Council.
However, local government units that pay SAC to the Council for new connections or increased
capacity demands typically pass on those costs to property and business owners by 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
deferring community SAC payment obligations pursuant to Minnesota Statutes section 473.517,
Met. Council No. 13M002-1
subdivision 6, so participating communities may pass through to businesses the benefits of
deferred SAC payments by 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 provide assistance to businesses,
communities will submit to the Council a signed master SAC deferral agreement. For the term
of the master agreement, communities will have the option to note on their 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 such subject
SAC liability the deferment will be effective as of the first day of the subsequent month (e.g., for
an April building permit that is reported for SAC in May, the deferment will be effective as of
June 1).
7. In order to define the rights and obligations of the Community and the Council and the
relevant SAC deferral arrangements, the Community and the Council agree as follows:
Article 1 - Definitions
1.1 Definition of Terms. Unless otherwise provided or 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 ").
(a) Community. "Community" means a "Community" or "Customer Community" as those
terms are defined in the SAC Procedure Manual.
(b) Determination. "Determination" has the meaning ascribed to that term in the SAC
Procedure Manual.
(c) Regional Portion of Local SAC. 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.
(d) SAC Deferred Amount. "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.
(e) Business. "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 type of "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
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Met. Council No. 13M002-1
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
2.1 SAC Deferred Amount. Subject to the terms and conditions of this Agreement and
applicable law, the Council will allow the Community to 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 connected or
increase capacity demand 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 units or 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.
2.2 Interest. Annually at each calendar year -end, the Council will determine the average rate
on its wastewater bonds, pursuant to Minnesota Statutes section 473.517, subdivision 6. All new
SAC deferments during 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 balances will be computed in
whole months, however, payments to the Council can be annual.
2.3 Payments. 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
Community will make payments to the Council at least annually. The Community may elect to
make payments semi - annually or more frequently to correspond with the Community's Local
SAC collections, assessments or 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 SAC payments to the Council under the payment 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 discontinue making 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.
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Met. Council No. 13M002 -1
2.4 Local 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
3.1 Term 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.
3.2 Term 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
4.1 Local Terms and Conditions. The Community will be responsible for identifying property
and business owners 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 if a 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.
(a) Local Deferment Period. The Community agrees it will not allow a Business a less
generous deferment period (i.e., a shorter deferment period) for payment of the 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.
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Met. Council No. 13M002-1
(b) Local .Deferred Amount. 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.
4.2 Unpaid 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:
(a) Continue SAC Payments. 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.
(b) Discontinue SAC Payments. 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 certify to the Council that
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.
4.3 Late Community Payments. If the Community makes a late SAC deferral payment to the
Council, an additional administrative charge of two percent (2 %) of the unpaid balance of the
SAC Deferred Amount per month (or such higher interest rate allowable under law) will be
applied.
Article 5 - Notices
5.1 Written 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
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Met. Council No. 13M002-1
5.2 Notice 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
6.1 Liability. To the extent permitted or authorized by law, the Community will 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 by a Business 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 by other applicable state or federal law.
6.2 Survival of Terms. Notwithstanding any other provision of this Agreement, the validity of
this Article and the Community's obligation to pay its SAC obligations shall survive the
expiration or termination of this Agreement.
Article 7 - Miscellaneous
7.1 Dispute Resolution. Any dispute arising under this Agreement shall be settled through
consultations between the Council's and the Community's representatives. If an agreement
regarding a dispute cannot be reached within thirty (30) days upon notice 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.
7.2 Exercise of Rights. Any rights, powers and remedies granted to the Council and the
Community by this Agreement shall not preclude or limit any other rights, powers and remedies
available to the Council or the Community in accordance with law and other provisions of this
Agreement. The exercise of any rights, powers and remedies by the Council or the Community
shall not preclude the Council or the Community from exercising any other rights, powers and
remedies available to the Council or the Community. No failure or delay by the Council or the
Community to exercise any of their respective rights, 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.
7.3 Severability 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.
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7.4 Amendments 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.
7.5 Assignment. The Community shall 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.
7.6 Successors. This Agreement shall be binding on the legal successors of the Council and the
Community, whether by operation of law or otherwise.
7.7 Warranty 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 the Council's behalf respectively and that this Agreement constitutes the
Community's and the Council's valid, binding and enforceable agreement.
IN WITNESS WHEREOF, the Community 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 LAKE METROPOLITAN COUNCIL
By: By:
Print Name: Jason Willett
Mayor Director, MCES Finance
Date: Date:
By:
City Manager
Date:
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