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HomeMy WebLinkAbout9C-SMSC Agreement for Stemmer Ridge Rd o� rRIo) r~ U 4646 Dakota Street SE Prior Lake,MN 55372 �INN6SD�P CITY COUNCIL AGENDA REPORT MEETING DATE: JANUARY 26, 2015 AGENDA#: 9B PREPARED BY: LARRY POPPLER, CITY ENGINEER/INSPECTIONS DIRECTOR PRESENTED BY: LARRY POPPLER FRANK BOYLES, CITY MANAGER RIC ROSOW, CITY ATTORNEY AGENDA ITEM: CONSIDER APPROVAL OF A COOPERATIVE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE CONSTRUCTION AND MAINTENANCE OF THE EXTENSION OF STEMMER RIDGE ROAD TO CSAH 82/154T" STREET DISCUSSION: Introduction The City Council agendas for both the December 22, 2014 and the January 12, 2015 included lengthy staff reports regarding this agreement. This agenda report does not recite those previous reports rather they are included as attachments. This report provides updated information based on amendments to the agreement and recent discussion points with the City Council and the SMSC. History The City Council has discussed the SMSC agreement at work sessions on December 8, 2014 and January 12, 2015. Each discussion included specific concerns with the agreement. Over the last two months, City Staff has worked with the SMSC Staff to prepare an agreement which both parties can support. Attached are two agreements prepared by the city attorney together with two draft letters to the BIA with respect to the trust application. Also attached is a copy of the agreement which was approved by the SMSC Business Council this week. Current Circumstances There are aspects to the two agreements that are not yet resolved. Some of them include: 1. Alignment—The City Council and SMSC endorse alignment"F"which has not been added to the SMSC agreement. 2. Last Day for land to be placed in Trust — The SMSC Agreement states March 30, 2016 and ours states December 31, 2015. Phone 952.447.9800 / Fax 952.447.4245/www.cityofpriorlake.com 3. Letter from City on Trust — City letter as referred to in the city attorney's version is different than the reference in the SMSC document. 4. Right of way—The method proposed for acquiring the easement and the conditions related thereto are different. 5. Uses within the first 1000 feet south of CSAH 82 — The attached concept plan for the residential plat does not show the 1000 foot proposed commercial area and its intended use but is referred to in both agreements. 6. Agreement with Respect to Future SMSC Land Purchases-- One version refers to language on this topic, while the other does not. In addition to these inconsistencies in the agreement versions other questions have arisen which are addressed below: 1. Can the SMSC members receive a land allocation, build a home and then lease it for income producing purposes? SMSC staff advises that as a part of their process to deliver residential land for the tribe, the lots must be occupied by the tribal members themselves and they cannot be rented or leased to others. 2. What is driving the SMSC need for the land now? The SMSC staff advises that the community conducted a study to identify their housing needs in the future. SMSC Staff have indicated that there is a need for approximately100 new lots to serve the needs of their residents between now and 2020. 3. What is the BIA and Court"track record"with respect to approval and denial of Fee to Trust Transfers based up the statutory criteria? Attached is a memorandum prepared by the city attorney's office which identifies an extensive list of transfer approvals and denials and the rationale therefore. Conclusion There continue to be a considerable number of differences between the various versions of the agreement. Acknowledging this, the tribal administrator suggested that it may be more fruitful if a two person negotiating team of the city council met with the Tribal Council directly as needed to determine whether an agreement is possible on the various issues. ISSUES: The Tribal Administrator's recommendation to create negotiating teams which include members of the policy making bodies appears to be potentially productive. Staff members and attorneys from both sides would be present to support as well in hopes that modifications can be accurately and immediately transcribed for incorporation into the agreement. The ultimate approving authority for each entity remains the entire policy making body. Even if the effort were to fail, members of the respective negotiating teams will have firsthand knowledge regarding the alternatives available and the potential ramifications of each. From a staff perspective, it appears most 2 appropriate that the city negotiating team be composed of Mayor Hedberg and Councilor Keeney. FINANCIAL Additional legal, staff and city council time. IMPACT: ALTERNATIVES: 1) A motion and a second to designate Mayor Hedberg and Councilor Keeney as the City's Negotiating Team. 2) Motion and second to establish a negotiating team different than proposed. 3) Motion and second to take no action or deny this item for a specific reason. 4) Table this item until some date in the future. RECOMMENDED Alternative# 1 MOTION: 3 December 22, 2014 City Council Agenda Packet (Electronic Pages 4-21) O� PRI() !r U 4646 Dakota Street SE Prior Lake,MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: DECEMBER 22, 2014 AGENDA#: 9A PREPARED BY: LARRY POPPLER, CITY ENGINEERIINSPECTIONS DIRECTOR FRANK BOYLES,CITY MANAGER PRESENTED BY: LARRY POPPLER AGENDA ITEM: CONSIDER APPROVAL OF A COOPERATIVE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE CONSTRUCTION AND MAINTENANCE OF THE EXTENSION OF STEMMER RIDGE ROAD TO CSAH 821154TH STREET DISCUSSION: Introduction The Stemmer Ridge Road Project has been initiated by the City Council for public improvement under Minnesota State Statutes Chapter 429 (Special Assessment). During the public improvement process, the Shakopee Mdewakanton Sioux Community(SMSC) has purchased significant property within the project area. This agenda item reviews an agreement whereby the SMSC and City work together to facilitate the design, construction, inspection and maintenance of Stemmer Ridge Road and sewer and water utilities to serve the annexation area. History Since 2005, Stemmer Ridge Road and the sewer and water beneath the roadway has been contemplated in the City's Comprehensive Plan document. In anticipation of this project, part of the 2013 County State Aid Highway 12 Project installed the structural components of the lift station that will serve the future annexation areas. The project also installed trunk forcemain that will connect to existing forcemain already installed with the previous phase of County State Aid Highway 12 construction. This forcemain currently extends north to the end of existing Stemmer Ridge Road. In order to serve the future annexation areas, Stemmer Ridge Road must extend from where it currently terminates north to County State Aid Highway 82. Trunk utilities were installed as part of the County State Aid Highway 82 in 2007 in anticipation of future need. These improvements combined cost over$4.2 Million. The Stemmer Ridge Road project would be the final link for utilities to serve the approximately 2400 acre annexation area. Recognizing this fact, the City Council placed the Stemmer Ridge Road project in the Capital Improvement Program for design in 2014 and construction in 2015. On October 7, 2013, the City Council initiated the public improvement project process to complete Stemmer Ridge Road and corresponding Phone 952.447.9800 / Fax 952.447.4245/www.cityofpriorlake.com utilities. Earlier this evening a Public Hearing was held to receive public testimony regarding the project. Since starting the public improvement process, the SMSC has purchased the Menden family parcels. These parcels encompass 95 acres of land and adds to the 70 acres already owned by the SMSC within this area. The proposed Stemmer Ridge Road route navigates through the former Menden family parcels. Current Circumstances Considering the SMSC land holdings and SMSC's desire to develop the property for primarily residential purposes, the City and SMSC has been working on an agreement for the construction of Stemmer Ridge Road and utilities. The agreement includes the following items: Alignment—The SMSC and the City would agree on a general alignment concept understanding that topography, drainage, wetlands, or land development may adjust the alignment. Utility Easement An easement for the utilities and roadway would be recorded against the property in advance of the property going into trust status at the time the city submits a letter supporting the trust application. Once the improvements are completed, the City would return unneeded easements to the SMSC. Land Use—The agreement confirms residential use of the property other than a small area of potential commercial use within 1000 feet of CSAH 82. Trust—The agreement confirms that the City will support the trust application for these 95 acres of property plus the present 70 acres owned by the SMSC in the immediate area by sending a letter to the Bureau of Indian Affairs to this affect at the appropriate time. Project—The agreement discusses a project that would occur after the land is approved for trust status. The project would include Stemmer Ridge Road project as agreed to in the alignment paragraph. The SMSC would build the project but plans for City utilities would follow the City specifications. The City would also have an opportunity to review the bids and inspect the installation of City utilities. Cost—The SMSC would pay for the design, construction, and inspection of the new roadway and utilities. Traffic control elements such as the medians and roundabout are also paid for by the SMSC. The City would only be responsible for the pipe material cost of the City sanitary sewer and watermain based upon bids received by the SMSC. Repair and Maintenance—Roles and responsibilities regarding maintenance of the streets and utilities are outlined in the agreement. The SMSC is responsible for the ongoing maintenance of the roadway. The City is responsible for maintaining the sewer and water system. Timeframe—A project completion date is set within the agreement to be 12 months after the date that the property is placed into trust. It is expected that the BIA will act upon the trust application within 8 months of its submission although the agreement provides that if the BIA has not acted on the application by March 30, 2016 the city may terminate the agreement. Annexation Area—This section of the agreement discourages future SMSC purchase of land within the annexation area and requires consultation in advance if such action is contemplated. Rights of the Public—Stemmer Ridge Road must be open to the public for use. A paragraph discusses the intent to place the roadway on the Indian Reservation Road Inventory. This effectively makes the roadway open to the public. Other Items—Other items within the agreement include: data practices, signage, acts and omissions, limitation of remedies, assignment, severability, waiver, governing law, authorization, non-impairment, representations and warranties regarding impairment, dispute resolution, non-waiver of immunity, notices, signing of the agreement, integration, and recitals. City and SMSC staff discussed various modifications to the agreement which were identified at the work session. The attached document is largely the document that the city council reviewed at its last work session. The Exhibits have not yet been prepared and attached so those pages have not been included in this package. Please refer to the attached agreement for specific details. Conclusion Considering that the SMSC has purchased the property, City Staff recommends that the City enter into the agreement with the SMSC. ISSUES: The SMSC has purchased the 95 acre Menden property. The acquisition is confirmed by the Scott County GIS website. The property is presently zoned agricultural and the vast majority is in "Green Acres". Green Acres is a program that reduces the overall taxes on parcels within the program. The annual property taxes paid to the city at this time for the 95 acre Menden parcels is $1944.00. Staff estimates that since the other 70 acres are similarly situated that the total annual taxes paid to the city would be approximately$3500.00 for the 165 acres. Council members have asked a variety of questions regarding the valuation, taxes, and development fees if the land remained in private ownership. Assuming that the 165 acres were developed as residential property primarily with a density of 3 units per acre (which is more than our average density) and reserving 10 acres for commercial along County Road 82, the annual city portion of the taxes generated are estimated at $334,000 or about$1190 per household (assuming 281 households). If the property were in private ownership, these taxes would be required to pay for ongoing city services to this subdivision for the following estimated infrastructure additions: 0.70 miles of collector streets, 3 miles of neighborhood streets, 1.5 miles of sidewalks, 2 miles of trail, one neighborhood park and various stormwater ponds, pipes and accessory structures.. The development fees the City would receive if the land were in private ownership is estimated at $3 Million. These fees are placed into City trunk funds to finance the infrastructure for which they were collected (Streets, Sewer, Water, Parks, Storm Water, Etc.). If the land were in private ownership the City would also owe oversizing charges to the private developer for street, sewer, water, and stormwater facilities which serve more than the immediate neighborhood. It is estimated that the trunk fees that would be owed to the developer amount to $250,000 plus $1,349,000 as shown below under a City project. The remaining amounts stay in the trunk funds to help build the remainder of the city systems. . Considering oversizing and trunk fees, the City would net about $1.4 Million more than would be contributed by the various trunk funds to this project. These fees replenish the trunk funds that have been used to build trunk improvements that were intended to serve this and other areas. Future trunk fund expenditures would facilitate trunk improvements in other areas of the City such as the annexation area. It is estimated that the total project cost including road, sewer, water, amenities and traffic calming is $4.985 million whether the City or SMSC builds the project. Using the special assessment approach, about $3,636,000 of the project will be assessed to the benefiting properties in this area. If the SMSC owned the property in fee status, they could be assessed as any other owner, provided the City can prove benefit for all four systems: street, sewer, water and storm water. The city would contribute $299,000 from sewer trunk, $479,000 in water trunk and$652,000 in street oversizing. On the other hand, the agreement with the SMSC would require City sewer and water trunk contributions of an estimated $778,000. The SMSC would pay $4,183,000. The SMSC will be solely responsible for ongoing maintenance costs of the street in perpetuity except for the City sewer and water pipes. The City Council has asked that the following additional questions be addressed. Q: What is the likely outcome if the city opposes the trust application? A: While the answer is uncertain, our experience has been that municipal opposition alone has only delayed but not defeated a trust request. The most recent example occurred when Scott County, Shakopee and Prior Lake* (*for a time) opposed a trust application for 745 acres of in Shakopee and 110 acres of land in Prior Lake. After in excess of$1 Million in legal and other related fees according Scott County Administrator, Gary Shelton, more than one trip to Washington D.C. and almost ten years delay, the request was granted. Here the situation is different. The trust request is on 165 acres solely within the City of Prior Lake and the City would be out of developable land well before the ten year period were over so delay is not a strategy we would want to pursue. Moreover, the BIA utilizes seven criteria for evaluating a trust request. Only one of the criteria is "impact upon the adjacent municipality" which is weighed the same as the other six. The SMSC indicates that there are 60 community members who desire homesteads right now. Last year they completed an actuarial analysis which confirmed future need for residential property. If the BIA were to engage in approving part of the application, our expectation is the residential portion would be approved because of the present need notwithstanding other properties which may be available. Q: Would opposing the application delay the city's ability to get the sewer connection built? A: Yes. The SMSC will not develop the property until the land is placed in trust. The 429 process would need to continue with this scenario beginning with condemnation of the land. The city attorney has indicated that the city would not be eligible to use "Quick Take" Condemnation as this time as we have no immediate need owing to the current status of the project since plans and specifications are not prepared nor do we have bids.. Q: What would happen in a worst case scenario where the land goes into trust even with our opposition and the city has no agreement or easement? A: If this happens, the City would need to find an alternative alignment to develop the annexation area. An alternate alignment for sewer/water could follow CSAH 82 to CSAH 17 south to CSAH 12. It is estimated that the cost of that route would be $7.5 to $9 Million, much of which would be borne by the City with some special assessments. In addition to these costs, $1.2 Million of investment in infrastructure on CSAH 12 and existing Stemmer Ridge Road would be wasted. Because of this risk, it is recommended that the City continue to follow the 429 process together with this agreement as a fall back in the event of some unforeseen scenario. Over time, the City has been the recipient of an annual gift amount of$400,000. The SMSC has also donated to numerous City projects(some examples include ballfield lights for Ryan Park, skate park, ATV, training, SCBA Gear, ATD units, amphitheater, Dakotah Ice Rink, park trails, etc.). This list is by no means complete. Opposing a trust application could undermine future contributions. It could also undermine our ability to work toward larger agreements like a second water agreement. All of this is speculation but the city council has requested this information. If the City apposed the trust application and proceeded with a City project, the following outcomes could happen: 1. The SMSC could appeal the special assessments. 2. The SMSC could delay the project construction and requiring the city to use the eminent domain process. 3. The trust application could be processed by the BIA regardless of the City's objection. Q: Should eminent domain be started? I A: Eminent domain may be started in conjunction with a 429 City project. This process takes roughly 7 months as time is needed to prepare title work, good faith offers, etc. A negotiated offer have to be tendered prior to starting a 90 day eminent domain process, but if an eminent domain process is necessary it could undermine our relationship with the SMSC. It could also be viewed as contrary if the City Council's previous practice of avoiding eminent domain where ever possible. It appears only a matter of time that this SMSC property would be placed into trust status. The history of SMSC land purchase shows that the SMSC does not sell property back to others. The City could continue to follow the 429 process and assess the SMSC for the installation of Stemmer Ridge Road, however the agreement appears to be the most efficient and effective manner to install the improvements for the following reasons: 1. Most cost effective for the City as it provides savings to the trunk fund expenditures as shown in the funding table below 2. Provides for another partnership opportunity with the SMSC i 3. Elimination of assessment challenge risk 4. Elimination of property acquisition process 5. Provides disincentive for further purchase within the annexation area by preparing the land for urban development. 6. Eliminates need for City oversight of a lengthy 429 process. FINANCIAL The preliminary cost estimate for the four alternatives range from IMPACT: $4,733,000 to$4,985,000 with the traffic calming features. The funding table below shows how the largest cost alternative could be financed by either a City"429" project or the agreement with the SMSC. PROJECTCITY PROJECT W/TRAFFIC VV/TRAFFIC CALMING CALMING Trunk Sewer Fund $286,000 $299,000 ,Trunk' Street Oversize Fund $652,000 Total 186,000 $4,986,000 Each of these estimates include an estimated $210,000 in right of way. Since the SMSC already own the property, this estimated right of way cost could be deducted from the project total for the SMSC project. The added traffic calming costs increase the street oversizing contribution from $277,460 to$652,000 for a City project. Due to the design speed changes, additional length was added to the street and corresponding utilities. New data on pipe material costs have increased the overall sewer and water pricing. ALTERNATIVES: 1. A motion and a second to approve a cooperative agreement between the City of Prior Lake and the Shakopee Mdewakanton Sioux Community for the construction and maintenance of the extension of Stemmer Ridge Road to CSAH 82/154t' Street. 2. Deny this item for a specific reason and provide staff with direction. 3. Table this item until some date in the future. RECOMMENDED A motion and a second for Alternative# 1 MOTION: b� PR.12 U u 4646 Dakota Street SE ;!riNxesollt Prior Lake,MN 55372 RESOLUTION 14-root A RESOLUTION APPROVING A COOPERATIVE AGREEMENT WITH THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE STEMMER RIDGE ROAD PROJECT Motion By: Second By: WHEREAS, Stemmer Ridge Road is shown in the City's Comprehensive Plan for connection between CSAH 82 and CSAH 12; and WHEREAS, The City began a process to complete a City project to complete the Stemmer Ridge Road Project and utilities; and WHEREAS, The SMSC has purchased property along the Stemmer Ridge Road route and also desires to complete the project; and WHEREAS, The City is authorized to enter into contracts pursuant to Minnesota Statutes Chapter§ 412.221; and WHEREAS, The Parties desire to enter into an Agreement to complete the Stemmer Ridge Road Project. 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 Council hereby approves a Cooperative Agreement with the Shakopee Mdewakanton Sioux Community dated December 22, 2014 for the Stemmer Ridge Road Project and authorize the Mayor and City Manager to execute the same. PASSED AND ADOPTED THIS 22nd DAY OF DECEMBER 2014. VOTE Hedberg Keeney McGuire Morton Soukup Aye ❑ ❑ ❑ ❑ ❑ Nay ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Frank Boyles,City Manager COOPERATIVE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE CONSTRUCTION AND MAINTENANCE OF THE EXTENSION OF STEMMER RIDGE ROAD TO CSAH 82/154M STREET THIS COOPERATIVE AGREEMENT (the "Agreement") is made and entered into this day of , 2014, by and between the CITY OF PRIOR LAKE, a Minnesota municipal corporation ("City") and the SHAKOPEE MDEWAKANTON SIOUX COMMUNITY,a federally recognized Indian Tribe("SMSC"). RECITALS A. The SMSC is the owner in fee simple of real property located within the City of Prior Lake as depicted on Exhibit A, attached hereto, and legally described as shown on Exhibit B(the"Property"): [insert legal description] B. The SMSC will apply to the United States government to place the Property in trust status pursuant to 25 C.F.R. § 151.1 et seq. (the "Trust Application") for use as residential parcels for SMSC Members; C. The City has existing sanitary sewer lines that extend to the northern portion of the Property and to the south of the property along Stemmer Ridge Road; D. Approximately 2400 acres of land that lie to the southwest in an annexation area agreed to by Spring Lake Township such land being south of 160th Street, east of County Road 79,north of 190th Street and west of CSAH 17 (hereinafter referred to as the"Annexation Area") that requires municipal services for development; I E. The parties agree to cooperate in the construction and maintenance of an extension of Stemmer Ridge Road from where it currently terminates south of the Property, across the Property to connect with County State Aid Highway ("CSAH") 82, also known as 154th Street, said roadway to provide access to the future SMSC residential parcels, and the construction of City water, and sanitary sewer which collectively are referred to as "Utilities") across the Property to allow the City to provide water and sanitary sewer service to the Annexation Area and the construction of initial phases by the SMSC of a residential subdivision including street and storm sewer(the"Project"); F. The parties desire to enter into this Agreement to establish their respective duties and obligations for the funding,construction,and maintenance of the above-described Project; G. The City will support and endorse the Tribe's Trust Application, while acknowledging this type of an agreement is not a prerequisite to having the Property taken into trust 1 of 16 i status and that this agreement does not establish a precedent upon which the City can rely in relation to any future SMSC fee to trust application and similarly neither can the SMSC rely on the City's support and endorsement for future actions of any type;and H. The City is authorized to enter into this Agreement pursuant to Minnesota Statutes § 471.59. The SMSC has a current and rapidly growing demand for residential parcels and will require the planned residential units by the end of 2019 to meet this demand. The costs for these improvements are included in the SMSC five year CIP. Notwithstanding this need and planned expense the obligations to construct is conditioned upon the SMSC legislative body approving the necessary funds for the project. The City has expended significant funds constructing infrastructure in reliance on development of the Annexation Area. Notwithstanding this need and previous expenditure, the City's obligations herein are conditioned upon its City Council approving necessary funding for the Project. J. For purposes of this Agreement Force Majeure shall have the following meaning: Force majeure means a condition beyond the reasonable control of the SMSC or the City and which either could not, by reasonable diligence, have avoided. Such conditions include natural disaster, fire, accidents, actions or decrees of governmental bodies, acts of God, wars (declared and undeclared), acts of terrorism,riots, embargoes,civil insurrection,and other events of force majeure, but shall not include a lack of funds or insufficiency of resources caused by lack of funds. NOW, THEREFORE, in consideration of their mutual covenants the parties agree as follows: 1. EFFECTIVE DATE. This Agreement shall become effective on the date set forth above. 2. ALIGNMENT. Both the SMSC and the City of Prior Lake agree to concept for the north / south road as shown in Exhibit C. It is understood that while this concept shows a general alignment, final design may adjust this alignment due to topography, wetland, or land use considerations. Notwithstanding, the street improvements shall include traffic calming design features such as a roundabout at the park entrance road, medians, minimum lane widths, street lights,a trail and sidewalk system and a design speed of 35 MPH. 3. UTILITY EASEMENT. At the time the City submits the Endorsement Letter as provided for in Paragraph 4, SMSC shall grant to the City an easement over the Property and within the right-of-way of the planned location of Stemmer Ridge Road for water and sewer purposes (the "Utility Easement"). The Easement shall grant the City the right to enter upon the Property for the purpose of repairing and maintaining utilities located in the Utility Easement and shall also include a duty to repair and restore any SMSC utility or roadway impacted by the repair. The City may begin to utilize this Utility Easement on the earlier of the date the land is taken into trust or upon completion of construction of the Utilities by the SMSC. After SMSC's construction of the Utilities is complete, the City Manager shall present to the City Council a resolution to vacate any portion of the easement area not necessary for the operation, 2of16 maintenance, or repair of the utilities. The City shall be responsible for all costs associated with the operation,repair, and maintenance of the Utilities. 4. TRUST APPLICATION. The SMSC shall submit the Trust Application to the United States government within sixty (60) days of the date of this Agreement. The land use for the Trust Application for the Property is residential use, except for that property which is within one thousand(1000)feet of CSAH 82/154' Street. The City shall submit a letter to the United States government endorsing the Trust Application (the "Endorsement Letter"). Said letter shall be in the form attached as Exhibit D to this Agreement, and shall be submitted by the City with-in the authorized comment period for the Trust Application. If the City fails to submit the Endorsement Letter as required herein, the SMSC shall have the right to immediately terminate this Agreement. The SMSC shall provide notice to the City within three (3) business days of its receipt of a decision from the United States government on the Trust Application. 5. PROJECT DESCRIPTION. The Project shall consist of the design and construction of a right-of-way across the Property to provide access to future SMSC residential subdivisions,the extension of Stemmer Ridge Road to CSAH 82/154' Street, the construction of water and sewer utilities within the right-of-way of the extension of Stemmer Ridge Road and the initial phases of construction of the SMSC residential subdivision, all as depicted on the attached Exhibit E, incorporated herein. 6. PLANS AND SPECIFICATIONS. SMSC shall have plans and specifications prepared for the Project. The sewer and water plans shall meet the City's Public Works Design Manual and SMSC plans for the storm sewer and ponds shall meet the requirements of the SMSC's Design Manual. The street improvements shall meet MnDOT State Aid requirements. The plans and specifications shall be subject to City approval as set forth below. 7. COST. SMSC shall be responsible for the full cost of the design, construction and materials for the Project, including but not limited to street, curb and gutter, valves, manhole covers, catch basins, and hydrants, except the material cost of the sanitary sewer pipe and water pipe only which the City shall pay for by reimbursement to the SMSC as provided for herein. The SMSC shall be responsible for the full cost of traffic safety improvements associated with the street work including but not limited to medians and roundabouts. 8. BIDDING AND CONTRACT. SMSC shall obtain bids for construction of the Project. The water and sanitary sewer pipe materials for the Utilities, to be paid for by the City, shall be itemized as a line item on the bid. Labor for installation of the Utilities shall be itemized as a separate line item. Once received, the bids shall be reviewed by both parties. The SMSC shall award the construction contract to the approved bidder, provided howeverthe pipe material bid and the award of the construction contract shall be subject to the City Council approval as set forth in Paragraph 9 hereof. Upon completion of installation of the Utilities the SMSC shall invoice the City for the pipe material cost. The City shall pay the invoice within thirty (30) calendar days. The SMSC shall supervise construction and administer the contract and shall be the paying agent for all payments due to the contractor and any other individual or entity hired in relation to the construction of the Project. 3of16 9. CITY APPROVAL. Prior to the award of the contract by the SMSC the City Council shall have the opportunity to review and approve the construction bids relative to the pipe material costs. The SMSC shall submit documents suitable for determining the pipe material costs to the City for approval prior to execution of the documents or performance of any related work. The City Council shall review the submission and shall provide to SMSC written approval or objection within forty-five (45) days of the City's receipt of the document(s). If the City Council objects, SMSC and the City shall use best efforts to achieve a mutually agreeable resolution on the pipe material cost. The approval of the bid, award of the bid, and execution of the construction contract shall not occur until the City and SMSC achieve a resolution acceptable to both parties. 10. COMPLETION OF THE PROJECT. Construction of the Utilities portion of the Project shall be completed within twelve (12) months of the date that SMSC receives notice that the federal government has accepted the Property in Trust status. If the Property has not been accepted into Trust by March 30, 2016 the City may upon written notice to the SMSC cancel this agreement. Upon cancellation neither party shall have any obligations hereunder to the other. Cancellation of the Agreement shall not terminate the easement granted to the City under Paragraph 3 hereof. 11.REPAIR AND MAINTENANCE. After construction is complete, SMSC shall be responsible for the repair and maintenance of the portion of Stemmer Ridge Road lying within the Trust Property. The SMSC shall be responsible for,and bear the full cost of,restoring any impacted City infrastructure to an"as was or better"condition subject to inspection and acceptance by the City. 12.The City shall be responsible for the repair and maintenance of all portions of Stemmer Ridge Road not located within the Trust Property. The City shall be responsible for maintenance and repair of the City watermain and sanitary sewer pipe. The SMSC hereby grants the City permission to manage traffic on Stemmer Ridge Road across the Trust Property for purposes of maintenance and repair of the utilities, except that any temporary closure shall maintain resident and emergency vehicle access to the Community residential subdivision served by the roadway except in the event of a Force Majeure. The City shall be responsible for, and bear the full cost of, restoring any impacted SMSC utilities or infrastructure to an "as was or better" condition subject to inspection and acceptance by the SMSC. 13.INSPECTION. During construction of the Project, the City shall be responsible for inspecting the City sewer and water systems by either City staff or an outside consultant representing the City. The SMSC shall be responsible for inspecting the street improvements and other utilities serving the SMSC. 14. SIGNAGE. The City shall have the non-exclusive right to install signage within the right-of-way of Stemmer Ridge Road consistent with typical road signage that exists throughout the City, including but not limited to directional signage to Spring Lake Regional Park and the City Park. 4of16 15.ANNEXATION AREA. The granting of the easement and installation of the City water and sewer utilities allows the City to serve the development of the approximately 2400 acre annexation area agreed to by Spring Lake Township(the"Annexation Area"). It is not the intent of the SMSC to purchase land within the Annexation Area and if any such purchase is contemplated,the SMSC shall consult with the City prior to the purchase. The SMSC will negotiate in good faith with the City on any impacts that any SMSC land purchase may have with respect to the trunk sewer and water system. 16.RIGHTS OF PUBLIC. The SMSC shall use its best efforts to have the portion of the constructed roadway lying on Trust Property listed on the Indian Reservation Roads Inventory maintained by the United States Department of the Interior, Bureau of Indian Affairs which has the effect of making the roadway a public roadway. Until such listing is made,the SMSC grants to the City, on behalf of the public, the right to use the portion of Stemmer Ridge Road on the Trust Property. The SMSC may close Stemmer Ridge Road for such temporary periods of time that are necessary for repair and maintenance of the road and for emergencies except that any such closure shall maintain resident and emergency vehicle access to City residential subdivisions except in the event of a Force Majeure. 17.FUTURE INFRASTRUCTURE. The SMSC agrees to work with the City for the future siting of water supply infrastructure and an integrated water supply system. 18.ACTS AND OMISSIONS. Each party shall be is responsible for its own acts and omissions and the results thereof to the extent authorized by law. Nothing in this Agreement constitutes a waiver by the City of any statutory or common law, defenses, immunities, or limits on liability. In no event shall the obligations of the City for a tort claim exceed the amount that the City would be obligated to pay under the provisions and limitations of Minn. Stat. Chap 466. In no event shall the obligations of the SMSC for a tort claim exceed the amount the SMSC would be obligated to pay under the provision and limitations of the SMSC Tort Claims Ordinance. 19. DATA PRACTICES. All data created, collected, received, maintained or disseminated by the City for any purpose in the course of this Agreement is governed by the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, any other applicable state statute, or any state rules adopted to implement the act, as well as federal regulations on data privacy. The SMSC asserts that it is not subject to the Minnesota Government Data Practices Act. To the extent it is decided by a court of competent jurisdiction that the SMSC is subject to the Minnesota Government Data Practices Act,it shall comply with the Act. 20.LIMITATION OF REMEDIES. In the event of a breach of the Agreement, neither party shall be entitled to recover punitive, special or consequential damages or damages for loss of business. 21.ASSIGNMENT. Neither party shall assign this Agreement, nor any interest arising herein,without the prior written consent of the other party. 5of16 22.SEVERABILITY. The provisions of this Agreement are severable. If any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision shall not affect the remaining provisions of this Agreement. 23.WAIVER No action nor failure to act by the City or the SMSC shall constitute a waiver of any right or duty afforded any of them under the Agreement, nor shall any such action or failure to act constitute an approval of or acquiescence in any breach thereunder, except as may be specifically agreed in writing. 24. GOVERNING LAW. When Tribal or Federal law does not apply, this Agreement is governed by and must be construed in accordance with the laws of the State of Minnesota without regard to Minnesota's conflict-of-law provisions. 25.AUTHORIZATION. This Agreement and all of its terms have been authorized and approved by the SMSC's Business Council Resolution No. , adopted the day of 2014, attached hereto as Exhibit F. This Agreement and all of its terms have been authorized and approved by the City Council of the City of Prior Lake by Resolution adopted the day of ,2014,attached hereto as Exhibit G. 26.NON-IMPAIRMENT. SMSC's Business Council will not initiate enactment of any law, ordinance, rule, or regulation that would impair the obligations of the SMSC under this Agreement. 27.REPRESENTATIONS AND WARRANTIES REGARDING IMPAIRMENT. The Business Council represents and warrants that it will not initiate any action to impair this Agreement, including an action to rescind this Agreement or any waiver contained herein except where the Business Council is acting on behalf of the SMSC as the non-breaching party in a breach of this Agreement. 28.DISPUTE RESOLUTION. The parties may meet if agreed to by both to attempt to negotiate an amicable resolution of any dispute arising from this Agreement. 29.NON-WAIVEROF IMMUNITY. Nothing in this agreement shall constitute a waiver of the SMSC's sovereign immunity to suit. 30.NOTICES. Notices to be given under this Agreement shall be given by enclosing the same in a sealed envelope, postage prepaid and deposited in same in the U.S. Postal Service, addressed to the parties as listed below: City of Prior Lake Shakopee Mdewakanton Sioux Community Attn: City Engineer Attn: William Rudnicki 4646 Dakota Ave SE 2330 Sioux Trail SW Prior Lake,MN 55372 Prior Lake,MN 55376 31. SIGNING OF AGREEMENT. This Agreement may be signed in counterparts and on different dates by each party without affecting the validity thereof. 6of16 32. INTEGRATION. The entire and integrated agreement of the parties contained in this Agreement shall supersede all prior negotiations, representations, or agreements between the parties regarding the subject matter hereof,whether written or oral. 33.RECITALS. The recitals set forth in paragraphs A through H are incorporated herein and made a part hereof. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written. [Remainder of Page Intentionally Left Blank. Signature Pages Follow.] 7of16 CITY OF PRIOR LAKE BY: Kenneth L. Hedberg,Mayor BY: Frank Boyles, City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 2014,by Kenneth L. Hedberg and Frank Boyles,the Mayor and City Manager, respectively,of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public 8of16 SHAKOPEE MDEWAKANTON SIOUX COMMUNITY By: Its: By: Its: STATE OF MINNESOTA ) )ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of 2014,by and ,the and ,respectively, of the Shakopee Mdewakanton Sioux Community,a federally recognized Indian Tribe,on behalf of the tribe and pursuant to the authority granted by its Notary Public DRAFTED BY: Gregerson,Rosow,Johnson&Nilan, ltd 650 Third Avenue South Suite 1600 Minneapolis,MN 55402 9of16 January 12, 2015 City Council Agenda Packet (Electronic Pages 22-47) O� PR12 �X u 4646 Dakota Street SE Prior Lake,MN 55372 aso�e CITY COUNCIL AGENDA REPORT MEETING DATE: JANUARY 12, 2015 AGENDA#: 10A PREPARED BY: LARRY POPPLER, CITY ENGINEERIINSPECTIONS DIRECTOR FRANK BOYLES,CITY MANAGER PRESENTED BY: LARRY POPPLER AGENDA ITEM: CONSIDER APPROVAL OF A COOPERATIVE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE CONSTRUCTION AND MAINTENANCE OF THE EXTENSION OF STEMMER RIDGE ROAD TO CSAH 821154TH STREET DISCUSSION: Introduction The Stemmer Ridge Road Project has been initiated by the City Council for public improvement under Minnesota State Statutes Chapter 429 (Special Assessment). During the public improvement process, the Shakopee Mdewakanton Sioux Community(SMSC)has purchased significant property within the project area. This agenda item reviews an agreement whereby the SMSC and City work together to facilitate the design, construction, inspection and maintenance of Stemmer Ridge Road and sewer and water utilities to serve the annexation area. At their December 22, 2014 meeting the city council deferred consideration of this agenda item due to time constraints and directed that the item be placed upon this agenda. Earlier this evening this topic was discussed at the city council work session. Depending upon the outcome of that discussion the city council could remove this item from this agenda for future consideration or take whatever other action they deem appropriate. This is the same report the city council received for the December 22 meeting although a few updates were made for clarification purposes. The Draft SMSC Agreement is the same one included with the December 22 report. History Since 2005, Stemmer Ridge Road and the sewer and water beneath the roadway has been contemplated in the City's Comprehensive Plan document. In anticipation of this project, part of the 2013 County State Aid Highway 12 Project installed the structural components of the lift station that will serve the future annexation areas. The project also installed trunk forcemain that will connect to existing forcemain already installed with the previous phase of County State Aid Highway 12 construction.This forcemain currently extends north to the end of existing Stemmer Ridge Road. In order Phone 952.447.9800 / Fax 952.447.4245/www.cityofpriorlake.com to serve the future annexation areas, Stemmer Ridge Road must extend from where it currently terminates north to County State Aid Highway 82. Trunk utilities were installed as part of the County State Aid Highway 82 in 2007 in anticipation of future need.These improvements combined cost over $4.2 Million. The Stemmer Ridge Road project would be the final link for utilities to serve the approximately 2400 acre annexation area. Recognizing this fact, the City Council placed the Stemmer Ridge Road project in the Capital Improvement Program for design in 2014 and construction in 2015. On October 7, 2013,the City Council initiated the public improvement project process to complete Stemmer Ridge Road and corresponding utilities. Earlier this evening a Public Hearing was held to receive public testimony regarding the project. Since starting the public improvement process, the SMSC has purchased the Menden family parcels. These parcels encompass 95 acres of land and adds to the 70 acres already owned by the SMSC within this area. The proposed Stemmer Ridge Road route navigates through the former Menden family parcels. Current Circumstances Considering the SMSC land holdings and SMSC's desire to develop the property for primarily residential purposes, the City and SMSC have been working on an agreement for the construction of Stemmer Ridge Road and utilities. The agreement includes the following items: Alignment — The SMSC and the City would agree on a general alignment concept understanding that topography, drainage, wetlands, or land development may adjust the alignment. Utility Easement — An easement for the utilities and roadway would be recorded against the property in advance of the property going into trust status at the time the city submits a letter supporting the trust application. Once the improvements are completed, the City would return unneeded easements to the SMSC. Land Use — The agreement confirms residential use of the property other than a small area of potential commercial use within 1000 feet of CSAH 82. Trust—The agreement confirms that the City will support the trust application for these 95 acres of property plus the present 70 acres owned by the SMSC in the immediate area by sending a letter to the Bureau of Indian Affairs to this affect at the appropriate time. Project—The agreement discusses a project that would occur after the land is approved for trust status. The project would include Stemmer Ridge Road project as agreed to in the alignment paragraph. The SMSC would build the project but plans for City utilities would follow the City specifications. The City would also have an opportunity to review the bids and inspect the installation of City utilities. 2 Cost—The SMSC would pay for the design, construction, and inspection of the new roadway and utilities. Traffic control elements such as the medians and roundabout are also paid for by the SMSC. The City would only be responsible for the pipe material cost of the City sanitary sewer and watermain based upon bids received by the SMSC. Repair and Maintenance—Roles and responsibilities regarding maintenance of the streets and utilities are outlined in the agreement. The SMSC is responsible for the ongoing maintenance of the roadway. The City is responsible for maintaining the sewer and water system. Timeframe—A project completion date is set within the agreement to be 12 months after the date that the property is placed into trust. It is expected that the BIA will act upon the trust application within 8 months of its submission although the agreement provides that if the BIA has not acted on the application by March 30, 2016 the city may terminate the agreement. Annexation Area—This section of the agreement discourages future SMSC purchase of land within the annexation area and requires consultation in advance if such action is contemplated. Ri-ghts of the Public— Stemmer Ridge Road must be open to the public for use. A paragraph discusses the intent to place the roadway on the Indian Reservation Road Inventory. This effectively makes the roadway open to the public. Other Items — Other items within the agreement include: data practices, signage, acts and omissions, limitation of remedies, assignment, severability, waiver, governing law, authorization, non-impairment, representations and warranties regarding impairment, dispute resolution, non-waiver of immunity, notices, signing of the agreement, integration, and recitals. City and SMSC staff discussed various modifications to the agreement which were identified at the work session. The attached document is largely the document that the city council reviewed in a recent work session. The Exhibits have not yet been prepared and attached so those pages have not been included in this package. Please refer to the attached agreement for specific details. Conclusion Considering that the SMSC has purchased the property, City Staff recommends that the City enter into the agreement with the SMSC. ISSUES: The SMSC has purchased the 95 acre Menden property. The acquisition is confirmed by the Scott County GIS website.The property is presently zoned agricultural and the vast majority was in "Green Acres". Green Acres is a program that reduces the overall taxes on parcels within the program. The annual property taxes paid to the city for the 95 acre Menden parcels was $1,944.00. Staff estimates that since the other 70 acres are similarly situated that the total annual taxes paid to the city would be approximately$3,500.00 3 for the 165 acres. The Menden property was recently taken out of the Green Acres program and the City received a Green Acres tax distribution of $9,469. Council members have asked a variety of questions regarding the valuation, taxes, and development fees if the land remained in private ownership. Assuming that the 165 acres were developed as residential property primarily with a density of 3 units per acre (which is more than our average density) and reserving 10 acres for commercial along County Road 82, the annual city portion of the taxes generated are estimated at $334,000 or about $1,190 per household (assuming 281 households). If the property were in private ownership, these taxes would be required to pay for ongoing city services to this subdivision for the following estimated infrastructure additions: 0.70 miles of collector streets, 3 miles of neighborhood streets, 1.5 miles of sidewalks, 2 miles of trail, one neighborhood park and various stormwater ponds, pipes and accessory structures. The development fees the City would receive if the land were in private ownership is estimated at$3 Million.These fees are placed into specific City Funds to finance the infrastructure for which they were collected (Streets, Sewer, Water, Parks, Storm Water, Etc.). If the land were in private ownership the City would also owe oversizing charges to the private developer for street, sewer, water, and stormwater facilities which serve more than the immediate neighborhood. It is estimated that the trunk and oversizing payment that would be owed to the developer would amount to $250,000 for a lift station that would be required plus $1,349,000 for oversizing the sewer, water and streets as shown below under a City project scenario. The remaining amounts stay in the specific Funds to help build the remainder of the City systems. The City would net about$1.4 Million more than would be contributed to this project. These fees replenish the Funds that have been used to build infrastructure improvements that were intended to serve this and other areas. Future Trunk Fund and Street Oversizing Fund expenditures would facilitate infrastructure improvements in other areas of the City such as the annexation area. Estimated Development Fees $3,000,000 Less: Payment to Developer Lift Station $ 250,000 Oversizing Sewer,Water, Street $1,349,000 Net $1,401,000 It should be noted that the City will be updating its rate studies to determine the impact that development over the past 10 years has had on the Trunk Fund, Street Oversizing Fund, etc. For example, certain assumptions about development density, amount of developable land, etc were used when the study is conducted. Over time, there will be variances to those assumptions which can impact the amount of fees collected and the use of the funds for 4 projects, thus impacting the remaining balance of the Funds for future projects. It is estimated that the total project cost including road, sewer, water, amenities and traffic calming is $4.985 million whether the City or SMSC builds the project. Using the special assessment approach, about $3,636,000 of the project will be assessed to the benefiting properties in this area. If the SMSC owned the property in fee status,they could be assessed as any other owner, provided the City can prove benefit for all four systems: street, sewer, water and storm water. The City would contribute $299,000 from sewer trunk, $479,000 in water trunk and $652,000 in street oversizing (totaling $1,349,000). On the other hand, the agreement with the SMSC would require City sewer and water trunk contributions of an estimated $778,000. The SMSC would pay $4,183,000. The SMSC will be solely responsible for ongoing maintenance costs of the street in perpetuity except for the City sewer and water pipes. Estimated Development Fees $0 Less: Payment to SMSC Oversizing Sewer,Water, Street $778,000 Net $778,000 The City Council has asked that the following additional questions: Q: What is the likely outcome if the city opposes the trust application? A: While the answer is uncertain, our experience has been that municipal opposition alone has only delayed but not defeated a trust request. The most recent example occurred when Scott County, Shakopee and Prior Lake* ("for a time)opposed a trust application for 745 acres of in Shakopee and 110 acres of land in Prior Lake. After in excess of $1 Million in legal and other related fees according Scott County Administrator, Gary Shelton, more than one trip to Washington D.C. and almost ten years delay, the request was granted. Here the situation is different. The trust request is on 165 acres solely within the City of Prior Lake and the City would be out of developable land well before the ten year period were over so delay is not a strategy we would want to pursue. Moreover, the BIA utilizes seven criteria for evaluating a trust request. Only one of the criteria is "impact upon the adjacent municipality" which is weighed the same as the other six. 5 The SMSC indicates that there are 60 community members who desire homesteads right now. Last year they completed an actuarial analysis which confirmed future need for residential property. If the BIA were to engage in approving part of the application, our expectation is the residential portion would be approved because of the present need notwithstanding other properties which may be available. Q: Would opposing the application delay the city's ability to get the sewer connection built? A: Yes. The SMSC will not develop the property until the land is placed in trust. The 429 process would need to continue with this scenario beginning with condemnation of the land. The city attorney has indicated that the city would not be eligible to use "Quick Take" Condemnation as this time as we have no immediate need owing to the current status of the project since plans and specifications are not prepared nor do we have bids. Q: What would happen in a worst case scenario where the land goes into trust even with our opposition and the city has no agreement or easement? A: If this happens, the City would need to find an alternative alignment to develop the annexation area. An alternate alignment for sewer/water could follow CSAH 82 to CSAH 17 south to CSAH 12. It is estimated that the cost of that route would be $7.5 to $9 Million, much of which would be borne by the City with some special assessments. In addition to these costs, $1.2 Million of investment in infrastructure on CSAH 12 and existing Stemmer Ridge Road would be wasted. Because of this risk, it is recommended that the City continue to follow the 429 process together with this agreement as a fall back in the event of some unforeseen scenario. Over time, the City has been the recipient of an annual gift amount of$400,000.The SMSC has also donated to numerous City projects (some examples include ball field lights for Ryan Park, skate park, ATV, training, SCBA Gear, ATD units, amphitheater, Dakotah Ice Rink, park trails, etc.). This list is by no means complete. Opposing a trust application could undermine future contributions. It could also undermine our ability to work toward larger agreements like a second water agreement. All of this is speculation but the city council has requested this information. If the City apposed the trust application and proceeded with a City project, the following outcomes could happen: 1. The SMSC could appeal the special assessments. 6 2. The SMSC could delay the project construction and requiring the city to use the eminent domain process. 3. The trust application could be processed by the BIA regardless of the City's objection. Q: Should eminent domain be started? A: Eminent domain may be started in conjunction with a 429 City project. This process takes roughly 7 months as time is needed to prepare title work, good faith offers, etc. A negotiated offer have to be tendered prior to starting a 90 day eminent domain process, but if an eminent domain process is necessary it could undermine our relationship with the SMSC. It could also be viewed as contrary if the City Council's previous practice of avoiding eminent domain where ever possible. It appears only a matter of time that this SMSC property would be placed into trust status. The history of SMSC land purchase shows that the SMSC does not sell property back to others. The City could continue to follow the 429 process and assess the SMSC for the installation of Stemmer Ridge Road, however the agreement appears to be the most efficient and effective manner to install the improvements for the following reasons: 1. Most cost effective for the City as it provides savings to the trunk fund expenditures as shown in the funding table below 2. Provides for another partnership opportunity with the SMSC 3. Elimination of assessment challenge risk 4. Elimination of property acquisition process 5. Provides disincentive for further purchase within the annexation area by preparing the land for urban development. 6. Eliminates need for City oversight of a lengthy 429 process. FINANCIAL The preliminary cost estimate for the project is $4,985,000 with the traffic IMPACT: calming features. The funding table below shows how the costs could be financed by either a City"429" project or the agreement with the SMSC. PROJECTCITY PROJECT TRAFFICVV/ TRAFFIC W/ CALMING CALMING Trunk Sewer Fund $286,000 $299,000 .Tru`��'�ClNaterFund�-�� .•���41-�10�9r� � .*., .�'.f000.� �:,.. , Street Oversize Fund $652,000 SMSC<FUNi13;�IGF . n43'13,0013r j r:` Total $4,985,000 $4,985,000 7 Each of these estimates include an estimated $210,000 in right of way. Since the SMSC already own the property, this estimated right of way cost could be deducted from the project total for the SMSC project. The added traffic calming costs increase the street oversizing contribution from $277,460 to $652,000 for a City project. Due to the design speed changes, additional length was added to the street and corresponding utilities. New data on pipe material costs have increased the overall sewer and water pricing. ALTERNATIVES: 1. A motion and a second to approve a cooperative agreement between the City of Prior Lake and the Shakopee Mdewakanton Sioux Community for the construction and maintenance of the extension of Stemmer Ridge Road to CSAH 82/154th Street. 2. Deny this item for a specific reason and provide staff with direction. 3. Table this item until some date in the future. RECOMMENDED A motion and a second for approval of Alternative# 1 MOTION: 8 ob�-,rPRIO4646 Dakota Street SE tjWmsols Prior Lake, MN 55372 RESOLUTION 15•xxx A RESOLUTION APPROVING A COOPERATIVE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE CONSTRUCTION AND MAINTENANCE OF THE EXTENSION OF STEMMER RIDGE ROAD TO CSAH 821154TH STREET Motion By: Second By: WHEREAS, Stemmer Ridge Road is shown in the City's Comprehensive Plan for connection between CSAH 82 and CSAH 12; and WHEREAS, The City began a process to complete a City project to complete the Stemmer Ridge Road Project and utilities; and WHEREAS, The SMSC has purchased property along the Stemmer Ridge Road route and also desires to complete the project; and WHEREAS, The City is authorized to enter into contracts pursuant to Minnesota Statutes Chapter§412.221; and WHEREAS, The Parties desire to enter into an Agreement to complete the Stemmer Ridge Road Project. 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 Council hereby approves a Cooperative Agreement with the Shakopee Mdewakanton Sioux Community dated January 12,2015 for the extension of Stemmer Ridge Road to CSAH 82/154th Street and authorizes the Mayor and City Manager to execute the same. PASSED AND ADOPTED THIS 12th DAY OF JANUARY, 2015. VOTE Hedberg Keeney McGuire Morton Thompson Aye ❑ ❑ ❑ ❑ ❑ Nay ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Frank Boyles,City Manager COOPERATIVE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE CONSTRUCTION AND MAINTENANCE OF THE EXTENSION OF STEMMER RIDGE ROAD TO CSAH 82/154 STREET THIS COOPERATIVE AGREEMENT (the "Agreement") is made and entered into this day of , 2014, by and between the CITY OF PRIOR LAKE, a Minnesota municipal corporation ("City") and the SHAKOPEE MDEWAKANTON SIOUX COMMUNITY, a federally recognized Indian Tribe ("SMSC"). RECITALS A. The SMSC is the owner in fee simple of real property located within the City of Prior Lake as depicted on Exhibit A, attached hereto, and legally described as shown on Exhibit B (the "Property"): [insert legal description] B. The SMSC will apply to the United States government to place the Property in trust status pursuant to 25 C.F.R. § 151.1 et seq. (the "Trust Application") for use as residential parcels for SMSC Members; C. The City has existing sanitary sewer lines that extend to the northern portion of the Property and to the south of the property along Stemmer Ridge Road; D. Approximately 2400 acres of land that lie to the southwest in an annexation area agreed to by Spring Lake Township such land being south of 160"' Street, east of County Road 79, north of 1901h Street and west of CSAH 17 (hereinafter referred to as the "Annexation Area") that requires municipal services for development; E. The parties agree to cooperate in the construction and maintenance of an extension of Stemmer Ridge Road from where it currently terminates south of the Property, across the Property to connect with County State Aid Highway ("CSAH") 82, also known as 154' Street, said roadway to provide access to the future SMSC residential parcels, and the construction of City water, and sanitary sewer which collectively are referred to as "Utilities") across the Property to allow the City to provide water and sanitary sewer service to the Annexation Area and the construction of initial phases by the SMSC of a residential subdivision including street and storm sewer(the"Project"); F. The parties desire to enter into this Agreement to establish their respective duties and obligations for the funding,construction,and maintenance of the above-described Project; G. The City will support and endorse the Tribe's Trust Application, while acknowledging this type of an agreement is not a prerequisite to having the Property taken into trust 1 of 16 status and that this agreement does not establish a precedent upon which the City can rely in relation to any future SMSC fee to trust application and similarly neither can the SMSC rely on the City's support and endorsement for future actions of any type; and H. The City is authorized to enter into this Agreement pursuant to Minnesota Statutes § 471.59. The SMSC has a current and rapidly growing demand for residential parcels and will require the planned residential units by the end of 2019 to meet this demand. The costs for these improvements are included in the SMSC five year CIP. Notwithstanding this need and planned expense the obligations to construct is conditioned upon the SMSC legislative body approving the necessary funds for the project. The City has expended significant funds constructing infrastructure in reliance on development of the Annexation Area. Notwithstanding this need and previous expenditure, the City's obligations herein are conditioned upon its City Council approving necessary funding for the Project. J. For purposes of this Agreement Force Majeure shall have the following meaning: Force majeure means a condition beyond the reasonable control of the SMSC or the City and which either could not,by reasonable diligence,have avoided. Such conditions include natural disaster, fire, accidents, actions or decrees of governmental bodies, acts of God, wars (declared and undeclared), acts of terrorism, riots, embargoes, civil insurrection, and other events of force majeure, but shall not include a lack of funds or insufficiency of resources caused by lack of funds. NOW, THEREFORE, in consideration of their mutual covenants the parties agree as follows: 1. EFFECTIVE DATE. This Agreement shall become effective on the date set forth above. 2. ALIGNMENT. Both the SMSC and the City of Prior Lake agree to concept �J[m1] for the north / south road as shown in Exhibit C. It is understood that while this concept shows a general alignment, final design may adjust this alignment due to topography, wetland, or land use considerations. Notwithstanding, the street improvements shall include traffic calming design features such as a roundabout at the park entrance road, medians, minimum lane widths, street lights, a trail and sidewalk system and a design speed of 35 MPH. 3. UTILITY EASEMENT. At the time the City submits the Endorsement Letter as provided for in Paragraph 4, SMSC shall grant to the City an easement over the Property and within the right-of-way of the planned location of Stemmer Ridge Road for water and sewer purposes (the "Utility Easement"). The Easement shall grant the City the right to enter upon the Property for the purpose of repairing and maintaining utilities located in the Utility Easement and shall also include a duty to repair and restore any SMSC utility or roadway impacted by the repair. The City may begin to utilize this Utility Easement on the earlier of the date the land is taken into trust or upon completion of construction of the Utilities by the SMSC. After SMSC's construction of the Utilities is complete, the City Manager shall present to the City Council a resolution to vacate any portion of the easement area not necessary for the operation, 2of16 maintenance, or repair of the utilities. The City shall be responsible for all costs associated with the operation, repair, and maintenance of the Utilities. 4. TRUST APPLICATION. The SMSC shall submit the Trust Application to the United States government within sixty (60) days of the date of this Agreement. The land use for the Trust Application for the Property is residential use, except for that property which is within one thousand(1000) feet of CSAH 82/154' Street. The City shall submit a letter to the United States government endorsing the Trust Application (the "Endorsement Letter"). Said letter shall be in the form attached as Exhibit D to this Agreement, and shall be submitted by the City with-in the authorized comment period for the Trust Application. If the City fails to submit the Endorsement Letter as required herein, the SMSC shall have the right to immediately terminate this Agreement. The SMSC shall provide notice to the City within three (3) business days of its receipt of a decision from the United States government on the Trust Application. 5. PROJECT DESCRIPTION. The Project shall consist of the design and construction of a right-of-way across the Property to provide access to future SMSC residential subdivisions, the extension of Stemmer Ridge Road to CSAH 82/154' Street, the construction of water and sewer utilities within the right-of-way of the extension of Stemmer Ridge Road and the initial phases of construction of the SMSC residential subdivision, all as depicted on the attached Exhibit E, incorporated herein. 6. PLANS AND SPECIFICATIONS. SMSC shall have plans and specifications prepared for the Project. The sewer and water plans shall meet the City's Public Works Design Manual and SMSC plans for the storm sewer and ponds shall meet the requirements of the SMSC's Design Manual. The street improvements shall meet MnDOT State Aid requirements. The plans and specifications shall be subject to City approval as set forth below. 7. COST. SMSC shall be responsible for the full cost of the design, construction and materials for the Project, including but not limited to street, curb and gutter, valves, manhole covers, catch basins, and hydrants, except the material cost of the sanitary sewer pipe and water pipe only which the City shall pay for by reimbursement to the SMSC as provided for herein. The SMSC shall be responsible for the full cost of traffic safety improvements associated with the street work including but not limited to medians and roundabouts. 8. BIDDING AND CONTRACT. SMSC shall obtain bids for construction of the Project. The water and sanitary sewer pipe materials for the Utilities, to be paid for by the City, shall be itemized as a line item on the bid. Labor for installation of the Utilities shall be itemized as a separate line item. Once received, the bids shall be reviewed by both parties. The SMSC shall award the construction contract to the approved bidder, provided howeverthe pipe material bid and the award of the construction contract shall be subject to the City Council approval as set forth in Paragraph 9 hereof. Upon completion of installation of the Utilities the SMSC shall invoice the City for the pipe material cost. The City shall pay the invoice within thirty (30) calendar days. The SMSC shall supervise construction and administer the contract and shall be the paying agent for all payments due to the contractor and any other individual or entity hired in relation to the construction of the Project. 3of16 9. CITY APPROVAL. Prior to the award of the contract by the SMSC the City Council shall have the opportunity to review and approve the construction bids relative to the pipe material costs. The SMSC shall submit documents suitable for determining the pipe material costs to the City for approval prior to execution of the documents or performance of any related work. The City Council shall review the submission and shall provide to SMSC written approval or objection within forty-five (45) days of the City's receipt of the document(s). If the City Council objects, SMSC and the City shall use best efforts to achieve a mutually agreeable resolution on the pipe material cost. The approval of the bid, award of the bid, and execution of the construction contract shall not occur until the City and SMSC achieve a resolution acceptable to both parties. 10. COMPLETION OF THE PROJECT. Construction of the Utilities portion of the Project shall be completed within twelve (12) months of the date that SMSC receives notice that the federal government has accepted the Property in Trust status. If the Property has not been accepted into Trust by December�0151[iv2] the City may upon written notice to the SMSC cancel this agreement. Upon cancellation neither party shall have any obligations hereunder to the other. Cancellation of the Agreement shall not terminate the easement granted to the City under Paragraph 3 hereo4ID3]. 11. REPAIR AND MAINTENANCE. After construction is complete, SMSC shall be responsible for the repair and maintenance of the portion of Stemmer Ridge Road lying within the Trust Property. The SMSC shall be responsible for, and bear the full cost of, restoring any impacted City infrastructure to an"as was or better"condition subject to inspection and acceptance by the City. 12. The City shall be responsible for the repair and maintenance of all portions of Stemmer Ridge Road not located within the Trust Property. The City shall be responsible for maintenance and repair of the City watermain and sanitary sewer pipe. The SMSC hereby grants the City permission to manage traffic on Stemmer Ridge Road across the Trust Property for purposes of maintenance and repair of the utilities, except that any temporary closure shall maintain resident and emergency vehicle access to the Community residential subdivision served by the roadway except in the event of a Force Majeure. The City shall be responsible for, and bear the full cost of, restoring any impacted SMSC utilities or infrastructure to an "as was or better" condition subject to inspection and acceptance by the SMSC. 13. INSPECTION. During construction of the Project, the City shall be responsible for inspecting the City sewer and water systems by either City staff or an outside consultant representing the City. The SMSC shall be responsible for inspecting the street improvements and other utilities serving the SMSC. 14. SIGNAGE. The City shall have the non-exclusive right to install signage within the right-of-way of Stemmer Ridge Road consistent with typical road signage that exists throughout the City, including but not limited to directional signage to Spring Lake Regional Park and the City Park. 4of16 15.ANNEXATION AREA. The granting of the easement and installation of the City water and sewer utilities allows the City to serve the development of the approximately 2400 acre annexation area agreed to by Spring Lake Township (the"Annexation Area"). It is not the intent of the SMSC to purchase land within the Annexation Area and if any such purchase is contemplated,the SMSC shall consult with the City prior to the purchase. The SMSC will negotiate in good faith with the City on any impacts that any SMSC land purchase may have with respect to the trunk sewer and water system. iiv4] 16. RIGHTS OF PUBLIC. The SMSC shall use its best efforts to have the portion of the constructed roadway lying on Trust Property listed on the Indian Reservation Roads Inventory maintained by the United States Department of the Interior, Bureau of Indian Affairs which has the effect of making the roadway a public roadway. Until such listing is made, the SMSC grants to the City, on behalf of the public, the right to use the portion of Stemmer Ridge Road on the Trust Property. The SMSC may close Stemmer Ridge Road for such temporary periods of time that are necessary for repair and maintenance of the road and for emergencies except that any such closure shall maintain resident and emergency vehicle access to City residential subdivisions except in the event of a Force Majeure. 17. FUTURE INFRASTRUCTURE. The SMSC agrees to work with the City for the future siting of water supply infrastructure and an integrated water supply system. 18.ACTS AND OMISSIONS. Each party shall be is responsible for its own acts and omissions and the results thereof to the extent authorized by law. Nothing in this Agreement constitutes a waiver by the City of any statutory or common law, defenses, immunities, or limits on liability. In no event shall the obligations of the City for a tort claim exceed the amount that the City would be obligated to pay under the provisions and limitations of Minn. Stat. Chap 466. In no event shall the obligations of the SMSC for a tort claim exceed the amount the SMSC would be obligated to pay under the provision and limitations of the SMSC Tort Claims Ordinance. 19. DATA PRACTICES. All data created, collected, received, maintained or disseminated by the City for any purpose in the course of this Agreement is governed by the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, any other applicable state statute, or any state rules adopted to implement the act, as well as federal regulations on data privacy. The SMSC asserts that it is not subject to the Minnesota Government Data Practices Act. To the extent it is decided by a court of competent jurisdiction that the SMSC is subject to the Minnesota Government Data Practices Act, it shall comply with the Act. 20. LIMITATION OF REMEDIES. In the event of a breach of the Agreement, neither party shall be entitled to recover punitive, special or consequential damages or damages for loss of business. 21.ASSIGNMENT. Neither party shall assign this Agreement, nor any interest arising herein, without the prior written consent of the other party. 5of16 22. SEVERABILITY. The provisions of this Agreement are severable. If any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision shall not affect the remaining provisions of this Agreement. 23.WAIVER. No action nor failure to act by the City or the SMSC shall constitute a waiver of any right or duty afforded any of them under the Agreement, nor shall any such action or failure to act constitute an approval of or acquiescence in any breach thereunder, except as may be specifically agreed in writing. 24. GOVERNING LAW. When Tribal or Federal law does not apply, this Agreement is governed by and must be construed in accordance with the laws of the State of Minnesota without regard to Minnesota's conflict-of-law provisions. 25.AUTHORIZATION. This Agreement and all of its terms have been authorized and approved by the SMSC's Business Council Resolution No. , adopted the day of , 2014, attached hereto as Exhibit F. This Agreement and all of its terms have been authorized and approved by the City Council of the City of Prior Lake by Resolution , adopted the day of , 2014, attached hereto as Exhibit G. 26. NON-IMPAIRMENT. SMSC's Business Council will not initiate enactment of any law, ordinance, rule, or regulation that would impair the obligations of the SMSC under this Agreement. 27. REPRESENTATIONS AND WARRANTIES REGARDING IMPAIRMENT. The Business Council represents and warrants that it will not initiate any action to impair this Agreement, including an action to rescind this Agreement or any waiver contained herein except where the Business Council is acting on behalf of the SMSC as the non-breaching party in a breach of this Agreement. 28. DISPUTE RESOLUTION. The parties may meet if agreed to by both to attempt to negotiate an amicable resolution of any dispute arising from this Agreement. 29. NON-WAIVEROF IMMUNITY. Nothing in this agreement shall constitute a waiver of the SMSC's sovereign immunity to suit. 30. NOTICES. Notices to be given under this Agreement shall be given by enclosing the same in a sealed envelope, postage prepaid and deposited in same in the U.S. Postal Service, addressed to the parties as listed below: City of Prior Lake Shakopee Mdewakanton Sioux Community Attn: City Engineer Attn: William Rudnicki 4646 Dakota Ave SE 2330 Sioux Trail SW Prior Lake, MN 55372 Prior Lake, MN 55376 31. SIGNING OF AGREEMENT. This Agreement may be signed in counterparts and on different dates by each parry without affecting the validity thereof. 6of16 32. INTEGRATION. The entire and integrated agreement of the parties contained in this Agreement shall supersede all prior negotiations, representations, or agreements between the parties regarding the subject matter hereof, whether written or oral. 33. RECITALS. The recitals set forth in paragraphs A through H are incorporated herein and made a part hereof. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written. [Remainder of'Page Intentionally Left Blank. Signature Pages Follow.] 7of16 CITY OF PRIOR LAKE BY: Kenneth L. Hedberg, Mayor BY: Frank Boyles, City Manager STATE OF MINNESOTA ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 2014, by Kenneth L. Hedberg and Frank Boyles, the Mayor and City Manager, respectively, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public 8of16 SHAKOPEE MDEWAKANTON SIOUX COMMUNITY By: Its: By: Its: STATE OF MINNESOTA ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of 2014, by and ,the and , respectively, of the Shakopee Mdewakanton Sioux Community, a federally recognized Indian Tribe, on behalf of the tribe and pursuant to the authority granted by its Notary Public DRAFTED BY: Gregerson, Rosow, Johnson&Nilan, ltd 650 Third Avenue South Suite 1600 Minneapolis, MN 55402 9of16 EXHIBIT A [Sketch Depiction of SMSC Property—Recital A] 10 of 16 EXHIBIT B [Legal Description of SMSC Property—Recital A] 11 of 16 EXHIBIT C [North/South Road Alignment—Paragraph 21 12 of 16 EXHIBIT D [Endorsement Letter—Paragraph 41 13 of 16 EXHIBIT E [Project Design Depiction—Paragraph 51 14 of 16 EXHIBIT F [SMSC Resolution—Paragraph 24] 15 of 16 EXHIBIT G [SMSC Resolution—Paragraph 24] 16 of 16 Version 1 (City Attorney Draft) No Endorsement Agreement & No Endorsement Letter (Ex. D) (Electronic pages 48-64; Ex. D on page 61) COOPERATIVE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE CONSTRUCTION AND MAINTENANCE OF THE EXTENSION OF STEMMER RIDGE ROAD TO CSAR 82/154TH STREET THIS COOPERATIVE AGREEMENT(the"Agreement")is made and entered into this day of January, 2015, by and between the CITY OF PRIOR LAKE, a Minnesota municipal corporation ("City") and the SHAKOPEE MDEWAKANTON SIOUX COMMUNITY,a federally recognized Indian Tribe ("SMSC"). RECITALS A. The SMSC is the owner in fee simple of real property located within the City of Prior Lake as depicted on Exhibit A, attached hereto,and legally described as shown on Exhibit B (the "Property"): [insert legal description] B. The SMSC will apply to the United States government to place the Property in trust status pursuant to 25 C.F.R. § 151.1 et seq. (the"Trust Application") for use as residential parcels for SMSC Members; C. The City has existing sanitary sewer lines that extend to the northern portion of the Property and to the south of the property along Stemmer Ridge Road; D. Approximately 2400 acres of land that lie to the southwest in an annexation area agreed to by Spring Lake Township such land being south of 1601h Street, east of County Road.79, north of 190th Street and west of CSAH 17 (hereinafter referred to as the "Annexation Area") that requires municipal services for development; E. The parties agree to cooperate in the construction and maintenance of an extension of Stemmer Ridge Road from where it currently terminates south of the Property, across the Property to connect with County State Aid Highway ("CSAH") 82, also known as 154th Street, said roadway to provide access to the future SMSC residential parcels,and the construction of City water, and sanitary sewer which collectively are referred to as "Utilities") across the Property to allow the City to provide water and sanitary sewer service to the Annexation Area and the construction of initial phases by the SMSC of a residential subdivision including street and storm sewer(the "Project"); F. The parties desire to enter into this Agreement to establish their respective duties and obligations for the funding, construction, and maintenance of the above-described Project; G. The City will comment on Tribe's Trust Application, while acknowledging this type of an agreement is not a prerequisite to having the Property taken into trust status and that this 1 of 16 agreement does not establish a precedent upon which the City can rely in relation to any future SMSC fee to trust application and similarly neither can the SMSC rely on the City's statements for future actions of any type; and H. The City is authorized to enter into this Agreement pursuant to Minnesota Statutes § 471.59. The SMSC has a current and rapidly growing demand for residential parcels and will require the planned residential units by the end of 2019 to meet this demand. The costs for these improvements are included in the SMSC five year CIP. Notwithstanding this need and planned expense the obligations to construct is conditioned upon the SMSC legislative body approving the necessary funds for the project. The City has expended significant funds constructing infrastructure in reliance on development of the Annexation Area. Notwithstanding this need and previous expenditure, the City's obligations herein are conditioned upon its City Council approving necessary funding for the Project. J. For purposes of this Agreement Force Majeure shall have the following meaning: Force majeure means a condition beyond the reasonable control of the SMSC or the City and which either could not, by reasonable diligence, have avoided. Such conditions include natural disaster, fire, accidents, actions or decrees of governmental bodies, acts of God, wars (declared and undeclared), acts of terrorism, riots, embargoes, civil insurrection, and other events of force majeure, but shall not include a lack of funds or insufficiency of resources caused by lack of funds. NOW, THEREFORE, in consideration of their mutual covenants the parties agree as follows: 1. EFFECTIVE DATE. This Agreement shall become effective on the date set forth above. 2. ALIGNMENT. Both the SMSC and the City of Prior Lake agree to Concept E north of Howard Lake Road and Concept F south of Howard Lake Road for the north/south road as shown in Exhibit C. It is understood that while this concept shows a general alignment, final design may adjust this alignment due to topography, wetland, or land use considerations. Notwithstanding, the street improvements shall include traffic calming design features such as a roundabout at the park entrance road, medians, minimum lane widths, street lights, a trail and sidewalk system and a design speed of 35 MPH. 3. UTILITY EASEMENT. At the time the City submits the Endorsement Letter as provided for in Paragraph 4, SMSC shall grant to the City an easement over the Property and within the right-of-way of the planned location of Stemmer Ridge Road for water and sewer purposes (the "Utility Easement"). The Easement shall grant the City the right to enter upon the Property for the purpose of repairing and maintaining utilities located in the Utility Easement and shall also include a duty to repair and restore any SMSC utility or roadway impacted by the repair. The City may begin to utilize this Utility Easement on the earlier of the date the land is taken into trust or upon completion of construction of the Utilities by the SMSC. After SMSC's construction of the Utilities is complete,the City Manager shall present to the City Council a resolution to vacate any portion of the easement area not necessary for the operation,maintenance, or repair of the utilities. The City shall be responsible for all costs associated with the operation, repair, and maintenance 2of16 of the Utilities. If the City's Road Application referred to in paragraph 4 is approved, the City Manager shall present to the City Council a resolution to conform the easement to the property subject to the Road Application. 4. TRUST APPLICATION. The SMSC shall submit the Trust Application to the United States government within sixty(60)days of the date of this Agreement. The land use for the Trust Application for the Property is residential use, except for that property which is within one thousand (1000) feet of CSAH 82/154th Street (the "Non-Residential Property"). The uses on the Non-Residential Property are restricted as the result of wetlands located thereon and shall be limited to a convenience store and a water treatment facility. The City may submit a letter to the United States government identifying its concerns relating to the Trust Application (the "City Letter"). The City's concerns include: (a)the authority under law for the Property to be transferred into Trust; (2) the Tribe's need for additional land including the Property to be transferred into Trust; (3)the purposes to which the Property will be put; (4)the impact on this City's tax base; (5) the impact on the City being able to provide municipal services to the Annexation Area; (6) jurisdiction problems and conflicts that may arise including land use and zoning issues; (7) the extensive investment in public infrastructure by the City in anticipation of development of the Annexation Area; and(8) future purchases of property by the SMSC that further inhibit the City's ability to provide municipal services in a reasonable manner and at a reasonable cost. The City Letter may be in the form attached as Exhibit D to this Agreement, and may be submitted by the City within the authorized comment period for the Trust Application. The City Letter may include a request that acceptance of the Property into trust be conditioned upon the following (1) that the United States government contemporaneously grant an application to be made by the City pursuant to the provisions 25 CFR 169 to establish a right-of-way over tribal land within the Property,which right-of-way includes City utilities (hereinafter "Road Application"); (2) that SMSC consent to and support the Road Application; (3) that the decision on the Trust Application identify this Cooperative Agreement and the Road Application; (4)that the United States government require the SMSC to negotiate a binding and enforceable agreement regarding future purchases that identifies specific property in the City that can be transferred into trust in the 50 years following a decision on the Trust Application. The SMSC shall provide notice to the City within three (3) business days of its receipt of a decision from the United States government on the Trust Application. 5. PROJECT DESCRIPTION. The Project shall consist of the design and construction of a right-of-way across the Property to provide access to future SMSC residential subdivisions, the extension of Stemmer Ridge Road to CSAH 82/1541h Street, the construction of water and sewer utilities within the right-of-way of the extension of Stemmer Ridge Road and the initial phases of construction of the SMSC residential subdivision, all as depicted on the attached Exhibit E, incorporated herein. 6. PLANS AND SPECIFICATIONS. SMSC shall have plans and specifications prepared for the Project. The sewer and water plans shall meet the City's Public Works Design Manual and SMSC plans for the storm sewer and ponds shall meet the requirements of the SMSC's Design Manual. The street improvements shall meet MnDOT State Aid requirements. The plans and specifications shall be subject to City approval as set forth below. 3of16 7. COST. SMSC shall be responsible for the full cost of the design, construction and materials for the Project, including but not limited to street, curb and gutter, valves, manhole covers, catch basins, and hydrants, except the material cost of the sanitary sewer pipe and water pipe only which the City shall pay for by reimbursement to the SMSC as provided for herein. The SMSC shall be responsible for the full cost of traffic safety improvements associated with the street work including but not limited to medians and roundabouts. 8. BIDDING AND CONTRACT. SMSC shall obtain bids for construction of the Project. The water and sanitary sewer pipe materials for the Utilities, to be paid for by the City, shall be itemized as a line item on the bid. The City shall have the right to purchase the pipe materials and deliver them to the SMSC contractor in accordance with the contractor's construction schedule for the project. The City shall notify the SMSC prior to the SMSC sending out a request for bids for the construction of the project. Labor costs for installation of the Utilities shall be itemized as a separate line item. Once received, the bids shall be reviewed by both parties. The SMSC shall award the construction contract to the approved bidder, provided however the pipe material bid and the award of the construction contract shall be subject to the City Council approval as set forth in Paragraph 9 hereof. Upon completion of installation of the Utilities the SMSC shall invoice the City for the pipe material cost. The City shall pay the invoice within thirty (30) calendar days. The SMSC shall supervise construction and administer the contract and shall be the paying agent for all payments due to the contractor and any other individual or entity hired in relation to the construction of the Project. 9. CITY APPROVAL. Prior to the award of the contract by the SMSC the City Council shall have the opportunity to review and approve the construction bids relative to the pipe material costs. The SMSC shall submit documents suitable for determining the pipe material costs to the City for approval prior to execution of the documents or performance of any related work. The City Council shall review the submission and shall provide to SMSC written approval or objection within forty-five (45) days of the City's receipt of the document(s). If the City Council objects, SMSC and the City shall use best efforts to achieve a mutually agreeable resolution on the pipe material cost. The approval of the bid,award of the bid,and execution of the construction contract shall not occur until the City and SMSC achieve a resolution acceptable to both parties. 10. COMPLETION OF THE PROJECT. Construction of the Utilities portion of the Project shall be completed within twelve(12)months of the date that SMSC receives notice that the federal government has accepted the Property in Trust status. If the Property has not been accepted into Trust by December 31, 2015 the City may upon written notice to the SMSC cancel this agreement. Upon cancellation neither party shall have any obligations hereunder to the other. Cancellation of the Agreement shall not terminate the easement granted to the City under Paragraph 3 hereof. 11. REPAIR AND MAINTENANCE. After construction is complete, SMSC shall be responsible for the repair and maintenance of the portion of Stemmer Ridge Road lying within the Trust Property. The SMSC shall be responsible for, and bear the full cost of, restoring any impacted City infrastructure to an"as was or better"condition subject to inspection and acceptance by the City. 4of16 12. MAINTENANCE OF ROAD NOT ON TRUST PROPERTY. The City shall be responsible for the repair and maintenance of all portions of Stemmer Ridge Road not located within the Trust Property. The City shall be responsible for maintenance and repair of the City watermain and sanitary sewer pipe. The SMSC hereby grants the City permission to manage traffic on Stemmer Ridge Road across the Trust Property for purposes of maintenance and repair of the utilities, except that any temporary closure shall maintain resident and emergency vehicle access to the Community residential subdivision served by the roadway except in the event of a Force Majeure. The City shall be responsible for,and bear the full cost of,restoring any impacted SMSC utilities or infrastructure to an"as was or better"condition subject to inspection and acceptance by the SMSC. 13. INSPECTION. During construction of the Project, the City shall be responsible for inspecting the City sewer and water systems by either City staff or an outside consultant representing the City. The SMSC shall be responsible for inspecting the street improvements and other utilities serving the SMSC. 14. SIGNAGE. The City shall have the non-exclusive right to install signage within the right- of-way of Stemmer Ridge Road consistent with typical road signage that exists throughout the City, including but not limited to directional signage to Spring Lake Regional Park and the City Park. 15. ANNEXATION AREA. The granting of the easement and installation of the City water and sewer utilities allows the City to serve the development of the approximately 2400 acre annexation area agreed to by Spring Lake Township (the "Annexation Area"). It is not the intent of the SMSC to purchase land within the Annexation Area and if any such purchase is contemplated, the SMSC shall consult with the City prior to the purchase. The SMSC will negotiate in good faith with the City on any impacts that any SMSC land purchase may have with respect to the trunk sewer and water system. 16. RIGHTS OF PUBLIC. If the Road Application is not granted the SMSC shall use its best efforts to have the portion of the constructed roadway lying on Trust Property listed on the Indian Reservation Roads Inventory maintained by the United States Department of the Interior, Bureau of Indian Affairs which has the effect of making the roadway a public roadway. Until such listing is made, the SMSC grants to the City, on behalf of the public, the right to use the portion of Stemmer Ridge Road on the Trust Property. The SMSC may close Stemmer Ridge Road for such temporary periods of time that are necessary for repair and maintenance of the road and for emergencies except that any such closure shall maintain resident and emergency vehicle access to City residential subdivisions except in the event of a Force Majeure. 17. FUTURE INFRASTRUCTURE. The SMSC agrees to work with the City for the future siting of water supply infrastructure and an integrated water supply system. 18. ACTS AND OMISSIONS. Each party shall be is responsible for its own acts and omissions and the results thereof to the extent authorized by law. Nothing in this Agreement constitutes a waiver by the City of any statutory or common law, defenses, immunities, or limits on liability. In no event shall the obligations of the City for a tort claim exceed the amount that 5of16 the City would be obligated to pay under the provisions and limitations of Minn. Stat. Chap 466. In no event shall the obligations of the SMSC for a tort claim exceed the amount the SMSC would be obligated to pay under the provision and limitations of the SMSC Tort Claims Ordinance. 19. DATA PRACTICES. All data created, collected, received, maintained or disseminated by the City for any purpose in the course of this Agreement is governed by the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, any other applicable state statute, or any state rules adopted to implement the act, as well as federal regulations on data privacy. The SMSC asserts that it is not subject to the Minnesota Government Data Practices Act. To the extent it is decided by a court of competent jurisdiction that the SMSC is subject to the Minnesota Government Data Practices Act, it shall comply with the Act. 20. LIMITATION OF REMEDIES. In the event of a breach of the Agreement,neither party shall be entitled to recover punitive, special or consequential damages or damages for loss of business. 21. ASSIGNMENT. Neither party shall assign this Agreement,nor any interest arising herein, without the prior written consent of the other party. 22. SEVERABILITY. The provisions of this Agreement are severable. If any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision shall not affect the remaining provisions of this Agreement. 23. WAIVER. No action nor failure to act by the City or the SMSC shall constitute a waiver of any right or duty afforded any of them under the Agreement,nor shall any such action or failure to act constitute an approval of or acquiescence in any breach thereunder, except as may be specifically agreed in writing. 24. GOVERNING LAW. When Tribal or Federal law does not apply, this Agreement is governed by and must be construed in accordance with the laws of the State of Minnesota without regard to Minnesota's conflict-of-law provisions. 25. AUTHORIZATION. This Agreement and all of its terms have been authorized and approved by the SMSC's Business Council Resolution No. , adopted the day of , 2014, attached hereto as Exhibit F. This Agreement and all of its terms have been authorized and approved by the City Council of the City of Prior Lake by Resolution , adopted the day of , 2014, attached hereto as Exhibit G. 26. NON-IMPAIRMENT. SMSC's Business Council will not initiate enactment of any law, ordinance,rule,or regulation that would impair the obligations of the SMSC under this Agreement. 27. REPRESENTATIONS AND WARRANTIES REGARDING IMPAIRMENT. The Business Council represents and warrants that it will not initiate any action to impair this Agreement, including an action to rescind this Agreement or any waiver contained herein except where the Business Council is acting on behalf of the SMSC as the non-breaching party in a breach of this Agreement. 6of16 28. DISPUTE RESOLUTION. The parties may meet if agreed to by both to attempt to negotiate an amicable resolution of any dispute arising from this Agreement. 29. NON-WAIVEROF IMMUNITY. Nothing in this agreement shall constitute a waiver of the SMSC's sovereign immunity to suit. 30. NOTICES. Notices to be given under this Agreement shall be given by enclosing the same in a sealed envelope, postage prepaid and deposited in same in the U.S. Postal Service, addressed to the parties as listed below: City of Prior Lake Shakopee Mdewakanton Sioux Community Attn: City Engineer Attn: William Rudnicki 4646 Dakota Ave SE 2330 Sioux Trail SW Prior Lake, MN 55372 Prior Lake, MN 55376 31. SIGNING OF AGREEMENT. This Agreement may be signed in counterparts and on different dates by each party without affecting the validity thereof. 32. INTEGRATION. The entire and integrated agreement of the parties contained in this Agreement shall supersede all prior negotiations, representations, or agreements between the parties regarding the subject matter hereof, whether written or oral. 33. RECITALS. The recitals set forth in paragraphs A through H are incorporated herein and made a part hereof. IN WITNESS WHEREOF,this Agreement has been executed as of the day and year first above written. [Remainder of Page Intentionally Left Blank. Signature Pages Follow.] 7of16 CITY OF PRIOR LAKE BY: Kenneth L. Hedberg, Mayor BY: Frank Boyles, City Manager STATE OF MINNESOTA ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 2014, by Kenneth L. Hedberg and Frank Boyles, the Mayor and City Manager, respectively, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public 8of16 SHAKOPEE MDEWAKANTON SIOUX COMMUNITY By: Its: By: Its: STATE OF MINNESOTA ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of 2014, by and ,the and , respectively, of the Shakopee Mdewakanton Sioux Community, a federally recognized Indian Tribe, on behalf of the tribe and pursuant to the authority granted by its Notary Public DRAFTED BY: Gregerson, Rosow, Johnson&Nilan, ltd 650 Third Avenue South Suite 1600 Minneapolis, MN 55402 9of16 EXHIBIT A [Sketch Depiction of SMSC Property—Recital A] 10 of 16 EXHIBIT B [Legal Description of SMSC Property—Recital A] 11 of 16 EXHIBIT C [North/South Road Alignment—Paragraph 21 12 of 16 EXHIBIT D [Endorsement Letter—Paragraph 41 To Be Addressed to Secretary of the Interior or designee This letter is submitted by the City of Prior Lake ("City") with respect to the Fee to Trust Application("Trust Application") submitted or to be submitted by the Shakopee Mdewakanton Sioux Community("SMSC") for the Property described on Exhibit A hereto (the "Property"). At the time of purchase of the Property the SMSC knew of the City's needs and plans for the construction of a road across the Property to serve an area referred to as the "Annexation Area". The City's Capital Improvement Plan has included plans for the establishment of a road over the Property to serve the Annexation Area. The Annexation Area is approximately 2,400 acre in size. The Annexation Area is subject to a 2003 Annexation Agreement and between the City and Spring Lake Township (the "Annexation Agreement"). The Annexation Agreement and accompanying City Resolution 03-130 and Township Resolution 03-005 are attached hereto. A portion of the Annexation Area has been annexed into the City(approximately acres). The majority of the Annexation is intended for future annexations following the construction and availability of necessary municipal infrastructure (road and utilities)to serve the Annexation Area. In preparation for serving the Annexation Area the City has spent approximately $4,255,000 on infrastructure to connect to the infrastructure that will serve the Annexation Area. If the City is unable to obtain a permanent road with utility right-of-way across the Property, infrastructure previously built to serve Annexation Area will be rendered worthless. The City concerns over the Trust Application include: (a)the authority under law for the Property to be transferred into Trust; (2)the Tribe's need for additional land including the Property to be transferred into Trust; (3)the purposes to which the Property will be put; (4)the impact on this City's tax base; (5)the impact on the City being able to provide municipal services to the Annexation Area; (6)jurisdiction problems and conflicts that may arise including land use and zoning issues; (7)the extensive investment in public infrastructure by the City in anticipation of development of the Annexation Area; and (8) future purchases of property by the SMSC that further inhibit the City's ability to provide municipal services in a reasonable manner and at a reasonable cost. The City a request that acceptance of the Property into trust be conditioned upon the following (1)that the United States government contemporaneously granting an application to be made by the City pursuant to the provisions 25 CFR 169 to establish a right-of-way over tribal land within the Property, which right-of-way includes City utilities (hereinafter"Road Application"); (2)that the SMSC consent to and support the Road Application; (3)that the decision on the Trust Application identify this Cooperative Agreement and the Road Application; and(4)that the United States government require the SMSC to negotiate a binding and enforceable agreement regarding future purchases that identifies specific property in the City that can be transferred into trust in the 50 years following a decision on the Trust Application. 13 of 16 EXHIBIT E [Project Design Depiction—Paragraph 51 14 of 16 EXHIBIT F [SMSC Resolution—Paragraph 241 15 of 16 EXHIBIT G (SMSC Resolution—Paragraph 24] 16 of 16 Version 2 (City Attorney Draft) Endorsement Agreement & Endorsement Letter (Ex. D) (Electronic pages 65-81; Ex. D on page 78) COOPERATIVE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE CONSTRUCTION AND MAINTENANCE OF THE EXTENSION OF STEMMER RIDGE ROAD TO CSAH 82/154TH STREET THIS COOPERATIVE AGREEMENT(the"Agreement")is made and entered into this day of January, 2015, by and between the CITY OF PRIOR LAKE, a Minnesota municipal corporation ("City") and the SHAKOPEE MDEWAKANTON SIOUX COMMUNITY,a federally recognized Indian Tribe ("SMSC"). RECITALS A. The SMSC is the owner in fee simple of real property located within the City of Prior Lake as depicted on Exhibit A,attached hereto, and legally described as shown on Exhibit B (the "Property"): [insert legal description] B. The SMSC will apply to the United States government to place the Property in trust status pursuant to 25 C.F.R. § 151.1 et seq. (the"Trust Application") for use as residential parcels for SMSC Members; C. The City has existing sanitary sewer lines that extend to the northern portion of the Property and to the south of the property along Stemmer Ridge Road; D. Approximately 2400 acres of land that lie to the southwest in an annexation area agreed to by Spring Lake Township such land being south of 160th Street, east of County Road 79, north of 190th Street and west of CSAH 17 (hereinafter referred to as the "Annexation Area") that requires municipal services for development; E. The parties agree to cooperate in the construction and maintenance of an extension of Stemmer Ridge Road from where it currently terminates south of the Property, across the Property to connect with County State Aid Highway ("CSAH") 82, also known as 154th Street, said roadway to provide access to the future SMSC residential parcels,and the construction of City water, and sanitary sewer which collectively are referred to as "Utilities") across the Property to allow the City to provide water and sanitary sewer service to the Annexation Area and the construction of initial phases by the SMSC of a residential subdivision including street and storm sewer(the "Project"); F. The parties desire to enter into this Agreement to establish their respective duties and obligations for the funding, construction, and maintenance of the above-described Project; G. The City will comment on Tribe's Trust Application, while acknowledging this type of an agreement is not a prerequisite to having the Property taken into trust status and that this I of 16 agreement does not establish a precedent upon which the City can rely in relation to any future SMSC fee to trust application and similarly neither can the SMSC rely on the City's support and endorsement for future actions of any type; and H. The City is authorized to enter into this Agreement pursuant to Minnesota Statutes § 471.59. The SMSC has a current and rapidly growing demand for residential parcels and will require the planned residential units by the end of 2019 to meet this demand. The costs for these improvements are included in the SMSC five year CIP. Notwithstanding this need and planned expense the obligations to construct is conditioned upon the SMSC legislative body approving the necessary funds for the project. The City has expended significant funds constructing infrastructure in reliance on development of the Annexation Area. Notwithstanding this need and previous expenditure, the City's obligations herein are conditioned upon its City Council approving necessary funding for the Project. J. For purposes of this Agreement Force Majeure shall have the following meaning: Force majeure means a condition beyond the reasonable control of the SMSC or the City and which either could not, by reasonable diligence, have avoided. Such conditions include natural disaster, fire, accidents, actions or decrees of governmental bodies, acts of God, wars (declared and undeclared), acts of terrorism, riots, embargoes, civil insurrection, and other events of force majeure, but shall not include a lack of funds or insufficiency of resources caused by lack of funds. NOW, THEREFORE, in consideration of their mutual covenants the parties agree as follows: 1. EFFECTIVE DATE. This Agreement shall become effective on the date set forth above. 2. ALIGNMENT. Both the SMSC and the City of Prior Lake agree to Concept E north of Howard Lake Road and Concept F south of Howard Lake Road for the north/south road as shown in Exhibit C. It is understood that while this concept shows a general alignment, final design may adjust this alignment due to topography, wetland, or land use considerations. Notwithstanding, the street improvements shall include traffic calming design features such as a roundabout at the park entrance road, medians, minimum lane widths, street lights, a trail and sidewalk system and a design speed of 35 MPH. 3. UTILITY EASEMENT. At the time the City submits the Endorsement Letter as provided for in Paragraph 4, SMSC shall grant to the City an easement over the Property and within the right-of-way of the planned location of Stemmer Ridge Road for water and sewer purposes (the "Utility Easement"). The Easement shall grant the City the right to enter upon the Property for the purpose of repairing and maintaining utilities located in the Utility Easement and shall also include a duty to repair and restore any SMSC utility or roadway impacted by the repair. The City may begin to utilize this Utility Easement on the earlier of the date the land is taken into trust or upon completion of construction of the Utilities by the SMSC. After SMSC's construction of the Utilities is complete,the City Manager shall present to the City Council a resolution to vacate any portion of the easement area not necessary for the operation,maintenance, or repair of the utilities. The City shall be responsible for all costs associated with the operation, repair, and maintenance 2of16 of the Utilities. If the City's Road Application referred to in paragraph 4 is approved, the City Manager shall present to the City Council a resolution to conform the easement to the property subject to the Road Application. 4. TRUST APPLICATION. The SMSC shall submit the Trust Application to the United States government within sixty(60)days of the date of this Agreement. The land use for the Trust Application for the Property is residential use, except for that property which is within one thousand (1000) feet of CSAH 82/1541h Street (the "Non-Residential Property"). The uses on the Non-Residential Property are restricted as the result of wetlands located thereon and shall be limited to a convenience store and a water treatment facility. The City may submit a letter of endorsement of the fee to trust application to the United States government which also identifies the City's concerns relating to the Trust Application (the "City Letter"). The City's concerns include: (a) the authority under law for the Property to be transferred into Trust; (2) the Tribe's need for additional land including the Property to be transferred into Trust; (3) the purposes to which the Property will be put; (4) the impact on this City's tax base; (5) the impact on the City being able to provide municipal services to the Annexation Area; (6)jurisdiction problems and conflicts that may arise including land use and zoning issues;(7)the extensive investment in public infrastructure by the City in anticipation of development of the Annexation Area; and (8) future purchases of property by the SMSC that further inhibit the City's ability to provide municipal services in a reasonable manner and at a reasonable cost. The City Letter may be in the form attached as Exhibit D to this Agreement, and may be submitted by the City within the authorized comment period for the Trust Application. The City Letter may include a request that acceptance of the Property into trust be conditioned upon the following(1)that the United States government contemporaneously grant an application to be made by the City pursuant to the provisions 25 CFR 169 to establish a right-of-way over tribal land within the Property, which right-of-way includes City utilities (hereinafter "Road Application"); (2) that SMSC consent to and support the Road Application; (3) that the decision on the Trust Application identify this Cooperative Agreement and the Road Application; (4) that the United States government require the SMSC to negotiate a binding and enforceable agreement regarding future purchases that identifies specific property in the City that can be transferred into trust in the 50 years following a decision on the Trust Application. The SMSC shall provide notice to the City within three(3)business days of its receipt of a decision from the United States government on the Trust Application. 5. PROJECT DESCRIPTION. The Project shall consist of the design and construction of a right-of-way across the Property to provide access to future SMSC residential subdivisions, the extension of Stemmer Ridge Road to CSAH 82/1541" Street, the construction of water and sewer utilities within the right-of-way of the extension of Stemmer Ridge Road and the initial phases of construction of the SMSC residential subdivision, all as depicted on the attached Exhibit E, incorporated herein. 6. PLANS AND SPECIFICATIONS. SMSC shall have plans and specifications prepared for the Project. The sewer and water plans shall meet the City's Public Works Design Manual and SMSC plans for the storm sewer and ponds shall meet the requirements of the SMSC's Design Manual. The street improvements shall meet MnDOT State Aid requirements. The plans and specifications shall be subject to City approval as set forth below. 3of16 7. COST. SMSC shall be responsible for the full cost of the design, construction and materials for the Project, including but not limited to street, curb and gutter, valves, manhole covers, catch basins, and hydrants, except the material cost of the sanitary sewer pipe and water pipe only which the City shall pay for by reimbursement to the SMSC as provided for herein. The SMSC shall be responsible for the full cost of traffic safety improvements associated with the street work including but not limited to medians and roundabouts. 8. BIDDING AND CONTRACT. SMSC shall obtain bids for construction of the Project. The water and sanitary sewer pipe materials for the Utilities, to be paid for by the City, shall be itemized as a line item on the bid. The City shall have the right to purchase the pipe materials and deliver them to the SMSC contractor in accordance with the contractor's construction schedule for the project. The City shall notify the SMSC prior to the SMSC sending out a request for bids for the construction of the project. Labor costs for installation of the Utilities shall be itemized as a separate line item. Once received, the bids shall be reviewed by both parties. The SMSC shall award the construction contract to the approved bidder, provided however the pipe material bid and the award of the construction contract shall be subject to the City Council approval as set forth in Paragraph 9 hereof. Upon completion of installation of the Utilities the SMSC shall invoice the City for the pipe material cost. The City shall pay the invoice within thirty (30) calendar days. The SMSC shall supervise construction and administer the contract and shall be the paying agent for all payments due to the contractor and any other individual or entity hired in relation to the construction of the Project. 9. CITY APPROVAL. Prior to the award of the contract by the SMSC the City Council shall have the opportunity to review and approve the construction bids relative to the pipe material costs. The SMSC shall submit documents suitable for determining the pipe material costs to the City for approval prior to execution of the documents or performance of any related work. The City Council shall review the submission and shall provide to SMSC written approval or objection within forty-five (45) days of the City's receipt of the document(s). If the City Council objects, SMSC and the City shall use best efforts to achieve a mutually agreeable resolution on the pipe material cost. The approval of the bid,award of the bid, and execution of the construction contract shall not occur until the City and SMSC achieve a resolution acceptable to both parties. 10. COMPLETION OF THE PROJECT. Construction of the Utilities portion of the Project shall be completed within twelve(12)months of the date that SMSC receives notice that the federal government has accepted the Property in Trust status. If the Property has not been accepted into Trust by December 31,2015 the City may upon written notice to the SMSC cancel this agreement. Upon cancellation neither party shall have any obligations hereunder to the other. Cancellation of the Agreement shall not terminate the easement granted to the City under Paragraph 3 hereof. 11. REPAIR AND MAINTENANCE. After construction is complete, SMSC shall be responsible for the repair and maintenance of the portion of Stemmer Ridge Road lying within the Trust Property. The SMSC shall be responsible for, and bear the full cost of, restoring any impacted City infrastructure to an"as was or better" condition subject to inspection and acceptance by the City. 4of16 12. MAINTENANCE OF ROAD NOT ON TRUST PROPERTY. The City shall be responsible for the repair and maintenance of all portions of Stemmer Ridge Road not located within the Trust Property. The City shall be responsible for maintenance and repair of the City watermain and sanitary sewer pipe. The SMSC hereby grants the City permission to manage traffic on Stemmer Ridge Road across the Trust Property for purposes of maintenance and repair of the utilities, except that any temporary closure shall maintain resident and emergency vehicle access to the Community residential subdivision served by the roadway except in the event of a Force Majeure. The City shall be responsible for,and bear the full cost of,restoring any impacted SMSC utilities or infrastructure to an"as was or better"condition subject to inspection and acceptance by the SMSC. 13. INSPECTION. During construction of the Project, the City shall be responsible for inspecting the City sewer and water systems by either City staff or an outside consultant representing the City. The SMSC shall be responsible for inspecting the street improvements and other utilities serving the SMSC. 14. SIGNAGE. The City shall have the non-exclusive right to install signage within the right- of-way of Stemmer Ridge Road consistent with typical road signage that exists throughout the City, including but not limited to directional signage to Spring Lake Regional Park and the City Park. 15. ANNEXATION AREA. The granting of the easement and installation of the City water and sewer utilities allows the City to serve the development of the approximately 2400 acre annexation area agreed to by Spring Lake Township (the "Annexation Area"). It is not the intent of the SMSC to purchase land within the Annexation Area and if any such purchase is contemplated, the SMSC shall consult with the City prior to the purchase. The SMSC will negotiate in good faith with the City on any impacts that any SMSC land purchase may have with respect to the trunk sewer and water system. 16. RIGHTS OF PUBLIC. If the Road Application is not granted the SMSC shall use its best efforts to have the portion of the constructed roadway lying on Trust Property listed on the Indian Reservation Roads Inventory maintained by the United States Department of the Interior, Bureau of Indian Affairs which has the effect of making the roadway a public roadway. Until such listing is made, the SMSC grants to the City, on behalf of the public, the right to use the portion of Stemmer Ridge Road on the Trust Property. The SMSC may close Stemmer Ridge Road for such temporary periods of time that are necessary for repair and maintenance of the road and for emergencies except that any such closure shall maintain resident and emergency vehicle access to City residential subdivisions except in the event of a Force Majeure. 17. FUTURE INFRASTRUCTURE. The SMSC agrees to work with the City for the future siting of water supply infrastructure and an integrated water supply system. 18. ACTS AND OMISSIONS. Each party shall be is responsible for its own acts and omissions and the results thereof to the extent authorized by law. Nothing in this Agreement constitutes a waiver by the City of any statutory or common law, defenses, immunities, or limits on liability. In no event shall the obligations of the City for a tort claim exceed the amount that 5of16 the City would be obligated to pay under the provisions and limitations of Minn. Stat. Chap 466. In no event shall the obligations of the SMSC for a tort claim exceed the amount the SMSC would be obligated to pay under the provision and limitations of the SMSC Tort Claims Ordinance. 19. DATA PRACTICES. All data created, collected, received, maintained or disseminated by the City for any purpose in the course of this Agreement is governed by the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, any other applicable state statute, or any state rules adopted to implement the act, as well as federal regulations on data privacy. The SMSC asserts that it is not subject to the Minnesota Government Data Practices Act. To the extent it is decided by a court of competent jurisdiction that the SMSC is subject to the Minnesota Government Data Practices Act, it shall comply with the Act. 20. LIMITATION OF REMEDIES. In the event of a breach of the Agreement,neither party shall be entitled to recover punitive, special or consequential damages or damages for loss of business. 21. ASSIGNMENT. Neither party shall assign this Agreement,nor any interest arising herein, without the prior written consent of the other party. 22. SEVERABILITY. The provisions of this Agreement are severable. If any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision shall not affect the remaining provisions of this Agreement. 23. WAIVER. No action nor failure to act by the City or the SMSC shall constitute a waiver of any right or duty afforded any of them under the Agreement,nor shall any such action or failure to act constitute an approval of or acquiescence in any breach thereunder, except as may be specifically agreed in writing. 24. GOVERNING LAW. When Tribal or Federal law does not apply, this Agreement is governed by and must be construed in accordance with the laws of the State of Minnesota without regard to Minnesota's conflict-of-law provisions. 25. AUTHORIZATION. This Agreement and all of its terms have been authorized and approved by the SMSC's Business Council Resolution No. , adopted the day of ,2014, attached hereto as Exhibit F. This Agreement and all of its terms have been authorized and approved by the City Council of the City of Prior Lake by Resolution , adopted the day of , 2014, attached hereto as Exhibit G. 26. NON-IMPAIRMENT. SMSC's Business Council will not initiate enactment of any law, ordinance,rule,or regulation that would impair the obligations of the SMSC under this Agreement. 27. REPRESENTATIONS AND WARRANTIES REGARDING IMPAIRMENT. The Business Council represents and warrants that it will not initiate any action to impair this Agreement, including an action to rescind this Agreement or any waiver contained herein except where the Business Council is acting on behalf of the SMSC as the non-breaching party in a breach of this Agreement. 6of16 28. DISPUTE RESOLUTION. The parties may meet if agreed to by both to attempt to negotiate an amicable resolution of any dispute arising from this Agreement. 29. NON-WAIVEROF IMMUNITY. Nothing in this agreement shall constitute a waiver of the SMSC's sovereign immunity to suit. 30. NOTICES. Notices to be given under this Agreement shall be given by enclosing the same in a sealed envelope, postage prepaid and deposited in same in the U.S. Postal Service, addressed to the parties as listed below: City of Prior Lake Shakopee Mdewakanton Sioux Community Attn: City Engineer Attn: William Rudnicki 4646 Dakota Ave SE 2330 Sioux Trail SW Prior Lake, MN 55372 Prior Lake, MN 55376 31. SIGNING OF AGREEMENT. This Agreement may be signed in counterparts and on different dates by each party without affecting the validity thereof. 32. INTEGRATION. The entire and integrated agreement of the parties contained in this Agreement shall supersede all prior negotiations, representations, or agreements between the parties regarding the subject matter hereof, whether written or oral. 33. RECITALS. The recitals set forth in paragraphs A through H are incorporated herein and made a part hereof. IN WITNESS WHEREOF,this Agreement has been executed as of the day and year first above written. [Remainder of Page Intentionally Left Blank. Signature Pages Follow.] 7of16 CITY OF PRIOR LAKE BY: Kenneth L. Hedberg, Mayor BY: Frank Boyles, City Manager STATE OF MINNESOTA ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 2014, by Kenneth L. Hedberg and Frank Boyles, the Mayor and City Manager, respectively, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public 8of16 SHAKOPEE MDEWAKANTON SIOUX COMMUNITY By: Its: By: Its: STATE OF MINNESOTA ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of 2014, by and , the and , respectively, of the Shakopee Mdewakanton Sioux Community, a federally recognized Indian Tribe, on behalf of the tribe and pursuant to the authority granted by its Notary Public DRAFTED BY: Gregerson, Rosow, Johnson&Nilan, ltd 650 Third Avenue South Suite 1600 Minneapolis, MN 55402 9of16 EXHIBIT A (Sketch Depiction of SMSC Property—Recital A] 10 of 16 EXHIBIT B [Legal Description of SMSC Property—Recital A] 11 of 16 EXHIBIT C [North/South Road Alignment—Paragraph 21 12 of 16 EXHIBIT D [Endorsement Letter—Paragraph 4] To Be Addressed to Secretary of the Interior or designee This letter is submitted by the City of Prior Lake ("City") with respect to the Fee to Trust Application("Trust Application") submitted or to be submitted by the Shakopee Mdewakanton Sioux Community("SMSC") for the Property described on Exhibit A hereto (the "Property"). The City consents to and endorses the fee to trust subject to the conditions stated in this letter. At the time of purchase of the Property the SMSC knew of the City's needs and plans for the construction of a road across the Property to serve an area referred to as the"Annexation Area". The City's Capital Improvement Plan has included plans for the establishment of a road over the Property to serve the Annexation Area. The Annexation Area is approximately 2,400 acre in size. The Annexation Area is subject to a 2003 Annexation Agreement and between the City and Spring Lake Township (the "Annexation Agreement"). The Annexation Agreement and accompanying City Resolution 03-130 and Township Resolution 03-005 are attached hereto. A portion of the Annexation Area has been annexed into the City(approximately acres). The majority of the Annexation is intended for future annexations following the construction and availability of necessary municipal infrastructure (road and utilities) to serve the Annexation Area. In preparation for serving the Annexation Area the City has spent approximately $4,255,000 on infrastructure to connect to the infrastructure that will serve the Annexation Area. If the City is unable to obtain a permanent road with utility right-of-way across the Property, infrastructure previously built to serve Annexation Area will be rendered worthless. The City concerns over the Trust Application include: (a)the authority under law for the Property to be transferred into Trust; (2)the Tribe's need for additional land including the Property to be transferred into Trust; (3)the purposes to which the Property will be put; (4)the impact on this City's tax base; (5)the impact on the City being able to provide municipal services to the Annexation Area; (6)jurisdiction problems and conflicts that may arise including land use and zoning issues; (7)the extensive investment in public infrastructure by the City in anticipation of development of the Annexation Area; and(8) future purchases of property by the SMSC that further inhibit the City's ability to provide municipal services in a reasonable manner and at a reasonable cost. The City's consent and endorsement of the fee to trust application is conditioned upon the following(1)that the United States government contemporaneously granting an application to be made by the City pursuant to the provisions 25 CFR 169 to establish a right-of-way over tribal land within the Property, which right-of-way includes City utilities (hereinafter"Road Application"); (2)that the SMSC consent to and support the Road Application; (3)that the decision on the Trust Application identify this Cooperative Agreement and the Road Application; and (4)that the United States government require the SMSC to negotiate a binding and enforceable agreement regarding future purchases that identifies specific property in the City that can be transferred into trust in the 50 years following a decision on the Trust Application. 13 of 16 EXHIBIT E [Project Design Depiction—Paragraph 51 14 of 16 EXHIBIT F [SMSC Resolution—Paragraph 24] 15 of 16 EXHIBIT G [SMSC Resolution—Paragraph 24] 16 of 16 SMSC Preliminary Concept for Stemmer Ridge Road (Electronic Pages 82-84) PRELIMINARY CONCEPT c MEADOWS AT : MrmG LAKE \ DAKOTA.SPORTS .// >,^, 't!'.i♦Ylii!!!!l i.i.lYi!•�Y.!!YY ♦4 _...- FIT. I Y AR— LAKE PROPERTY \\ PARK PUNNING AREA �3 � W11- H.— ET oHOWARD LAKE AR� RIC LAKE _ u SPRING LAKE REGIONAL BIKE TRAIL PARK A SPRING LAKE * •/0 p $e•&h. - REGIONAL PARK WETUND PROPOSED BOARDWALKj— t. z aF }-�WETUNO " ...._. fy . PARK ilt fi �s k r . � EXISTING SIDEWALK � EKISTINGTRAIL r LEGEND r A. PRN. zE ] E 11 ^ M L 5 6 Avl anc�loT 51 [."TWIN HOMES INYAN 1 OTONWE (LITTLE RAPIDS , LAYOUT y% > 6 • �R4!!4$�F.lI•li9•!! lAbY • \ e t• < 1 Y i IQ • kd • ! i • ik \ f Oxen Ro. �e®St e!�cz°'N i�}f a•t!!!•!•!-ii!••6!9•!!!••!R ,. v 1 i 9 J I . aw P P� 'r r m • r w � o ui uiMvsnc lwt[Bt'✓o.NW aS i' ..._ ,( )t 's.. rt++✓i __ .ate..=- -_. _. . Tv LLJ LU I � I W E Version 3 SMSC Business Council Approved Agreement (Electronic pages 85-100) COOPERATIVE AGREEMENT BETWEEN THE CITY OF PRIOR LAKE AND THE SHAKOPEE MDEWAKANTON SIOUX COMMUNITY FOR THE CONSTRUCTION AND MAINTENANCE OF THE EXTENSION OF STEMMER RIDGE ROAD TO CSAH 82/154TH STREET THIS COOPERATIVE AGREEMENT (the "Agreement") is made and entered into this day of , 2015, by and between the CITY OF PRIOR LAKE, a Minnesota municipal corporation ("City") and the SHAKOPEE MDEWAKANTON SIOUX COMMUNITY, a federally recognized Indian Tribe ("SMSC"). RECITALS A. The SMSC is the owner in fee simple of real property located within the City of Prior Lake as depicted on Exhibit A, attached hereto, and legally described as shown on Exhibit B (the "Property"): B. The SMSC will apply to the United States government to place the Property in trust status pursuant to 25 C.F.R. § 151.1 et seq. (the "Trust Application") for use as residential parcels for SMSC Members; C. The City has existing sanitary sewer lines that extend to the northern portion of the Property and to the south of the property along Stemmer Ridge Road; D. Approximately 2400 acres of land that lie to the southwest in an annexation area agreed to by Spring Lake Township such land being south of 160th Street, east of County Road 79, north of 190th Street and west of CSAH 17 (hereinafter referred to as the "Annexation Area") that requires municipal services for development; E. The parties agree to cooperate in the construction and maintenance of an extension of Stemmer Ridge Road from where it currently terminates south of the Property, across the Property to connect with County State Aid Highway ("CSAH") 82, also known as 1541h Street, said roadway to provide access to the future SMSC residential parcels, and the construction of City water, and sanitary sewer which collectively are referred to as "Utilities") across the Property to allow the City to provide water and sanitary sewer service to the Annexation Area and the construction of initial phases by the SMSC of a residential subdivision including street and storm sewer(the "Project"); F. The parties desire to enter into this Agreement to establish their respective duties and obligations for the funding, construction, and maintenance of the above-described Project; G. The City will support and endorse the Tribe's Trust Application, while acknowledging this agreement does not establish a precedent of any nature; and H. The City is authorized to enter into this Agreement pursuant to Minnesota Statutes § 471.59. The SMSC has a current and rapidly growing demand for residential parcels and will 1of15 require the planned residential units by the end of 2019 to meet this demand. The costs for these improvements are included in the SMSC five year CIP. Notwithstanding this need and planned expense the obligations to construct is conditioned upon the SMSC legislative body approving the necessary funds for the project. The City has expended significant funds constructing infrastructure in reliance on development of the Annexation Area. Notwithstanding this need and previous expenditure, the City's obligations herein are conditioned upon its City Council approving necessary funding for the Project. J. For purposes of this Agreement Force Majeure shall have the following meaning: Force majeure means a condition beyond the reasonable control of the SMSC or the City and which either could not, by reasonable diligence, have avoided. Such conditions include natural disaster, fire, accidents, actions or decrees of governmental bodies, acts of God, wars (declared and undeclared), acts of terrorism, riots, embargoes, civil insurrection, and other events of force majeure, but shall not include a lack of funds or insufficiency of resources caused by lack of funds. NOW, THEREFORE, in consideration of their mutual covenants the parties agree as follows: 1. EFFECTIVE DATE. This Agreement shall become effective on the date set forth above. 2. ALIGNMENT. Both the SMSC and the City of Prior Lake agree to concept for the north / south road as shown in Exhibit C. It is understood that while this concept shows a general alignment, final design may adjust this alignment due to topography, wetland, or land use considerations. Notwithstanding, the street improvements shall include traffic calming design features such as a roundabout at the park entrance road, medians, minimum lane widths, street lights, a trail and sidewalk system and a design speed of 35 MPH. 3. UTILITY EASEMENT. At the time the City submits the Endorsement Letter as provided for in Paragraph 4, SMSC shall grant to the City an easement over the Property and within the right-of-way of the planned location of Stemmer Ridge Road for water and sewer purposes (the "Utility Easement"). The Easement shall grant the City the right to enter upon the Property for the purpose of repairing and maintaining utilities located in the Utility Easement and shall also include a duty to repair and restore any SMSC utility or roadway impacted by the repair. The City may begin to utilize this Utility Easement on the earlier of the date the land is taken into trust or upon completion of construction of the Utilities by the SMSC. After SMSC's construction of the Utilities is complete, the City Manager shall present to the City Council a resolution to vacate any portion of the easement area not necessary for the operation, maintenance, or repair of the utilities. The City shall be responsible for all costs associated with the operation, repair, and maintenance of the Utilities. 4. TRUST APPLICATION. The SMSC shall submit the Trust Application to the United States government within sixty (60) days of the date of this Agreement. The land use for the Trust Application for the Property is residential use, except for that property which is within one thousand (1000) feet of CSAH 82/154th Street. The City shall submit a letter to the United States 2of15 government endorsing the Trust Application (the "Endorsement Letter"). Said letter shall be in the form attached as Exhibit D to this Agreement, and shall be submitted by the City with-in the authorized comment period for the Trust Application. If the City fails to submit the Endorsement Letter as required herein, the SMSC shall have the right to immediately terminate this Agreement. The SMSC shall provide notice to the City within three (3) business days of its receipt of a decision from the United States government on the Trust Application. 5. PROJECT DESCRIPTION. The Project shall consist of the design and construction of a right-of-way across the Property to provide access to future SMSC residential subdivisions, the extension of Stemmer Ridge Road to CSAH 82/154th Street, the construction of water and sewer utilities within the right-of-way of the extension of Stemmer Ridge Road and the initial phases of construction of the SMSC residential subdivision, all as depicted on the attached Exhibit E, incorporated herein. 6. PLANS AND SPECIFICATIONS. SMSC shall have plans and specifications prepared for the Project. The sewer and water plans shall meet the City's Public Works Design Manual and SMSC plans for the storm sewer and ponds shall meet the requirements of the SMSC's Design Manual. The street improvements shall meet MnDOT State Aid requirements. The plans and specifications shall be subject to City approval as set forth below. 7. COST. SMSC shall be responsible for the full cost of the design, construction and materials for the Project, including but not limited to street, curb and gutter, valves, manhole covers, catch basins, and hydrants, except the material cost of the sanitary sewer pipe and water pipe only which the City shall pay for by reimbursement to the SMSC as provided for herein. The SMSC shall be responsible for the full cost of traffic safety improvements associated with the street work including but not limited to medians and roundabouts. 8. BIDDING AND CONTRACT. SMSC shall obtain bids for construction of the Project. The water and sanitary sewer pipe materials for the Utilities, to be paid for by the City, shall be itemized as a line item on the bid. Labor for installation of the Utilities shall be itemized as a separate line item. Once received, the bids shall be reviewed by both parties. The SMSC shall award the construction contract to the approved bidder, provided however the pipe material bid and the award of the construction contract shall be subject to the City Council approval as set forth in Paragraph 9 hereof. Upon completion of installation of the Utilities the SMSC shall invoice the City for the pipe material cost. The City shall pay the invoice within thirty (30) calendar days. The SMSC shall supervise construction and administer the contract and shall be the paying agent for all payments due to the contractor and any other individual or entity hired in relation to the construction of the Project. 9. CITY APPROVAL. Prior to the award of the contract by the SMSC the City Council shall have the opportunity to review and approve the construction bids relative to the pipe material costs. The SMSC shall submit documents suitable for determining the pipe material costs to the City for approval prior to execution of the documents or performance of any related work. The City Council shall review the submission and shall provide to SMSC written approval or objection within forty-five (45) days of the City's receipt of the document(s). If the City Council objects, SMSC and the City shall use best efforts to achieve a mutually agreeable 3of15 resolution on the pipe material cost. The approval of the bid, award of the bid, and execution of the construction contract shall not occur until the City and SMSC achieve a resolution acceptable to both parties. 10. COMPLETION OF THE PROJECT. Construction of the Utilities portion of the Project shall be completed within twelve (12) months of the date that SMSC receives notice that the federal government has accepted the Property in Trust status. If the Property has not been accepted into Trust by March 30, 2016 the City may upon written notice to the SMSC cancel this agreement. Upon cancellation neither party shall have any obligations hereunder to the other. Cancellation of the Agreement shall not terminate the easement granted to the City under Paragraph 3 hereof. 11. REPAIR AND MAINTENANCE. After construction is complete, SMSC shall be responsible for the repair and maintenance of the portion of Stemmer Ridge Road lying within the Trust Property. The SMSC shall be responsible for, and bear the full cost of,restoring any impacted City infrastructure to an "as was or better" condition subject to inspection and acceptance by the City. 12. The City shall be responsible for the repair and maintenance of all portions of Stemmer Ridge Road not located within the Trust Property. The City shall be responsible for maintenance and repair of the City watermain and sanitary sewer pipe. The SMSC hereby grants the City permission to manage traffic on Stemmer Ridge Road across the Trust Property for purposes of maintenance and repair of the utilities, except that any temporary closure shall maintain resident and emergency vehicle access to the Community residential subdivision served by the roadway except in the event of a Force Majeure. The City shall be responsible for, and bear the full cost of, restoring any impacted SMSC utilities or infrastructure to an "as was or better" condition subject to inspection and acceptance by the SMSC. 13. INSPECTION. During construction of the Project, the City shall be responsible for inspecting the City sewer and water systems by either City staff or an outside consultant representing the City. The SMSC shall be responsible for inspecting the street improvements and other utilities serving the SMSC. 14. SIGNAGE. The City shall have the non-exclusive right to install signage within the right-of-way of Stemmer Ridge Road consistent with typical road signage that exists throughout the City, including but not limited to directional signage to Spring Lake Regional Park and the City Park. 15. ANNEXATION AREA. The granting of the easement and installation of the City water and sewer utilities allows the City to serve the development of the approximately 2400 acre annexation area agreed to by Spring Lake Township (the "Annexation Area"). 16. RIGHTS OF PUBLIC. The SMSC shall use its best efforts to have the portion of the constructed roadway lying on Trust Property listed on the Indian Reservation Roads Inventory maintained by the United States Department of the Interior, Bureau of Indian Affairs that has the 4of15 effect of making the roadway a public roadway. Until such listing is made, the SMSC grants to the City, on behalf of the public, the right to use the portion of Stemmer Ridge Road on the Trust Property. The SMSC may close Stemmer Ridge Road for such temporary periods of time that are necessary for repair and maintenance of the road and for emergencies except that any such closure shall maintain resident and emergency vehicle access to City residential subdivisions except in the event of a Force Majeure. 17. FUTURE INFRASTRUCTURE. The SMSC agrees to work with the City for the future siting of water supply infrastructure and an integrated water supply system. 18. ACTS AND OMISSIONS. Each party shall be is responsible for its own acts and omissions and the results thereof to the extent authorized by law. Nothing in this Agreement constitutes a waiver by the City of any statutory or common law, defenses, immunities, or limits on liability. In no event shall the obligations of the City for a tort claim exceed the amount that the City would be obligated to pay under the provisions and limitations of Minn. Stat. Chap 466. In no event shall the obligations of the SMSC for a tort claim exceed the amount the SMSC would be obligated to pay under the provision and limitations of the SMSC Tort Claims Ordinance. 19. DATA PRACTICES. All data created, collected, received, maintained or disseminated by the City for any purpose in the course of this Agreement is governed by the Minnesota Government Data Practices Act, Minn. Stat. Ch. 13, any other applicable state statute, or any state rules adopted to implement the act, as well as federal regulations on data privacy. The SMSC asserts that it is not subject to the Minnesota Government Data Practices Act. 20. LIMITATION OF REMEDIES. In the event of a breach of the Agreement, neither party shall be entitled to recover punitive, special or consequential damages or damages for loss of business. 21. ASSIGNMENT. Neither party shall assign this Agreement, nor any interest arising herein, without the prior written consent of the other party. 22. SEVERABILITY. The provisions of this Agreement are severable. If any portion hereof is, for any reason, held by a court of competent jurisdiction to be contrary to law, such decision shall not affect the remaining provisions of this Agreement. 23. WAIVER. No action nor failure to act by the City or the SMSC shall constitute a waiver of any right or duty afforded any of them under the Agreement, nor shall any such action or failure to act constitute an approval of or acquiescence in any breach thereunder, except as may be specifically agreed in writing. 24. AUTHORIZATION. This Agreement and all of its terms have been authorized and approved by the SMSC's Business Council Resolution No. , adopted the day of 2015, attached hereto as Exhibit F. This Agreement and all of its terms have 5of15 been authorized and approved by the City Council of the City of Prior Lake by Resolution adopted the day of , 201_, attached hereto as Exhibit G. 25. NON-IMPAIRMENT. SMSC's Business Council will not initiate enactment of any law, ordinance, rule, or regulation that would impair the obligations of the SMSC under this Agreement. 26. REPRESENTATIONS AND WARRANTIES REGARDING IMPAIRMENT. The Business Council represents and warrants that it will not initiate any action to impair this Agreement, including an action to rescind this Agreement or any waiver contained herein except where the Business Council is acting on behalf of the SMSC as the non-breaching party in a breach of this Agreement. 27. DISPUTE RESOLUTION. The parties may meet if agreed to by both to attempt to negotiate an amicable resolution of any dispute arising from this Agreement. 28. NON-WAIVER OF IMMUNITY. Nothing in this agreement shall constitute a waiver of the SMSC's sovereign immunity to suit. 29. NOTICES. Notices to be given under this Agreement shall be given by enclosing the same in a sealed envelope, postage prepaid and deposited in same in the U.S. Postal Service, addressed to the parties as listed below: City of Prior Lake Shakopee Mdewakanton Sioux Community Attn: City Engineer Attn: William Rudnicki 4646 Dakota Ave SE 2330 Sioux Trail NW Prior Lake, MN 55372 Prior Lake, MN 55376 30. SIGNING OF AGREEMENT. This Agreement may be signed in counterparts and on different dates by each party without affecting the validity thereof. 31. INTEGRATION. The entire and integrated agreement of the parties contained in this Agreement shall supersede all prior negotiations, representations, or agreements between the parties regarding the subject matter hereof, whether written or oral. 32. RECITALS. The recitals set forth in paragraphs A through H are incorporated herein and made a part hereof. IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written. [Remainder of Page Intentionally Left Blank. Signature Pages Follow.] 6of15 CITY OF PRIOR LAKE BY: Kenneth L. Hedberg, Mayor BY: Frank Boyles, City Manager STATE OF MINNESOTA ) ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 2015, by Kenneth L. Hedberg and Frank Boyles, the Mayor and City Manager, respectively, of the City of Prior Lake, a Minnesota municipal corporation, on behalf of the corporation and pursuant to the authority granted by its City Council. Notary Public 7of15 SHAKOPEE MDEWAKANTON SIOUX COMMUNITY By: Charlie Vig Its: Tribal Chairman By: William J. Hardacker Its: Special Staff Legal Counsel STATE OF MINNESOTA ) ) ss. COUNTY OF SCOTT ) The foregoing instrument was acknowledged before me this day of , 2015, by Charlie Vig and William J. Hardacker, the Tribal Chairman and Special Staff Legal Counsel, respectively, of the Shakopee Mdewakanton Sioux Community, a federally recognized Indian Tribe, on behalf of the tribe and pursuant to the authority granted by its General Council. Notary Public 8of15 EXHIBIT A (Sketch Depiction of SMSC Property—Recital A] 9of15 EXHIBIT B [Legal Description of SMSC Property—Recital A] 10 of 15 EXHIBIT C [North/South Road Alignment—Paragraph 2] 11 of 15 EXHIBIT D [Endorsement Letter—Paragraph 41 12 of 15 EXHIBIT E [Project Design Depiction—Paragraph 51 13 of 15 EXHIBIT F [SMSC Resolution—Paragraph 241 14 of 15 EXHIBIT G [SMSC Resolution—Paragraph 241 15 of 15 City Attorney Memo Regarding Fee to Trust Decision (Electronic Pages 101-107) MEMORANDUM TO: Mayor and City Council FROM: Richard Rosow and Sarah Schwarzhoff DATE: January 22, 2015 RE: Fee to Trust Decision Our File No.: 4200.012 There are a number of consistent objections and responses by both the IBIA and the Court. The following is a summary of those issues and responses. Summaries of the IBIA and Court cases are set forth below. I did not find any cases that specifically address Councilor Keeney's questions. There are several cases that address costs but none that have a project in process. Consistent objections Need for Land • Objectors argue that the tribe needs to show a need for the land to be in trust, not just a need for the land. The IBIA and Courts consistently find that only a need for the land is required. • Objectors argue that the tribe is economically successful so does not "need" land. The IBIA and Courts consistently find that while the tribe's economic status can be considered it is not determinative regarding need. • The IBIA and the Courts use a very broad approach in determining what constitutes need including economic development, reclaiming old land, housing, security, services, agriculture, etc. Tax Impact • Objectors argue that the cumulative impact of all trust land must be considered. The IBIA and Courts consistently find that cumulative impact"could"be relevant in certain circumstances but no cases state what those circumstances are and no cases find cumulative impact relevant. • Objectors argue that the loss of revenue is especially important as the objector must The IBIA and Courts generally find that the tribe will be taking over still provide services. g y many services and look to the benefits and payments the tribe contributes to the community. Generally the IBIA and Courts find any tax impact to be minimal. Jurisdiction • Objectors raise issues relating to the patchwork of jurisdiction and the conflicts. The IBIA and Courts consistently find that differing jurisdiction, even in a patchwork manner, is not, sufficient to stop a transfer to trust. BIA ability to administer January 22, 2015 Page 2 • Objectors raise the issue of BIA administration. No cases found that the BIA would be unable to administer. Denials of Transfer There are several denials of transfer where a tribe has filed the application. However,those denials are related to other types of issues such as: a pending dispute in tribal government; Executive Branch of the Cheyenne and Arapaho Tribes v.Acting Southern Plains Regional Director, Bureau of Indian Affairs 59 IBIA 39 (07/23/2014); gaming which has additional criteria; and other constitutional,jurisdictional or Carcieri type issues. The IBIA did approve the Secretary's denial of one tribe's application. The application was initially approved. However, after approval the tribe changed the intended use of the land and paved a parking area prior to the land actually being accepted into trust. The Secretary reconsidered and denied the application. The Court found that the Secretary's reconsideration was reasonable and noted that it did not prohibit future transfer applications. The Secretary's decision appears to be related to the change in use while the transfer was still in process and the additional gaming requirements. Sycuan Band of Mission Indians v. Acting Sacramento Area Director Bureau of Indian Affairs, 31 IBIA 238 (11/05/1997) The other denials of transfer are related to individuals, for whom different criteria exists: Applicant was deceased, the IBIA found that the BIA has no authority to acquire land for the decedent or his estate. Transfer denied. Darrell Chissoe v. Acting Eastern Oklahoma Regional Director, Bureau of Indian Affairs, 59 IBIA 304 (01/09/2015) The IBIA found that the individual did not show a need for assistance in handing his affairs. Transfer denied. Louis J. King, Jr. v. Eastern Oklahoma Regional Director, Bureau of Indian Affairs, 46 IBIA 149 (12/13/2007) The IBIA found that the individual did not establish need for transfer, justification for removal from taxes or need for assistance in handling affairs. Transfer denied. Johnny Louis McAlpine v. Muskogee Area Director, Bureau of Indian Affairs, 19 IBIA 2 (10/10/1990), Affirmed by 10th circuit. Approval of Transfer The following cases focused on review of criteria and result in approval of the transfer. The summaries below include a summary of the IBIA or Court's review of the criteria and the result of the case: The 8th Circuit found that the tribe did need the land for diversity in economic development and to generate income. The Court confirmed that the tribe need only establish the need for land not the need for the land to be in trust. The Court found that the purpose for the land was industrial park and a scenic byway which the Court deemed acceptable. The Court found that the BIA did not need to consider gaming in analyzing the use of the land January 22, 2015 Page 3 as there was no evidence that the tribe intended to use the land for gaming. The Court found that the loss of tax revenue was not significant. The Court also found that the there was no need to consider the tax loss from projected future development. The Court found that there were minimal jurisdictional issues and that the BIA had the ability to administer the property after transfer. The Court granted summary judgment for the Secretary and approved the transfer. S. Dakota v. U.S. Dep't of Interior, 423 F.3d 790, 793 (8th Cir. 2005) The Court found that the tribe needed the land to reconstruct its territory due to a major loss in historical land. The Court also found that the tribe needed the land for cultural and social preservation, self-determination, self-sufficiency and economic growth. The Court held that the BIA did not need to consider the use of the land for gaming as speculative uses did not need to be considered. The Court granted summary judgment for the tribe and approved the transfer. City of Yreka v. Salazar, No. CIV. 2:10-1734 WBS E, 2011 WL 2433660, at *10 (E.D. Cal. June 14, 2011) The Court found that the tribe needed the land for economic growth and job opportunities. The Court held that the tribe needed to show a need for the land not a need for land to be held in trust. The Court found that there was a loss of tax revenue but that the County would need to provide fewer services as well. The Court held that there is no need for the BIA to consider the cumulative loss in tax revenue of the property at issue or the cumulative loss due to other trust transfers. The Court found no jurisdictional conflicts and that the BIA was able to administer the transfer. The Court granted summary judgment for the Secretary and approved the transfer. Cnty. of Charles Mix v. U.S. Dep't of Interior, 799 F. Supp. 2d 1027 (D.S.D. 2011) affd, 674 F.3d 898 (8th Cir. 2012) The Court found the tribe needed the land for agricultural, consolidation of land, and housing. The Court held that the tribe needed to show a need for the land not a need for land to be held in trust and held that the fact that the tribe already owns fee title to the land does not negate the need for the land. The Court found that the loss in tan revenue was minimal and that eth BIA did not need to consider cumulative impact of tax revenue loss. The Court found that jurisdictional issues were already a concern but that the transfer would not increase the issues. The Court found that the BIA had the ability to administer the transfer. The Court granted summary judgment for the Secretary and approved the transfer. S. Dakota v. U.S. Dep't of Interior, 775 F. Supp. 2d 1129, 1145 (D.S.D. 2011) The Court held that the BIA only needed to evaluate the proposed use of the land not other possible uses. The Court found that the tribe needed the land for self-determination, economic development, and housing. The Court found that the BIA considered loss of tax revenue and that there was no need for the BIA to consider possible future lost tax revenue. The Court found that the BIA considered potential problems and found significant issues to be unlikely. The City argued that a conditional transfer (i.e. transfer conditioned on continued payment of taxes) should be granted. The Court found that there was no January 22, 2015 Page 4 authority to grant conditional transfer. The Court granted the Secretary's motion to dismiss and approved the transfer. City of Lincoln City v. U.S. Dep't of Interior, 229 F. Supp. 2d 1109, 1132 (D. Or. 2002) The IBIA found that the tribe had many members but little land and therefore needed the land for housing, education, cultural health and social services. The Court held that the BIA can consider the financial status of the tribe in determining need but that the factor was not determinative. The IBIA found that the use of the land was for housing and community services. The IBIA found that the tax revenue loss was de minims and was offset by the tribe's contributions to community. The IBIA approved the transfer. County of Sauk, Wisconsin v. Midwest Regional Director, Bureau of Indian Affairs 45 IBIA 201 (08/31/2007) The IBIA found that the tribe needed the land for housing and community services. The IBIA found minimal tax revenue loss and held that there was no need to speculate about future possible tax revenue loss. The IBIA approved the transfer. Sauk Cnty.v. U.S.Dep't of Interior,No. 07-CV-543-BBC,2008 WL 2225680,at*5 (W.D. Wis. May 29, 2008) The IBIA found that there was no need to consider the cumulative effect of lost tax revenue. The IBIA did note that there may be a case in which cumulative effect(either future losses from the property in question or the overall effect of trust transfers) might be relevant but did not specify in what circumstances that might occur. The IBIA also noted that road maintenance costs were not an issue because tribe has contributed over 1.6 million to road maintenance. The IBIA approved the transfer. State of Kansas v. Acting Southern Plains Regional Director, Bureau of Indian Affairs, 53 IBIA 32 (02/11/2011) The IBIA found the tribe needed the land for agriculture, growth, self-sufficiency and self- determination. The IBIA held that the tribe needed only show the need for the land not the need for the land to be held in trust. The IBIA found that there was no need to consider cumulative impact of tax revenue loss. The IBIA acknowledged that the City would need to provide road maintenance but noted that the tribe had contributed considerable funds to roads and bridges both on and off the reservation. The IBIA found no jurisdictional issues an approved the transfer. State of Kansas and Jackson County, Kansas v. Acting Southern Plains Regional Director, Bureau of Indian Affairs 56 IBIA 220 (03/15/2013) The IBIA found the tribe needed the land for farming, homes, development, and preservation. The IBIA noted that the tribe only needed to provide reasonable intended use not specific detail. The IBIA held that it was not necessary to consider speculative future tax losses or cumulative losses. The IBIA approved the transfer. Shawano County, Wisconsin v. Acting Midwest Regional Director, Bureau of Indian Affairs, 53 IBIA 62 (02/28/2011) January 22, 2015 Page 5 The County argued that the sole reason the tribe sought the transfer was to avoid taxes. The IBIA found that there was no evidence of such intend and that even if that was the tribe's intent there was no prohibition against transferring the property to trust to avoid taxes. The IBIA found that the tax loss was a tiny percentage of the County's budget and that there was no evidence the loss was significant. The IBIA approved the transfer. Carroll County, Mississippi, Board of Supervisors v. Acting Eastern Regional Director, Bureau of Indian Affairs, 56 IBIA 194 (02/15/2013) The IBIA found the tribe needed the land for housing, economic development and self- determination and that the use of the land was to be for conservation. The IBIA found no significant tax loss and held that cumulative tax loss was irrelevant. The IBIA also held that the tribe's financial ability to pay the taxes was irrelevant. The IBIA noted that no jurisdictional issues were raised and approved the transfer. Benewah County,Idaho v.Northwest Regional Director,Bureau of Indian Affairs 55 IBIA 281 (09/21/2012) The IBIA held the tribe needed for an existing transfer station. The IBIA held that the tribe did not need to provide an acre by acre justification. The IBIA found no significant loss of tax revenue. The IBIA held that a general statement that services would be affected was not sufficient to show increased burden on the County and noted that the tribe provides services as well. The IBIA held that it did not need to consider potential issues. The IBIA did consider existing issues and found them not to be significant. The IBIA did note that there was a right of way concern but as it had not been raised previously it was not properly before the IBIA. The IBIA approved the transfer. State of New York; Franklin County,New York; and Town of Fort Covington,New York v. Acting Eastern Regional Director, Bureau of Indian Affairs 58 IBIA 323 (06/11/2014) The IBIA found the tribe needed the land for revenue leasing and forestry, consolidation, federal funding, and to increase self-government, self-determination and self-sufficiency by reducing state and local jurisdiction. The IBIA determined that the land would be used for preservation and timber as it was previously used. The IBIA found minimal tax revenue loss and held that the loss was offset by the BIA and tribe providing most services. The IBIA held that the cumulative impact of loss of revenue was irrelevant. The IBIA found no evidence of jurisdictional issues. The IBIA affirmed the BIA's analysis of the criteria but remanded to the BIA to consider environmental issues. Thurston County, Nebraska v. Acting Great Plains Regional Director, Bureau of Indian Affairs, 56 IBIA 62 (12/18/2012) The IBIA found that the individual applicant needed the land for a home site. The IBIA found minimal tax loss which was offset by the services the BIA would provide. The IBIA approved the transfer. City of Eagle Butte, South Dakota v. Acting Great Plains Regional Director, Bureau of Indian Affairs 49 IBIA 75 (04/10/2009) The IBIA found the tribe needed the land for an assisted living unit. The IBIA found that the establishment of an assisted living unit relieved the County's demand for elder living January 22, 2015 Page 6 which would balance out the lost tax revenue. The IBIA also noted the tribe had contributed to roads, fire, police, and conservation. The IBIA approved the transfer. Aitkin County, Minnesota v. Acting Midwest Regional Director, Bureau of Indian Affairs 47 IBIA 99 (06/12/2008) The IBIA found that the BIA only needed to consider intended use of the land not gaming which was not identified as an intended use. The IBIA approved the transfer. Preservation of Los Olivos and Preservation of Santa Ynez v. Pacific Regional Director, Bureau of Indian Affairs 58 IBIA 278 (06/03/2014) The IBIA found no need to consider possible increased revenue lost from future development, only removal from tax roles as the property currently exists. The IBIA approved the transfer. Skagit County, Washington v. Northwest Regional Director, Bureau of Indian Affairs 43 IBIA 62 (05/24/2006) The IBIA held that the tribe needed to show a need for the land not the need for the land to be held in trust. The IBIA found the tax revenue loss was minimal and that cumulative loss did not need to be considered. The IBIA found no jurisdictional issues. The IBIA did note that Regional Director should have provided more analysis of the criteria and that there were mistakes in the decision,but concluded that the record was sufficient to support the decision and approved the transfer. State of South Dakota and Moody County, South Dakota v. Acting Great Plains Regional Director, Bureau of Indian Affairs, 39 IBIA 283 (04/06/2004) Agency requested that the transfer be conditioned on the tribes continued payment of assessment for imported water and property taxes. The IBIA found that such a condition was not necessary and that there was no requirement that payments continue. Desert Water Agency v. Acting Pacific Regional Director, Bureau of Indian Affairs, 59 IBIA 119 (09/08/2014) Remand There were a number of cases remanded back to the Secretary, however, these were primarily due to a lack of consideration in the decision and the cases provided little analysis of the factors: Butte Cnty., Cal. v. Hogen, 613 F.3d 190, 194 (D.C. Cir. 2010) Thurston County,Nebraska v. Great Plains Regional Director, Bureau of Indian Affairs 56 IBIA 296 (04/30/2013) Village of Hobart, Wisconsin v. Midwest Regional Director, Bureau of Indian Affairs 57 IBIA 4 (05/09/2013) Village of Ruidoso,New Mexico v. Albuquerque Area Director, Bureau of Indian Affairs 32 IBIA 130 (04/14/1998)