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4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL AGENDA REPORT
MEETING DATE: MARCH 28, 2016
AGENDA #: 5H
PREPARED BY: SARAH SCHWARZHOFF, CITY ATTORNEY
PRESENTED BY: SARAH SCHWARZHOFF
AGENDA ITEM: CONSIDER APPROVAL OF AN EXTENSION OF THE 2015
SEWER/WATER CONNECTION FEES FOR
MUSHTOWN/MAPLE/PANAMA PROJECT AREA
DISCUSSION: Introduction
The purpose of this agenda item is for the Council to consider the
extension of the 2015 sewer/water connection fees for the properties in the
Mushtown/Maple/Panama Project area for those who connect to both
utilities through September 25, 2016.
History
At the March 14, 2016 Council meeting the Council discussed extending
the 2015 sewer/water connection fees for the properties in the
Mushtown/Maple/Panama Project area. Council directed the City Attorney
to review the matter and provide a report.
Current Circumstances
City fees must be applied in a fair and equitable manner. In addition, fees
must be charged in the same manner to people that are similarly situated.
Generally, this means that sewer/water connection fees are imposed
based on when the permit to connect is issued. If the permit is issued in
2015 the 2015 fees are paid.
However, in this situation, the property owners in the
Mushtown/Maple/Panama Project area are situated differently than other
property owners. The property owners in the Project area are being
required to connect to the City’s sewer and water systems and that
required connection has been delayed due to City action. The Project was
scheduled to be completed in the Fall of 2014. However, due to various
delays it was not completed until Fall of 2015. This means that property
owners in the Project area were given only a very narrow window in 2015
to complete the required connection, in part because such work can only
occur economically before there is frost in the ground.
As opposed to other property owners and developers who can determine
when to connect, the property owners in the Project area have been forced
to delay connection due to the City Project. Therefore, it may be
appropriate to provide an extension of the 2015 fees for those property
owners.
2
The deadline for the property owners in the Project area to connect is
September 25, 2016; therefore, this would be an appropriate date for the
extension if approved since this time period is consistent with the
connection requirements in the Prior Lake City Code.
Conclusion
The Council should consider whether it believes that an extension of the
2015 sewer/water connection fees for the property owners in the Project
area through September 25, 2016 is appropriate. There have been several
property owners in the Project area who have paid the 2016 fees already
this year, if Council approves the extension staff would issue refunds to
those property owners in the amount of the difference between the 2015
and 2016 fees—approximately $650.
ISSUES: The reduction of a $6,000 fee by $650 is 10%. By continuing the 2015 fee
for those owners affected by the delay of the City Project the city is
addressing concerns about property owner costs while at the same time
creating only a moderate reduction in city revenues.
By this action, a clear and understandable message is being sent that the
fees after September 25, 2016 will be about $650 more which we hope will
avert any kind of misunderstanding at that time.
The city council expressed some concerns about the equity of this action in
light of the Dominium Project which has been going through the planning
phase for in excess of one year. The fact is that Dominium entered into
their Development Contract in 2015 which specified connection fees at the
2015 rates. They have paid their fees in accordance with the Development
Contract at the 2015 rates.
The staff will issue a new letter to property owners in this project area
notifying them of this potential savings if they complete utility connections
through September 25, 2016.
FINANCIAL
IMPACT:
If all remaining property owners in the Project area take advantage of the
extension of fees the financial impact will be approximately $18,000.
ALTERNATIVES: 1. Motion and second as part of the consent agenda to direct staff to
extend the 2015 sewer/water connection fees for the property
owners in the Mushtown, Maple and Panama Project area until
September 25, 2016.
2. Deny this agenda item for a specific reason and provide staff with
direction.
RECOMMENDED
MOTION:
A Motion and a Second for Approval of Alternative #1