PUBLIC HEARING
T.H. NUMBER 241 SANITARY SEWER EXTENSION
DECEMBER 19, 1996
Saint Michael Council Chambers 7:30 p.m.
Present: Mayor Roxanne Packa; Council Members Michael Brunner, Kenneth Duerr, Wayne Kessler and Kevin Zachman; Engineer Peter Raatikka; Attorney David Lenhardt; Financial Advisor Bob Ehlers; Advisory Board Members Thomas Hagerty and Andy Block.
Mayor Packa called the meeting to order. The Pledge of Allegiance was said and a quorum declared present. Mayor Packa explained the purpose of the public hearing and how the meeting would be conducted with an explanation of the project by the engineer, followed by questions for the engineer; an explanation by the financial advisor, followed by questions for him; and then an opportunity for comments and questions from the public, followed by Council discussion and action.
ENGINEERING REPORT. Engineer Peter Raatikka reviewed the history of the proposed sanitary sewer extension from Larabee east toward I-94. He explained the beginnings of the proposal in the township in 1994 up through the merger with the city of Saint Michael, the four informational meetings held and now the public hearing. Raatikka went through the total estimated cost of Phase I of the project, and Phase II which would be done some time in the future. He also showed the area included in the 1,848.58 acres of proposed assessment. He explained the proposed $372 per acre assessment cost and how that figure came about, as well as the proposed trunk charge of $1,000 and the proposed wastewater treatment connection charge of $1,000. He also explained about residential connections and the REC or Residential Equivalency Charge which would be used for commercial properties. Raatikka showed a revised project schedule with a possible completion date of October, 1997, if the project went forward per the project schedule. The meeting was then opened to any engineering questions.
Fran Dehmer asked about the cost of and need for lift stations, which cost he said is substantial. Raatikka explained that the lift station provides a method of getting the wastewater to the treatment plant. It was questioned if the benefit was greater in some areas than others. Raatikka said the lift station would be required to pump the wastewater across the creek and all would benefit.
Jerry Dehmer asked how deep the sewer is going to be at the bottom. Raatikka explained that the force main would be 7-1/2 to 8 feet deep. The question was about hooking on at the bottom end. Raatikka explained there would be no connection directly to the force main line, but gravity lines feeding would be done as part of another improvement project. He said lateral lines are still required.
Lowell Blom asked about a portion of the line shown in green on the transparency and who that would cover. It was answered that usually a lateral project is split up among the benefitting owners.
Tom Henkemeyer asked about the capacity and when it would be maxed out. Raatikka explained there is capacity for at least seven to ten years, and there is capability to upgrade the treatment plant at that time. He stated that in the future the line would be extended across the freeway.
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Ken Hagman of J&B Meats asked about the line on 241 and costs. Raatikka stated at this time they would be paying the area assessment and a trunk fee based on the REC or residential equivalency charge of $1,000 per connection, in addition to the proposed water treatment connection charge. If laterals would be serving several, the lateral could be shared.
FINANCIAL ANALYSIS. Bob Ehlers, city financial consultant gave a brief history of how they started looking at this project, when the city asked their firm to determine financial liability based on certain assumptions. He explained some were interested in connection right away and there were future connections that would help pay for the project. Ehlers said they took numbers from the engineer’s reports, looked at construction costs, capitalized interest, and such things as bond proceeds being invested during the construction period, how much would be assessed and projected assessments, future unit charges, the projected construction index and such other factors to come up with a model to be used by the council to determine if the project were financially viable. Ehlers showed tables on the overhead which explained how they made their analysis. He than invited questions on the financial aspects of the project.
Jack Richter asked what happens with the schedule of payments in regard to assessments if the constructions levels rise and fall with the level of the economy. At this time there is a moratorium and there are other unknown factors. He asked how much of a margin of error was built in. Ehlers said the cash flow could be affected, but there are safeguards built in. There are some legal ramifications. The city does have to come back to prove benefit. He explained the assessment hearing process. He said as you look at the area being served, however, $372 per acre appears to be reasonable.
There was discussion concerning parcels with more than one acre, and also large tract parcels which will not have the assessment sitting on the property. The smaller parcels essentially would be assessed, and Ehlers said that overall they feel comfortable with the cash flow projected.
Mayor Packa invited general questions. Ken Hagman asked about the time table and how precise or close that was. It was felt the schedule was fairly conservative and with reasonable weather conditions, it should be fairly accurate. Raatikka explained that an Environment Assessment Worksheet would be required and would need to be approved. There are a number of steps to go through, but it was felt the schedule could be met if there were no major roadblocks
Jim Hackenmueller said they live at the end of 39th Street off MacIver Avenue, and he could not see where the sewer would ever get to his property, so he could not see how it could benefit him. There was then some discussion concerning non-conforming septic systems. Bruner indicated if the system was installed prior to 1986, it would undoubtedly be a non-conforming system. If a property is sold, it is necessary to file a Wright County Certificate of Sanitary System Compliance before the sale can be recorded. It was also pointed out that if an area is served, those in the area would share the cost of laterals. Hackenmueller felt because of the distance to get to his property, the cost would be great for the laterals, and it was asked if there would be a per foot charge. Raatikka said that had not been determined, but the costs to service a benefiting area would be divided between those properties benefiting, and usually municipal services are not brought out to two to five acre tracts.
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Cathy Zachman said she had been told sewer service would not be available to them until the year 2007 because another lift station is needed. It was not known where the 2007 year came from. Raatikka said that year had been listed as the projected year to upgrade the Wastewater Treatment Plant, but there is enough capacity at this time to serve the entire area on this project, as well as much more. The area in question would be part of Phase two and when that happened would depend on when the residents were ready.
Jack Richter questioned some of the information stated concerning non-conforming septic systems. He said he had recently talked to Steve Schirmers of SP Testing and an entire new system is not always required. Sometimes it is just the tanks that need to be replaced. It was pointed out, however, that there are new MPCA guidelines such as the change to 3-foot separation.
Fran Dehmer asked how the project originated and whether anybody petitioned to get it going. K. Zachman said there was not a petition; however, there were a number of problems and it became obvious that any development would have to be slowed down considerably or provide some municipal services to the area. The Saint Michael area was running out of space for any commercial expansion and the Frankfort area had space, but needed municipal services, so it seemed like this was the time to provide for both. There was a question about other areas. At this time just the eastern part of the township was being looked at, other than the package plant as a joint project with Rockford Township for the Charlotte and Beebe Lakes area. There was also a question as to whether it would not be more economical to look at another system farther east rather than to take this system under the freeway. Engineer Raatikka said they had done a study and found it was more economical to go with an existing system. He said a study was done between Dayton and Otsego, and treatment costs came in at $4500 per unit, whereas here it is at $3300 or substantially less. Duerr also said that DNR and PCA have an interest and are getting more restrictive about the number of plants. They would rather see one regional than five or six scattered along an area.
Jim Hackenmueller asked if the meeting tonight was to help the council decide. Mayor Packa sated there had been four informational meetings held and it was her opinion those were to help her decide. She stated tonight’s meeting was to decide whether to go ahead with the project. Kessler said there would still be an assessment hearing when residents would have a chance to protest an assessment if they felt it was unfair. Bob Ehlers explained this public hearing is required by law for the council to hear all comments from the public before proceeding with the project. Then at a later date after the costs are known, they will either reject for whatever reason, or go forward. There is a commitment to spend some funds if they vote to go forward tonight, but it is really a vote of the council, not of the people, and it requires a 4/5 vote. Later the bids can be accepted or rejected, and if public feel they are not benefited from the project, they have the chance at the next public hearing to so state. Attorney Lenhardt further explained the requirement by law and if the council should vote in favor, they are authorizing the engineer to prepare plans and specifications and then get bids. Once those numbers are known the assessment rolls should be prepared, everyone would receive another notice and at that time they have the right to challenge an assessment. He said by law the improvement has to benefit at least the amount of the proposed assessment. If some people decide to challenge their assessments, the council could decide it was not feasible to go forward with the project.
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Mark Meyer asked if the burden was on the property owner or the city. Lenhardt said that ultimately the burden would be on the city, but there are certain steps the property owner has to go through, which ultimately would come to a hearing, and at that hearing the city would have the burden of proof.
Larry Urai asked about the $372 per acre being set in stone. That figure was thought to be pretty definite at this time, but it would be increased with the construction index for the future for those who were not assessed at this time.
Jerry Dehmer asked about a large piece such as 40 acres and about prepaying rather than to have the amount go up with the construction index. It would not be deferred with interest accumulating, but there was also some question as to whether anyone could totally prepay at this time even if they were not a part of phase one of the project or ready to develop. There was discussion concerning the best policy concerning prepaid assessments. That policy will have to be set.
Jim Chervenak also asked about those existing residences south of 241 which are in the area of assessment but could not hook up if they wanted to. It was explained that you have to start with the trunk, then laterals come as the residents are ready, but you can’t have the laterals until the trunk is there. There are approximately 10 residences in the general area of the Chervenak property.
Mark Meyer asked how this was going to work for him. His residence is on Larabee, but he chose not to be a part of the Larabee project. He was told he could probably pay the assessment and hook his house up to the Larabee sewer line, but only the one residence. If he were to subdivide or need more than one hookup, it would have to be as a part of this project. He asked why he was different from his neighbor across the road who did not get notices on this project. The neighbor had chosen to be assessed for the Larabee project and had paid the assessment in full, so was not sent notices on this project. Meyer was told he could challenge at an assessment hearing if he so chose.
Mark Berning had a question on the trunk line and whether it would be big enough if it were to go across the freeway and east towards Highway 101. Raatikka said the gravity lines are large enough, but the forced mains probably are not. The pump would have to be increased at some later date. There was further discussion on future costs, which would be inflated at the cost of the construction index. It was stated that is the only fair way.
It was asked if as the lines are extended, whether the residents included in this project could be charged again. Those people who were getting service in the future would be paying for that extended service. It was asked how you get a sewer line under the freeway, and Raatikka explained MNDOT will give a permit and you bore it under.
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Mayor Packa next asked for comments from the council. She said the council felt they were trying to be fair to residents in what they were doing. She said the council listened to what the people said and tried to make adjustments and be accommodating and she felt the council should proceed with the project. Tom Hagerty, who will be joining the council in January, said he definitely thinks it is time to go forward with the plans and specs. He said Frankfort worked on this for two years before being consolidated with St Michael. He said the driving factor is that if it does not go forward the Industrial-Commercial will effectively be killed. Some people in existing homes have just upgraded their systems and eventually every system will probably be nonconforming. Timing can never be exactly right for everyone. Kevin Zachman said there is never going to be the perfect time, but ultimately we are giving the people the chance to pay once. Kenny Duerr said he was in agreement with what had been said up to this point. He said there are some unique situations, but he feels the benefit is there or he would not be sitting here in favor of it at this point. There is also the consideration of cost to do it now versus cost to do it in eight to ten, or even five, years when there will be a substantial difference.