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HomeMy WebLinkAbout5.C.3. Approval of Shakopee Interceptor and Lift Station Transfer Agreement between the City and Met Council l s;c.3, CITY OF SHAKO PEE CONSENT Memorandum TO: Mayor & City Council ,.0_'''' Mark McNeill, City Administrator FROM: Bruce Loney, Public Works Director SUBJECT: Consider Approval of Shakopee Interceptor and Lift Station Transfer Agreement between City of Shakopee and Metropolitan Council DATE: December 5, 2006 INTRODUCTION: Attached is a Transfer Agreement between the City and the Metropolitan Council on transferring MCES's Interceptors and Lift Station L-16 to the City. BACKGROUND: On April 19, 2005, the City Council of Shako pee approved a letter with recommendation in regard to the MCES reconveyance of Interceptor No.'s 7023 and 7024 and Lift Station No. L-16. This letter had four recommendations as follows: 1. That the MCES include a lO-year warranty for the reconveyed interceptor, force main and lift station, as allowed by Minnesota Statute Section 473.51 Subd. 7 (c) provides that "the (transfer) agreement may provide for the Council to share in the cost of emergency repairs to the transferred interceptor for an agreed warranty period not to exceed ten years..." MCES's current policy is to offer a sliding scale warranty. 2. That the MCES be required to construct a SCADA system on Lift Station No. 16 to match the City's Standard Lift Station design for proper operation. 3. That the MCES repair the line, as necessary, to meet good operation conditions as determined on inspection of new video DVD's. 4. That the MCES credit the City the SAC units for Rahr Malting once Rahr Malting comes off line of the MCES system. This would allow the City to build a fund dedicated to the repair and replacement of the interceptor in the future when it is required. . The MCES staff has prepared the Transfer Agreement and this agreement has been reviewed by Kennedy & Graven. In the agreement, a lO-year warranty has been included under Section VI. The MCES will provide a Communication Replacement System for L-16 to meet the City's need and will reimburse the City the cost of communication system as shown in Exhibit C. Also, the MCES will repair the interceptor as indicated in Exhibit B. The City will not have to maintain the interceptors or L-16 lift station until the repairs and replacement communication system is completed and operational. Also attached is the MCES's new policy on SAC credits which affects the City of Shakopee. The City has had discussion over the years with MCES to obtain SAC credits, if and when Rahr Malting comes off the Metro Sewer System. This new policy includes a provision to have Shakopee obtain SAC credits from Rahr Malting ifRahr Malting comes off the Metro system by July 1, 2011. These SAC credits could amount to 1500 units, and would be collected upon future building permits. ALTERNATIVES: 1. Authorize the appropriate City officials to execute the Transfer Agreement between the City of Shakopee and Metropolitan Council. 2. Do not execute this agreement. 3. Table for additional information. RECOMMENDATION: Staff recommends Alternative No. 1. ACTION REQUESTED: Authorize the appropriate City officials to execute the Shakopee Interceptor and Lift Station Transfer Agreement between the City of Shakopee and Metropolitan Council. ~n~ Public Works Director BUpmp ENGR/EFIPPENINGTON/COUNCIUTRANSFER-CITY-METCOUNCIL As of November 30,2006 . SHAKOPEE INTERCEPTOR AND LIFT STATION TRANSFER AGREEMENT THIS TRANSFER AGREEMENT C'Agreement"), effective on the date of execution by both ofthe parties, is made and entered into by the CITY OF SHAKOPEE, a municipal corporation ("Shakopee") and the METROPOLITAN COUNCIL, a public corporation and political subdivision of the State of Minnesota ("Met Council"), collectively referred to as the "Parties"). BACKGROUND RECITALS 1. Pursuant to Minnesota Statutes 9473.146 the Met Council has adopted a comprehensive plan for the collection, treatment and disposal of sewage in the Minneapolis-St. Paul . metropolitan area. 2. To implement its comprehensive plan for the collection, treatment and disposal of sewage, Met Council owns and operates the wastewater treatment and collection facilities including the sanitary sewer interceptor systems for the Minneapolis-St. Paul, Minnesota region hereinafter referred to in this Agreement as the "Metropolitan Disposal System". 3. As part ofthe Metropolitan Disposal System, Met Council owns and operates interceptor sewers and related ancillary facilities which for the purposes of this Agreement is identified as the Interceptor MSB 7024 from Lift Station L16 including Meter 4010n Bluff Ave E; MSB7023 from MH22 and 22Aalong 2nd Avenue E, to and including a section ofMSB 6904 at junction Box JB 4 and Siphon Outlet S2 (referred to in this Agreement as "Shakopee Interceptor), the location of which is shown on Exhibit A attached hereto and made a part ofthis Agreement. 4. On February 9, 2005, Met Council, in accordance with Minnesota Statutes 9 473:511, subd. 2, determined that the Shakopee Interceptor is no longer necessary for Met Council's Comprehensive Plan for the collection, treatment and disposal of sewage in the metropolitan area. Met Council notified Shakopee in writing ofthis determination on February 10, 2005. On February 9, 2005, in accordance with Minnesota Statutes S 473:5111, subd. 3, Met Council further determined that the Shakopee Interceptor continues to be of benefit to the Shakopee sanitary sewer system. Met Council notified Shakopee in writing of this determination on February 10, 2005. 5. Further, on February 9, 2005, Met Council, in accordance with Minnesota Statutes 9 473.5111, subd. 3 declared the Shakopee Interceptor to be in good operating condition as that term is defined by Minnesota Statutes 9473.5111. Met Council as part of this agreement will perform repairs specifically listed in Exhibit B attached, and the Shakopee will perform replacement specifically listed in Exhibit C attached and hereto made part of, and Upon completion of the repairs and replacement listed in subparagraph 5 above, pursuant to Minnesota Statutes 9 473.5111(7)(b), Met Council will transfer to Shakopee, the Shakopee Interceptor and Lift Station L16 in accordance with the terms and conditions of this Agreement. -- 1 -- 6. Shakopee recognizes and agrees with the determinations made by Met Council as stated above in the Recitals. 7. Further, Met Council has determined that it is in its best interest for Shakopeeto act as Met Council's agent to select, purchase and install a replacement communications system, at Met Council's expense, for Met Council's Lift Station Ll6 to convey Lift Station L-16 to Shakopee. 8. The Parties have now reached agreement on the topics and issues related to the transfer of the Shakopee Interceptor and Lift Station L16 and hereby set forth their agreement pursuant to their power and authority under Minnesota Statutes S 473.501, et. Seq., S 473.5111, S 473.59, and other applicable statutes. Shakopee is authorized to enter into this Agreementpursuant to dated . The Council is authorized to enter into this Agreement pursuant to Council Action dated September 13,2006. Further, the parties specifically acknowledge and agree that it is their intent by this Agreement that Met Council, upon completion ofthe repair and replacement items specifically listed in this Agreement, will transfer to Shakopee and Shakopee will accept ownership and all responsibility and liability for maintenance and operation of the Shakopee Interceptor and Lift Station 16. NOW, THEREFORE, for mutual consideration, the sufficiency of which has been agreed to by the Parties, Shakopee and Met Council agree as follows: I. Purpose of Agreement 1. The purpose of this Agreement is to set forth the terms and conditions with respect to the transfer ofthe Shakopee Interceptor from Met Council to Shakopee. For purposes of this Agreement, the Shakopee futerceptor is the interceptor shown on Exhibit A attached hereto and made a part hereof. The Shakopee Interceptor begins at MH 3 and Junction Box JB 4 (6904) in Shakopee and ends at MH40l and Lift Station L-l6 in Shakopee. 2. The Parties agree that the purpose of this Agreement is to serve as the agreement governing transfer pursuant to Minnesota Statutes S 473.5111, subd. 7(b). Met Council will transfer the Shakopee Interceptor and Lift Station 16 in accordance with the terms of this Agreement. \ 3. Shakopee agrees that the Shakopee Interceptor and Lift Station 16 is beneficial to Shakopee I as a local Shakopee sanitary sewer system and Shakopee will accept the transfer ofthe Shakopee Interceptor and Lift Station 16 in accordance with the terms of this Agreement. 4. Met Council has determined and Shakopee agrees that the Shakopee Interceptor and Lift Station L16 is in good operating S911<:lition as that term is defined in Minnesota Statutes ~ 473.5111, subd. 1 (a) "Good Operating Condition"). As part of the reconveyance and as terms to -- 2 -- this agreement Shakopee will accept the Shakopee Interceptor and Lift Station L16 subject to certain repairs and replacement to be performed at Met Council's expense. The repairs to be performed by Met Council are specified in Exhibit B attached hereto and made a part hereof ("Repairs"). Shakopee, as Met Council's agent, will perform replacement as specified in Exhibit C attached hereto and made a part hereof ("Replacement"). Shakopee hereby waives any right provided by MilUlesota Statutes ~ 473.5111 or any other applicable statute to contest or request a hearing on Met Council's determination that the Shakopee Interceptor and Lift Station L16 is in Good Operating Condition subject to the Repairs to be performed by Met Council, and the Replacement to be performed by Shakopee. II. Communications Replacement Provisions of Met Council Lift Station L-16 1. For purposes of this Agreement, the Met Council Lift Station L-16 replacement proj ect that is the subject of this Agreement is identified as Lift Station L-16 Communications Replacement and consists of facility Lift Station L-16 details of which are shown on Exhibit C (description of facility) attached hereto and made a part hereof. For purposes of this Agreement, the Met Council Lift Station L-16 Project is referred to as "Lift Station L-16 Project". 2. Met Council in cOlUlection with the communications system replacement of the Lift Station L-16 Project does hereby appoint Shakopee as its agent to select, purchase and install a communications system suitable to the needs of Shakopee. 3. Shakopee will prepare and submit to Met Council for Met Council's review and approval the specifications and proposed replacement costs pertaining to the Lift Station L-16 Project. Evidence of Met Council's written approval or consent pursuant to this Paragraph II will be a letter to Shakopee from the Project Manager of Met Council's Environmental Services Division ("MCES"). Met Council shall not unreasonably withhold approval. 4. Shakopee will administer the contract and inspect the installation ofthe contract work. Shakopee will provide to Met Council final cost documents. Final Cost Documents will be submitted to the Project Manager of Met Council's Environmental Services Division ("MCES"). Bill Moeller, Assistant General Manager Metropolitan Council Environmental Services Regional Maintenance Facility 3565 KelUlebec Drive Eagan, MN 55122 5. Met Council shall reimburse Shakopee for the purchase and installation of the communications system ofL-16 Lift Station Project as provided in this Agreement in the approximate amount of Five Thousand Six Hundred/l 00 Dollars, plus any required installation -- 3 -- costs. Payments to the contractor for work performed on the L-16 Lift Station Project will be made byShakopee and Met Council will reimburse Shakopee in accordance with the terms of this Agreement. 6. Met Council has agreed to provide Shakopee 80 hours oftraining on the operation and maintenance ofL-16 Lift Station, to be accomplished by the end of2007 at no expense to Shakopee. IV. General Conditions 1. Met Council and Shakopee agree that Met Council may not have property rights in its own name for the Shakopee Interceptor or portions thereof and that Met Council shall have no obligation to obtain any property right or rights, easements, or right of way for the Shakopee Interceptor or any portion thereof. However, Met Council agrees to reasonably cooperate in any transfer of property rights it does have. 2. Nothing in this Agreement shall be construed to modify or limit any statutory authority or legal obligations or responsibilities of Met Council. Specifically, and without limitation, nothing in this Agreement shall be deemed to modify or limit Met Council's review authority over Shakopee's plans under Minnesota Statutes ~~ 103DA01, 103DA05, or 473.165, or other applicable law. V. Transfer of the Shakopee Interceptor and Lift Station L16 1. Met Council shall, at its own expense, perform the Repairs for Shakopee interceptor specifically listed in Exhibit B attached hereto and made a part hereof. The work may be periodically inspected by Shakopee's project manager in accordance with an inspection schedule arranged by the project managers of Met Council and Shakopee butShakopee will have n() responsibility for supervision of the work. 2. Met Council and Shakopee agree that Shakopee will, at Met Council's expense perform the Purchase and Replacement ofa communications system for the Shakopee Lift Station L16 specifically listed in Exhibit C. 3. Upon completion of the Repairs by Met Council and Replacement by Shakopee, that pursuant to Minnesota Statutes S 473.5111, subd. 6(b)(2) and Met Council action September 13, 2006 that Shakopee Interceptor is in Good Operating Condition. 4. Immediately upon completion ofthe repairs listed in Exhibit B by Met Council, and the replacement listed in Exhibit C by Shakopee, Met Council shall transfer to Shakopee, at no cost to Shakopee, and Shakopee shall accept the transfer of Met Council's interest in the Shakopee Interceptor and Lift Station L16 and Met Council's interest in any associated property. Met Council shall transfer and Shakopee shall accept by such transfer the Shakopee Interceptor and Lift Station L16 in "as is" condition by means of a Bill of Sale for Met Council's -- 4 -- interest in the pipes and associated facilities constituting the Shakopee Interceptor and Lift Station L16 and a Quit Claim Deed for Met Council's property rights associated with the Shakopee Interceptor and Lift Station L16. Shakopee acknowledges that any rights transferred by Met Council to Shakopee are subject to existing easements and rights-of-way for highways, roads, railroads, pipelines, canals, laterals, ditches or electric or telephone lines previously granted by Met Councilor by any other party or parties. 5. Subsequent to transfer of the Shakopee Interceptor and Lift Station L16 to Shakopee, Shakopee shall have full and sole liability and responsibility for operation and maintenance of the Shakopee Interceptor and Lift Station L16. VI. Warranty 1. Provided that Shakopee has performed routine maintenance on the Shakopee Interceptor and Lift StationL16 , Met Council agrees, pursuant to Minnesota Statutes ~ 473.5111 that it will reimburse Shakopee for Met Council's share as provided in this Agreement, for the actual, reasonable and verifiable cost of uninsured and unwarranted emergency repairs for the Shakopee Interceptor and Lift Station L16 for a period often (10) years starting on the date Met Council. has certified the Shakopee Interceptor to be in Good Operating Condition pursuant to Minnesota Statutes ~ 473.5111, subd. 6(2) and Section III of this Agreement and ending ten (10) years from such date. Met Council will transfer to Shakopee any warranties or guarantees Met Council has received from its contractors and subcontractors for such Repairs. For the purposes ofthis Agreement, emergency repairs are only such repairs needed to fix any imminent and bona fide threat to the structural integrity of the Shakopee Interceptor and Lift Station L16 within the ten year period stated above in this Section IV. Specifically, repairs due to outside sources, including, but not limited to, acts of God, terrorism, use of facilities for other than wastewater purposes, misuse of facilities and vandalism are not considered to be due to structural condition of the pipe and are the responsibility of Shakopee. 2. Met Council's obligation to reimburse Shakopee for its share in the cost of emergency repairs for the Shakopee Interceptor and Lift Station L16 is subject to the following conditions: a. Shakopee has provided written notice as soon as practicable to Met Council that an imminent and bona fide threat to the structural integrity of the Shakopee Interceptor has occurred, the date on which the threat first occurred, and the nature and cause of imminent and bona fide threat; and b. Ifthere is disagreement that the condition reported by Shakopee constitutes an imminent and bona fide threat to Shakopee MSB 7024, 7023 Interceptor or Lift Station L16 an independent third party will be contracted to make the determination. -- 5 -- c. The determining date for eligibility ofthe emergency repair costs to be shared by Met Council under the terms of this Agreement is the date on which the incident causing the bona fide and imminent threat was noticed to Met Council as provided in subparagraph 2(a) above in this Section IV; and (d) Shakopee has submitted to Met Council written plans for the emergency repair to the Shakopee Interceptor and Met Council has reviewed such plans and determined that the plans are reasonable and necessary for the emergency repair; and (e) Shakopee provides to Met Council maintenance records that demonstrate the routine maintenance of the facilities to be repaired; and (f) Any portion ofthe facilities for which Shakopee has done a material rehabilitation or repairs previously covered under this Section IV ofthis Agreement are not eligible for repair under this Section IV of this Agreement. 3. Met Council will provide 100% emergency repair costs in year one until the first anniversary, decreasing by ten percent each year. On the tenth anniversary ofthe (re)conveyance, Met Council is released of all obligations, warranties and liabilities for the Interceptor. 4. Met Council will make the reimbursement for emergency repairs in accordance with the following procedure: Met Council will reimburse Shakopee within 45 days of submittal to Met Council of an invoice from Shakopee specifically listing the reimbursable costs listed in this Section IV of this Agreement, written evidence of payment to contractors and subcontractors by Shakopee including written receipts of such payments from contractors and subcontractors, and certification from Shakopee that the work for which it is requesting reimbursement has been completed to the satisfaction of Shakopee and Shakopee has accepted such work in accordance with the terms of its contract with its contractor. In the event any items of an invoice are contested, the uncontested portion ofthe invoice shall be paid in accordance with the normal 45-day period and the contested items shall be paid within 45 days of resolution of the matter. Upon completion ofthe emergency repairs, Shakopee will submit a Final Estimate for the emergency repairs, a final invoice for any remaining eligible reimbursable costs, together with certification from Shakopee that the emergency repairs have been completed in accordance with the construction documents and accepted by Shakopee and certification from Shakopee that all contractors and subcontractors have been paid. Shakopee agrees that Met Council may use general obligation bond funds to reimburse Shakopee for any eligible costs under this Section IV ofthis Agreement, and Shakopee agrees to consult with Met Council in advance of spending such funds and to comply with any requirements of Met Council for USy 9fbond funds. -- 6 -- VII. General Provisions 1. Applicable provisions of federal law, Minnesota law, and of any applicable local ordinances relating to civil rights and discrimination and the AffIrmative Action Policy statements of Shakopee and Met Council shall be considered a part ofthis Agreement as though fully set forth herein. SpecifIcally, Shakopee agrees to comply with all federal, state and local applicable laws and ordinances relating to nondiscrimination, affIrmative action, public purchases, contracting, employment, including workers' compensation and surety deposits required for construction contracts. Shakopee agrees to request payment of state labor wage information from its contractor and provide such information to Met.Council. 2. It is understood and agreed that the entire Agreement between the parties is contained herein and that this Agreement supersedes all oral agreements and negotiations between the parties relating to the subject matter hereof. All items referred to in this Agreement are incorporated or attached and deemed to be part of this Agreement. 3. All employees of Shakopee and all other persons engaged by Shakopee in the performance of any work or services required or provided for .herein to be performed by Shakopee shall not be considered employees of Met Council, and that any and all claims that may or might arise under the Worker's Compensation Act or the Unemployment Compensation Act of the state of Minnesota on behalf of said employees while so engaged, and any and all claims made by any third parties as a consequence ofany act or omission on the part of said employees while so engaged, on any ofthe work or services provided to be rendered herein, shall in no way be the obligation or responsibility of Met Council. It is further agreed that any and all employees of Met Council and all other persons engaged by Met Council in the performance of any work or services required or provided herein to be performed by Met Council shall not be considered employees of Shakopee, and that any and all claims that mayor might arise under the Worker's Compensation Act or the Minnesota Economic Security Law of behalf of said employees while so engaged, and any and all claims made by any third parties as a consequence of any act or omission ofthepart of said employees while so engaged, on any work or services provided to be rendered herein, shall in no way be the obligation or responsibility of Shakopee. 4. The provisions of this Agreement shall be deemed severable. If any part of this Agreement is rendered void, invalid, or unenforceable, such rendering shall not affect the validity and enforceability ofthe remainder ofthis Agreement unless the part or parts which are void, invalid or otherwise unenforceable shall substantially impair the value ofthe entire Agreement with respect to the parties. One or more waivers by said party of any provision, term, condition or covenant shall not be construed by the other party as a waiver of a subsequent breach ofthe same by the other party. 5. All records kept by Met Council and Shakopee with respect to this Agreement shall be subject to examination by the representatives of each party hereto and the State Auditor, and its representatives. All data collected, created, received, maintained or disseminated for any -- 7 -- purpose by the activities of Shakopee and Met Council pursuant to this Agreement shall be governed by Minnesota Statutes, Chapter 13, as amended, and the Minnesota Rules implementing such Act now in force or hereafter adopted. 6. The covenants of this Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns. 7. Any notice or demand, which mayor must be given or made by a party hereto, under the terms of this Agreement or any statute or ordinance, shall be in writing and shall be sent certified mail or delivered in person to the other party addressed as follows: Regional Administrator Metropolitan Council 390 Robert Street North S1. Paul, MN 55101-1805 with a copy to: Metropolitan Council Environmental Services c/o General Manager 390 Robert Street North S1. Paul, MN 55101-1805 -- 8 -- City Administrator City of Shakopee 129 Holmes Street S. Shakopee, MN 55379-1328 8. This Contract is entered into in and under the laws ofthe State of Minnesota and shall be interpreted in accordance therewith. 9. If a dispute should arise between Met Council and Shakopee with respect to this Agreement or any of its provisions, Met Council and Shakopee agree to attempt to resolve such dispute through the use of a mediator mutually acceptable to Met Council and Shakopee prior to initiation of any legal action on the part of Met Councilor Shakopee with respect to this Agreement, any of its provisions and/or its enforcement. The costs of such mediation shall be shared equally by the parties. 10 Met Council's project manager is: William Moeller, Assistant General Manager, Interceptor Services or his designee Metropolitan Council Environmental Services Shakopee's project manager is: Bruce Loney or his designee Public Works Director City of Shakopee 11. The parties agree that any agreement or contract entered into by them pursuant to this Agreement shall include clauses that shall: 1) require the contractor to defend, indemnify and hold harmless Shakopee and the Met Council, their officials, agents, contractors and employees from claims, suits, demands, damages, judgments, costs, interest, expenses (including, without limitation, reasonable attorneys' fees, witness fees and disbursements incurred in the defense thereof) arising out of or by reason ofthe negligence of the said contractor, its officers, employees, agents, or subcontractors; 2) require the contractor to provide and maintain insurance and provide to the parties prior to commencement of the construction a Certificate of Insurance evidencing the insurance coverage and naming both parties as additional insureds; and 3) require the contractor to be an independent contractor for purposes of completing the work provided for in this Agreement. 12. Each party agrees that it will be responsible for its own acts and the results thereof, to the extent authorized by law, and shall not be responsible for the acts of the other party and the results thereof. The Met Council's and Shakopee's liability is governed by the provisions of Minnesota Statutes Chapter 466. The Met Council and Shakopee each warrant that they are able to comply with the aforementioned liability requirements through an insurance or self-insurance program and have minimum coverage consistent with the liability limits contained in Minnesota -- 9 -- Statutes Chapter 466. IN TESTIMONY WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the day and year first above written. CITY OF SHAKOPEE ATTEST: By Shakopee City Mayor Date: By Shakopee City Administrator Date: By Shakopee City Clerk Date: APPROVED AS TO FORM By Shakopee City Attorney Date. METROPOLITAN COUNCIL Approved as to form: By Office of General Council Its -- 1 0 -- EXHIBIT LIST Exhibit A - Map Showing Location of the Shakopee Interceptor and Lift Station L16 Exhibit B - Repairs to interceptor to be made by Met Council Exhibit C - Replacement of communications by MCES and Shakopee, to Lift Station L-16 EXHIBIT A Map Showing Location of the Shakopee Interceptor and Lift Station L16 -- . ...-..... ----- - .\~.3 ---.. . .... ----- AI. ........ Forcermin I I ...,.,. O:l1er MCES Intel't.epto' i J ~1~~"~\~ ~.--: .....-...:...---r-......-.::.--. . ; ~: ..: . :;! . ; ...... ! . 'fl. , :t .------------- i - - -:. . . $.. S,hUKQpee.; ... ... c ,_: . I~il . ~~t~~- " ' .W-__i , i~. ~.___ i -- ,.. .......-...... .......- ~. .... 1._... ~ ......I ._." EXHIBIT A Map Showing Location ofthe Shakopee Interceptor and Lift Station L16 "'~' .... -, A 11.(1::5 Lilt I . ti:L"' ""'""',,,,._. l/ ....; -., .... i S,hakopee n'C::',' Q' ,"': " ~1 ; 'c'; :!l'..... """""". ~. ~" .......-.... . .' ,....,... .-..,.... ....... , ", ...:.:.:~ :~. :.::. ;::.~:. .::':::::. .....:.:::~ . .... .:^~::.~::.:.:.... ..... ., .,..... .~..-. . .l~ '^ EXHIBIT B SECTION SUMMARY OF WORK INTERCEPTOR GENERAL 1.0 Basic description: Work will consist of rehabilitating 7261 feet of 42" RCP interceptor using Cured In Place Pipe (CIPP). This type of lining creates a structural lining of 15-17 mm thickness with little/no loss of capacity in the line. The CIPP lining will begin at MH 13 at the intersection of Canterbury Downs Blvd (interceptor 7023) to Junction structure #4 to the east at Siphon Outlet (interceptor 6904). 1.1 Timeline: Project is scheduled to commence in 2007 and is expected to be completed in 2007. EXHIBIT C Installation of Telemetry System Installation of Remote Site Wireless Lift Station Analyzer/Equipment Monitor: Item A: Crystal Ball Plus Multimedia Alarm "Management System Remote Site Wireless Lift Station Analyzer/Equipment Monitor-2 units @ $2800/ea Total: $5600.00 not including electrical work Electiral Work. Crane/Lift and Locks 1. Metropolitan Council staff shall perform the electrical work necessarv for the provision ofthe crane/lift instaflment at no cost to City of Shakopee. 2. Metropolitan Council staff. shall perform electrical work required for the provision of the contractor to install Telemetry System at no cost to City of Shakopee. 3. Metropolitan Council staff shall provide for the chanqe of locks on the lift station at no cost to City of Shakopee. Committee Report E Environment Committee Item: 2006 - 254 For the Metropolitan Council meeting of August 23, 2006 ADVISORY INFORMATION Date Prepared: August 9, 2006 Subject: Proposed Rule Changes to the Service Availability Charge (SAC) Credit System Summary of Committee Discussion: At the July 25th Environment Committee meeting, staff discussed the proposed changes, the events to-date in the public outreach process, and the public input received to-date. Representatives from the City of Minneapolis and AMM (Association of Metropolitan Municipalities) spoke and both generally supported the proposed changes. However, there was a question about what might be considered extraordinary circumstances that would allow a longer time for use of credits on site. At the August 8, 2006 Environment Committee meeting, the Committee, staff and AMM discussed what extraordinary circumstances might warrant an increase in the lO-year timeframe for use of credits. AMM suggested criteria which might be used as guidelines when considering further extension (see Exhibit D). It was noted that since the new rules are not to be implemented until 2010 and already have a 10-year timeframe that additional rules would not have any impact before 2020 and many factors could change in the interim, including development issues and timelines as well as SAC economics. Staff suggested retaining flexibility for future Council(s) to decide what warranted the rare additional extension of time. AMM asked that a formal process for time line extension appeals be developed for Council approval. Staff stated that the proposed rule changes included authority for staff to do so and that the rules will be written to require Council review and approval of these appeals. No action was taken at this meeting. Recommendation: That the Metropolitan Council approve the proposed changes to the SAC rules (attached as Exhibit A) and direct staff to incorporate them into the SAC Procedure Manual. Executive Summary E Environment Committee Item: 2006 - 254 Meeting date: July 25,2006 For Metropolitan Council Meeting of August 23, 2006 ADVISORY INFORMATION Date: July 14, 2006 Subject: Proposed Rule Changes to the Service Availability Charge (SAC) Credit System District(s), Member(s): All Policy/Legal Reference: Policy 3-2-5 and MN Statute 473.517 subd. 3 Staff Presented/Prepared: Jason Willett (651-602-1196) Division/Department: MCES c/o William G. Moore, (651-602-1162) Proposed Action/Motion That the Metropolitan Council approve the proposed changes to the SAC rules (attached as Exhibit A) and direct staff to incorporate them into the SAC Procedure Manual. Issue The proposed changes to the credit system are material and require Council approval. Overview MCES grants "credits" to municipalities for a permanent reduction in the wastewater capacity needs of individual properties. These SAC credits reflect the amount a municipality can subsequently restore its use of capacity (measured in SAC units) without paying additional SAC. Currently, when a redevelopment is smaller (from a wastewater demand perspective), the credits beyond what is needed for the redevelopment become available to the municipality as "net" credits, although the capacity itself cannot be moved and its maintenance is financed by sewer fees from those properties still using the system. The most significant changes being proposed are: . When a redeveloped property's new use requires lower wastewater capacity than what was needed at any time in the prior seven years, SAC credits to the city will be limited tothe amount needed on the site for the new use. Net credits will not occur. . Credits will be granted based on the prior demand, in SAC units, over the seven years prior to the year of permitting, not based on SAC payments or grandparenting. If a property is vacant for the entire 7 year look- back period, no credits will be granted. . Phased redevelopment is given 10 years to use the credits, and possibly more in extraordinary circumstances. . Shakopee is protected from these changes for the withdrawal of Rahr Malting, for 5 additional years, due to the prior Council action. . The proposed implementation date of these changes is January 1,2010. . Existing credits will remain available to the municipalities. The proposed changes to the SAC credit system will improve equity of the SAC system and restrain future SAC rate increases. Exhibit A includes the detailed rule changes. Exhibit B is a summary ofthe public outreach process. Exhibit C is the public comment letters received. I Exhibit A I ~ Metropolitan Council Environmental Services SAC Credit System 2006 PROPOSAL: "NO NET CREDITS" _ A redevelopment receives credits for SAC that was actnally paid (and grandparent credits based on 1973 use) regardless of the recent use on the property. When the redevelopment is smaller (from a wastewater demand perspective), the credits beyond what is needed for the redevelopment become available as excess or "net" credits. The city may save these net credits on the site for a subsequent redevelopment or use them elsewhere in the city (city-wide credit election). PROBLEMS WITH CURRENT SYSTEM: 1. 1973 data has become difficult to locate and therefore, increasingly inaccurate and disputable. 2. SAC pays for initial capacity and ongoing sewer fees pay to maintain the assigned capacity. A property that has not been used in recent years has not been paying sewer fees and is not payingto maintain the sewer capacity at the site. This is inequitable, as other sewer users must pay more to maintain the unused capacity. For example, a brewery operating in 1973 and closed in 1980 could have over a thousand credits available when the site is redeveloped, even though for over 25 years the burden was on other sewer users to maintain sewer capacity for the site. 3. In 1973 when SAC was first implemented, existing users were "grandparented" into the system. In other words, these users did not pay for the capacity at that time, nor for any redevelopment- associated SAC fees on those sites since then. Nevertheless, the current rules grant credits. It is MCES staffs' view that this is inequitable. We acknowledge that AMM and some communities disagree that this is inequitable as many or all of the communities that had properties grandparented into SAC built the original facilities and were the original ratepayers ofthe regional agency as it was buying the facilities from the cities. _ When a redeveloping property's new nse requires lower wastewater capacity (than · what was demanded at any time in the prior seven years), SAC credits to the city · ., will be limited to the amount needed on the site for the new use. Credits will be based on the prior demand, in SAC units, over the seven prior years and up to the date of permitting (and not based on SAC payments or grandparenting). Net credits will never occur. In other words, a property redeveloping at the same or lesser wastewater demand will not incur SAC nor get credits. If redeveloping at a higher waste-water demand, it will incur SAC only for the capacity increment above the recent demand. EXAMPLES USING PROPOSED CHANGE: Example 1: A-24 unit functioning apartment building is demolished and a restaurant is permitted (that has a SAC determination of 15 units). No SAC would be paid and no net credit would be created. Example 2: A 15-SAC functioning restaurant is demolished and a 24-unit apartment is permitted. Nine SAC would need to be paid. Example 3: A 15-SAC restaurant that had been vacant for seven or more years is demolished and a 24-unit apartment is permitted. Twenty-four SAC would need to be paid. Example 4: A house that has been vacant for seven or more years is demolished and rebuilt. One SAC would need to be paid. lIB I. Phased developments will be allowed to nse the credits, compnted as described, . over a 1 O-year period on the specific site from which they originated, and longer in extraordinary cases upon appeal to MCES. 2. If a property should have paid SAC for the capacity demand being used (for the seven-year prior period) but did not, MCES reserves the right to reduce the credits, or make the charges that should have occurred. That is, if a change of use or increase in size of an operation occurred and a determination was missed, the missed determination will be used to compute the net payments/credit to what should have occurred. 3. If a property is being remodeled or rebuilt (e. g. after afire) but is not changing use or size, no SAC determination will be necessary and no SAC charge will occur. If it is changing size but not use, SAC will be required on the incremental capacity demanded. 4. Capacity demand for the seven-year prior period will not be the actual flow used, but rather defined as the capacity in SAC units for the specific type of property, except that a demolished or vacant building shall be considered as having no demand (and therefore have no credits available). Vacancy will be evidenced by the absence of flow based sewer fees on the property (note: an administrative or minimum charge would not count as a flow based fee and thus the building would still count as vacant). 5. The seven-year prior period goes back from January 1 of the year in which the determination is requested. For example, if a determination is requested in June and completed in July of2006, the seven-year prior period will go back to January 1 of 1999 (seven calendar years, plus the portion of the year in which the determination is requested). When MCES is asked for a commercial determination, the city or developer should submit a sewer bill for the property or the city should submit a certification as evidence that the property is occupied or vacant. 6. These new rules are proposed for implementation Jan. 1,2010. This will allow cities time to change ordinances as necessary. Moreover, developments now being planned that have counted on credits in their proformas will be able to get a determination (at the time ofthe building permit) under the existing rules. 7. Industrial permittees shall continue to have a "baseline" determined by the maximum demand at each three-year flow review. At each review, the new baseline will be the greater of the current use and the prior baseline. SAC shall be charged for any capacity increment resulting from an increase in baseline. No credits for use below the baseline will occur; however the baseline is not reduced and therefore itis available to that industry in the future. Ifthe permit is discontinued (e.g. a permitted industrial site is converted to a different use), potential credits will be based on the highest demand in the prior seven years (not necessarily the current baseline). 8. If a city or area (e.g. a tribal nation) or property withdraws from the MCES service area after the 2010 implementation date, SAC credits shall be available to the host city or tribal nation based on the amount of capacity demand being withdrawn. However, based on a Metropolitan Council resolution, the City of Shakopee has a commitment as to the treatment of credits regarding Rahr Malting's potential withdrawal. The Council shall grant credits to the City of Shako pee per that action, if and to the extent Rahr does withdraw before July 1, 2011). 9. All existing city-wide credits (those currently on MCES books, where redevelopment has occurred and net credits granted) will remain available to the community for use to offset other SAC charges. Any site-specific credits will be subject to the ten-year rule for phased developments (see #1) beginning January 1, 2010. This new proposal takes the place of all three modifications proposed in 2005. Last Update: 5/23/06 Public. Outreach Process Summary I Exhibit B I Events to date: . May 24,2005: Three proposed changes (somewhat different from current proposal) reviewed by Environment Committee. Authorized taking these proposals out for public comment. . August 1,2005: Mailing to all 104 customer municipalities and a notice of the public meeting was published in the State Register, Star Tribune and St. Paul Pioneer Press. . August 23,2005: Public meeting (22 non-Council attended) . September 2,2005: End date of first written comment period (10 letters & 3 e-mails received) . September 13,2005: Environment Committee discussion about comments received; decision to work with communities to look for a better or compromise proposal. . Oct-Dec. 2005: Council staff met with the Association of Metropolitan Municipalities (AMM) and some cities . January 24, 2006: Environment Committee review of AMM letter and alternative ideas (including current proposal). . June 7,2006: Mailing to all 104 customer municipalities and publication in State Register asking for comments on this proposal. . June 2006: The currently proposed changes were discussed atthe five customer budget meeting (4 municipal meetings and the industrial customer forum) . July 7, 2006: End of written comment period for proposed changes: Letters received from AMM and the City ofSt. Paul (see Exhibit C) - I Exhibit C I Association of Metropolitan Muni(ipalitie~ June 27, 2006 Mr. Jason Willett Metropolitan Council. Enviro~ent Services 390 North Robert Street StPaulMN 55101 Dear Mr. Willett: Thekssociation of Metropolitan Municipalities appreciates the opportunity to comment regarding, the Sewer Availability Charge (SkC) program changes under consideration by. the Metropolitan Council. We would like to commendyou and your stafffor your efforts .in considering alternatives to the original proposals that.we believe will. be more equitable. forcities. Tlle;AMMis appreciative of the additionaltime.provided.by the Met Councin~ffalI when the original proposed, changes to this program were made, which allowed us to convep.e a ~ork group of cities to review the prop,osals and put forth reconirrlendatiop.s. As you know, the primary concerns that emerged from those discussions centered on,the .' impacts program ch(lJlges would have on redevelopment projects, andiwhat we . considered an arbitrary and inequitable distinction'being made between 1973andp()st~ 1973 parcels in terms of credit eligibility. ". . Subsequent discussions with MCES staff and our work group led to the 'no netcrediP proposa~curr.ent1y under consideration. The AMM ~uppprtsthisproposal, with a, . baseline., look back for credit eligibility of seven years" 10 years for ph~ed developments and a Ipngerperiod of time for extraordinary yircumstances to bedetennined on a case- by-caSe basis. These timelineswill helpto accoIfunodatecomplicated and extensive develgpment <,md redevelopment projects. . kgain,iJason, we appreciate all of the time, ,effort and information you and your staff have provided to us regarding the SkC proposals, <,md we lopkforward. to continuing tQ work with you .on this important issue. Sincerely,. ~a is ,.' ..' ''','". \,., Executive Director 145 University A venue West SaintPauJ, Minnesota 55103--2044 Teleptione:(051) 2154000 Fax; (651) 281-1299 E-mail; amm@amm145.of:g CITY OF SAINT PAUL 140 City Hall ChristopherB. Coleman; Mayor 15 W. Kellogg Blvd. Sail!tPaul; Mi~nes()ta 55102.1660 Fax: 6~1.2r;6.6222 July 7, 2006 Jason Willett, Finance Director Metropolitan Ceuncil EnVironmental Services 230 EaSt 5th Street st. Paul. Minneseta 55102-1626 Dear Mr. Willett:. Tl1ank.)'o.ufer this opportunity to. respond to recently proposed changes to. the MetropolitanCounciI's Service Availability Charge (SAC) credit system. We recognize the n.eed to modernize the SAC system, and we appreciate your efferts to. collaborate with eur partners on a reasonable compromise. Th~ .current propesed changes allew for a seven-year period of redevelepme~~ befere existing SAC credits areJost, with 10 years allewed fer phased-:-in redevelopment plans and no. time limits en situatiens of extrao.rdinary circumstances as determined on a. case" by;.case baSis. In general we support th'ese tenns,although we still believe seven yearS is a narrow time frame for cities to thoughtfully and theroughly determine the best useef a redeyelopl;lient site. Weappreyiate thereco.gnitio.n efextenu<\ting circumstances anqthe potential need to extend thelifeofa SAC credit. We would like you and the Metro.po.litan Co.uncil to. co.nsider an additional rule to. yeur preposed changes thataddres.ses the cencerns ef many cIder c~ties. Large facilities and industrial sites existing prier to. the 1973 implementation of SAC that still,tise a . considerable amount of seWer capacity sho.uldno.t be held to. a seven or 10-year redevelopment requirement. These parcels of land, should they alter their primary uses, wo.uldbring dramatic change to. communities within the metropo.litan area. Redevelopment o.fthese areas.sho.uld be done with significant community inv()lvement and thorough deb~te; restrictions and timelinessuchas loss of SAC credits should not be a factor. .We reco.mmend that facilities using 30 million gallons per year ()TIDOre of sewer capacity be exempt from timelines fer redevelopment. AA-ADA-EEO Employer Responsive Services . Quality Facilities . Employee Pride Tn~yoU\aga.in fortliisopPQ@tiity t()reSpohdto)'o'lU;ptoposedchanges;..Pleasedo. not hesit.ateto contactmewith questio.ns. ~rtlceI3~e Director ofPublicW(jrks or ..Ri9hatdAgum~r'lY1~t~oJ5olitfmCouncifDistrictI3 SongLo..Fawcett~Metropolitan Council District .14 I Exhibit D I - Association of Metropolitan August 8, 2006 Municipalities Ms. Peggy Leppik, Chair Metropolitan Council Environment Services Committee 390 North Robert St Paul, MN 55101 Dear Chair Leppik: Per your request, the Association of Metropolitan Municipalities (AMM) would suggest for inclusion in a new SAC rule the following guidelines for changes in property use that, due to extenuating circumstances, may require a longer timeline for redevelopment. Our intent is to offer these as guidelines for consideration, rather than a set list of criteria, so as not to restrict the Metropolitan Council in its consideration of extended timelines of such projects on a case-by-case basis. By definition, a change in SAC units for any given site means a change in water usage, and often, a big change in land use. Many of these changes can be routine, but others can be dramatic. Redevelopment involving large sites or dramatic land use changes requires careful planning, citizen involvement and extensive financing. Many redevelopment sites require contamination remediation along with the demolition or retrofitting of buildings. These sites often take many years to redevelop and because the projected new uSe can -. often influence the surrounding neighborhood for a century, it should not be hurried. Moreover, redevelopment is often long on cost and short on financing, so potential loss of SAC credits can compound the challenge to redevelop the site. As a result, the Council should be allowed to consider extenuating circumstances, based on written criteria, to extend the timeline to use SAC credits beyond what is allowed under rule. The following criteria provide some examples and guidelines that the Council may wish to use in considering whether to extend timelines for determining SAC credits for a particular use. . Large sites, industrial facilities, multiple parcels . Uses with significant previous flow (30 million gallons per year or more) . Parcels with re-use zoning challenges - i.e. zoned industrial, high density residential, etc. . Parcels located in TIF Districts . Parcels in which the new use is using federallstate/local public fmancing 145 University Avenue West Saint Paul, Minnesota 55103-2044 Telephone: (651) 215-4000 Fax: (651) 281-1299 E-mail: amm@amm145.org . Parcels in which contamination cleanup is required . Significantly blighted parcels . A community's vacancy rate (consideration of real estate cycle) The AMM would support a formal process for any tirneline extensions, so that extensions for the use of SAC credits would be determined by the MCES Committee and Metropolitan Council. Thank you for your consideration. We appreciate the hard work of the MCES staff and committee on this important issue. ~y, --fil~ Louis F. J is Executive Director Cc: Members of the MCES Committee Jason Willett, MCES Staff 5, c, 3 EXHIBIT A Map Showing Location of the Shako pee Interceptor and Lift Station L 16 \ /.j '\ fY .I ......---_.-. '---- ,,\ \ff C. ,!-~""" Shakopee Interceptor Reconveyance , 1~ !.!IOD 3.01JDFeet I , 1 , I c:J RECONVEYANCE LIMITS I N I W~E I I --. , I '. S \ , I I '. I I , \ I ..' I j I ! '.,,"' ....,1>" ,..'- I ,_..,~., ......~ """'f,', :i" ,,' .--" ....,,, ., "t...." I .'" .. I ...l" ',- ..... I I I ."" I i .,,'11 3 I ..., , I 4TH AVEE ~ .....-... .- ''', / / / \ / ) / i :; \ I --i h'I{;J I . _.-..~~_ I 1 I - -_.. .- - 1 hit! ... I ( 1---.. -.. /~-'BROAD.^,D BLVO/ I, I "'~ ~ :; 2 !___._~'lTH AVE E- ~ \ ><: : ,;.. \ ~ 1 ~ roH tl , w c "'----... i ~ ~ I . V .' ~ ~