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HomeMy WebLinkAbout06/17/1969 Council Minutes185 Mr. Carley gave three formulas for assessment: 100% assessment for all interceptors; some assessed for the main in an area plus assessment for those abutting a lateral and the rest on general taxes; or with 30% in Federal grants, the balance assessed to area served (as above). He suggested placing some of the assessment on general taxes and putting the payment on a 30 year bond with the larger payments at the end of that time so that a larger population would keep the individual cost down. He suggested a low mill rate of perhaps 10 mills. The Village actually has to pay for the line first since no money comes from the taxpayers until they are hooked up. The estimated cost of the Jandric plant for a minimum size would be $150,000. Mr. Gotwald stated that the cost of Supplement No. 2 would be $1000, $700 for Lino Lakes and $300 for Centerville. They would pay their share when the Supplement is presented to them. Centerville would not have to pay immediately for the line to be run that far, but would later. Mr. Cardinal moved to authorize the Engineer to proceed with a cost estimate for different segments of the Village to be finished within three weeks and not to cost more than $100. Seconded by Mr. Jaworski. Carried. The Clerk will send a letter confirming this. Mr. Jaworski moved to adjourn at 9 :50 p.m. Seconded by Mr. Cardinal. Carried. Minutes approved at the meeting of June 23, 196 rk- Treasurer The special meeting of the Lino Lakes Village Council held on June 17, 1969 was called to order at 8 :12 p.m. by Mayor L'Allier with all Council members present. Also in attendance were five members of the Planning Board, Mr. Gotwald, Mr. Locher representatives from U. S. Lakes Development Company and many concerned landowners surrounding Reshanau Lake. Mr. L'Allier asked each of the Councilmen if they had received notification of this special meeting which was called to consider the franchise request of U.S. Lakes Development Company (hereafter called Company or Developer). All answered in the affirmative. Mr. L'Allier urged everyone present to be sure to register to vote before the fall elections. Mr. L'Allier gave background information on the development for the benefit of the audience. He stated that Company had purchased several hundred acres of land on Reshanau Lake and the first part of the year the Council had given preliminary ap- proval to a plat containing about 30 acres. They had also given approval for four model homes and one townhouse to be erected. Now the question of sewer and water installation must be decided so the developer can proceed with plans. Mayor L'Allier pointed out the three alternatives in sewer installation: 1) Private wells and septic tanks. This is not conceivable because of the pollution problem of the lakes and the low land problem. 2) The Village provides them with a municipal system. The nearest main where we could connect is located one mile 'Nest of 49 and County Road J. We are not in a position to run a main interceptor up to the development at a cost of approximately $1,366,000. (Some aid could come from the Federal Government for the main pipe and about $250,000 from NSSSD.) He felt the majority of the Council was in agreement in that they did not wish to burden the villagers who have large parcels of land with as assessment in this amount. 186 3) The Council could grant a franchise to the Company to install their own treatment plant. This would be a sewer plant similar to the one now operating in Forest Lake. The Council has studied this franchise for at least one month and the Engineer and Attorney have met and recommended changes. The three main changes are: a) The Village has the option to buy the sewer facilities at the market value on the date of purchase. This is to be the laterals only as they would not have need for the plant which may be obsolete by that date. b) The Company must have the rates charged their customers approved by the Council. c) Every contract, deed and abstract must state that the facilities are nrivate1-:- owned and when the Village buys the system the homeowner will be assessed for his share of the sewer system. On discussion of the revised franchise with the changes noted above, it was pointed out that only the benefiting property owners would have to pay and owners of large parcels of land would not be stuck with heavy assessments. Also the Company would have to guarantee that there would be no water pollution in any of our Lakes or the Rice Creek Chain. The franchise stated that before any construction is started the plan has to be approved by the Minnesota Pollution Control Agency. At this time the franchise would not be of any cost to the people of Lino Lakes only to the ones who purchase homes in the new development. Mr. L'Allier thought that the PCA would look unfavorably upon a plant being built on the Rice Creek Chain and that the Council is premature in acting on the franchise and the Company should first contact the PCA to see if they are in favor of such a plant. Mr. Gotwald stated that he had visited with a staff member of the PCA who is in charge of approving grant applications and this gentleman had indicated great doubts as to whether the PCA would approve of a plant on the Rice Creek Chain. Similar plants had been denied in Forest Lake and Hugo. Mr. Gotwald stated we may be spending a lot of time on something that might not occur if we do not ask the Company to get an indication of feeling from the PCA first. Mr. Nm. Busch from the Company objected to this saying just the reverse is true in that the PCA would want an indication from the Village on how they feel about the franchise. He said the PCA requires definitive plans from the Engineer. He stated that they have been dealing with the Village for about two months on this subject and had been led to believe the Council would approve the franchise with an open mind and suggested the Council be willing to consider the franchise knowing the Company cannot proceed without approval. Mr. Busch repeated again he felt they needed the Council approval first and the Community feeling before they would approach the PCA with definitive plans. Mr. L'Allier replied he thought the PCA would not refuse to give the Company approval just because they did not have the Council's approval. Mr. Busch again repeated himself and stated that engineering work gets involved and they could not submit formal plans without positive assurance from the Community and the Community is not in any jeapordy because if the PCA turns them down, then the franchise agreement is null and void. Mr. L'Allier thought the logical chain of events should be -- studied, PCA approval, further consideration by the Council. Mr. Gotwald felt the Company could obtain some indication of approval or disapproval from the PCA without a complete set of plans from the Company. Mr. Busch stated that Mr. Jensen had approached the PCA and was advised they issue no rulings except final decisions. He had been told to submit all plans and specifications. He felt he had been assured by the Council it recognized the necessity of a franchise and had not indicated in any way that they would move in another direction. 1 187 Mr. Gotwald stated that other builders have requested sewer disposal and have been told to get an indication from the State and this is a calculated risk. Mr. L'Allier told Mr. Busch he did not feel the Council had encouraged or dis- couraged the Company concerning the franchise and Mr. Busch replied they had made preliminary contact since Feb. or March and the Council had given no sign of disapproval. Mr. Jensen recalled that he had been in the office of a staff person for PCA some time ago and stated that the staff people discuss the scope of the develop- ment, specific area, type of development in general terms, sewer treatment, and the fact that this would be a temporary system and ultimately be connected with a community system. In this light he thought the PCA would act favorably. Mr. Gotwald explained the structure of the Pollution Control Agency: 1) It is a Board made up of private citizens. 2) The Board is advised by professional staff members who work full time on matters concerning pollution. 3) The staff makes recommendations to the Board who in turn make the final decisions. Mr. Jensen stated the Board has no control over private individual systems as the policing of this type is left up to the community. Mr. Locher stated the sewer is the main problem as the water is a self- contained unit. He again listed the three choices stated by Mayor L'Allier above. A franchise could be handled in three ways: 1) Installation of both sewer and water to accomodate both the Company and other areas. 2) Leave it in the development only and have a buy -out feature. The buy- out price would be the value on the date of purchase. If a disagreement arises over the price a board of appraisers would be picked by the Village and the Company. Money for the buy -out would have to be assessed to the landowners by special assessment or cash payment. The Village would have to issue bonds and costs would include the main trunk and laterals but not the treatment plant. 3) The developer could add on the charge of installation of sewer and water to the cost of each home as he sells them as is being done with the streets. One charge of this type may price the homes out of the sales market as there is stiff competition for mortgage money. These homes would still be subject to assessment in the future when trunk lines are brought in. Mr. Locher thought the whole situation was a matter of getting the horse before the cart, or the cart before the horse, etc. He felt the Company could get an indication of approval from the PCA over the general overall theory. Mr. L'Allier stated that Lino Lakes had gone on record in opposition to Forest Lake dumping into the Rice Creek Chain and it would not be right for Lino Lakes to dump in and disregard the communities downstream. He sympathizes with the developer in his not wanting to spend a large amount of money without some assurance from the Council but hoped they would try and get some indication from PCA as to either approval or disapproval of the treatment plant. Mr. L'Allier asked if there was anyone present from the Pollution Board. No answer. Mr. Rosengren asked Mr. Dielentheis for his projection as to how many homes would be built in the next year. He replied that prior to the interest rate raise last week, they had planned on completing 200 homes a year until completion. Mr. Rosengren asked if Village sewer came in the not- too - distant future, the Company could install private wells and septic tanks with the necessary connections to be hooked up to the municipal system. Mr. Dielentheis thought if sewer comes in 3 -5 years and 600 -1,000 homes have their own systems which are working good they will resist hook -up to a central system. If they are not working Iproperly no one will be able to sleep nights, including Mr. Rosengren. Mr. Rosengren only suggested private systems as it was a cheaper way for everyone at this point. Mr. Locher reminded the Council that the plumbing ordinance requires plumbing to be stubbed toward the nearest feasible community placement. Mr. Bohjanen felt the PCA would not give assurances other than being more or less against. He wondered how much assurance we could get towards a treatment plant according to how many homes could be built before pollution begins. He mentioned the sewer line from NSSSD to Centerville, and thought we should ask the PCA two questions: 1) How far would they go? and 2) How much of a plan would they have to have? Mr. Gotwald and Mr. Jensen have obtained opposite opinions and it is now up to the PCA to provide a written statement. The PCA is the controlling body and should give some answers. He thought the engineer and the fiscal agent should try to break down the cost of every type of sewer system. He had heard 6 -9 months ago that a municipal system would cost about $150 /acre. Mr. L'Allier asked if he meant we could put sewers in ourselves. Mr. Bohjanen replied, "I'm not indicating this at all." A gentleman from the audience asked Mr. L'Allier if the question of sewers would be put up to a vote of the people. Mr. L'Allier answered we are not con- sidering sewers at this time, only a request for a franchise, which is an agree- ment between the Council and the developer. The Village has the option to purchase the franchise in the Jandric development at which time bonds will be sold and the people living in the development will be assessed to pay for the bonds. Concerning sewers, the people must come to the Council and request sewers, right now we are not in a position to put in sewers but it will come eventually. Mr. Gotwald reiterated that this is one franchise and one developer; he will build it and his home buyers will pay for it. Anything that affects assessments requires a public hearing and everyone receives notice by mail of plans to put in a community sewer. However, this could be changed by the Metropolitan Sewer Bill; there is the possibility they could put in the main trunk line right through the Village and we could have nothing to say about it. Al Ross stated that he thought the Council was premature if they voted tonight and he definitely thought we should have some indication from the PCA as this development is completely surrounded by water. Mr. Locher explained the procedure if the Village were to put in sewers: Petitions would have to be signed by 35 percent of the homeowners affected and it would require a 3/5 or more vote by the Council. Hearings must be held where the public would have a chance to voice their opinions. In some cases the state could force certain areas to make improvements if the health of the community is in jeopardy. He emphasized the power of the PCA should not be overlooked- - if the wells are affected, etc., they can force the community to put in sewers. Ann Bohjanen questioned the PCA approving the system if it is temporary. Mr. Busch explained that temporary means "temporary treatment plant ", not temporary pipes; the pipes would be permanent. Mr. Bohjanen thought if the PCA would have some indication that we are making plans for a sewer system, they would be more favor- able. Mr. Gotwald stated we would have to have some projection as to when the Village will have a sewer system. Crystal Ahlmann praised the developer for upgrading the Village and asserted that the value of the surrounding property will go up. 1 1 i 1 S9 Harold Lehman retorted that nobody would want his property if it costs $60,000 to put in sewer on 40 acres. He asked what it would cost the homeowners for sewer. Mr. Locher said we have no way of knowing as it depends on the cost of the unit which covers the main pipe, labor, engineer, legal, bonds, interest, hookup to laterals and hookup to the home. There is a Green Acres Ordinance whereby those who make their living off the acreage could be deferred, but he knows of only one person in Anoka County who has qualified under this ordinance. He said there are a dozen methods of figuring assessments. One could be per acre plus front footage and hookup; another could be a connection charge laid to taxes. Mr. L'Allier repeated that under the franchise only the benefiting property owners would be assessed. Mr. Bohjanen stated that no one could count on deferrment under the Green Acres Ordinance and Mr. Locher stated that this is only a deferrment and ultimately it must be paid with interest piling up from the date of installa- tion. Loyola Thiltgen stated that the Village should put pressure on the PCA with publicity as a decision has to be reached. She also stated the Village should integrate the benefits of a Professional Planner and use the booklet put out last year, "Planning District 2 ". Glenn Rehbein inquired how the buy -back feature was set up. Mr. L'Allier replied it would be the market value at the time of purchase with no set amount of dollars. They would not purchase the plant only the laterals and the cost would be assessed back to the owners. Glenn Rehbein thought the water franchise could be added into the selling price of the home and the Company could turn over the water system to the Village for one dollar. Mr. Busch did not agree with this but stated in figuring the buy- back price if there was a disagreement on the fair value the price would be determined by three appraisers, one appointed by the Council, one by the Company, and one by these two. (Part 9, page 7 of the agreement). The appraisers would be disinterested individuals who would reach a fair value. Value fluctuations vary from 10 -20 per cent but not more than that, a fair value of the system will rise when money rises. Mr. Rehbein again mentioned the $1 but Mr. Busch insisted this was not feasible because a municipality can sell bonds but an individual company cannot, and for 300 houses he estimated it would cost about $250 - $350,000 to put in water. Bill Houle thought that if people could afford a $60,000 house they should have sewer and water in the original payment. He suggested the Mayor form a committee to study the issue and to meet with the PCA. Mr. L'Allier replied that the Council has studied the franchise for two months already and it is the Council's responsibility, but thanked Mr. Houle for his observations. Mr. Bohjanen wondered what sewer and water would add to the price per home on a $60,000 house if it actually would price it out of the market. Mr. Busch answered that it is unwise to add the sewer and water to the selling price of the home. Marketing people had advised them to keep the price as low as possible. Funds must be available from ordinary allocations and the cost of the whole unit cannot be added to the first house you sell. The company does not want any complications and intends to make it very clear to the buyers that the systems are not munici- pally owned and when they are sold to the Village they will be assessed for same. Mr. Busch stated the builder is not financially able to include the sewer in the purchase price. Norm Miller asked Mr. Locher if this agreement would be binding on future Councils. He answered yes, a franchise would be as it will be an ordinance. He men- tioned isolated instances where trouble may arise. Mr. Bohjanen pointed out one word in the minutes of May 15 which was not the same as the word in the water franchise agreement. Page 5, article 6. The minutes state the word 'shall' should be changed to the word 'may'. Mr. L'Allier thought this would be a disadvantage to the Council and Mr. Locher said itis an absolute directive. The other three councilmen agreed it should be left as 'shall' in the franchise, but no ruling was made on the matter. Mr. L'Allier stated the question facing us is two -fold: 1) We request the Company to contact PCA and sollicit an indication, preferably in writing, their feelings of the construction of a treatment plant according to the specifications and standards set forth by the PCA. or 2) The Council could proceed to act on the franchise this evening. Mr. Bohjanen moved to set July 28 for a date of reviewal of the franchise agreement presented by the U.S. Lake Development Company. By- this date the Company should contact the Pollution Control Agency and get an indication in writing of the PCA's feelings toward the construction of a treatment plant on the Rice Cteek Chain, either favorable or unfavorable and report back to the Council, perhaps through the Engineer. Seconded by Mr. Jaworski. Carried unanimously. Mr. L'Allier asked Mr. Busch if this was sufficient time. He answered yes, but still desired some indication from the Council which they could pass on to the PCA. Mr. L'Allier said they could not give any indication and stated that request= ing an indication from the PCA did not give any indication whether the Council would act favorably or unfavorably only that they would review the matter on July 28th. Mr. L'Allier instructed the Clerk to inform the Company by letter of the above decision. At this time Mr. Busch asked if the water franchise couldn't be considered entirely separate from the sewer franchise. Mr. L'Allier asked if he meant they would put water in at this time and sewer later. Mr. Busch answered no - -only the engineering part of it•could be done now and they would work on the sewer engineering at the same time to conserve time. Mr. L'Allier inquired about the estimated cost and Mr. Dielentheis answered they were not sure about the size yet. Mr. L'Allier stated they could still install a private water system even if the sewer franchise doesn't go through. Mr. Busch said yes to this and also that they wanted to in- stall pipes before the streets are finished. Mr. L'Allier asked the Council if they wished that we proceed to act upon the water franchise knowing we may or may not go thru with the Newer franchise. Mr. Gotwald makde it very clear that he does not look forward to this development putting in private wells and private spetic tanks. He indicated that the Village must get involved with the franchise. Mr. Rosengren said he was in favor of the water franchise and Mr. Gotwald said there are less problems with water froAm an engineering standpoint. Mr. Gotwald pointed out that approving the franchise does not bind them at this time as the plans have to be approved by the State Board of Health and by the Council. 191 Mr. Locher stated there are two ways to work the buy -back feature: 1) It can be billed now to the property purchasers and turned over to the Village for one dollar. 2) I can be built by the Comapny as private, not billed to buyer, at some time bought by the Village and assessed back to the buyers. Anne Bohjanen asked about the possibility of the Village putting in water now, bill the buyers and they will be paying for it. Mr. Gotwald stated that we would have to sell bonds and Mr. L'Allier said the interest rate on bonds is 6.71 per cent, the highest it has been in 25 years. Mrs. Bohjanen said yes, but at a later date it will cost much more to buy it. Mr. L'Allier answered it doesn't make that much dif- ference because all phases of money will rise at the same time. Mr. Bohjanen men- tioned in Blaine Vern Donney had donated his water system to the Village. Loyola Thiltgen thought private systems of Septic tanks would be brought to an early end because of the pollution. Glenn Rehbein stated water was not as expensive as sewer and the price of water could be added into the purchase price of the home and the system turned over to the Village for $1.00. Anne Bohjanen stated the developer would not have to put water lines all over the 700 acres but it could be built in stages. Mr. Gotwald added that the well and tanks would have to be put in right Mr. Busch stated the Company would be happy to withdraw the franchise if the Vil- lage could put in a municipal system, but he understood the Village could not bond for such an amount. He again stated that it was not possible for his company to finance asystem that is publicly owned and could not possibly contend with what some other company can do. He hoped the Council would grant the franchise and ex- pressed clearly the decision of the appraisers would be final assuming the arbitra- tors are fair and disinterested. It is their intent to express in every deed and conversation that the buyer will be assessed for water. Mr. Bohjanen felt this issue could be decided on July 28th. Mr. L'Allier questioned the cost of this system for the community to install. Mr. Jensen said the golf course would be a separate system. Mr. Gotwald figured it would take at least one month to come up with some type of cost, but they should have a request for a municipal system from the Company, to do it legally. Mr. Rosengren felt the biggest problem was the buy -back feature. He stated "Who's to say we would ever want to buy it back, . . . it could run forever by itself. . . and would not interfere with the municipal system for the rest of the Village." It is optional whether we ever buy it back or not. Mr. Jensen said there would be two or more water tanks. The one for the first ad- dition and the club house would not be elevated. There would be fire hydrants. Mr. Gotwald said an elevated storage tank would not be a temporary tank. Al Ross thought the area should be much larger for a village system. Mr. Gotwald said a system for 600 homes would not be self - supporting, as there would be additional costs such as maintenance and office work. Mr. Rosengren thought the system would be sized for their project and would service only their area, and could still be operated when a Village system is put in. Mr. Bohjanen mentioned the possibility oa another samller system. Mr. Gotwald thought we should not get involved until the Village itself is involved in a water system. Mr. Rosengren thought we should grant the franchise with no reason to buy it back but the buy -back feature could remain in the agreement for protection. Mr. Rosengren moved to grant a water franchise to U. S. Lakes Development Company. 9 Seconded by Mr. Cardinal. Discussion followed: The Mayor asked the Engineer and the Attorney if they had checked to see if the necessary changes had been made and if there were any further changes they could think of. Mr. Gotwald paid none he could think of and Mr. Locher noted the possibility of tearing up the streets again if the sewer is put in at a later date. Mr. Busch answered that no construction will begin until after the July meeting, and that they needed a franchise with some specifics so they could proceed with plans. After further prolonged discussion about the buy =back and a water franchise, Mr. Locher inquired -- are you saying then that this would be handled in two parts -- one would be for a water franchise and a second motion would cover the buy -out? Mr. L'Allier answered that this was correct. Mr. Gotwald said this agreement seems to be complete and Mr. Rosengren could still not see the need for a buy -out but Mr. Gotwald explained that other de- velopers will be moving in and they will need municipal sewer and water. Jandric must make some type of profit plus paying personal property taxes, income taxes, and interest. The Company must request that this become a municipal sewer. Cost estimates would take a long time and cost a lot of money. Mr. Bush stated that if the Council would grant a franchise tonigh, the Village still retains the right to put in a municipal system. If the Council would grant the franchise and then reevaluate the whole program and decide they want a muni- cipal system the Company would contribute their engineering services up to that point without cost. Mr. Busch would not state a cost for the system. Again Mr. Gotwald mentioned the request for municipal system should come fvom U.S. Lakes Development Company. Mr. Busch stated again that if the Council granted the franchise tonight, and then decided to go ahead with a municipal water system, at the time they come before the Council to have their plans okayed, they will hand over the plans to the Village and put in a formal request to the Village for a municipal water system. At this point either the Company or the Village could go ahead with t the plans. The agreement states on page three, paragraph two that the plans shall be approved by the Council or the franchise is dead. Mr. Gotwald said the plan should be workable and made big enough to start with. Mr. Rosengren moved to grant a water franchise to U. S. lakes Development Company. Seconded by Mr. Cardinal, Vote: All ayes, except Mr. Bohjanen who felt the matter could wait until July 28th. Motion carried. Mr. Jaworski moved to adjourn at 11:05 p.m., seconded by everyone. Carried. Minutes approved at the meeting of 9,,i. ,v) /96f Defy Clerk