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LAKE ELMO CITY COUNCIL MINUTES DECEMBER 11, 2012 Page 3 of 4 Discussion was had to clarify the process of implementing these recommendations. It was suggested that there be a formal adoption at a future meeting, perhaps in January or February of 2013. There was a discussion regarding where the city was in comparison to other cities. It was stated that the base rate was perhaps low, but after sewer is factored in, it is comparable. Council Member Pearson noted that he was not in favor of the higher tier users subsidizing the artificially lower rates. Further minor discussion was had regarding system chlorination. Council Member Smith also inquired about the actual amount that was negotiated with 3M and what happened to that money. It was discussed that there is not very good documentation regarding the 3M agreements. It was pointed out that 3M’s intent was to deal with the specifically contaminated area and not aid in the development of the City system. 3M did provide land. C: KEATS AVENUE WATER ASSESSMENT City Administrator Zuleger provided overview of item. The primary question for the Council is “how should the residents of Keats Avenue be assessed for the trunk water main running in front of their property when the primary purpose is to improve the hydraulics of the water system as a whole?” City’s assessment policy prescribes $5,800 lateral benefit charge levied on all properties directly served by trunk water main. To date 21 out of 22 homes have indicated any interest in connecting to system. Additional benefits are: potential insurance reductions due to access to fire hydrants, however, this varies based on carrier; property value increase based on city-provided water (especially in salability). It was noted that the potential range of 5-8% value increase would practically pay for itself if accurate. The three main benefits to the system are 1) Relief of Head Pressure, 2) Improve Water Quality, and 3) Improve Hydraulic Circulation. City Engineer Griffin provided an overview of the water distribution system. Mr. Griffin also described the future issues that will arise if this loop is not built. Mr. Zuleger noted that here are additional neighborhoods along route that can eventually share the burden. Grants and settlements are also being looked at. Due to the fact that connection interest is so low, staff recommends that the City assess a Water Lateral Benefit Charge of 50% of the current approved fee= $2,900. Charge the remainder of the charge if the property owner connects. Mayor Johnston suggested that the second $2,900 was assessed if either the property connectd or was sold. There was a question of whether there would still be the $3,900 connection charge in addition to the assessment. The answer was yes. Council Member Smith expressed her concern for tying the second $2,900 to a sale because it would be demanded of the seller at the time of sale. Ms. Smith also expressed her position that she did not