1b. Revision of sanitary sewer and water hookup charges 1 16
C ITY OF ...•■•••••■■•••1
I 41
i
1 CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
I (612) 937 -1900 • FAX (612) 937 -5739
Acbon by City Administrator
jndorsed // P
•
MEMORANDUM i a
Re}ecte
1 TO: Don Ashworth, City Manager Dote Submtted to Commissiod
FROM: Charles Folch, City Engineer Date s�,hritted to Councit
II DATE: December 3, 1993
I SUBJ: Authorize Revision of Sanitary Sewer and Water Hook -Up Charges
PW011
Sections 19 -21 and 19 -46 of the City Code (see attached) regulating connection to the municipal
sanitary sewer and water systems require the collection of hook -up charges from properties not
1 previously assessed for a trunk utility project to offset construction and operation costs for the
trunk sanitary sewer and watermain system, lift stations, forcemains, wells, and water storage
facilities. These hook -up charges were first established by City Council in March of 1984 and
I were not adjusted or increased until 1991. I am confident that the original rates established at
of $600 per sewer unit and $650 per water unit were derived using some reasonable cost
rationale, however, these rates were not likely based on a comprehensive analysis of the total
1 system needs for the City.
I In 1991, the City commissioned the consulting engineering firm of Bonestroo, Rosene, Anderlik
& Associates to do a utility system study for the expanded Municipal Urban Service Area
(MUSA). These efforts were subsequently expanded into the preparation of comprehensive
I sanitary sewer and water policy plans for the entire city. In short, these policy plans identified
deficiencies in the existing utility infrastructure which need upgrading and also mapped out the
remaining infrastructure improvements (i.e. trunk water and sewer mains, lift stations, wells, and
I water storage facilities) needed to service the City in a fully developed condition. Total system
cost revenue and a capital improvement schedule were presented in these policy plans. These
comprehensive sanitary sewer and water policy plans were approved by the City Council in the
1 spring of 1993.
Based on current zoning for undeveloped property remaining in the City, the total number of
I remaining residential equivalent unit (REU) hook -up charges to be collected in the future was
estimated. The estimated total system costs for sanitary sewer and for water was then divided
by total anticipated REU's generated to determine trunk hook -up unit rates respectively. Based
1 on 1992 construction costs, these trunk rates were determined to be $970/REU for sanitary sewer
and $1,275/REU for water. In fact, these are the same per unit assessment charges which have
been established and implemented on recent projects such as Upper Bluff Creek Trunk Utility
1 Phases I and II and Johnson/Turner/Dolesji Trunk Utility Project.
1
Don Ashworth
December 3, 1993
1 Page 2
In terms of assessments for these trunk utility projects, the City Council's policy has been to
initially assess one unit charge for a large lot, nondeveloping, homesteaded parcel with the
remaining units to be collected as hook -up charges at the current hook -up rate when the property
is developed in the future. Therefore, it is imperative that these hook -up charges be revised
annually, based on the Construction Cost Index (CCI), in order to adequately recover the City's
capital investment and holding (bonded interest) costs during the deferment period for these
' properties. The $970/REU and $1,275/REU rates for sewer and water were established based on
the fully completed utility system needs and on the construction cost index for February of 1992.
The 1992 rates shall serve as the base datum for future annual rate adjustments.
1 The Engineering News Record National Construction Cost Index for December of this year is
approximately 8% higher than that of two years ago. This basically means that over the past two
1 years, the inflationary increase in material and labor costs associated with construction has
increased approximately 4% per year. Implementing the base unit charges of $970/REU for
sanitary sewer and $1,275/REU for water and the 8% construction cost increase for the past two
1 years, the 1995 hook -up charges should be revised to $1,050/REU for sewer and $1,375/REU for
water. It is important that these hook -up charges be adjusted annually based on the CCI so that
the deferred trunk utility assessments associated with recently completed and future capital utility
1 projects will recover most of the City's annual interest bonding (holding) costs.
These revised rates shall apply to all sanitary sewer districts in the City with the exception of the
1 Lake Ann District. Properties located within the Lake Ann Sewer District were assessed in 1991
for a portion of the Lake Ann Intersceptor with the understanding that future subtrunk systems
would need to be constructed as land develops. This year the City completed one of the subtrunk
1 sewer system (Johnson/Dolesji/Tumer Project No. 92 -5) with an assessment rate of $659/REU.
Therefore it is proposed that the trunk sewer hook -up charge for the Lake Ann District be set at
$659/REU with annual adjustments based on the CCI.
It is therefore recommended that effective January 1, 1994, the trunk hook-up charges be adjusted
�' P g adjusted
' to $1,050 for sanitary sewer and $1,375 for water for all sewer districts within the City of
Chanhassen with the exception that the Lake Ann District sanitary sewer hook -up charge be set
at $660.00.
jms
1 Attachments: 1. Sewer Hook -Up Ordinance Section 19 -46.
2. Water Hook -Up Ordinance Section 19 -21.
3. Page 79 from the Comprehensive Water Supply Plan.
I 4.
5. Page 41 of the Comprehensive Sanitary Sewer Plan.
Resolution.
c: Jean Meuwissen, Treasurer
Tom Chaffee, Data Processing Coordinator
Dave Hempel, Assistant City Engineer
1
1
WATER, SEWERS AND SEWAGE DISPOSAL § 19-46
(b) The applicant shall pay a connection fee equal to the proportionate cost of construc-
tion of the sanitary sewer. The cost is to be determined by the city using the same formula as
was used for assessments previously levied against other property for the main and shall
include equivalency charges as required to arrive at the present day worth of the sewer 111 service. This equivalency charge shall be equal to simple interest calculated from the project
assessment date to the connection date at the rate of interest at which the bonds sold to
finance the project were issued minus a depreciation factor of three (3) percent per year. If no
assessment has been levied, the cost shall be determined by the city council, and in determin-
ing said cost the council shall take into consideration the front footage, shape and area of the
benefitted lot or tract of land. '
(c) Upon written request of the owner of the benefitted premises showing good cause, the
city council may provide that the connection charge be specially assessed against the benefit-
ted property payable in semi - annual installments for a term of eight (8) years at an interest
rate equal to that at which the project bonds were sold. Unless deferred payment is so
authorized, all connection charges shall be payable in full prior to the issuance of a building
permit for new construction on said property.
(Ord. No. 5, § 5, 3- 11-85)
Sec. 19-46. Hook -up charges.
(a) In addition to the connection charges, a hook -up charge, for all lots not so charged as a
part of public improvement assessment, shall be imposed against each lot or tract of land, or
portion thereof, served by the sewer system for usage of sewer treatment facilities, lift
stations, forcemains, and trunk sewers. The amount of this charge shall be established by
resolution of the city council and may periodically be revised to reflect construction cost
changes evidenced by the Engineering News - Record Construction Cost Index.
(b) The number of unit hook -up charges to be levied against each benefitted lot or tract of
land, or portion thereof, shall be established by using the following criteria:
(1) Single - family houses, townhouses, condominiums and duplex units shall each com- '
prise one (1) unit;
(2) Apartments shall each comprise eighty (80) percent of a unit; '
(3) Mobile homes shall each comprise one hundred (100) percent of a unit;
(4) Other buildings and structures shall be assigned one (1) unit for each two hundred ,
seventy four (274) gallons of water usage which it is estimated they will discharge,
and commercial and industrial building units shall be assigned a minimum of one (1)
unit.
(c) The number of hook -up charges imposed against the premises may thereafter be
revised by resolution of the city council to more accurately establish the usage of the system,
and the council in making said redetermination may take into account the estimated strength
and quality of sewage to be discharged into the sanitary sewer system.
1071 _
1
§ 19 -46 CHANHASSEN CITY CODE
.1
(d) Upon written request of the owner of the benefitted premises showing good cause, the
' city council may provide that the hook -up charge be specially assessed against the benefitted
property payable in semi - annual installments for such period and on such terms as the council
may determine. Unless deferred payment is so authorized, all hook -up charges shall be
' payable in full prior to the issuance of a building permit for new construction on the property.
(Ord. No. 5, § 6, 3- 11-85)
Sec. 19-47. Service availability charges.
In addition to, and not in lieu of, all other charges imposed from time to time by the city
' for building permits, sewer connection permits, sewer usage rates, and sewer hook -up charges,
the then prevailing Metropolitan Waste Control Commission service availability charge
(SAC) shall be paid to the city at the time a building permit for new construction is issued, or
' at the time a sewer connection permit is issued for the connection of an existing building to
the city sanitary sewer system. The amount of the service availability charge shall be
established by the Metropolitan Waste Control Commission.
1 (Ord. No. 5, § 7.02, 3- 11 -85)
' Sec. 19-48. Persons authorized to make connections, etc.; bond.
(a) Any work which in any way affects the city's sewer lines or connections thereto shall
be performed only under the direct supervision of a master plumber licensed by the state.
(b) In the event that the permitted work includes any direct contact with the city's sewer
system or the alteration of a city street, the plumber shall file with the city a corporate surety
bond approved by the city in the sum of two thousand dollars ($2,000.00) conditioned that he
will perform competently all work with due care and skill, and in accordance with state and
city laws, ordinances, rules and regulations. The bond shall provide that the principal and
' surety shall indemnify and save harmless the city and the owner of the premises for which the
work is to be performed against all damages, costs, expenses, and claims of every nature
arising out of violation of state and city laws, ordinances, rules and regulations, lack of skill,
or negligence on the part of the principal in connection with the performance of any work
hereunder or the furnishing of materials therefore. Said bond shall remain in force for a
period of one (1) year, except that on such expiration it shall remain in force as to all penalties,
claims and demands that may have arisen thereunder prior to such expiration.
(Ord. No. 5, § 2.01, 3- 11-85)
1 Sec. 19-49. Sewer specifications.
' (a) Sanitary sewer mains, manholes and service installation shall be as specified by the
most recent edition of the state plumbing code.
(b) A separate and independent building sewer shall be provided for every building
except where a building stands at the rear of another on 'an interior lot and no building sewer
can be constructed to the rear building through an adjoining street, alley, courtyard, or
1 ;1;,072
•
1
_ �
WATER, SEWERS AND SEWAGE DISPOSAL § 19 -22
written request of the owner of the benefitted property showing good cause, the city council
may provide that the connection charge be specially assessed as a lien against the benefitted
property payable in semi- annual installments for a term of eight (8) years at an interest rate
equal to that at which the project bonds were sold. Unless deferred payment is so authorized, '
all connection charges shall be payable in full prior to the issuance of a building permit for
new construction of said benefitted property.
(Ord. No. 6, § 7, 3- 11-85) 1
Sec. 19-21. Hook-up charges.
•
(a) In addition to the connection charges set forth herein, a hook -up charge, unless
assessed as a part of public improvement project, shall be levied against each lot or tract of
land, or portion thereof served by the system, for usage of the wells, pumping stations, water ,
storage facilities, and equipment of the city water system. The amount of this charge shall be
set by the city council and may periodically be revised to reflect construction cost changes
evidenced by the Engineering News - Record Construction Cost Index. 1
(b) The number of unit hook -up charges to be levied against each benefitted lot or tract of
land, portion thereof, shall be established using the following criteria: '
(1) Single - family houses, townhouses, condominiums and duplex units shall each com-
prise one (1) unit;
(2) Apartments shall each comprise eighty (80) percent of a unit;
(3) Mobile homes shall each comprise one hundred (100) percent of a unit;
(4) Other buildings and structures shall be assigned one unit for each two hundred
seventy four (274) gallons of water usage and sewage flow which it is estimated they
will discharge, and commercial and industrial building units shall be assigned a
minimum of one (1) unit.
(c) The number of unit hook -up charges to be levied against the premises may thereafter '
be revised by resolution of the city council to more accurately establish the use, and the
council in making said redetermination may take into account the actual quantity of water
consumed on said premises. 1
(d) Upon written request of the owner of the benefitted premises showing good cause, the
city council may provide that the hook -up charge be specially assessed against the benefitted
property payable in semi - annual installments for such period and on such terms as the council
may determine. Unless deferred payment is so authorized, all hook -up charges shall be
payable in full prior to the issuance of a building permit for new construction on the property.
(Ord. No. 6, § 8.01, 3- 11 -85)
Sec. 19 -22. Persons authorized to make connections, etc.; bond. 1
r (a) Any work which in any way affects the city's water lines or connections thereto shall
be performed only under the direct supervision p by P y pervision of a master lumber licensed b the state.
1065
IN TES H A EGES
A s part of this report, the City's Comprehensive Land Use Plan was reviewed to
determine the estimated amount of new hookups that are projected at ultimate
development. The total amount of hookups was determined by assigning a minimum
number of Residential Equivalent Units (REU's) to each type of land use based on the
projected flow rates used in the overall system design. With the number of total estimated
future hookups (REUs) and the total estimated future water system costs (Table 16), the
cost per hookup was determined to be $1,275 per unit (Table 19). The Unit Rate of $1,275
can be adjusted annually based on
Y a February, 1992 ENR Index of 4884.
It is recommended that the resulting minimum area charge (REUs x Unit Rate) be
r levied when improvements are installed in the service area (Table 20). If additional units
above the minimum per acre shown in Table 18 are platted, additional charges should be
�+ levied at the time of development. Similarly, additional charges should hould be levied at the time
of development of commercial/industrial property if additional units (based on SAC units)
are developed beyond the minimum of 4 per acre shown in Table 18.
Table 18 on the following page presents a summary of the estimated REUs for the
I l water system. The table includes estimated future chargeable units based on land use types
for remaining developable land. The third column of the table lists the minimum number
rI
of REU's per acre for different land types.
rI
_ - I
1
1 39303bW - 79 -
-