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H-1. Ordinance 627 Amendment to City Code Chapter 4 Concerning FeesAL 1 Did 0]:L•A11Ie CITY OF C HANHASSE N Chanhassen is a Community for Life - Providing forToday and Planning forTomorrow TO: Mayor and City Council FROM: Greg Sticha, Finance Director DATE: December 11, 2017 SUBJ: Adoption of Ordinance, Chapter 4, Chanhassen City Code, Fees PROPOSED MOTION: "The City Council adopts the attached ordinance amending Chapter 4 of the Chanhassen City Code revising the fees for 2018." Approval requires a simple majority vote of the City Council. BACKGROUND City fees are designed to cover the cost of providing a specific service. Issue: Surface Water Management Fees The City's Surface Water Management Plan was first adopted in February of 1994. Based upon recommendations in that plan the City established surface water connection fees as a means of financing citywide improvements recommended in the plan's implementation section. The initial fee was based upon the cost of the recommended pipes and ponds in the 1994 plan. The fees were apportioned according to acreage and intensity of land use and intended to be a more equitable distribution of the cost associated with storm water runoff: This did not consider long- term maintenance of the facilities or increased regulatory requirements. 24 years after the 1994 plan was adopted the City is entering its 3'd generation plan. In the past 24 years the National Pollution Discharge Elimination System Municipal Separate Storm Sewer System (NPDES MS4) permit was issued and revised. This permit allows the City to operate its stonnsewer system. Our local Watershed Districts have also implemented Rules and Standards the City must meet. This has resulted in increased stone water and surface water management requirements. The city has begun to look at the significant life cycle costs of maintaining our existing infrastructure as well as the cost of repairing damage caused by runoff in the past. Chanhassen PH 952.227.1100 • wwwA.Chanhassen.mn.us • FX 952.227.1110 7700 MARKET BOULEVARD • PO BOX 147 • CHANHASSEN • MINNESOTA 55317 Chapter 4 Code Amendment December 11, 2017 Page 2 of 6 has been replacing storm sewer infrastructure with every road reconstruction project. This has ranged in cost from $50,000 to over $400,000 per project. The amount of infrastructure has increased substantially over what the city had in 1994 and this amount continues to grow with each year new development. For example, it is estimated that if all ponds were cleaned out this year, the cost would be $1.4 million for the excavation alone. These costs will continue to increase. Other costs not considered included the City's pollution reduction requirements for the 8 lakes and creeks that do not meet State water quality standards. For instance, meeting the reduction requirement for Bluff Creek could cost the City approximately $5.8 million. hi 2018, Ehlers & Associates, the city's financial advisors, recommends a one percent increase to the surface water development fees. Amend Section 4-30 (c) 3. Surface water development fees: Development Type Per Acre Fee Parks/Open Space $4390 4,640 Single -Family Residential $&980 8,160 Medium Density Residential $9,-690 9,790 Townhouse/Apartment Complex/High Complex/HighDensity Residential $4434914,660 Industrial $20,930 21,160 Commercial $30;600 30,910 Fees are based on the developable land. Undeveloped areas such as wetlands and buffers placed into an outlet, public parks, and public right-of-way are exempt from these fees. Issue: Sewer and Water Fees A lateral connection charge replaces a missed assessment. When the city installs a pipe next to a property, some owners choose not to connect. In some instances, the city may not have assessed the property owner for their portion of the pipe. When those properties eventually connect, the lateral connection charge approximately covers the cost of the omitted assessment. These charges are only levied in rare instances. Trunk hook-up charges, on the other hand, are for core utility infrastructure such as wells, lift stations, and trunk main oversizing. Every new lot in the city that hooks up to the utility system pays a trunk hook-up charge. Hook-up fees paid at the time of final residential subdivision approval remain the same for sewer at $691.00/unit and increase for water from $2,147.00 to $2,233.00/unit. The remainder of the sewer and water hook-up fee is collected with the building permit at the rate in effect at that time. The total sanitary hook-up fee remains the same at $2,302.00 and the total water hook-up fee is increasing from $7,157.00 to $7,443.00. Parcels within the Lake Ann Sewer District will also be subject to the Lake Ann Trunk sewer fees in addition to the sewer trunk hook-up fees. The Lake Ann Interceptor hook-up fee remains at $1,971.00 and the sub -trunk fee remains at Chapter 4 Code Amendment December 11, 2017 Page 3 of 6 $2,068.00. Commercial, industrial and institutional developments pay the total hook-up fee at the time of building permit. Trunk hook-up fees are based on the number of sanitary access charge (SAC) units assigned by Metropolitan Council for office or industrial/commercial buildings. Lateral connection charges are charges for utility infrastructure which has been constructed by the city but were not assessed to or paid for a property. Sewer lateral connection charges remain the same at $7,710.00 and water lateral connection charges increase from $8,833.00 to $9,186.00. The Met Council SAC fee for 2018 remains the same as 2017 at $2,485.00. Amend Section 4-30 (c) 5. Sewer and water fees. Residential development: Shall pay a portion of the sewer and water hook-up fees (area trunk fees) at the time of final subdivision approval: $691.00/unit (sewer) and $2,147 2,233.00/unit (water). The remainder of the sewer and water hook-up fees shall be collected with the building permit at the rate in effect at that time. Parcels previously assessed trunk hook-up fees are exempt. Residential trunk hook-up fees are based per unit. Sanitary 2015 2016 2017 Proposed 2018 Water Hook-up $6,523 $6,882 $7,157 $7,443 Sewer Hook-up $2,257 $2,302 $2,302 $2,302 Water Connection $8,050 $8,493 $8,833 $9,186 Sewer Connection $7,559 $7,710 $7,710 $7,710 Lake Ann Interceptor $1,932 $1,971 $1,971 $1,971 Sub -trunk 1 $2,027 1 $2,068 1 $2,068 1 $2,068 The Met Council SAC fee for 2018 remains the same as 2017 at $2,485.00. Amend Section 4-30 (c) 5. Sewer and water fees. Residential development: Shall pay a portion of the sewer and water hook-up fees (area trunk fees) at the time of final subdivision approval: $691.00/unit (sewer) and $2,147 2,233.00/unit (water). The remainder of the sewer and water hook-up fees shall be collected with the building permit at the rate in effect at that time. Parcels previously assessed trunk hook-up fees are exempt. Residential trunk hook-up fees are based per unit. Sanitary $1,611.00/unit, or $2,302.00/unit if a portion of the sewer hook-up fee was not paid sewer at the time of final subdivision approval—(Lake Ann Interceptor - $1,971.00/unit and subtrunk $2,068.00/unit)* Water $54, W 5,210.00/unit, or$', �; 7,443.00 if a portion of the water hook-up fee was not paid at the time of final subdivision approval SAC As established by the Metropolitan Council and $75.00 city SAC surcharge -Parcels within the lake Ann Sewer District will be subject to the Lake Am Trunk sewer fees in addition to the sewer trunk hook-up fees. Commercial, industrial and institutional development: Chapter 4 Code Amendment December 11, 2017 Page 4 of 6 Sewer and water trunk hook-up fees (area trunk fees). Fee is paid at the time of building permit. Parcels previously assessed trunk hook-up fees are exempt. Trunk hook-up fees are based on the number of sanitary access charge (SAC) units assigned by Metropolitan Council for office or industrial/commercial buildings. Sanitary sewer $2,302.00/unit-(Lake Ann Interceptor - $1,971.00/unit and subtrunk $2,068.00/unit)* Water $7,437 7,443.00/unit SAC As established by the Metropolitan Council and $75.00 city SAC surcharge -Parcels within the Lake Am Sewer District will be subject to the Lake Ann Trunk sewer fees in addition to the sewer trunk hook-up fees. All development: Lateral connection charges: If the lot or tract of land, or portion thereof, to be served by a lateral connection that has not been assessed for the cost of construction, then the applicant shall pay the following lateral connection: Sewer lateral connection charge $7,710.00 Water lateral connection charge $8;833 9,186.00 Issue: Water and Sewage Rates For 2018, the Ehlers and Associates analysis recommended an increase to the water base fee. In addition, City Council requested an increase to tiers 3 through 5 to help offset the need for a larger increase in the base fee. The utility rate analysis also recommended an increase to the sewer base fee and a 5% increase to the per 1,000 gallon usage fee. This change is due to a significant increase in the treatment charge from Metropolitan Council Environmental Services for 2018. Listed below is the 2015, 2016, 2017 and proposed 2018 water consumption rate structure along with the sewer rate structure: Water 2015 2016 2017 2018 Fixed Charge (minimum per quarter) 7.98 8.43 8.88 12.99 0 - 6,000 Gallons 1.10 1.16 1.22 1.22 6,001 - 24,000 Gallons 2.20 2.32 2.45 2.45 24,001 - 48,000 Gallons 2.75 2.90 3.06 3.21 48,001 - 99,000 Gallons 3.19 3.37 3.56 3.74 99,001+ Gallons (Irrigation and Residential Only) 4.06 4.28 4.52 4.75 Multi -Family 2.20 2.32 2.45 2.45 Bulk sales to contractors, landscapers; etc. at City fill stations or other designated locations 5.52 5.82 6.14 6.45 Chapter 4 Code Amendment December 11, 2017 Page 5 of 6 Sewer 2015 2016 2017 2018 Minimum Charge (includes up to 6,000 2 Agricultural Not Applicable 3 gallons) 22.11 22.89 23.85 30.00 Residential - amounts over 6,000 gallons (based on winter quarter usage) 4.30 4.45 4.64 4.88 Commerical - amounts over 6,000 gallons (based on actual quarterly 4.30 4.45 4.64 4.88 usage) Amend Section 4-45. Water and sewage rates. Utility rates are established for each 1,000 gallons of usage: Water: Fixed Charge (minimum water charge per quarter) 0 to 6,000 gallons per quarter 6,001 to 24,000 gallons per quarter 24,001 to 48,000 gallons per quarter 48,001 to 99,000 gallons per quarter 99,001+ gallons per quarter (Irrigation and Residential Only) Multi -family properties - uniform water rate Bulk sales to contractors, landscapers, etc. at City fill stations or other designated locations Sewage: Residential based on winter quarter usage Commercial based on actual quarterly usage Minimum sewage charge per quarter (for amounts up to 6,000 gallons per quarter) Issue: Surface Water Management Fees (Utility Factor) $5812.99 per quarter $1.22 per 1,000 gallons $2.45 per 1,000 gallons $3.06 3.21 per 1,000 gallons $336 3.74 per 1,000 gallons $4.33 4.75 per 1,000 gallons $2.45 per 1,000 gallons $644 6.45 per 1,000 gallons $4.64 4.88 per 1,000 gallons $4A4 4.88 per 1,000 gallons $2383 30.00 per quarter The utility factor for each land use is not changing. The rates are increasing five percent for 2018. The rates for tax parcels classified 1, 2 or 3 shall increase from $10.68 to $11.22. The rates for tax parcels classified 4 through 8 shall increase from $20.84 to $21.88. Amend Section 4-50. Surface water management fees: Classification Land Use Utility Factor 1 Single-family and Rural residential Not Applicable 2 Agricultural Not Applicable 3 Undeveloped Not Applicable 4 Medium density residential 2.22 Chapter 4 Code Amendment December 11, 2017 Page 6 of 6 5 High density residential, Industrial, Office, Institutions (churches, schools, government buildings, hospitals) 3.30 6 Business/Commercial 4.23 7 Parks, cemeteries, golf courses, arboretum 0.46 8 Parking lots as a principal use 6.14 The surface water management fee for each tax parcel classified 1, 2 and 3 shall be $10.6811.22 per quarter. The surface water management fee for each tax parcel classified 4 through 8 shall be calculated for each quarter as follows: $20.84 21.88 multiplied by the utility factor multiplied by the acreage of the parcel. Staff recommends that City Council adopt the attached ordinance amending Chapter 4 of the Chanhassen City Code revising the fees for 2018. ATTACHMENTS 1. Ordinance Amending Chapter 4, Chanhassen City Code, Fees. 2. PowerPoint presentation of changes in utility rates. \\cfs5\cfs5\s1ared_data\plamcity code\2017\2017-05 chapter 4 fees\cc memo fees.doe CITY OF CHANHASSEN CARVER AND HENNEPIN COUNTIES, MINNESOTA ORDINANCE NO. 627 AN ORDINANCE AMENDING CHAPTER 4 CHANHASSEN CITY CODE, LICENSE, PERMIT AND ADMINISTRATIVE FEES THE CITY COUNCIL OF THE CITY OF CHANHASSEN, MINNESOTA ORDAINS: Section 1. Section 4-30 (c) 3 of the City Code, City of Chanhassen, Minnesota, is hereby amended to read as follows: Surface water development fees: Development Type Per Acre Fee Parks/Open Space $4,640 Single Family Residential $8,160 Medium Density Residential $9,790 Townhouse/Apartment Complex/High Complex/HighDensity Residential $14,660 Industrial $21,160 Commercial $30,910 Fees are based on the developable land. Undeveloped areas such as wetlands and buffers placed into an outlot, public parks, and public right-of-way are exempt from these fees. Section 2. Section 4-30 (c) 5 of the City Code, City of Chanhassen, Minnesota, is hereby amended to read as follows: Sewer and water fees. Residential development: Shall pay a portion of the sewer and water hook-up fees (area trunk fees) at the time of final subdivision approval: $691.00/unit (sewer) and $2,233.00/unit (water). The remainder of the sewer and water hook-up fees shall be collected with the building permit at the rate in effect at that time. Parcels previously assessed trunk hook-up fees are exempt. Residential trunk hook-up fees are based per unit. Sanitary $1,611.00/unit, or $2,302.00/unit if a portion of the sewer hook-up fee was not paid Sewer at the time of final subdivision approval --(Lake Ann Interceptor - $1,971.00/unit SAC and subtrunk $2,068.00/unit)* Water $5,210.00/unit, or $7,443.00 if a portion of the water hook-up fee was not paid at the time of final subdivision approval SAC As established by the Metropolitan Council and $75.00 city SAC surcharge *Parcels within the Lake Ann Sewer District will be subject to the Lake Ann Trunk sewer fees in addition to the sewer trunk hook-up fees. Commercial, industrial and institutional development: Sewer and water trunk hook-up fees (area trunk fees). Fee is paid at the time of building permit. Parcels previously assessed trunk hook-up fees are exempt. Trunk hook-up fees are based on the number of sanitary access charge (SAC) units assigned by Metropolitan Council for office or industrial/commercial buildings. Sanitary Sewer $2,302.00/unit—(Lake Ann Interceptor - $1,971.00/unit and subtrunk $2,068.00/unit)* Water $7,443.00/unit SAC As established by the Metropolitan Council and $75.00 city SAC surcharge *Parcels within the Lake Ann Sewer District will be subject to the Lake Ann Trunk sewer fees in addition to the sewer trunk hook-up fees. All development: Lateral connection charges: If the lot or tract of land, or portion thereof, to be served by a lateral connection that has not been assessed for the cost of construction, then the applicant shall pay the following lateral connection: Sewer lateral connection charge $7,710.00 Water lateral connection charge $9,186.00 Section 3. Section 4-45 of the City Code, City of Chanhassen, Minnesota, is hereby amended to read as follows: Utility rates are established for each 1,000 gallons of usage: Water: Fixed Charge (minimum water charge per quarter) $12.99 per quarter 0 to 6,000 gallons per quarter $1.22 per 1,000 gallons 6,001 to 24,000 gallons per quarter $2.45 per 1,000 gallons 24,001 to 48,000 gallons per quarter $3.21 per 1,000 gallons 48,001 to 99,000 gallons per quarter $3.74 per 1,000 gallons 99,001+ gallons per quarter (Irrigation and Residential Only) $4.75 per 1,000 gallons Multi -family properties – uniform water rate $2.45 per 1,000 gallons Bulk sales to contractors, landscapers, etc. at City fill stations or other designated locations $6.45 per 1,000 gallons 2 Sewage: Residential based on winter quarter usage Commercial based on actual quarterly usage Minimum sewage charge per quarter (for amounts up to 6,000 gallons per quarter) $4.88 per 1,000 gallons $4.88 per 1,000 gallons $30.00 per quarter Section 4. Section 4-50 of the City Code, City of Chanhassen, Minnesota, is hereby amended to read as follows: Surface water management fees. Classification Land Use Utility Factor 1 Single-family and Rural residential Not Applicable 2 Agricultural Not Applicable 3 Undeveloped Not Applicable 4 Medium density residential 2.22 5 High density residential, Industrial, Office, Institutions (churches, schools, government hospitals) 3.30 6 -buildings, Business/Commercial 4.23 7 Parks, cemeteries, golf courses, arboretum 0.46 8 -Parking lots as a principal use 6.14 The surface water management fee for each tax parcel classified 1, 2 and 3 shall be $11.22 per quarter. The surface water management fee for each tax parcel classified 4 through 8 shall be calculated for each quarter as follows: $21.88 multiplied by the utility factor multiplied by the acreage of the parcel. Section 5. This ordinance shall be effective January 1, 2018 after its passage and publication. 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