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4. Staff Report-Wyldewood Acres Sewer System Request Staff Report Date of Meeting: October 3, 2023 For: Honorable Mayor and Council From: Kyle Morell, City Administrator Subject: Wyldewood Acres HOA Sewer System Request Background: Wyldewood Acres is a 28-unit development constructed in 2003 between Scandia Trail Road and 205th St N. along Odell Ave N. The development was constructed with private water and sewer systems. The Homeowners Association (HOA) has drafted the attached letter for Council. As their letter states, their sewer system is not compliant with the new MPCA sewer system regulations. This is the same set of regulation changes that require the City to upgrade the Bliss System. Current Proposal: The HOA would like the Council to consider one of two options: 1) create a subordinate tax district that encompasses the entire development (which will open the door to possible grant funding), or 2) take ownership of our wastewater treatment facility with the financial responsibility falling on the association members. Discussion: At this time, more research is needed to determine whether a subordinate tax district can be established for the purpose of sewer system improvements. The state does allow a variety of special service districts, but they are all limited in how and what they can be applied for. The Director of Public Works does not favor taking over another sewer system within the city. Recommendation: Tabled discussion until the Regular Council meeting in October or the Work Session in November. This will give staff and the City Attorney time to review state stature and report back on the City’s options. Attachments: Wyldewood Acres Homeowners Association Letter dated 09 18 23 City Council of Scandia September 18, 2023 Dear City Council Members, Thank you for your continual work and efforts for our Scandia community. As board members of Wyldewood Acres homeowner association, Paul Hoppe, Linda Mickley, and Aaron Soule, would like to meet with you for a special working session to discuss sewer management solutions for our self-managed system. Over the past two years, our board members have met with the City Administrator, Kyle Morell, and then before Kyle, with his predecessor, regarding new MPCA regulations and our wastewater treatment facility permit. The Wyldewood Acres homeowner association contracts with Natural Systems Utilities (NSU) for the management and maintenance of our septic system. The MPCA informed the association of new wastewater nitrogen regulations and that our current system does not meet those regulations (which were not in place when the system was built in the early 2000s). The MPCA also informed the association our wastewater permit had expired. We have since renewed our permit and are on the road to determining options to upgrade the system to MPCA guidelines and plan for the facility’s future. However, because the association owns the system, we are limited to private grants and state loan programs, thereby missing out on the opportunity of federal, state, and county grant funding programs. The board would like to meet with the City Council to discuss the possible implementation of one of two options: 1) create a subordinate tax district that encompasses the entire development (which will open the door to possible grant funding), or 2) take ownership of our wastewater treatment facility with the financial responsibility falling on the association members. These options will allow the City to ensure the system is updated according to the MPCA permit. It is in good running order into perpetuity and provides access to grant funding and the expertise to run such a facility. If the City assumes ownership of the facility and establishes a special taxing district encompassing the Wyldewood Acres development to cover all financial operating costs, there would be no adverse financial impact on the residents of Scandia. The board has already approached the residence of the development on the conceptional idea of creating a special taxing district to assume ownership, directing our board to explore the option with the City. The association has looked into changing over to a county permit. However, our system is too large based on the county calculations. Over the past year, the association has taken steps to prepare for future projects and needs. Constant flow monitoring was installed on the system in August of 2023, which allows for reading constant flow data and will aid in planning upgrades and future facility needs. The system was re-jetted in July 2023 for maintenance purposes. The association has begun assessments to set aside funds for future needs. Thank you for considering the options outlined in this letter and for the opportunity to attend a working session with the council. Best regards, Wyldewood Homeowner Association Board