09.f1 Wyldewood Acres Private Septic SystemPage 1 of 2
ECKBERG LAMMERS
MEMORANDUM
To: City of Scandia; Kyle Morell, City Administrator
From: Eric Larson, Scandia City AƩorney; ChrisƟna Benson, Assistant City AƩorney
Date: October 3, 2023
Re: Wyldewood Acres Development. Private Sanitary SepƟc System.
INTRODUCTION
Wyldewood Acres is a residenƟal development created in 2004-05 that includes a homeowners’
associaƟon. Wyldewood Acres contains 28 residenƟal lots totaling approximately 49.67 acres
over an approximate 67.19 acre development in total. The Wyldewood Acres development
contains three outlots.
Outlot A contains a community on-site sepƟc system. Outlots B and C contain the Wyldewood
Acres community well system. All outlots are owned by the Wyldewood Acres Homeowner’s
AssociaƟon, a condominium associaƟon formed to own and operate the common areas and the
outlots.
Wyldewood Acres Homeowner’s AssociaƟon (“AssociaƟon”) is formed pursuant to Minesota
Statutes Chapter 317A and SecƟons 515B.1-101 et seq., respecƟvely known as the Minnesota
Non-profit CorporaƟon Act and Minnesota Common Interest Ownership Act.
The AssociaƟon is faced with substanƟal future expenses for the community on-site sepƟc
system due to the system’s age and in order to meet state regulatory compliance. The
AssociaƟon has requested the City of Scandia to consider taking over the community on-site
sepƟc system and tax the AssociaƟon and/or AssociaƟon residents for all associated costs.
SHORT ANSWER
429 Assessment. Scandia could take ownership of the Wyldewood sepƟc system and impose
special assessments per Minn. Stat. Ch. 429. The assessment would cover acquisiƟon,
development, construcƟon, reconstrucƟon, extension, and maintenance.
Special Taxing District. A special taxing district requires approval by an AdministraƟve Law
Judge (ALJ) per the procedures and laws set forth in Minn. Stat. Ch. 275, Taxes; Levy, Extension,
and Minn. Stat. §§ 442A.01 to 442A.29, Sanitary Districts.
Special Services District. Scandia cannot create a Special Services District for the Wyldewood
Acres sepƟc system. ResidenƟal real estate may not be assessed in a special services district.
Page 2 of 2
ANALYSIS
Taking over ownership and responsibility of the Wyldewood Acres community on-site sepƟc
system is possible but a significant challenge.
Special Taxing District. The creaƟon of a Special Taxing District is involved and could be a
lengthy process since its creaƟon is based on the ALJ review and approval process and, by
extension, the ALJ’s calendar. A benefit of a Special Taxing District is that the City would be able
to ensure reimbursement for most, if not all, of its resource expenditures through the creaƟon
of a Special Taxing District, but there is no guarantee that an ALJ would approve a Special Taxing
District.
429 Assessment. A 429 Assessment is a standard means for ciƟes to fund public improvements,
including sanitary systems. CiƟes are restricted on what can be assessed under Minn. Stat. Ch.
429, which could impair Scandia’s ability to recapture all its expenses now and in the future.
City Resources
AdministraƟve and Governance Oversight) and System Expenses. In addiƟon to repair,
replacement, and maintenance expenses, with City ownership of property comes operaƟonal expenses,
such as insurance, administraƟve oversight, professional fees and expenses, and liability arising out of
ownership. In addiƟon, there are governance expenses for either the 429 Assessment process or the
Special Taxing District. As noted above, these addiƟonal resource expenditures may be more easily
covered by the creaƟon of a Special Taxing District, but the creaƟon of a Special Taxing District will take
longer than a tradiƟonal 429 Assessment process and take longer to create as well.
City Owner LiabiliƟes. Owners of real or personal property are legally responsible for
the property in all respects, including the sepƟc system discharge and environmental impacts
and operaƟons. The City would need to secure both property and liability insurance for the
Wyldewood Acres sanitary system. In the end, the ulƟmate liability always rests with the
property owner and when that owner is a public enƟty, an enƟty that exists in perpetuity with
the ability to levy, then the city is customarily the primary source that others look to.
Strategies. Scandia may need to invesƟgate further as to how to legally bind the
AssociaƟon and its residents to cover the above-noted expenses and liabiliƟes as well as any
others, such as restricƟve covenants recorded against each residenƟal lot and/or agreement
with the AssociaƟon to ensure cost recovery as well as appropriate insurance and
indemnificaƟon documents.
AssociaƟon. Pursuing Wyldewood Acres’ proposal further would involve significant
professional expenses, including legal. An Agreement with the AssociaƟon to cover the City’s
expenses and an iniƟal deposit may be a consideraƟon.