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6.a) Continenza Variance Meeting Date: 12/13/11 Agenda Item: �p Q,� City Council Agenda Report City of Scandia 14727 209th St. North Scandia, MN 55073 (651) 433-2274 Action Requested: Receive and discuss information relating to the application of Jeff Balmer, Lands End Development, on behalf of Jim and Sandi Continenza, for a variance from the minimum lot size to allow construction of a single family dwelling at 13350 188th Street North. Deadline/ Timeline: 60-day review period (extended to 120 days) expires February 1 l, 2012. Background: • The Continenzas have requested a variance to allow construction of a new home on Big Marine Lake. They have requested a new connection to the Anderson/Erickson 201 Sewer System to serve the proposed home. During review of their application,the City determined that the Continenzas need two new sewer connections. The existing septic system that serves a home on an adjacent parcel is located on the lots where the new home is proposed, and would need to be removed in order to construct the new home. Therefore both homes would need new sewer service in order to construct the new home. • Washington County manages the 201 Sewer System. T'heir comments on the application recommended that no new connections be allow to the Anderson/Erickson system, because the system does not have the capacity to serve additional users. • Based on the County's comments,the applicants explored options for creating an on-site septic system to serve the new home. It appears an on-site sewage disposal system is feasible,but would require a variance from the design standards. T'he need for a system to serve the existing home on the adjacent lot was not included in this discussion. � Section 8. A. of Ordinance No. 108,which governs the operation of the sewage treatment system, states that"new connections to the community sewage treatment system sha11 be prohibited unless sufficient capacity is available in all downstream facilities." • The Council postponed action on the variance application to allow staff to gather information regarding the capacity of the Anderson- Erickson sewage system, and the potential cost of a feasibility study to expand the system capacity. Page 1 of 3 12/08/11 • Staff findings are summarized below, and in an attachment to this memo. Staff Review and Findings: • Staff undertook an extensive search of records on the construction and expansion of the sewer system and reviewed property records to estimate the potential demand for future connections. Documents and reports (including record plans and a 2002 study of the 201 sewer system)that were not in the city's files were obtained from both the City Engineer and City Attorney. We also consulted with former Town Board Chair Dennis Seefeldt and Pete Ganzel of the county health department to confirm some of the history and data. • The Anderson/Erickson System was designed to provide service for approximately 31 homes. There are currently 30 homes connected to the system. • A 2002 Wastewater System Management Plan(prepared by Bonestroo, now Stantec) included a feasibility study for expanding the Anderson Erickson treatment system. The system had a total of 26 connections at the time. The report estimated that there would be a future need to serve 45 dwellings in total, and that treatment capacity for 20 additional dwellings would be needed. The cost for system expansion was estimated at $170,000, requiring a per unit connection fee of$10,000. The Town Board at the time concluded that expansion was not feasible. As no�ed in the report, not all potential users would connect immediately, so there was a risk that the connection fees would not provide enough cash flow to pay the debt service and a surcharge on existing users might be needed to pay for expansion. • The 2002 study indicated that there was "extra"treatment capacity in the system because so many of the homes (all but 3 of 20) originally served were seasonal. Now, at least half are probably year-round residences and more will likely be converted or rebuilt in the future. New Feasibility Study: • Staff contacted consultants to estimate the cost of completing a feasibility study to update the 2002 Wastewater System Management Plan, in order to determine current options and related costs for expanding the Anderson/Erickson system. Two estimates will be available on December 13. • Staff's impression after talking to the consultants about a possible feasibility study is that the options for expanding treatment capacity of the system have probably not changed much since the 2002 report. Costs could be updated,but if the project was not feasible based on estimated costs in 2002, it most likely will not be feasible today. We estimate that there are only 15 (not 20) Page 2 of 3 12/08/11 potential connections to share the cost of treatment expansion. Some of those potential users have currently compliant on-site systems and/or have other options for sewer service. The connection fee would need to be much more than the current fee ($4,250); based on the 2002 report, a$10,000 fee would. • A new or updated study could determine whether or not the remaining life on the system is limited and creates the need to start planning and setting aside funds for a replacement or upgrade that may not be far off, and what funding options there might be. Recommendations: A new study is unlikely to find that an expansion of the treatment capacity of the Anderson/Erickson 201 System is currently feasible. At some time in the future,the treatment system may need to be replaced and it might be feasible to add capacity at that time. The city should probably undertake a study at some point, but it is not urgent to do so at this time. Based on the additional review and the ordinance requirements, it is staf�s recommendation that no new connections to the Anderson Erickson collector system be permitted to serve the existing home on Lot 8 or the proposed home on Lots 9 and 10. Ordinance No. 108 provides the authority for the city to deny the connection because of inadequate treatment capacity. Staff recommend approval of the variance to request development of a new home on lots 9 and 10 with an on-site septic system, and approval of the variance to design standards needed to construct the on-site system. Staff prepared a draft set of findings (attached)that should be included in the resolution to support a decision not to allow the sewer connection, if that is the decision of the Council. Pending direction from the Council at the December 13 meeting, a resolution will be prepared for the action at the December 20 meeting. Attachments/ • Supplemental Information: Sewer System Issues, Findings and Materials provided: Recommendation • Wastewater System Management Plan, May 2002 Contact(s): Jeff Balmer, Lands End Development(218 692-5263) Jim& Sandi Continenza(612 867-8899) Prepared by: Anne Hurlburt,Administrator Dave Hebert, City Attorney Sherri Buss, City Planner (continenza and sewer issue) Page 3 of 3 12/08/11 CONTINENZA VARIANCE APPLICATION SUPPLEMENTAL INFORMATION: SEWER SYSTEM ISSUES,FINDINGS AND RECOMMENDATION DECEMBER 8,2011 Backgound In connection with their application for a variance to construct a residential dwelling, James V. Continenza and Sandra K. Continenza have requested the right to connect the proposed new dwelling to an existing 201 Wastewater Treatment System that serves a number of properties on Norell Avenue and 188�' Street in the City of Scandia. • The property identified in the application is legally described as Lots 9 and 10, Anderson's Big Lake 2°d Addition. • The total combined area of the two lots is .98 acres. • The applicants have explored the feasibility of constructing an on-site septic system on the property, and discussions with Washington County indicate that construction of an on-site system may be feasible with a variance. At the time of the application, the applicants indicated that Lots 9 and 10 were owned by James V. and Sandra K. Continenza, and that Lot 8 was owned by Italia B. Continenza. The City Attorney has reviewed the deeds and ownership history of the three lots, and has found the following: • Prior to November 25, 1998, Lots 8, 9 and 10, Anderson's Big Lake 2°d Addition, were held by Italia and Eugene Continenza. • Lot 8 has a presently existing dwelling located on it and is served by a septic system located on Lot 9. This system would need to be removed in order to construct the new home on Lots 9 and 10. (The location of the septic system that serves Lot 8 was not included on the survey or other documents provided with the application.) • Lot 8 was conveyed by Italia Continenza to James V. Continenza and Sandra K. Continenza by deed dated October 6, 2000. Lot 9 was conveyed by Italia B. Continenza to James V. Continenza by deed dated August 3, 1999. Lot 10 was conveyed by Eugene Continenza and Italia Continenza to James V. Continenza by deed dated November 25, 1998. Based on review of the application and supplemental findings the applicant would require new sewer service for the existin�home on Lot 8 in addition to the sewer service that would be needed for the new home on lots 9 and 10, in order to construct the new home. 1 Existing Anderson/Erickson 201 Svstem In the 1980's, Washington County and New Scandia Township utilized a program commonly known as the "201" program to construct individual and cluster wastewater treatment systems to correct identified defective septic systems. The system pertinent to this application is the Anderson/Erickson System, which became operational in 1987. New Scandia Township entered into a contract with Washington County to provide the basic operation and maintenance of the system. Twenty residential properties were connected to the system in 1987, having a total of 14.6 Equivalent Residential Units. Sixteen units were deemed to be of seasonal or part time use at that time. • The Town's engineers determined that the system as designed could reasonably be expected to provide service for about 31 homes. • There are currently 30 homes connected to the system. • A number of residential sites on Norell Avenue and 188�' Street adjacent to the sewer lines as originally constructed have not connected to the system and are served by private on-site systems. Such properties could reasonably expect to connect to the system in the event of the failure of their systems. • A number of the seasonal dwellings located on the system as originally constructed have been converted to year-round residences. Washington Countv the operator of the Anderson/Erickson svstem has indicated that, at most, one additional connection to the existing Anderson/Erickson 201 SYstem could be permitted at this time. Section 8 A of the City's Ordinance No 108 which �overns the operation of the sewa�e treatment system states that "new connections to the communi sewage treatment svstem shali be prohibited unless sufficient c�acity is available in a11 downstream facilities." Potential Anderson/Erickson 201 Svstem Expansion In 2001 the Town undertook to pave Norell Avenue and 188�' Street as a part of an overall road surfacing project and policy of the Town. At that time, it was determined that there were tax increment financing funds available to expand the 201 System. The Town undertook negotiations with a land owner to purchase additional drain field as a part of the system expansion, but, ultimately, was not successful in acquiring the additional land and did not expand the system. Nevertheless, the Town utilized the ta�c increment financing dollars to install additional sewer lines and connections to serve additional properties on 188�' Street and on a private roadway intersecting with 188th Street, ultimately intending to serve approximately 45 residential 2 properties. However, as indicated, the Town did not acquire the necessary drain field and treatment facilities to service the additional connections. Financial Analvsis of the Potential Svstem Expansion A memo dated September 18, 2001 prepared by the Town's engineers stated that the capacity af the existing drain field was 6,200 gallons per day generated from 31 households. A capacity of 9,000 gallons per day would be needed to serve 45 households. The memorandum identifiect three options for expanding the capacity of the system: Option 1: A mound soil treatment system for 14 connections requiring 4.5 acres of land at an estimated cost of$136,000.00. Option 2: A single pass sand filter to treat effluent from 45 homes, requiring 1.5 acres of additional land and costing about$250,000.00. Option 3: A recirculating gravel filter on existing site at a cost of$130,000.00. In June of 2001, the Town entered into negotiations for the purchase of some additional lan� adjacent to the existing drain field but was unable to reach an agreement for the purchase and, on October 16, 2001, directed that a letter be sent to the property owner terminating negotiations. A subsequent report entitled "Wastewater System Management Plan" prepared by the City engineers dated May 2002 identified costs to expand the system of approximately $210,800.00 exclusive of land acquisition and financing costs. • The report suggested financing methods including assessing the expansion costs against new users to the system and/or a combination of assessing a portion of the costs against the new users and charging a portion of the debt service in the user charge system and/or use a surcharge for a11 of the users benefited by the system. The Town Board took no further action after the 2002 report related to expanding the system. Summarv and Findings of Fact Based on the review of the application and the results of reseazch related to the Anderson/Erickson 201 System,the following summarizes the findings fact related to the request for connection of the Continenza properties to the Anderson/Erickson system: 1. The Anderson/Erickson 201 Sewer System is presently near to or at full capacity. 2. Section 8. A. of the City's Ordinance No. 108, which governs the operation of the sewage treatment system, states that "new connections to the community sewage treatment system shall be prohibited unless sufficient capacity is available in all downstream facilities." 3 3. There are a number of residential properties with existing structures and available service stubs which have not connected to the system and which have the potential for failing on-site systems. A service stub is available for Lot 8, but not for Lots 9 or 10. 4. The City determined in 2001 and 2002 that expansion of the system was not fmancialiy feasible based on the potential costs to the relatively few number of users/ potential users of the system, and the unknown timing of potential new connections to the system. 5. The estimated costs of expansion in 2002 would be significantly higher in today's dollars. 6. The applicants would require new sewer service to serve two dwellings in order to cor�struct the proposed home on Lots 9 and 10. Service would be required to replace the existing service for the home on Lot 8, which would be removed to a11ow new construction on Lots 9 and 10, and new service for the proposed new dwelling on Lots 9 and 10. 7. Discussions with Washington County indicate that construction of a new on-site system o:� Lots 9 and 10 is feasible with a variance. Recommendation Based on the findings, City staff recommends that the variance application of James �%. Continenza and Sandra K. Continenza be approved, but that the request to connect to the Anderson/Erickson 201 wastewater system should be denied. The applicants should be granted a variance from design standards to construct a new on-site septic system(s) to serve the existing home on Lot 8 and the proposed new home on Lots 9 and 10. (Continenza Findings and Recom for 12 13 11) 4