8.f)1) Gammelgarden Connection to Uptown Sewer System . s�
Meeting Date: 12/21/2010
Agenda Item: ,�
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City Council Agenda Report
City of Scandia
14727 209th St. North
Scandia, MN 55073 (651) 433-2274
Action Requested: Receive a staff report concerning the Council's request that
Gammelgarden Museum be invoiced for a fee to connect to the city's
Uptown Sewer System, and give direction for next steps.
Deadline/ Timeline: N/A
Background: • Gammelgarden Museum was built and connected to the town/city
Uptown sewer system in 2003. At the time there was some
discussion about collecting a connection fee, but no action was
taken and no fee was paid. This issue came up again this past year
when another user was added to the system.
• There was and is no formula in the ordinance governing the
Uptown Sewer System to determine Gammelgarden's
proportionate share of system cost. Since the opportunity to
collect a connection fee was missed when construction approvals
were given, any payment now would need to be negotiated with
the museum.
• The attached memo was prepared to discuss how an equitable fee
could be determined. Depending upon the approach taken, a wide
range of possible fees can be calculated, from $1,520 to $9,041.
Recommendation: Direction is needed from the Council on whether to make a request for
payment, and for what amount. The Council might also consider
whether or not to offer a payment plan to the museum, depending
upon the amount requested.
Attachments/ • Memorandum dated December 14, 2010, with attachments
Materials provided:
Contact(s):
Prepared by: Anne Hurlburt, Administrator
(gammelgarden sewer connection fee)
Page 1 of 1
12/15/10
12/14/2010
Page 2 of 3
Ordinance No. 55 (adopted 4/16/96)provided that all costs would be recovered from the users of the
system,proportionate to their share of waste generated. The ordinance(which is in need of an update)
provides a formula for quarterly billings. 'The ordinance does not specify the connection fee for new
users. However, as a condition of hooking up to the system,the city may negotiate a connection fee.
The system is assumed to have a useful life of at least 20 years. In a December,2009 report, staff
identified issues and concerns about the condition and capacity of the system. After discussion with
the system users in July 2010,the Council decided to budget for an engineering study in 2011 to
evaluate the existing condition of the system,to develop a plan for maintenance to extend the life of
the system as far as possible, and to begin planning for future replacement. The city plans to bill 75%
of the cost of the study(estimated at$15,000)to the users, in addition to operating expenses, in 2011.
Calculation of Connection Fee
What is Gammelgarden's "proportional share"of the cost of the Uptown sewer system? What would
an equitable contribution be,based on the timing of the connection and payment, and the expected life
of the system?
One way to approach this would be to determine what would ha�e been paid by Gammelgarden if it
had been one of the initial users of the system. The allocation of the$60,000 cost among the users was
negotiated and established by ageement with the Town Board. (Capital expenditures since then ha�e
not been included in this analysis because the Town/City,not the users,has paid those costs.)
In 2005,the county health department calculated the estimated"design flow"for each user(see letter,
attached.) If Gammelgarden had been one of the initial users, and the$60,000 cost had been allocated
according to each user's share of that design flow,the museum's share of the construction would have
been$11,765. This is based on a design flow of 600 gallons per day(20%)of the 3,060 gallons per
day for all(non-public)users. (We do not have background information on how design flows were
calculated.)
The actual use of the system has not been consistent with the estimated design flows. We now have
the benefit of years of water meter readings. The December 2009 report included a summary of ineter
data from Apri12004 through November 2009. Using this information, staff estimated the average
gallons per day used by each connection. Gammelgarden accounted for only about 3%(about 65
gallons per day) of actual water use. If this data were used to allocate the initial$60,000 cost,the
museum's share would have been$1,978.
If a fair cost could be agreed upon, it should also be determined whether there should be an adjustment
based on the useful life of the system when the connection was made(the system had about 13 years
of its 20-year usefullife remaining) and whether an adjushnent for inflation(the difference between
2003 dollars and current dollars, about 18.22%based on the 10/2003 to 10/2010 CPI-U) should be
made. For example:
$11,165 X (13/20)_$7,647+ 18.22%_$9,041
or
$1,978 X (13/20)_$1,285+ 18.22%_$1,520
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