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The second ordinance has been generated based on discussion from the January 9 City Council meeting. <br />In addition to the improvements that would be allowed in the previous option, this ordinance would <br />allow for existing businesses or homes that are currently not connected to the public sanitary and or water <br />system to connect and have those costs assessed against their property. The policy associated with this <br />ordinance, as drafted, would allow for the petitioning property owners to include the water and sewer <br />access charges in the assessment. <br />The question regarding the ability to recover this assessment if a property were to go into foreclosure has <br />been further reviewed by Ciry Attorney Peter Beck. It is his finding that the assessment would be treated <br />the same as other special assessments against the property and would need to be repaid by the new <br />owner. <br />Staff will be present at the Apri12, 2012, meeting to further detail the two options and answer any <br />questions you may have. <br />FINANCIAL IMPACT <br />There is no direct financial impact associated with the requested actions. Adoption of this ordinance will <br />allow for petitioners to come forward and request funding for approved repairs and/or connections. The <br />costs for the sewer connections would be drawn from the sewer fund and repaid to that fund as the <br />special assessment payments are received. Costs for water repairs would be paid by the Elk River <br />Municipal Utilities. The Elk River Municipal Utilities costs will be reimbursed by the city as special <br />assessment payments are received. <br />The first described ordinance, which only authorizes repairs to existing service lines, has a smaller <br />potential funding obligation associated with it. While it remains to be seen how many properties might <br />take advantage of the assessment option, staff is estimating five sewer petitions and five water petitions <br />may be submitted in a year. Staff estimates the repair cost, of an average petition, to be around $8,000. <br />This would have a total impact of $80,000 per year, $40,000 for the city and $40,000 for the Elk River <br />Municipal Utilities. <br />The second ordinance, which in addition to repairs would allow for new connection of sewer and water <br />services, has the potential for a higher obligation of payments. There are currently about 90 properties <br />within the city that have both sewer and water available but have not connected to them. There are also <br />about 105 properties that are connected to either sewer or water but not the other. Staff has estimated, if <br />all of the unconnected properties were to take advantage of this new program, with an average cost of <br />$11,000 per utility, including access charge, the city and the Elk River Municipal Utilities may be <br />requested to cover costs up to $3,135,000. Staff does not expect all of these connections to be made the <br />first year. More likely these connections would be spread out over five to ten years. A more realistic <br />estimate of financial obligation in the first year of the program would be $175,000 from the city and <br />$175,000 from the Elk River Municipal Utilities. After the first year the obligation would be lower as the <br />first special assessment repayments would help offset the costs of new petitions. <br />Both ordinances have been drafted to allow the city to deny any petitions received, if there is not <br />sufficient money in the associated funds to cover the costs. <br />P ~ ~E'8~`£ m B V <br />i ~~ <br />