Committee Minutes

Minutes/Service/Safety Standby Committee
Wednesday, December 17, 2003 - 4:30 p.m.

Members present: Kreun, Kerian, Gershman.

Also present were: Christensen, Glassheim. Al Grasser, Cindy Voigt, Dennis Potter, Todd Feland, Mel Carsen.

1. Sanitary sewer service areas for Adams property.
Chairman Kreun stated there is broader issue for discussion, have lot of property on wet side of the dike in the city limits, and lot of property between city limits and permanent dike and need to work on policy issue of whether continue with development on wet side of the dike or take another look at it - have three issues: 1) annex and provide service on wet side of the dike; 2) what to do with annexed land on the wet side of the permanent dike system and how and what to do with land density without services. That 1) is the key issue and if we decide to do that, then 2) and 3) answered - first concentrate on 1) and that Mr. Grasser and Mr. Potter have given us background information to help make that decision, and also information from Mr. Carsen.

Christensen reported present.

Mr. Grasser reviewed info in packets along with maps focusing on annexation and land density. Chairman Kreun stated certain lots having septic systems, and those legal descriptions have some wording about dike alignment. Mr. Potter stated they did that and would have to go back to check minutes to find out if that information is on the plats. Mr. Grasser stated they would only be able to address that on areas platted after 1997/98. It was noted that what is north of Adams Drive should have that wording on either the abstract or title of the conditions because they are on the wet side of the dike already, replatted after the flood and probably after 2000. Chairman Kreun asked if they would find out if that has taken place.

Mr. Grasser reviewed map 2014 showing annexation by the annexation agreement that is in place and city limits would encompass the entire area outlined, and presuming not go south of 62nd in those areas - there are a lot of expensive homes out there. Kreun asked who wanted the 2014 annexation area; and it was noted that was combination of push by Mr. Bushfield to annex and conversations between Planning Department and Commission and the city council, and agreement was that it would be annexed in 2014. Kreun stated he would like to know thought process in 1994, 95 and 96 when this was coming in and what trying to accomplish, and one of the questions is if we want to continue the course set in 1996 - Mr. Potter stated it is in a resolution adopted by the city council on September 9, 1996. which would anticipate annexation of all areas platted at that time. Mr. Grasser stated that Mr. Adams wanted to start developing some of this area and they had this proposed annexation and Mr. Bushfield wanted to annex this area to the river so have a complete annexation - and the current residents at that time were objecting to the annexation, didn’t want to come into the city and left out and as a negotiation or compromise, the City said they would annex on date certain, annexation of 2014, and areas closer into the city were annexed immediately. Mr. Carsen agreed with that and said that residents liked the tax structure the way it is now - relatively low.

Mr. Grasser reviewed additional maps in the packet - that he thinks the problem is the fact they have this pre-protection alignment annexation that they need to deal with. Christensen stated they could deal with that by de-annexing - Mr. Grasser stated we are providing them garbage pickup, etc., snow plowing.

Mr. Grasser reviewed the water service area map, this is the agreement they struck with GF Traill Rural Water to help balance both parties infrastructure needs, that the City was going to commit to supplying the water basically north of 62nd Ave. and Rural Water was going to cover the areas south of 62nd (some north of 62nd but not lot of density) and we have the ability to provide water to meet whatever density - we don't have any pipes in there now but are planning to put project in there, and thing holding back is the interim dike alignment as not knowing where that is going to sit. Kerian asked what servicing on the wet side, Mr. Grasser stated none of it and areas hooked into rural water now but we have bought those properties out of Rural Water service area many years back and have paid for them, they are providing the service but when run water line in there we will pick them up - that thoughts were on interim is that run trunk main down Adams Dr. and have done a study and would hook into the existing rural water line and without disturbing or imposing any additional costs, can simply switch over to provide city water (as soon as pipes available - but won't have fire protection based on existing pipes and if want fire protection which we don't need to provide until 2014 and upsize pipes at that time. (fire protection from Thompson).

Chairman Kreun stated one of the reasons this was designed this way was that Rural Water did not anticipate a great deal of growth, they do not have the pumping capacity if area fills in and to higher degree of density to provide services. Mr. Grasser stated the City could provide even if not annexed - but could physically if chose to de-annex, could still physically get the water out there but couldn't special assess.

Kerian asked if everything on the wet side of the dike have their own septic tanks - Mr. Grasser stated anything that is current; and that they do have a problem as there are certain lots that are not big enough for septic systems - he stated he believes you need 2.5 acre lots to have a decent septic system and not have water problems - they made an exception for one acre lots and back yards are going into the river or into the coulee and not cause buildup in the high water table as would on the flat land and think can get by with one acre lots but as filling in on the flat wouldn't be a supporter of that.

Chairman Kreun stated the ones that are the problem are already in the city limits and if get close to the proposed dike alignment those lots are not big enough (not one acre lots) and have approx. 12-14 lots that are not developed but platted and in the city limits and that's where this problem comes in as they are not big to put in septic system. Mr. Potter said if we stay on the track of not providing sanitary sewer in area of Adams Drive, Desiree and those are zoned for multi-family and would have to go in and change that density and get it down to something that could support septics - could do that by zoning and face question of a takings.

Chairman Kreun stated these are the problems they are facing now - these lots are in the city limits, platted and cannot have sewer. Mr. Grasser stated he has made provisions that we can poke a pipe underneath the dike alignment and can get sewer to those lots. Kreun stated as a policy we are saying we do not provide all those services on the wet side of the dike - logistically we can give everything out here water, sewer, curb and gutter, streets, can do any of those things but want to develop a policy to determine whether we want to do that - all can be accomplished but trying to bring up all of the conditions; but whether regular sanitary sewer type system with lift stations or grinder system.
Mr. Grasser stated he doesn't want to have alternatives or options and if the in city limits need to have the ability to get these services, costs, and owners pay those costs. - there is difference, ability to provide something as opposed to providing it; and doesn't see anything that we can't address and by decisions start to funnel alternatives that are available. Christensen said question is whether city council should have a policy of annexation of land on the wet side of the dike or not, what are benefits to the City by doing that and what are the responsibilities that the City has if we annex this area and provide services on the wet side of the dike, and that if we annex and people want to have protection on the wet side of the dike. Grasser stated there is high ground on the wet side and this is fairly high ground and not in the flood plain now but in the new flood plain.

Christensen stated that these people want to build a private dike and want the City to assume responsibility. and if the City doesn't assume responsibility, they don't get done. Grasser stated there are different options and concerns but degree of how wet you are is a different factor in how we would handle the infrastructure. Christensen stated the issue is what responsibility does this City have for the citizens that are on the wet side of the dike when we annex it. Kreun stated we can provide sewer, water, streets, storm gutters, temporary dike or not, and can do those things or do none of those of those things - do we want to do any of them or all of them and that has to be decided and if decide to annex that property, how do we do it - build a little dike or not, put in regular sewer system or grinder system, ditches, curb and gutter, and on sheet showing decision impact with starting point and can add or detract from that, what are pros, costs of development and how flexible do we want to be, physical constraints, income sources and if staff or council want to add to this list they think important, focus down and have additional meetings on this - and would like to hear from Mr. Carsen and Mr. Potter what our 2025 plan is and 2050 plan is and how this plays into as well.

Mr. Potter stated that going outside of the dike alignment doesn't make a lot of sense because should be inside and protect citizens, but if ever to make an exception this would be the logical area to do it because they were already out there, that we have existing agreements granted, that the capability exists but do we want to do it - what happens inside and saying to developers who are out that we are not going to accept 2 1/2 acre lots or 1 1/2 acre lots that deal with septic and can't build on it until we are ready to run our city's water and sewer service. The City issues building permits within the 2.5 mile limit of the city.

Christensen asked what are consequences if we were to impose moratorium saying we are not going to be able to issue building permits - legal issue. Grasser stated if going to address it, should address on the platting side. Christensen stated we are trying to square the city off, and have plenty of land to square it off and have infrastructure in place and from policy standpoint, why would you continue to grow to the southeast by making an exception to the dike rather than trying to square this off so it makes it easier for future service providers to have a box. Kreun stated from a policy issue you would try to encourage all our growth to take place where have infrastructure.

Glassheim and Gershman reported present.

Grasser stated he was in favor of concentration but concentrate more of that into very few property owners who are able to develop and does impact land prices, Christensen stated the way to counter that is when have services in place, you annex and forces people to start doing something with their land because have taxes to pay; that we can force an annexation that goes to an annexation committee and that there is a check list for annexation. Kreun stated the City should take the initiative to annex area and provide services and that would be where the development would go. Kerian stated if City clear in policies, when go to vote could use that for guidance.

Mr. Feland stated that Bismarck went to a 1 year moratorium because they were having more building permits outside the city than within because the City of Bismarck sells water to water district and people were outside the city and get city water - it was noted that the other issue driving that was in Burleigh County was had large lots and how get city utilities through there; and Mr. Potter stated he would see outcome of that. Kreun stated this would fall under our policy issue if develop for the whole city.

Grasser stated they have difficult time defining corridors for utilities in the future because cut yourself off from the ability to grow and probably not an issue they would have to face but it's something leave a legacy for Mr. Potter stated critical where Columbia coming down and leaves little residential string beyond intersection of Columbia and Merrifield and starting to move east and west along Merrifield and get more resistance from people coming in when start asking for big R/W widths but have to do that to protect the road corridor and leaving room for easements - finding people becoming upset when on a plat and take as an easement on bare dirt and in 3-4 years someone comes in and wants to build a house and in another 5 years City comes to widen road and property owners says he didn't know about that, he and Mr. Grasser have been talking about taking the whole thing as R/W and very clear where edge of what the city is and not as many easements lapping off - never eliminate them.

Grasser stated they have probably heard from various rural property owners what the annexations that are in place now with flood protection specials come with it, now costs money. Kreun stated with property within our dike alignment system that is not annexed to the city is getting benefit of the dike system without paying for it as well - however, it was noted when they are annexed they will receive their share. Grasser stated not to allow those types of developments to occur, either annex them now or put moratorium out there or keep in mind what's happening. Kreun stated he was asked Mr. Potter to find out what is happening in Bismarck and give us more information for the next meeting.

An explanation was made to Gershman and Glassheim that moratorium on building permits within our 2 mile jurisdiction or within the flood protection alignment or develop a plan that whatever we allow to happen there is consistent with that plan - that if a property owner with 2 1/2 acres gets annexed to the city, will cost $5,000 in flood specials for the city, and assess for sewer, water, etc. and they cannot afford it.

Kerian asked if not do a moratorium, what put in the plan - Grasser stated could require city-size lots but then have to get the sewer out there now.

Glassheim asked if we could annex an area and make provision that they not pay on land until it is divided into lots and sold; Christensen stated treat same as tapping fees; but Grasser stated once a project comes in, if in the city limits have to create a special assessment district - outside the city limits can create either a future assessment district or a tapping fee area - but doesn't think can start a tapping fee in the city limit when annexed.

Christensen stated when we levy special assessments in the community for dike, we levied special assessments against all the property that was annexed to the city at that time; so when someone else comes in there is an amendment or new special assessment district and levy on them for the balance of their share of the dike. Kreun stated they could delay start of the payment. Grasser stated you've been talked to by various rural property owners that are suffering under the fact they are paying special assessments because of annexation and if start taking somebody in the future and not bringing the specials on them immediately, they will come back at you and doesn't think that is an option that would be viable.

Mel Carsen, city assessor, stated the first assessment was on a certain number of properties what was in the city at that time and when we annex additional property, we don't go back and recalculate the assessments - Grasser disagreed, that when they got this assessment, they got Phase I and Phase II. Mr. Carsen stated that is a question that the city auditor would answer. Kreun stated the original assessment stays the same and the only thing it does by adding new property is that the second assessment becomes less because you pick up that difference - Carsen stated that was his understanding - The committee asked for clarification. Assessments for dike by newly annexed property if paid off would be used for maintenance.

Grasser stated they haven't had discussion on mechanism that you would use to accomplish that - whether collect on building permit as tapping or assessment levied with the annexation or how they were going to handle that.

Kreun stated on Decision Inputs, he wrote income sources but might fit in with cost of development and would like Mr. Carsen to go over what he has included. Mr. Carsen stated he had two pages in the report that was distributed, and that he divided the area into three separate areas and anticipated how many homes and average cost on those homes, inflation rate, development time, and in Area A take 15 years to develop; Area B 10-year development, there is 1 home on Desiree and 4 on Adams Drive; and Area C all developed by 2014 - 75% developed now. He stated he figures a straight line development, a 3% inflation rate every year, and in Area B there are 35 up-scale homes with an average value of $300,000 each on 2004 dollars, start point, and next year worth $309,000; 34 premium homes at starting value of $450,000 each on 2004 dollars and 3% inflation rate and 10-year development plan. In Area C there are 16 inclusive lots, 12 developed and figured value in 2014 of $1 million each and 4 premium lots with a value in 2014 of $525,000. He anticipated based on that development City portion of the taxes would be annually using a constant mill rate of 127 and no down turn or up turn on the mill rate, only an increase of in valuation of 3% per year. He stated the only area that has any tax revenue is Area B, and that is the area that is currently annexed; Area B by the tenth year the annual collection would be $188,000 based on his projection. He stated by the year 2015 based on his projections, the total for all 3 areas would be $485,000 (City's share). It was also noted that it would cost a lot of money to get there - Grasser put together numbers on water, sewer, etc.

Mr. Grasser stated with policies in place, if follow his suggestion about Adams and making it more of a local street and basically special assessing all those costs to the benefiting properties and the cost to the City is more picking up maintenance costs with the exception of a lift station which would be an investment if they choose to do that - that Areas B and C gravity involves lift station and a forcemain which is the City's cost as $400,000, depth and size of those gravity mains which would be $1,400,000 and that cost would be assigned to the property owners. He stated if go gravity you have $1.4 million of owner costs and $400,000 of City costs because we do not special assess the lift station forcemain but that could change - the other option is to go with forcemain option which is $1.1 million to the owners and City cost almost negligent; that if choose to go gravity in Area C would need to have pump station and forcemain and that City cost would be $150,000 and owners cost would be $460,000 for the line and service lines. Area C is a separate stand alone area. (Area C should be labeled Area D) and Area C is inside the city limits.

Potter stated we have Areas B, C and D and do it by gravity the City's cost is $400,000 plus $150,000 which is $550,000; and if do it by forcemain it is $4,500.00; that there are technical ways to deal with providing sewer into these areas and now back to the basic question if you want to do it or not. Grasser stated you could do this same analysis to any development that came into the city of Grand Forks, and not going to find that we're making money on them, but essentially taking the tax dollars and using them to provide services in those current years and balance between income and maintenance activities. Grasser stated we build a lift station to serve an area, the cost of the lift station goes into the debt fund of the sewer rate and that gets figured into the rates and gets paid back over time - we all pay for it. Carsen stated in residential property you don't make money from tax standpoint, the costs exceed and the tax revenue does not meet what it costs us but make up the money on the commercial end.

Grasser asked what are the important issues - that when they had WFW do the forcemain or force system outlook, thought it was very important to be able to tell the rest of citizens of Grand Forks that we are not impacting their rates by building a new lift station, etc. but the trade-off on risk to the new areas in the pressure system if have failure of balance in backups get nasty stuff in your basement and those are some of the trade-offs - it is a matter of what the priorities are, what the balance is that the City or if don't want to annex them, de-annex them and not deal with them at all. He stated he put a high weight on trying to make sure we could justify to the rest of the citizens that we are not bringing a burden in there.

Kreun stated in this decision if we don't decide to do it all this is mute, and if we should happen to do it, that would be part of the decision making process is if you put in the gravity system and spend the extra money to do that, or if able to do it and get that on the title or deed what pros and cons are of buying that piece of property, and if decide to do it get to that next step. Grasser stated there are lot of different ways to address different issues and so diverse that difficult to talk about them until we get some structure to them.

Gershman stated that if we have infrastructure in places west of where talking about and if we allow, are we detracting from development where we already have infrastructure. Kreun stated not if we go with a cheaper system. Grasser stated what it boils down to is the land costs are such that they think they can make this development fly at this location and they can't make that development fly in other areas assuming land costs are more expensive.

Kerian asked what are the decision input for whether we annex or not - cost of land, availability of land - timing - and asked committee which issues we need to focus on and what are the facts and will be on the agenda.

Grasser stated one of the questions he will ask the city attorney is how do we de-annex and if we de-annex what might we face from the areas that are currently platted and within the city limits. Christensen stated all of the issue you have there is that you clarify your question - what issues do we have to those we intend to de-annex, what benefit have we given them that they are going to lose - that is the only issue; and if there is no benefit, there is not much they could talk about - suing for actual benefits lost - and what about potential benefit. Feland asked if too expensive to go to the 230 year level - Grasser stated city council could say we re not going to consider anything that is less than a full 230 year design that the Corps has and that will have consequences in where that dike can be because people in L & S and Burke will flip out if see a dike that high on this alignment, and almost by default you are going to kill that development or any development.

Kreun stated we have 7 issues for clarification on agenda for next meeting:
1) health and safety (Kerian noted this is partly risk, but if being on the wet side of the dike in terms of health and safety or protection of those people - if we can't get to them and if we can't assure them of quality water and if we have any responsibility for that or if by taking them in can we do something for them. Grasser suggested that perhaps have to have Mr. Schmisek and Mr. Swanson at the next meeting as most of these are non-engineering issues)
2) political issues
3) current impact to fees and services
4) maintenance of 100-year dike, how handled
5) risks involved
6) legal aspect
7) income sources

Kreun stated that we are narrowing this down to policy discussion and that is what next meeting will focus on. Christensen stated that if we are going to pursue something like this, so we don't leave problems for the people who are going to go out there and listen to person whose sewer grinder broke down, and that we should explore gravity system - its $400,000 and spend money on good system in place, not baby-sitting future home owners - people don't look at insurance policies, plat, etc. only at payment; shouldn't be going down that line, do it right. It was noted that it isn't just this piece of property.

ADJOURN

The meeting adjourned at 6:30 p.m.

Alice Fontaine
City Clerk