03-10-1997 Council Packet - Laserfiche WebLink

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TO: FROM: DATE: Mayor and City Council Ron Moorse, City Administrator March 5,1997 SUBJECT: Allocation of Bay Ridge/Hartwood Sewer Project Costs The Council approved the Bay Ridge sewer improvement feasibility report at its February 10 meeting, and set a public hearing for March 10. An important issue related to the project is the payment of the "trunk" portion of the project costs. The project includes a gravity lateral line that ser\ es the eight Bay Ridge properties. This cost will be paid by the Bay Ridge properties. The project also includes a lift station and trunk force main that serves the Bay Ridge properties but also will serve the Hartwood area to the south at some time in the future. The Engineer has suggested the costs of the lift station and force main be allocated to both the Bay Ridge and Hartwood properties. The Engineer has also suggested that the costs allocated to the Hartwood properties not be assessed until sewer service is provided to the Hartwood area. This means the city would provide "interim financing" of approximately $78,000 of project costs until the city is repaid by Hartwood at the time they receive sewer service. The cost to the city, assuming a fifteen year bond issue at 5%, interest would be approximately $7,500 per year for 15 years. Options 1. The city provide "interim financing" of the $78,000 of "trunk" costs, with repayment by Hartwood at the time they receive sewer service. 2. The Council could allocate all project costs to the Bay Ridge properties. This would increase the amount of the assessment to the Bay Ridge properties from $20,000 per unit to $30,000 per unit. 3. Assess the Hartwood properties the trunk costs now. This could be difficult since they are not receiving sewer service now. If the Hartwood properties were to be assessed for the trunk costs it would probably need to be a voluntar>' decision by the Hartwood property owners based on paying a portion of their sewer service costs now and a portion later. Staff can approach the Hartwood property owners regarding the assessment of trunk costs. In the absence of agreement by the Hartwood property owners, stall recommends the city absorb the trunk costs on an interim basis to be repaid, with interest, through connection charges to the Hartwood properties at the time sewer service is provided.