10-10-1994 Council Packet - Laserfiche WebLink

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-.rK : *. »^TI> —^^t#.VW<>f-^->4-.-.-^F' m ■m ;^- Jv;:’ r: ::^v '> Request for Council Action continued Psge2 October?. 1994 MWCC Intetceptor Reconveyance Proposal After numerous meetinss. the CiQr agreed to take over the operation and maiiuenance of the line but did not agree to tte credit reduction or to the purchase of the line. At that time, the new interceptor project proceeded but there was no formal resolution of the reconveyance. In 1988 the MWCC and the Met Council established a new policy that required die MWCC to charge cities the current value for all reconveyed lines. The MWCC then advised the City it was responsible to pay $131,000 for the reconveyed interceptor. The City indicated this request for payment was made in bad faith since tte City had supported the interceptor project based on the City's 1987 letter of agreement which inAinmtmA ibe City wouM only take over operation and maintenance of the line. The Met Council has now agreed that the City does not have to pay for the line but hu propos^ that the credits provided to the City toward the purchase of the line be reduced in proportion to the petoenlage of the line beii« used Ity the City as part of its local system. This results in an $11,970 p^ year reduction in credhs over the remaining twelve years of the MWCC's payment schedule. The value of the imercepior line and lift station when originaUy purchased by the MWCC was set at $528,600. Over the past eighteen years the MWCC credits have paid $252,744 in priiK^Md payments leaving $275,873 to be paid. The MWCC is proposing die credits be reduced such that the principal payments will be reduced by a total of $103,006 based on the Chy continuing to use 53.79% of the pipe capacit '. A reduction of $103,000 would result in the MWCC payii« $425,000 vs. the original $528,600 for their use of the pipe as an imercepior. This would result in the MWCC paying 80% of the value of the line at the time of the original purchase. ' 7;: 91 ^■1, BffOTiif the new interceptor went on line in 1990, the MWCC has proposed that the credit be reduced retroactive to 1990. Staff has indicated the retroactive reduction in credits could be recommended if the retroactive interest was forgiven. This is the recommendation staff is now bringing to the Council. The recommendation is that the interceptor reconveyance issue be resolved by acceptii« the Met CouncU's proposal to reduce the credits retroactive to 1990, but allowing the reduction in credits for the yem 1990 through 1994 to be reread across the remainini twelve years of the credits with no imerest on the prior years* reduced creditt. This results in a total cost to the City over a twelve year period of $143,652. COUNCIL ACTION REQUESTED: Motion to approve the proposal to resolve the MWCC interceptor reconveyance issue by reducing the MWCC cunem value credits by $11,971 per year over a twelve year period. m