Friday, June 29, 2012

Trying to understand sewer/water arrangements between City of Ramsey and Flaherty and Collins. UPDATED, per comment and email messages.

I got this email response from the city administrator replying to an email request I had sent jointly to him, to the city CFO, and to the HRA chairman. I have sent back a few follow-up questions because I am unsure of details and hence will for now simply post the email response that was sent me:

In response to your inquiry ("What are the per unit SAC and WAC assessments being leveled upon Flaherty? What of that is being city-subsidized?") the per unit SAC fee for the Flaherty and Collins apartment project is $2,365, and the WAC fee is $1,640. As part of the development agreement, the entire amount was paid by the HRA utilizing existing tax increment revenue streams. The HRA, in acting as the developer on this project, undertook payment of these fees as a developer obligation, and the full amounts were charged to the project in order to remain consistent with our City SAC and WAC policy.

Please note, HRA Chair McGlone and Finance Director Lund, are aware of this response and have been copied, along with all members of our City Council.

[bolding added]. Those are assessments, per housing unit (per dwelling unit set to benefit from sewer/water being a provided government service to such dwelling unit), as the city administrator noted. I am unsure if total cost to other residents would be in line with those amounts (on a per dwelling unit basis), were we subjected to having sewer/water run down our roads and having to hook up. I am trying to pin that down.

What confuses me most, is the sentence, "As part of the development agreement, the entire amount was paid by the HRA utilizing existing tax increment revenue streams."

That reads as if we all in town now are subsidizing 100% of Flaherty's SAC and WAc charges, which also seem quite low per dwelling unit. These are the kinds of questions I am trying to pin down, the facts, of Flaherty relative to existing detached dwelling units that may in the future have to connect to city sewer/water. Whether there is a disparity.

Certainly the HRA will not pick up our tab, but, what else????

It seems the HRA has been over-generous with the Flaherty interests, and the only redress available is the ballot box.

I had said I would only post the email, but in retrospect, adding my concerns and uncertainties was a step I believed would help readers. I await further city info.

____________UPDATE___________
More confusion, before we can have it all clarified to publish. Darren Lazan sent me a quick email note, I do not know if he did any bcc, but there was no indication of any cc, but since I posted Kurt's info already, it is only fair to post this too - even though for now I do not know what to make of things beyond noting they are confusing. Darren wrote:

The fees quotes to you were not correct. I'm traveling today but can clarify. Essentially, the city was paying itself the fees so nobody challenged the amount. $ went from tif funds direct to utility funds.

Had the normal discussion occurred, and accounting for recent fee changes, those fees would not have been anywhere near $2.4m, that just sounds good on the campaign trail. They likely would have been $1.4m max. Still FAR, FAR, FAR out of line.

More work needs to be done so a 600sf studio does not pay the same as a 4000sf McMansion...

Ramsey simply never had to account for a product like this very often. Only one new appt in recent years.

Sent from my iPhone

That contradicts Kurt's response, as posted.

Interjecting "McMansions" into things is a bit like dragging out a red herring across the path of understanding. A 600 sq ft studio with two adults and a child would demand as much water as three adults living in a modest and affordable detached home (without lawn sprinklers - but relying on a domestic private well and private septic system). Each unit would produce sewage at a roughly comparable rate.

And water is scarce. The city presently is not allowed to punch any new municipal wells.

The present subjective feel -- It's apples and oranges, but with it looking as if the apples skate and the oranges are being set up to have to later pay a lot.

But that is a preliminary impression. I hope to have a better understanding to post in the next few days.

__________FURTHER UPDATE___________
Lazan sent a follow-up email and Council member Backous also emailed. I will post each, Darren's first, since it expands on his earlier message:

There are about 10 different development fees - SAC, WAC, sewer trunk, water trunk, sewer lateral, water lateral, park dedication, trail fee, Stormwater fee... Might be one or two more, that's from memory as I sit at a campsite in Ely.

All go to the city, except SAC which goes to met council.

To my knowledge, Deal paid all for VA, but EDA paid about <=$200k for SAC on his building when the Falls was added. SAC credits stay with the building forever, so that is an asset of Deal as the building owner. EDA also granted assistance on top of that for George Wells, but ultimately George did not take that loan. Likely because bank would not allow EDA first position on equipment. On your previous email... I absolutely understand your point. Typical hardship every growing city sees. I respect the desire of the rural portions of Ramsey to remain rural, it's actually one of the things I like most about Ramsey - they have rural, suburban, and now urban character all in one community. I was simply using that [McMansion vs studio rental] example to illustrate an issue with how development fees are levied. If it is solely based on 'units' a 600 sf studio with one or two residents pay the same as as the largest home in Ramsey that may have 6 people living in it. The water/sewer usage is not the same. That is why FC fees, as quoted, are not accurate. That fee is the equivalent of a 300 home subdivision. Had FC had to pay them it would have been reassessed and negotiated just like Legacy Academy was.


I think that's a fair and helpful statement. It gives no real solace to us who might face high hook-up futures, but that is clearly not something within Darren's reach to change or lessen. His firm's contract is Town Center centered. And his term "development fees" is illuminating. Thinking of them as that, an existing home forced to connect is not "development" but rather "coercion."

Interestingly, what Lazan seems to emphasize is that concessions to Flaherty are not precedential, in arguing that Deal received taxpayer subsidy, and Legacy Christian Academy did too [the latter causing concern over church-state separation, especially presuming that the Christian thing adds nothing to tax base while drawing scarce water and putting its load on the sanitary sewer system]. If everybody but the existing residents get perks, then revenue generation likely will be heavier when present private-water private-septic homes are coerced and assessed [despite absolute zero "benefit" or improvement to a single-family detached dwelling via a forced switch from dependable well/septic services, to municipal surrogate service - all the while remaining a single family detached dwelling having services].

Enough editorializing for now, the sewer/water forced connection is not new but instead reaches back to when James Norman was administrator, Gamec was mayor, and Hendriksen was on council protecting homeowners against coercive and very costly connection effort afoot at those times.

Backous actually submitted a proposed comment, but with all the other things rolled into the main part of the post (and in the updating), Randy's thoughts are published here:

Now you see first hand what we're dealing with in obtaining information in order to make informed decisions in Ramsey. Our own City Administrator and HRA Executive Director provides different numbers than does our Develoment Manager. Then the Development Manager somehow politicizes the question in order to discredit the questioner and distract from the question. This exact scenario plays out weekly and I'm glad the public was finally able to witness it in action.

In addition, many times information is provided last minute due to some "late breaking development" requiring an urgent decision that just can't wait. I understand that this is the nature of the development world which is why we shouldn't be in it. If we can't obtain accurate information and be given enough time to analyze it, we shouldn't be making decisions based on it. Randy

James Norman was a practitioner of the last-minute bombshell tactic, often passing out paper among council members for them to see for the first time at the 10:30 - 11:30 pm timeframe of televised meetings, at a point where tedium had reduced attendance at chambers and broadcast viewing substantially. Norman did that while studiously ignoring repeatedly the requirement of law that papers before the council also had to be placed on the Citezens' side table at the meeting ---- the "we're not mushrooms" requirement, I called it. Strommen and Elvig would remember that. They were on council during Norman times.

___________FURTHER UPDATE__________
Regarding the Christian Academy, I may be in error. Just as Jim Deal built the VA clinic and has lease arrangements with the VA - but with the building going into tax base as a rental venture; I believe I was told, if I recall correctly, that the school will be built by an affiliated but independent entity and rented to the school venture; thus also being in tax base. Any reader keen on that question is urged to ask city officials. But on reflection my recollection is the school and the VA clinic each are additions to tax base.