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Home My WebLink About1997-03-29 CA Fax to BRAA & NAC Re Draft Letter to OPH 03/29/97 08:58 ECKBERG LAW FIRM 4 5959837 N0.002 P01 i • • LAW OFMCS Or ECKaERG, LAMMERS, BRIGGS, WOLFF & VIERLING, P.L.L.P. 1835 NORTHWESTERN AVENUE STILLWATER, MINNESOTA 55O 82 8812) 439.21870 FAX (2I12) 439 -2929 LYLE J. COKBERG GREGORY G. GALLER JAMES I'. LAMmERS KEvIM K. 3W0E3ERG ROCER-r Q. BRIGGS TIOMAS,J WEIDNER PAUL A. WOLFF SUSAN O. OLSON NARK .J, VIERLING COVER SHEET - FACSIMILE TRANSMISSION DAVID K. SNYOER DATE: 3/69/9.? Please deliver the following page(s) to: FAX NO: NAME: JO 1' /2Mcim / /C 5( Pitheads FROM: TOTAL NUMBER OF PAGES (p , INCLUDING COVER SHEET. The pages comprising this facsimile transmission contain confidential information from Eckberg, Lammers, Briggs, Wolff & Vierling. This information is intended solely for use by the individual or entity named as the recipient hereof. If you are not the intended recipient, be aware that any disclosure, copying, distribution, or use of the contents of this transmission is prohibited. If you have received this transmission in error, please notify us by telephone immediately so we may arrange to retrieve this transmission at no cost to you. Violation of this confidentiality notice could constitute a basis for a claim for damages against the violation. If you received this communication in error, please immediately notify us by telephone at (612) 439- 2878. IF YOU DO NOT RECEIVE ALL OF THE PAGES, PLEASE CALL US BACK AS SOON AS POSSIBLE AT (612) 439 -2878 COMMENTS yi� ../ �� L�....I - ! 0/• e/1/Z. / / • r_ • I 7L./ /// a iv LLl� � " � / i/ /L. // 4 • HARD COPY WILL (NOT) FOLLOW BY MAIL 03/29/97 08:58 ECKBERG LAW FIRM 4 5959837 N0.002 l02 • • • LAW OFFICES OF Eckkerg. Lammers. li Wolff & V ier[ing, P.L. 1835 Nortbwosiet•u Avenue, Lyl ,I. Fcl.bcrg Stillwater. Minnesota 55082 $ngan L). OOlson r .Ino,cs I . LawmerM (612) 439 -2878 David K. Sn IiubeTt G. kiriggcp• !>r \1' (612) d.i�) -2023 .'�1.,,•It .I. V,cricng* Paul A. wt,Irr C rG Ors ci (faller► (194.4.1906) Kevin K SINneke.rs Direct Dial (612) 351 -2118 *Qw N:ttlral A,.6,t.dt.,, fs M.J.,tor Ilumds , wctdner •Quslil,.J Nontrel Arblwto, Speoinllsl March 29, 1997 THE HONORABLE DAVID SCHAAF MR MARK SWENSON MAYOR OF CITY OF OAK PARK HTS 14846 UPPER 55TH ST 6201 ST CROIX TRAIL N #121 OAK PARK HTS MN 55082 OAK PARK HTS MN 55082 MR JERRY TURNQUIST MS JANET ROBERT 14298 56TH STREET NORTH 6216 N LOOKOUT TRAIL OAK PARK HTS MN 55082 OAK PARK HTS MN 55082 MR DAVID BEAUDET 6400 LOOKOUT TRAIL NORTH OAK PARK HTS MN 55082 RE: Application by David Screaton for Annexation of Lands to the City of Oak Park Heights Dear Mayor and Council: You have requested that this office review the proposal of Mr. David Screaton to have his lands and those adjoining his the north in Kern Center annexed to the City of Oak Park Heights and thereafter provided municipal water and sewer services. The proposal of Mr. Screaton raises a number of questions which are generally categorized into two areas of annexation and municipal improvements. Dealing with those questions in that order we report to the Council as follows: 1. Annexation of Lands. Mr. Screaton appeared in front of the Council earlier in 1996 with regard to a proposal to annex his lands which are approximately 57 acres in size along Trunk Highway 5 which boarders the City of Oak Park Heights. Municipal approval for annexation by Ordinance is allowed in Minn. Stat. 5414.033 if the lands involved as abut the City are 60 acres or less. Consequently, Mr. Screaton's proposal at that time was technically permissible, however, upon review of the issues of 03/29/97 08:58 ECKBERG LAW FIRM 4 5959837 N0.002 P03 . . MAYOR AND COUNCIL Page Two March 29, 1997 servicing the Screaton land, it was determined that there was a need to bring utility service through other lands outside of the City of Oak Park Heights in order to provide services to the Screaton property. Consequently, the proposal to annex by Ordinance was declined by the City of Oak Park Heights. Minn. Stat. §414.031 subd. 1 allows annexation of unincorporated (township) property by municipalities. That statute provides for initiation of proceedings in one of four manners: "a. Resolution of the Annexing Municipality; b. Resolution of the township containing the area proposed for annexation; c. The petition of 20% of the property owners or 100 property owners, whichever is less, in the area to be annexed; and, d. A resolution of the municipal council together with a resolution of the town board stating their desire to have the entire township annexed to the municipality." It has always been the position of the City of Oak Park Heights to encourage township property owners to approach their township first before the City would entertain annexation requests. Even then, the City has preceded by Petitions from affected property owners before the municipal board, supported by approving resolutions of the City of Oak Park Heights. At the Council meeting as was held before the City on the 25th of March, Mr. Screaton indicated it was his intent to obtain the consent of the affected property owners, rather than simply proceeding by way of annexation initiated by the municipality. That express desire is consistent with the City's past practice and policy of requiring property owner support for the annexation. Consequently, there is statutory authority for annexation of the Screaton and Kern Center lands either by way of property owner Petition or by way of municipal resolution initiating same. 2. Municipal Utility Improvements. Mr. Screaton has prepared a proposal which involves his financing on behalf of his neighboring property owners of the costs of extending utility service to the area. What Mr. Screaton has proposed is that he would advance approximately $450,000.00 of funds with which the City could utilize for purposes of extending services into the area, however, he requests that he be repaid back approximately 03/29/97 08:58 ECKBERG LAID FIRM 4 5959837 NO.002 904 • • MAYOR AND COUNCIL Page Three March 29, 1997 $341,000.00 of funds charged as hook -up fees to the properties that are benefited at such time that they would connect the City utilities. Apparently, Mr. Screaton is proposing that the City would act as a conduit for the receipt and collection of funds related to City utilities. Traditionally, municipalities will put in place utilities and recoup the cost either by direct payment from a developer and /or by way of assessment. The City of Oak Park Heights already has established a series of connection charges to our utilities in service areas where the City has put into place Trunk facilities and other infrastructure for which connection charges have been pledged to repay bonds. It is theoretically possible for a municipality to enter into an agreement to allow a developer to advance the costs of utility extension to an area not exclusively owned or controlled by the developer. Further, it is possible for the City to enter into limited agreements with regard to the return of capital to the developer as various users connect to the system and pay the charges with which to do so. There are obvious limitations with regard to the duration of the agreement as well as the practical limitations on the City's ability to force other land owners to connect to the system so as to secure the return of capital to the developer. I am concerned with regard to the nature of the proposal from Mr. Screaton as it involves issues of planning and zoning, which the City can obviously not commit to as part of a proposal to annex lands. Planning and zoning issues are established by ordinance and by statute and can only be established following annexation and public hearing processes to afford those property owners affected, the opportunity to participate fully in the process without any prejudice or bias to the City establishing patterns and land use. Furthermore, the City could not place itself in the position of being a guarantor to a developer of a profit with regard to their particular development. In this particular instance, the proposed developer is going to expend significant capital beyond its own needs and benefits to bring water and sewer services to an area through adjoining lands. The profitability of that venture is a risk that must be exclusively born by the proposed developer and the City cannot and should not place itself in a position where the developer has an expectation of return of capital guaranteed over a period of time so as to make this risk and expenditure viable. 03/29/97 08:58 ECKBERG LAW FIRM 4 5959837 N0.002 P05 • • MAYOR AND COUNCIL Page Four March 29, 1997 It is theoretically possible for the City to enter into a development agreement with Mr. Screaton that would allow him to advance the total funds to the City of Oak Park Heights to extend utilities to his service area which, of course, benefits lands other than his own. The City, however, cannot guarantee the return of capital nor should the City be in a position to make any representation or expectation as to planning and zoning controls to be implemented upon property annexed to the City of Oak Park Heights now or in the future. In short, Mr. Screaton must be totally at his own risk that should he choose to advance funds for the purposes of extending utilities to the City of Oak Park Heights, that he be well aware that he has every expectation and possibility that those funds would never be returned to him. Further, the City should not be in a position of having an indefinite development agreement extended whereby the City would be in perpetuity the collector of funds from people that would connect at some distant point in the future. The development agreement would have to be reasonably limited in time so that any connections beyond a given point in time would not be returned to the Screaton family. Further, the terms of the development agreement may not limit the City's ability to assess benefited property owners for improvements to be put into place within the area to be annexed, should the City experience costs for doing so, which are over and above that which is projected or anticipated or involve improvements not funded by the developer. There are, of course, many variables which are yet to be developed as it affects this particular proposal as well as the issues of the affected land owners that are most impacted by the proposed annexation. The contents of this letter deal with the conceptual issue and the theoretical possibility of the developer's proposal to advance funds to the City of Oak Park Heights for purposes of serving his parcel and benefiting others adjacent to it. This letter shall not serve as a commitment from this office on any terms and provisions of a future development agreement which may be executed or negotiated between the City of Oak Park Heights and Mr. Screaton. Further, this letter shall not be interpreted to be construed as a recommendation from the Office of the City Attorney to the City Council that the proposal by the Developer is sound or reasonable or should be implemented by the City. There is 03/29/97 08:58 ECKBERG LAW FIRM 4 5959837 NO.002 P06 i • MAYOR AND COUNCIL Page Five March 29, 1997 simply not enough detail provided upon which any recommendation could be made at this time. Yours very truly, Mark J. Vierling MJV /smp cc: Michael Robertson