| City residents not responsible for park's fees |
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By Joel Stottrup Princeton city residents who don’t live in the newly-annexed Sherburne Country Mobile Home Park should not have to be liable for the nearly $1 million cost of extending a city sewer main to it. That appears to be the consensus of the city council. Council members, city administrator Mark Karnowski, city finance officer Steve Jackson and engineering consultant Mike Nielson discussed that Aug. 4. A few months ago the city annexed the 55-acre mobile home parcel that is owned by Michael Wadsworth and lies just south of Sherburne County Road 2. It sits about a mile south of the city’s wastewater treatment plant and golf course. Wadsworth requested annexation of the 96-unit mobile home park late last year in order to hook into city sewer. The state issued an ultimatum for Wadsworth to either do that or redo the park’s septic system to meet pollution-control standards. The septic system upgrade would likely be costly, according to discussions in city hall. City consultant Nielson with the engineering firm, WSB, also mentioned that septic systems have a limited life before needing to be replaced. How to finance it is the issue Wadsworth was not at the Aug. 4 council meeting to give input. Neither Nielson nor the council were able to determine how much money Wadsworth would pay up front for the sewer extension and hookup. The city sewer access charge (SAC) for hookup to the mobile home park would be $336,200 and Nielson estimated the sewer main extension at $591,250 for a total cost of $927,450. SAC fees are in place and are considered part of the project cost because it costs the city money to have a wastewater treatment plant of sufficient size to handle the wastewater. City council member Paul Whitcomb responded by asking if the $336,200 SAC would increase if the mobile home park went away and was replaced by single family homes. There would be no increase because the number of single family homes would be fewer, Nielson answered. Council member Victoria Hallin began asking questions about how much the lot rent would be for the mobile home park residents in light of the sewer project costs. But the city will also have to make sure that it does not end up being liable for project costs if the city pays for them up front and collects over time, council members agreed. What if Wadsworth should ever become unable to repay the amount owed the city, was the question. Nielson presented ideas for financing the project if the mobile home park owner was unable to pay everything up front. Nielson explained the city could sell bonds or get a loan through the United States Department of Agriculture (USDA). Nielson calculated that if Wadsworth did the financing, the cost spread out over the mobile home units would be $92.55 per unit, per month. If the financing was done through a USDA loan it would be $69.52 per unit, per month. If the city ran bonds for all the costs it would be $70.39 per unit, per month. If the mobile home park should cease to exist, the city would want some collateral or means of “staying whole” for the cost of the sewer extension, Nielson said. Nielson suggested a way to make sure the city was not held liable for any unpaid costs would be to assess the 55-acre parcel. Then, if the current owner was not able to keep the property, the assessment would go to the next property owner, Nielson said. The assessment payments could be used to make the payments on the loan the city took out, he explained. City financial consultant George Eilertson has determined there could be a 30-year loan to the city at 4.5 percent for the sewer extension cost, Karnowski noted. Wadsworth would have to do private financing to pay for the SAC fee, Karnowski said. But maybe it would be cheaper overall if the city bonded for both the sewer extension and the SAC fees, Karnowski said. If Wadsworth is able to put up any money it would help offset the costs, Whitcomb responded. “We always say that development pays for development,” Nielson said. “This is a little different, but it (the mobile home park) has [already existed] and is not part of the city. We would like him (Wadsworth) to bring a wheelbarrow with something.” Nielson noted that only a small number of homes nearby could be served by the sewer extension. There are a couple homes to the north of the mobile home park and the Evangelical Free Church, but not a lot of them beyond that, Nielson noted. Hallin said she would hate to see the costs go up so much for the mobile home park lot renters that they can’t afford to stay there. But Wadsworth will have to do something about the sewer situation, said Karnowski. It’s not like if the city does not do something that he has a cheaper option, Karnowski added. This approach is environmentally safer, Hallin said. Nielson suggested the city ask Wadsworth to pay the $336,000 SAC fee up front. “If he can’t do that, find out how much he can,” Nielson said. Comments (0)
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