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HomeMy WebLinkAbout11-19-18 City Commission Packet Materials - A1. Res 4972, Establishing Commission Conditions for Riverside Annexation1 Commission Memorandum REPORT TO: Mayor and City Commission FROM: Chuck Winn, Assistant City Manager Andrea Surratt, City Manager SUBJECT: Commission Resolution 4972 stating conditions necessary for the City Commission to consider annexation of property located within the Riverside Water and Sewer District. MEETING DATE: November 19, 2018 AGENDA ITEM TYPE: Action RECOMMENDATION: That the City Commission adopt Resolution 4972 and direct staff to work with appropriate parties to initiate and complete the Riverside annexation. RECOMMENDED MOTION: I move to adopt Resolution 4972 and direct staff to work with the appropriate parties to initiate and complete the Riverside Annexation. STRATEGIC PLAN IMPLMEMENTATION: This action affects three different goals in the Strategic Plan; 4. A Well-Planned City - 4.2.a Manage Growth Adjacent to City, 4.3.e, Annexation of Islands and Critical Adjacent Lands, and, 6. A Sustainable Environment - 6.1.a Watershed Management. BACKGROUND: Fifty years ago the Riverside Manor development was subdivided. At that time the development was nearly three miles outside of City limits and a water and sewer district were created to provide services to the new subdivision. Today, the Riverside Water and Sewer District No. 310 (District) owns and operates facilities and systems that provide water and sewer services to approximately 59 single family homes, 64 townhouse units, and the Riverside Country Club. In December of 2011, the Montana Department of Environmental Quality (MDEQ) conducted an inspection of the District’s wastewater facilities and informed the District of a number of deficiencies requiring correction. Since that time the District has been exploring options to correct the violations. Two options have risen to the top for futher consideration; construction of a new wastewater treatment plant for the District, and, connection to the City’s Water Reclamation Facility (WRF). On August 18, 2014 the Commission considered an action item that included an interlocal agreement with the District that would have allowed connection to the WRF with an annexation deferral for the properties within the District. Initially, the District requested a 10-year deferral while city staff recommended a five-year annexation deferral. The City Commission approved the interlocal agreement with a maximum 18-month deferral. The interlocal agreement was never signed by the District. 188 2 In the intervening years, city staff has met with District representatives on many occasions and discussed several options for connection to the WRF. Additionally, city staff has provided different cost analysis and done much work to provide information they requested to provide to their residents. The District has not yet petitioned for annexation. The main hurdle appears to be some residents’ concern with annexation into the City and how being Bozeman residents will impact their neighborhood. In an effort to provide as much certainty as possible to the residents as they consider annexation, we have prepared a resolution for Commission consideration that includes the main terms and conditions of annexation and sewer connection. This memo summarizes city staff’s preliminary consideration of the issue and the unique elements of this request. GENERAL Annexation of the Riverside properties will occur through a request for annexation signed by more than 50% of the resident electors owning real property in the area to be annexed or the owner or owners of real property representing 50% or more of the total area to be annexed. • Upon annexation, the annexed properties will be part of the City for all municipal and governmental proposes including debts, taxation, city street and tree, arterial and collector district assessments, representation, enforcement of laws and ordinances including the City’s Unified Development Code (UDC), etc. • The City Commission will not immediately require, at the time of annexation, property owners to upgrade streets and sidewalks within the District to City standards though future city commissions may require property owners to do so. ANNEXATION Annexation needs to be of a mutual benefit to the City and the property owners and the City must be able to deliver municipal services upon annexation. The City receives, processes, and approves annexation requests every year. However, this circumstance is unusual due to the number of owners and that the District rather than individual owners are approaching the City. Therefore, there will likely be modification to the standard procedures. The City uses Part 46 annexation by petition wherever possible. This is the simplest option for annexation. Typically, the City relies upon an annexation agreement to address some elements of state law requirements for annexation. Due to the large number of owners and the unusual circumstances motivating the annexation, staff believes the use of an extension of services plan is a better option. However, this also means modifications in standard procedures. Staff will work with Riverside representatives to create an appropriate Petition by owners of land which will include the request to be annexed and a waiver of right to protest creation of an SID to construct the needed sewer improvements. SEWER The City’s annexation policy, adopted by Commission Resolution 4400 calls for the annexation of any contiguous property for which City services are requested. The area of Riverside is contiguous along Springhill Road. See the attached map. The Riverside area is within the City’s sewer and water service boundaries. It is in the East Gallatin River drainage basin in the 2015 Wastewater Master Plan. It also within the City’s planned urban 189 3 expansion area as shown on Figure 3-1 of the Bozeman Community Plan. The City’s water reclamation facility has the capacity to serve the additional load from 127 homes and the Riverside Country Club. The proposed service plan is to use the existing collection system and add a single lift station and force main to cross the East Gallatin River and connect to the WRF. The Riverside properties will be responsible for all costs of the project which is anticipated to be paid through the creation of a new Special Improvement District (SID). The City will own and operate the collection system but will not take ownership or responsibility for the existing treatment facilities. The City will have the opportunity to coordinate the installation of the new equipment for future connections to the Sypes Creek, Deer Creek, and Churn Creek drainage basins as anticipated in the Wastewater Facility Plan. The City has conducted inspection of the existing collection system with its TV camera van and finds the pipes to be in generally good condition but not to the City’s standards. As the new services will be provided entirely by the City any nutrient or other beneficial credits that are created by the change to municipal sewer service are to be provided solely to the City’s benefit. There is high ground water in the area and some of the homes discharge sump water into the sewer system which has a negative effect on WRF operations and consumes extra capacity. It will be the responsibility of each property owner to disconnect any sump pumps discharging into the sanitary sewer. Additionally, it is proposed that property owners install individual water meters so that proper and accurate sewer charges can be calculated. WATER The District currently provides their residents water for domestic consumption and firefighting purposes. They are proposing they remain responsible for water provision to the area after annexation and city staff is agreeable to this at this time. However, it is important that the District not expand its service area. The Fire Department has verified adequacy of firefighting flow although the amount available does not meet the gallons per minute standards normally expected in the City. The City has interest in future acquisition of the District’s water assets including the water rights. When such future transfer occurs, the City will be taking on the entire assets and obligations of the system and therefore such future transfer will occur at no cost to the City. During the interim, the entire system shall be maintained in good condition will all repairs and maintenance meeting City standards. These terms regarding water and sewer systems will be memorialized by a contract between the City and the District. FIRE SERVICES The area is currently served by the Central Valley Fire Department (Central Valley). State law requires that if Central Valley is carrying debt then the areas to be annexed must continue to meet that obligation. There does not appear to be any fire district debt for the Riverside area. STREETS The Riverside subdivisions have non-standard City streets. They appear to be operating adequately and were recently overlaid. At this time we do not see a need to immediately bring them to City standards. A rural street maintenance district is in place for maintenance of the streets. Springhill Road divides the area to be annexed and is an MDT jurisdiction street. The City must annex all streets within or adjacent to annexing property. The residents have requested the ability to pay for more frequent snow plowing and we have no objection to this request. RIVERSIDE COUNTRY CLUB 190 4 The area to be annexed includes some or all of the Riverside Country Club and golf course. The size of the golf course has an impact on being able to meet the 50% threshold for petitions for annexation. The intent of the initial annexation is to capture all areas connected to the wastewater system and the golf course may not want to include all its property in the annexation area. A similar situation exists at the Valley View golf course with the clubhouse located in city limits but the majority of golf course outside. We need to have further conversation with the District on this particular issue but there appears to be options for a similar situation to occur with this annexation. POLICY IMPLICATIONS Since 1984, the City’s annexation policies have encouraged orderly annexation that considers ability to serve urban services boundaries while considering the cost impacts of providing those service. It is a large step for existing development to have to retrofit all of the existing streets, water, and sewer facilities at one time. Previously created community water and sewer systems typically have had some operational oversite from DEQ which is different from the individual onsite septic and well systems from most single lot annexations. As a rule, we believe it is better to have urban level development inside the City than not. This will require creativity and flexibility when annexing places like Riverside that originally developed in more rural areas when the City boundary was far away. City staff does not support creation of new non-municipal community water or sewer systems within the municipal water or sewer planning boundaries. The City should actively oppose permitting for such systems. Staff supports annexation processes that bring community systems into municipal operation and ownership and in the long term upgrades to municipal standards and connections. NEXT STEPS The action item before the Commission is to pass a resolution outlining key terms under which the City will consider annexation. This will enable the District and city staff to work together with owners in the annexation area to move the process forward with understanding of Commission priorities and concerns. Any and all agreements drafted will come back before the Commission for review. UNRESOLVED ISSUES: None determined at this time. ALTERNATIVES: As determined by the Commission. FISCAL EFFECTS: None identified. Attachment A: Riverside Maps Attachment B: Resolution 4972 Report compiled on November 6, 2018 191 5 192 6 193 Page 1 of 10 RESOLUTION NO. 4972 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, STATING THE CONDITIONS NECESSARY FOR THE COMMISSION TO CONSIDER ANNEXATION OF PROPERTY LOCATED WITHIN THE RIVERSIDE SEWER AND WATER DISTRICT. WHEREAS, the City of Bozeman (“City”) has established comprehensive annexation goals and policies to provide for orderly, well-planned growth of the City; and WHEREAS, the City established these goals and policies in accordance with annexation statutes as set forth in Title 7, Chapter 2, MCA.; and WHEREAS, it is the goal of the City to encourage annexations of land contiguous to the City; and WHEREAS, the City seeks to annex all property contracting with the City for services such as water, sanitary sewer and/or fire protection; and WHEREAS, it is the goal of the City to require annexation of all land proposed for development lying within the service boundary of the existing sewer system as depicted in the Bozeman Community Plan (Growth Policy), and to encourage annexations within the urban growth area identified in the Growth Policy; and WHEREAS, it is the general policy of the City to require annexation of any contiguous property for which City services are requested or for which City services are currently being 194 Resolution 4972, Riverside Annexation Conditions Page 2 of 10 contracted; and WHEREAS, Riverside County Water and Sewer District No. 310 (“District”) is a water and sewer district organized and operating pursuant to §7-13-2200 et seq., MCA, and is located contiguous to the City; and WHEREAS, in December of 2011, the Montana Department of Environmental Quality (“MDEQ”) conducted an inspection of the District’s wastewater facilities and informed the District of a number of deficiencies that needed to be corrected with respect to treatment and disposal of its wastewater; and WHEREAS, the District is comprised of and serves properties contiguous to the City described as Riverside Manor Subdivision, Riverside Greens Subdivision, and Riverside Country Club (“Riverside Properties”); and WHEREAS, the City’s water reclamation facility (WRF) is contiguous to the Riverside Properties and has the capacity to treat and dispose of the wastewater that is collected within the District; and WHEREAS, in 2014, the City Commission heard a request from the District and several owners of Riverside Properties to enter into an interlocal agreement with the District that would have connected the District’s wastewater collection system to the WRF; at that time, the City Commission determined that should the City agree to assist the District and its residents in addressing the ongoing water quality violations annexation could not be delayed for longer than 18 months after the connection; and WHEREAS, since 2014 the District has been pursuing options related to addressing its water quality violations; and WHEREAS, in 2018 the District contacted the City to begin discussions regarding entering into an agreement with the City whereby the City would treat and dispose of the 195 Resolution 4972, Riverside Annexation Conditions Page 3 of 10 wastewater collected within the District; and WHEREAS, §7-13-4314, MCA, and Sec. 40.03.1380, BMC, provide that any person, firm, or corporation receiving sewer or wastewater service outside of the incorporated city limits may be required by the City, as a condition to initiate or extend such service, to consent to annexation of the property served by the City; and WHEREAS, upon the filing of a Petition for Annexation pursuant to §7-2-4610, MCA, the City is required to provide a plan for the extension of municipal services to the area to be annexed; and WHEREAS, an extension of services plan can be specifically tailored to Riverside Properties, for extending each municipal service based on the present circumstances concerning existing services, systems, and facilities; and WHEREAS, a petition for annexation and an extension of service plan may address issues that are in the best interests of the City and the inhabitants thereof and of the inhabitants of the Riverside Properties, such as, but not limited to, rights of way, easements, transportation facilities, water rights or cash-in-lieu, waivers of right to protest creation of special improvement districts (SID) and/or special districts or maintenance districts, impact fees and water and sewer hookup fees, recognition of existing improvements and reservation of existing maintenance responsibilities; and WHEREAS, the City and the District may enter into an agreement for the City to acquire the District’s wastewater facilities and to treat and dispose of the wastewater collected within the Riverside Properties pursuant to §7-11-101 et seq. MCA; and WHEREAS, connecting the District’s wastewater effluent to the City’s WRF (the “Project”) will improve water quality in the East Gallatin River by eliminating the District’s discharge of wastewater that is currently in excess of Montana water quality standards – a benefit to residents of the Riverside Properties, the residents of the City of Bozeman, Gallatin County, and the State of 196 Resolution 4972, Riverside Annexation Conditions Page 4 of 10 Montana; and WHEREAS, the board of the District and several residents requested the City Commission inform them of the terms and conditions under which, should a petition to annex into the City be filed by the owners of the Riverside Properties, the City Commission would look favorably upon the petition; and WHEREAS, the City Commission recognizes providing such terms in a non-binding manner may facilitate a final resolution to the District’s ongoing wastewater violation and facilitate resolving the issue of whether the City will participate in such a solution on behalf of the District and the Riverside Properties. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana: Section 1 Subject to terms and conditions described herein and subject to a petition for annexation containing the terms and conditions in substantially similar form to those stated herein and subject to all required annexation procedures, the Commission determines it will be in the best interests of the City of Bozeman and its residents, visitors, and businesses and of the owners and residents of the Riverside Properties to extend the boundaries of the City of Bozeman to include said Riverside Properties within the corporate limits of said City of Bozeman, Montana. The terms and conditions under which the City Commission would look favorably upon a petition for annexation pursuant to Title 7, Chapter 2, Part 46, MCA, by the owners of the Riverside Properties are as follows: 1. That to consider annexation of the Riverside Properties the owners of property seeking annexation must, along with paying all required fees, submit a written petition containing a description of the area requested to be annexed, the requested zoning, and signed by more than 50% of the resident electors owning real property in the area to be annexed or 197 Resolution 4972, Riverside Annexation Conditions Page 5 of 10 the owner or owners of real property representing 50% or more of the total area to be annexed. The Commission will look most favorably upon a petition containing more than 60% of the above. 2. Upon receipt of a petition, the City will process the petition pursuant to Montana law in the same manner as all other petitions for annexation including all applicable zoning procedures. 3. Upon annexation, the annexed properties will be part of the City for all municipal and governmental purposes including debts, taxation, representation, enforcement of laws and ordinances including the City’s Unified Development Code (UDC), etc. The annexed properties shall be entitled to the same privileges and benefits as other parts of the City. The Commission will not immediately require, at the time of annexation, property owners to upgrade streets and sidewalks within the District to City standards though future city commissions may require property owners to do so. In addition, the City will charge upon completion of the Project, all costs for wastewater collection and processing directly to the owners/residents of the annexed properties in the same manner as all other City wastewater customers. The City will require property owners or the District as a condition of receiving wastewater service to install water meters on their water service to determine the volume of wastewater generated by the Riverside Properties. In addition, the City will determine the assessment rate and methodology for wastewater treatment including any additional charges for operation of any required lift stations. 4. That property owners may plow their own streets though all properties within the area to be annexed will be subject to full City street maintenance assessments. The Commission recognizes the Riverside Properties appear to be included in Gallatin County’s Rural Improvement District (RID) Maintenance Program through RID 308 and RID 346. The owners must coordinate with Gallatin County regarding the owners’ and Gallatin County’s proposed method of addressing the current Riverside Properties’ involvement in the County program and propose to the City at the time of submission of a petition for annexation how such RIDs will be addressed upon annexation to the City. Regardless of how the owners propose to address these RIDs, the Riverside Properties will be subject to full city street and tree, and arterial and collector district assessments. 5. That the District and/or the Riverside Properties shall be solely responsible for paying for all costs of the Project. If the Riverside Properties desire for the City to create a SID for selling bonds to finance the costs of the Project, in addition to the petition for annexation, the owners of the Riverside Properties must submit a petition for the creation of a SID to fund the Project. The petition must be pursuant to 7-12-4102(3), MCA and must detail the costs to be covered by the SID assessments which such costs must include costs of 198 Resolution 4972, Riverside Annexation Conditions Page 6 of 10 construction, costs associated with the sale of bonds, and administrative costs including those applicable to the City’s SID revolving fund. If not all owners of the Riverside Properties sign such a petition for creation of a SID the petition for annexation must at a minimum include a waiver of right to protest creation of such a SID from every property owner signing the annexation petition. Waivers of right to protest such a SID must be provided in sufficient number to exceed the protest thresholds provided in 7-12-4113, MCA. If the residents find alternative financing so as to not seek the City’s assistance in financing the required connection the petition for annexation must indicate the method of financing and indicate such financing has been secured and will be made available to the City to pay for the City’s costs associated with the Project. The owners of the Riverside Properties recognize that for the City to create a SID to finance the Project the Riverside Properties must be annexed into the City prior to the City commencing the process to create the SID. 6. The petition for annexation must also include a waiver of right to protest creation of a special district for park and trail maintenance to be created pursuant to 7-11-1001 et seq., MCA. 7. The owners of the Riverside Properties must, along with the petition for annexation, submit a waiver of right to protest the creation of a SID for construction of all local streets to the City’s local street standard including all City requirements such as lighting, curb, gutter, sidewalks, etc. and waivers of right to protest the creation of a SID for future improvements to Springhill Road, the intersection of Springhill Road and Frontage Road and the intersection of Springhill Road and N. 19th Avenue. 8. That the City and the District, prior to annexation, enter into an agreement. The agreement must address: a. The manner in which the City will acquire the District’s wastewater collection facilities at no cost to the City which the City determines necessary for it to treat and dispose of the wastewater collected within the Riverside Properties. b. That the District hold the City harmless and indemnify the City from any claims or damages resulting from, arising out of, or in any way related to pollution and water quality violations stemming from the District’s operation of its wastewater facilities for both past action and for any future issues related to the District’s facilities that City does not obtain. The indemnity obligation must also hold the City harmless from any delay in the District meeting DEQ’s required compliance schedule. The District must 199 Resolution 4972, Riverside Annexation Conditions Page 7 of 10 secure and maintain adequate insurance to support its indemnity obligations. c. How design, financing, and construction of the Project will occur. The agreement must address: i. If the District and the Riverside Properties seek the City’s participation in financing the Project through a SID, the District’s financial and logistical participation as the City completes the design for the Project and its necessary components, secures financing, and bids and awards a contract for the construction. ii. How, at its own cost, the District will be solely responsible for obtaining all necessary permits and easements for the Project provided that the same meet the standards and requirements of the MDEQ and the City that apply to public wastewater systems and are sufficient to serve the Riverside Properties. Any easements or other right of way necessary for the City to provide wastewater service must be transferred to the City at annexation. d. That should the City finance the Project through the creation of a SID, the District will be solely responsible for ensuring compliance with any water quality violations and the act of the City to assist the District and the Riverside Properties in designing, constructing, and financing the Project will not subject the City to enforcement action by MDEQ for the District’s ongoing water quality violations. e. That at the time of completion and approval by the City of the construction of the Project and notice to the District the City is ready to assume wastewater services for the Riverside Properties, the District shall convey to the City its functioning wastewater collection facilities, including but not limited to the existing pipes, manholes, lift stations, and other wastewater infrastructure used to collect and deliver wastewater within the District’s boundaries to the WRF. After the City agrees to begin treating the District’s and Riverside Properties’ wastewater, the City shall be solely responsible for all collection, treatment and disposal of wastewater within what was once the District’s jurisdictional boundaries. f. That the District will retain possession of and maintain responsibility for its existing treatment system and all infrastructure connected to that system after the completion of the Project and the commencement of treatment of wastewater by the City. 200 Resolution 4972, Riverside Annexation Conditions Page 8 of 10 g. That the City will not require transfer of the District’s water supply and distribution system or the District’s water rights to the City at the time of annexation. The District’s water supply and distribution system may be considered to demonstrate compliance with the City’s water adequacy requirements. If the District’s water system is altered or modified, or no longer functioning, or demand for water in Riverside Properties is increased or not otherwise being met, the Riverside Properties must comply with the City’s water adequacy requirements in place at that time by either paying cash-in-lieu of water rights, or transfer ownership of water rights, or a combination thereof. h. How the District must transfer ownership to the City of the District’s personal and real property necessary for the provision of water service to the Riverside Properties should the District request the City take over the water treatment and distribution system or should the District no longer be able to provide water service to the District. i. How the District will cease to operate any sewer collection or treatment operations and how the District will exist for wastewater purposes solely to address any outstanding reclamation and indemnity obligations. j. That the District must agree that it will not expand its area of water service. 9. That the City shall take no action in financing the Project (if requested) until all properties proposed to be served by the City have been annexed into the City. 10. At the time of annexation, all the owners of the Riverside must provide fire impact fees and wastewater impact fees. The City shall provide a listing of the cost of impact fees by individual property. The City will collect all fire impact fees and distribute such to the fire impact fee capital fund at the time of annexation. For wastewater impact fees, the City will place wastewater impact fees in a fund to be held by the City until the completion of the connection between the WRF and the Riverside Properties. At the time the City commences treating wastewater effluent from the Riverside Properties the City will transfer all wastewater impact fee to the wastewater impact fee capital fund. 11. That the petition must provide a plan that is approved by the City that requires property owners or the District to disconnect every sump pump within all structures disposing of such water into the District’s wastewater collection system and dispose of such water outside of the wastewater collection system in a manner that complies with all local, state, and federal 201 Resolution 4972, Riverside Annexation Conditions Page 9 of 10 requirements. The disconnection must occur prior to the City accepting wastewater for treatment. 12. The petition for annexation must address the requested zoning designation of the Riverside Properties. The determination of zoning is a legislative act of the Commission and will be conducted pursuant to the requirements of Montana law and the City’s development regulations. The City Commission retains sole authority over the zoning designation. 13. That the petition must acknowledge any future nitrogen and phosphorus nutrient credits that result from removing the District’s lagoon system from operation approved by MDEQ will belong to the City to offset nutrient discharge limits at the WRF. Section 2 That upon receipt of a petition for annexation, the City will prepare an extension of services plan specifically tailored to Riverside Properties, for extending each municipal service based on the present circumstances concerning existing services, systems, and facilities, will be prepared. Section 3 The conditions of this Resolution are non-binding as conditions may change from the date of this Resolution to the date a petition is submitted. The Commission adopts this Resolution in a good faith effort to communicate the Commission’s policy regarding the City assisting the Riverside Properties and the District in addressing their wastewater violations and, as such, the Commission intends for the statements in this resolution to provide guidance as the District and Riverside Properties determine whether to move forward with a petition for annexation seeking the City’s assistance. 202 Resolution 4972, Riverside Annexation Conditions Page 10 of 10 PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 19th day of November, 2018. ___________________________________ CYNTHIA L. ANDRUS Mayor ATTEST: __________________________________ ROBIN CROUGH City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney 203