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231192rORIGINAL TO CITY CLVRK PRESENTED BY COMMISSION CITY OF ST. PAUL FILE NO NO OFFICE OF THE CITY CLERK UNCIL -RESQLUTION — GENERAL FORM 231 192 WHEREAS, There exists a need for coordinated planning, construction and operation of sanitary sewerage facilities through- out the metropolitan Twin Cities area; and WHEREAS, The need for said sewerage facilities is in- creasing yearly and is expected to become more acute; and WHEREAS, For several sessions of the Minnesota State Legislature and for periods between such sessions$ unsuccessful efforts have been made to devise adequate organizational and financial arrangements to solve these problems; and WHEREAS, One of the principal problems has been the determination of a reasonable, fair and acceptable formula for apportioning capital costs among the several municipalities; and WHEREAS, It is the desire of the Saint Paul City Council to join with other metropolitan communities in seeking a collective solution to the problem on a fair and equitable basis; and WHEREAS, The Minneapolis -Saint Paul Sanitary District, assisted by a consulting engineer and the• staffs of Minneapolis- and Saint Paul, has studied and evaluated alternative apportionment plans and has devised a plan which would apportion capital costs by a combination of proportional design capacity and proportional real property valuations; and WHEREAS, The principles embodied in said plan ba ve been approved by the Minneapolis -Saint Paul Sanitary District Board of Directas and by the City Council of Minneapolis; and WHEREAS, The said plan based on a combination of methods is considered to proportion factors of use, need and benefit in an .40 equitable manner ;, now, therefore, be it FARM APPROVED COUNCILMEN Asst. Corporation counsel Adopted by the Council 19— Yeas Nays Carlson Dalglish Approved 19 Holland Tn Favor Meredith Peterson Mayor Tedesco Against Mr. President, Byrne X22 ORIGINAL TO CITY CLPRK I PRESENTED BY COMMISSIONI CITY OF ST. PAUL COUNCIL OFFICE NO OFFICE OF THE CITY CLERK COUNCIL RESOLUTION — GENERAL FORM 231192 RESOLVED, That the City Council of the City of Saint Paul, having reviewed the report entitled "Report on the Propo.&als for the Apportionment of Sewerage Works Capital-Costs Minneapolis- Saint Paul Metropolitan Area ", dated December 1941 and prepared for the Minneapolis -Saint Paul Sanitary District by Toltz, Kingq Duvall, Anderson and Associates, Inc.q does hereby approve the concepts set forth in said report and does hereby instruct its staff to cooperate with the various governmental entities of the Twin Cities metropolitan area with the objective of accomplishing legislation providing for the establishment of a metropolitan sanitary district based upon the cost apportionment principles set forth in the aforesaid report. ieC i 41966 COUNCILMEN Adopted by the Council 19— Yeas Nays DEC 141966 Dalglish Approved 19._ Nvmm Tn Favor Meredith „) Peterson (/ Mayor Against gainst Mr. President, Byrne PUBLISHED DEC, 1 �, 1966 X22 Deg; ember 144 1966 Minneapb].is+Sa int Paul Sewitary District t 2400' Childs Road Saint 14ul,' Minnesota ` Eftcloied.is A certifi6d Council -File No 231192, - _ adopted today) ; approving t se, rth-in "Report on the Proposals, for the Appert went of 8 Works Capital. Costs j MinneapAia =Sai. nt Paul opolitetn a" I etc • s as more fully set ; out in the 'ran aution 4 - ' ` Very truly yours, _ - t City Clerk _ ng s. ; •CQE22rC)D3 City of OFFICE OF CITY CLERK LEONARD A. JOHNSON, CITY CLERK 307 CITY HALL 330 -2215 MINNEAPOLIS, MINNESOTA 55415 RESOLUTION (By Aldermen Risk, M Denny, Anderson, G Christensen, Cohen, I son, Martens, Newton John Johnson and Olson) Recommending approval of a Major Metropolitan Sanitary District based upon the concept of the Metropolitan Works. Whereas, the Legislature of.the State of Minnesota and the com- ponent municipalities and towns of the Twin Cities area have ex- pressed a desire to form a major Metropolitan Sanitary District; and Whereas, the City of Minneapo- lis and the City of Saint Paul have indicated an interest through the present Minneapolis -Saint Paul Sanitary District in forming a major sanitary district through the expansion and improvement of its existing sewerage works and treatment- plant; and Whereas, the Legislature has received and reviewed various plans for both' engineering design and financial propovtignmenf and has not to this date recognized any single plan as 'the final and best solution; and " Whereas, the Minneapolis -Saint ]Maul Sanitary District has studied and evaluated all plans and their financial impact on all, subdi- visions of the_ proposed major sanitary district and has devised a compromise plan designated as' "Metropolitan Works" which ap- portions capital costs by a cdm- bination of proportionate design and real property valuations; and Whereas, the said "Metropoli- tan Works" represents a com- promise solution based upoti a combination of methods indicat- ing' reasonableness and fairness in cost to all suburban communi, ties and the 'core cities of Saint Paul and Minneapolis; I I Now, Therefore, Be It Resolved: That the City Council of the City of Minneapolis having re- viewed this "Metropolitan Works" compromise plan does approve this concept in principal and does i =!furthermore instruct its staff to '`•',cooperate with the component ;= municipalities and towns of the "'Twin Cities metropolitan area in a: securing the establishment of a :Major Metropolitan Sanitary Dis- c: trict based upon the Metropolitan Works concept. Passed December 9, 1966. Glenn �';G. C. Olson, President of the Approved December 12, { 1966. Arthur Naftalin, Mayor. Attest: Leonard A. Johnson, City Clerk. Minneapolis The Honorable City Council City of Saint Paul City Hall Saint Paul, Minn. Gentlemen: December 16, 1 66 W Attached copy shows action taken by the City Council of the City of Minneapolis at a meeting held December 9, 1966, of interest to you. M ,e. F•IiI __•F -, Very truly yours, LEONARD A. JOHNSDN City Clerk .�. 111 Ili` II� I I IM f *- EUGENE V. AVERY CHIEF ENGINEER CITY O'F " - - "Capita .f DEP a i RANTHONY J. CREA COMMISSIONM .of Minnesota -" " ° km r�� EILIC- House.,:.55f02' m - � I g ,4 In, ..;, �n� i 1 40 ill] .z. 110n lCf ,,, w ,MY��� rs.►_".,r_..-- Commissioner ,,,,�„�jj � t _ _ December 8, 1966 Hon. Thomas R. Byrne, Mayor and Members of the City Council City of Saint Pauli Gentlemen: I Attached hereto for your information and use is a copy of the November, 1966, report by Toltz, King, Duvall, Anderson, Associates, Inc. and entitled "Preliminary Report On An Evaluation Of The Impact Of Cost Apportionment Pro- visions Of Legislative Proposals ". This report was made by the consulting firm to the Sanitary District Board on November 28, 1966. A somewhat enlarged report embodying the same recommended principles and presenting certain cost figures is expected to be made to the Sanitary District Board on the afternoon of December 12th. Overall coordination of the study and report was done by the engineering and legal staffs of Minneapolis, St. Paul and the Sanitary District. The report represents the considered joint recommendations of the staffs for a compromise finance and apportionment plan for needed metropolitan -wide sewerage facilities. i The Sanitary District Board has acted favorably on the recommended principles and we'would expect that the Board on December 12th would refer the more complete report to the City Councils of Minneapolis and St. Paul for con- sideration. In the meantime, I am sure that you will find the,attached pre- liminary report of considerable interest and usefulness. It is my recommendation that the Council approve the recommended appor- tionment plan and concur in the Sanitary District's plan to have the attorneys from Minneapolis,lSt. Paul and the Sanitary District collaborate on drawing up a proposed legislative bill which would embody the recommended apportionment principles. It is my understanding that the Minneapolis City Council, which meets once a week on Fridays, may consider and possibly approve the recommended plan on December 9th. Inasmuch as the St. Paul Council meets four days a week and has more flexibility, it is my suggestion that we study the preliminary report and also tt'e larger report which I will distribute immediately after receiving copies of it on December 12th. I would suggest that the Council then take the matter up at our regular session on December 14th. Yours very truly, Robert F. Peterson Commissioner of Public Works RFP /EVA /jv Attachment (� r t iTOLTZ, KING, DUVALL,ANDERSON AND ASSOCIATES, INCORPORATED ENGINEERS AND ARCHITECTS ARNDT J. DUVALL GERALD A. ANDERSON ' H. P. ARNESEN 1408 PIONEER BUILDING SAINT PAUL I, MINNESOTA CAPITAL 4 -7891 November 28, 1966 Mr. Kerwin L. Mick Chief Engineer and Superintendent Minneapolis -Saint Paul Sanitary District 2400 Childs Road St. Paul, Minnesota 55106 Dear Mr. Mick: In partial, compliance with the instructions contained in your letter of August 30, 1966, we are submitting a preliminary report on the evaluation of the effect of the cost apportionment procedures contained in the three legis- lative proposals submitted to us for study. I The purpose of this report is to define the alternate apportionment plans, to indicate the general impact as determined from a preliminary evaluation, and to set forth the basic principles involved in possible modifi- cations or compromises of the three legislative proposals. The proposals submitted for study were the following: 1. The apportionment and financing plan prepared to accompany the 1964 Comprehensive Sewage Works Plan. 2. H.F.i 594 of the 1965 legislative session (Ashbach Bill), with the amendments proposed in the Senate Civil Administration Committee (Popham Amendments). 3. The proposal of the St. Paul Sewer Study Committee dated July, 1966. The differing methods of cost apportionment contained in these three pro- posals have generally been considered as bases for the division of the costs involved in the creation and operation of a Metropolitan Sanitary District. 1 Mr. Kerwin L. Mick -2- November 28, 1966 In addition to these proposals, the impact of a compromise plan, selected by the Minneapolis -St. Paul Sewage Works Coordinating Committee ' (Twin Cities Areal), has also been studied. Of particular concern in the evaluations to -date has been the relative economic impact of each of the cost apportionment methods proposed by these plans to various areas of the Metropolitan Area; particularly the Central Cities, the inner ring of suburbs and the secondary suburban areas to be included in a possible Metropolitan District. ' The adoptilon of a Metropolitan District approach would necessitate the apportionment of costs for the construction and acquisition of the major trunk and intercepting sewers, the cost of construction and acquisition of sewage treatment facilities, and the cost of operating and maintaining these works. The cost items which have been considered in this preliminary analysis are the capital costs of the sewerage works and the treatment works. The cost of construction and acquisition of these facilities represents the major portion of the total costs and are the key to the financial impact. The term ', "Sewerage Works" is defined as all sewers and appurtenances for the collection; transportation and pumping of sewage or industrial waste. In the formation of a Metropolitan District, it is assumed that all such jointly- used conveyance facilities would be included. I Comprehensive,SewajZe Works Plan_ (Proportionate Design Capacity) The 1963 session of the Minnesota Legislature requested the prepara- tion and submission of a basic sewage works plan for the area likely to be served by the sewage treatment plant of the Minneapolis -Saint Paul Sanitary District. In addition, the Legislation (Chapter 882 M.S. Laws of 1963) re- quired a plan to finance construction of the works, and a formula for determin- ing the cost to each affected town and municipality. The Minneapolis -Saint Paul Sanitary District and the Cities of Minneapolis and St. Paul prepared this plan and, after approval by their respective governing bodies, submitted the plan to the Water Pollution Control Commission as required. The Com- mission reviewed the sewage works plan and the accompanying financing and ' apportionment plan, and submitted a report approving the former but recom- mending that an alternate financing and apportionment method be considered. The apportionment and finance plan submitted with the Comprehensive Sewage Works Plan proposed an apportionment method for sewerage works termed "Proportionate Design Capacity ". - Under the Proportionate Design Capacity methods of apportionment, the design capacity, based on maximum hourly utilization of the sewerage works by each area tributary thereto, is the basic element. Costs would be apportioned on the proportion which this value bears to the capacity of the sewer from point to point. Under this ' method, there are two principal elements which determine the apportioned I Mr. Kerwin L. Mick -3- November 28, 1966 I cost to a community. One is the capacity reserved in the various sewers for the community's eventual needs and the other is the length of major sewers necessary'to convey the community's wastes to the treatment facility location. Other costs would be apportioned on the proportion that the annual average dry weather sewage flow from a municipality or town bears to the total such flow treated fat the treatment plant from year to year. H.F. 594 of the 1965 Legislative Session ( Ashbach Bill), With Amendments Proposed in the Senate Civil Administration Com- mittee (Popham Amendments) - (Year 2000 Design Flow at the Plant) During the 1965 Legislative session, Rep. Robert Ashbach introduced proposed legislation for the formation of a Metropolitan Sanitary District. The bill passed the House of Representatives, but subsequently failed to receive the endorsement of the Senate Civil Administration Committee. Amendments having to do particularly with the apportionment of costs were proposed in the senate committee ,lby Sen. Wayne Popham. Despite the failure of the amended proposal to pass in the 1965 session, considerable interest in the plan as a basis for a Metropolitan Sanitary District Bill for the 1967 session has been expressed, especially from groups in Minneapolis and adjacent suburban areas. The basic;.manner of apportioning sewerage works capital costs under this plan would be the use of relative projected annual average dry weather flow at the treatment plant in the year 2000. These costs would be apportioned to individual towns and communities in proportion to the relationship which their projected plant flow bears to the total. This method of apportionment has often been referred to as "Year 2000 Design Flow at the Plant ". Other costs, as in the Comprehensive Sewage Works Financing Plan, would be apportioned on the basis of the proportionate annual average dry weather sewage flow. The St. Paul Sewer Study Committee Proposal of July, 1966 - (Relative Real Property Valuation) The City of St. Paul undertook a study to determine an alternate method of apportioning sewerage works cost, due to a concern regarding the effect upon the city of the "Year_ 2000 Flow at the Plant" apportionment method. After the study, the committee recommended that sewerage works capital costs and those of the treatment works be apportioned on the basis of proportionate annual real property valuation. Capital costs would be apportioned on the ratio which the real property valuation of a community bears to the total real property valuation inside the District limits. Operation and maintenance costs would be apportioned on a relative annual average flow basis as in the other proposals. I The St. Paul.Sewer Study Committee's Proposal is similar in this manner of apportioning costs to a proposal made during the 1965 Legislative Mr. Kerwin L. Mick -4- November 28, 1966 Session by the staff of the Minnesota Water Pollution Control Commission. Preliminary Evaluation of the Proposals The relative e economic impact of the three apportionment proposals was preliminarily evaluated, based primarily on the resulting apportionment of sewerage works capital costs under the various plans. While this evaluation does not include all of the factors involved, it does present a relative picture of the economic impact. Sewerage works capital costs included both the acquisition of existing jointly -used works and the cost of constructing required works to serve the District. Existing works were evaluated on the basis of their "Present Value ", derived by adjusting their original construction cost, less any Federal Grant received, by the ratio of a construction cost index at the present time to a construction cost index at the time of construction. The index used in the evaluation was that of the Department of Interior (formerly that of the U. S. Public Health Service) for the construction of sewers, modified so as to be applicable to construction undertaken prior to the year for which values of this index are available. Proposed limits and works used in the evaluation were, with limited .modifications, those of the sewage works plan prepared under Chapter 882, M.S. Laws of 1963, referred to earlier as the Comprehensive Sewage Works Plan. This plan utilizes a system of major interceptor sewers to convey sewage to one permanent treatment facility located downstream from the heavily populated part of the Metropolitan Area, as shown on Figure No. 1. Other details regarding procedure and assumption were discussed with and agreed upon by members of the Minneapolis -Saint Paul Sewage Works Coordinating Committee (Twin Cities Service Area). Results of the Evaluation Preliminary conclusions indicate that the relative apportioned capital costs to the various areas of the metropolitan community for the acquisition and construction of sewerage works vary considerably between the three pro- posals. The variation of these costs is probably of such magnitude as to suggest a problem of fairness and of the acceptability of any .metropolitan solution based upon these proposed apportionment tenets. Each of the proposals which was satisfactory to one or more areas of the proposed district was conversely un- favorable to the other areas, causing for the most part a wide span of apportioned costs to any one area under the provisions of the various proposals. The results of the preliminary evaluation were discussed with the i Mr. Kerwin L. Mick -5- November 28, 1966 Coordinating Committee. Based on the apparent deviation in costs under the plans, the Committee directed the preparation of evaluations of possible compromise plans in an attempt to present for consideration a plan with more acceptability to the area as a whole. Compromise Apportionment Plan After consideration of various alternate apportionment plans, the Com- mittee endorsed the presentation of a plan considered to be based more on fair- ness and equitable apportionment than those plans previously proposed. In principle, this alternate plan utilizes a combination of apportionment procedures related to the benefits derived by the construction or acquisition of the sewerage works. I Description of the Plan The Coordinating Committee's Plan involves the categorizing of the sewerage works into two classifications based on benefit. The first classification includes those sewerage works which must be acquired or constructed and which are necessary for the joint collection of wastes from .municipalities and towns in the District, but which must be con- structed or acquired regardless of the point of treatment of the wastes. The second classification of works, referred to as "Metropolitan Works ", are those which would be installed or acquired to convey wastes to a point down- stream from the Metropolitan Area in lieu of treatment plants to serve the various upriver regions and communities. The term "Metropolitan Works" is not intended to'limit the responsibility for construction, acquisition and maintenance of these works by a Metropolitan Sanitary District, but rather denotes those works which are considered beneficial to the Metropolitan Area as a whole. It is' envisioned that all cf the jointly -used sewerage works, and also sewage treatment plants, within the District Limits would be purchased, constructed, financed, operated and maintained by the District. ' The location of the two classifications of sewerage works is shown on Figure No. Z. The Coordinating Committee Plan would apportion the capital costs of the "Metropolitan Works" to the Metropolitan District communities and towns on the basis of relative annual real property valuation, as a measure of general benefit to the whole area. The capital cost of the other sewerage works, those which are not "Metropolitan Works ", would be apportioned to the municipalities and towns for which they are,provided, and which will receive the benefits of the existence of these facilities. The plan provides that the basis for apportion- ment of these facilities be on "Proportionate Design Capacity ". This combina- tion of apportionment elements is considered to be a basic approach to the Mr. Kerwin L. Mick -6- November 28, 1966 concept of dividing the cost based on the use of, the need for, and the benefits derived from the facilities provided. Economic Impact of the Plan Further studies of the economic impact of the Coordinating Committee Plan on the various areas within the proposed limits of a Metropolitan District are underway. The preliminary conclusion of the evaluation of the apportion- ment plan, is that the discrepancies inherent in the three proposals evaluated ' previously will be minimized, and that the apportioned costs will be more acceptable to the i ntities involved. Summary and Conclusions One of theli major concerns in the formation of a Metropolitan Sanitary District for the Twin Cities Area has related the division of costs among the ' component municipalities and towns. Preliminary evaluation of the three currently - proposed methods for the apportionment of these costs showed an apparent disparity in the economic impact, depending upon the method used ' and various other' elements such as location in the Metropolitan Area, sewage flow per capita, assessed valuation, etc. In an attempt to reconcile the divergent methods of cost division, the Coordinating Committee studied a number of compromise solutions to the cost apportionment problem, and from among these recommended a plan based on a combination of methods which indicates a reasonableness and fairness in the division of costs to all areas. This plan recognizes a new element in this division -- that of general benefit to the Metropolitan Area as a whole. Sewerage works in this plan are classified into two groups for purposes of cost apportionment. The "Metropolitan Works" are those which are considered to benefit the whole metropolitan area. The cost of the "Metropolitan Works" would be divided among all municipalities and towns within the District Limits based on their relative real property valuations. The cost of the remaining, or Non - Metropolitan Works,would be apportioned among the communities, based on their proportionate use of a facility in the year for which it is designed. For most communities the "length factor" as an element in the division of costs is .minimized. The principles involved in this method of dividing the costs are con- sidered to be a basic approach to the concept of paying in proportion to the use of, the need for, and the benefits derived from the facilities provided. While studies of the economic impact of the Coordinating Committee Plan on the several sectors of the Metropolitan Area have not been carried to a Mr. Kerwin L. Mick -7- November Z8, 1966 final conclusion, the preliminary investigation indicates that the application of the Metropolitan works concept results in a reasonable and fair balance of the apportioned costs to the entities involved. Very truly yours, TOLTZ, KING, DUVALL, ANDERSON AND ASSOCIATES, INC. U� I Walter W. TIVorpe WWT /ao % ra siAGE 1 -lase ro IGTo INTEAtf PTOV SEVERS P' PINS STATIONS STAGE 3 -I%0 TO IGSO A� INTEGCf PTOV SEVERS PUMPING STATIONS STAGE s-IGeG TO 3000 IITTEAOEPTOV SEVERS PUYPINS STATIONS - -- EXISTING INTERCEPTOR SEVERS LIMITS OF SERVICE -TEAR 3000 COMPREHENSIVE SEWAGE WORKS PLAN FIGURE N0. } SCALE ,.11 2.I 1, Llln ,.Il n % ra siAGE 1 -lase ro IGTo INTEAtf PTOV SEVERS P' PINS STATIONS STAGE 3 -I%0 TO IGSO A� INTEGCf PTOV SEVERS PUMPING STATIONS STAGE s-IGeG TO 3000 IITTEAOEPTOV SEVERS PUYPINS STATIONS - -- EXISTING INTERCEPTOR SEVERS LIMITS OF SERVICE -TEAR 3000 COMPREHENSIVE SEWAGE WORKS PLAN FIGURE N0. }