Council mulling utility rate hike

Increase would allow city to budget for more realistic infrastructure life cycles

Clint Riese
News Editor

Pleas by residents in northwest Forest Lake for assistance from the city might lead, in a roundabout way, to a 6 percent increase in the utility rate.

Residents from the 200 block of Northwest Third Avenue approached the council in June regarding problems stemming from shared sewer and water lines. One sewer hook-up serves four houses and two of the homes also share a water line. In some cases, the original homeowners did not hook up individually to services, and at some point, the city did not extend mains down the street. More than once a year on average, the sewer line backs up into one of the properties, despite regular cleaning of the line.

Through a June meeting, a July workshop and at last Monday’s regular meeting, the council discussed alternatives, including taking no action.

At the workshop, city staff introduced the idea of establishing an ongoing source of funding that would, in part, serve to aid in this and similar situations. Public Works Director Mike Tate at a council meeting said the amount of similar cases with unextended service lines in the city is unknown but may number up to 100.

In a separate but related discussion, the Finance Committee has explored shortening the depreciable life of the city’s water and sewer mains. Current utility rates allow for maintenance of an infrastructure system with a 75-year life span. The number used to be 40, but the city in 2004 let that slip in order to keep rates down.

Research by City Engineer Ryan Goodman and Finance Director Ellie Paulseth showed Forest Lake lags behind other communities in maintaining its system. The infrastructure in communities Goodman talked to averaged 40-50 year life cycles.

“Seventy-five years is expecting a lot out of infrastructure, with corrosive soils,” Goodman said.

Paulseth found no other community working on a schedule of over 60 years. She said a 6 percent utility hike would bring in $190,000. That amount could be used to bring the city’s infrastructure life cycle down to 50 years. It could also fund work in problem areas, such as the Third Avenue neighborhood.

“If you want to take on more responsibility, this would be the source of funding in order to accomplish that,” she said.

City Administrator Aaron Parrish said the council could prioritize use of the funds.

The council voted 3-1 to direct staff to prepare a revised depreciation schedule and rate impact analysis for further consideration.

“Regardless of what we set a depreciation schedule at, it’s depreciating at a rate that is faster than 75 years, and we should get ourselves in line with reality,” Mayor Chris Johnson said.

Councilman Mike Freer said that while 75 years is likely not a feasible schedule, he could not support the rate increase.

With that potential funding source identified, the council acted via a 4-0 vote to assist in the Third Avenue dilemma by authorizing an approximately $25,000 project that will provide the residents access to individual connections. No city funding would go toward work on private property; the residents will need to have their lines extended to the street if they choose to connect.

“Considering where we started with this – I was definitely not in favor of having the city getting into repairing private lines given the challenge that the city faces. … This is probably a decent middle ground to solve the problem without getting into the business of moving into private property and doing private property rehabs,” Johnson said. “I think it is taking a bad situation and making the best of it.”

Though he supported this project, Councilman Ben Winnick urged caution with how the new utility proceeds would be used, should a rate increase be adopted. The majority of the funds, he said, should go to regular maintenance and replacement rather than to filling in the system’s gaps.

“Very few of those lines are going to survive 75 years,” he said. “A big portion of changing that depreciation isn’t just to cover the random line that was omitted here or there but just to bring that fund in so we can afford to fix those lines without having to bond for them.”

Residential variance

Another property-specific request from a resident won approval from the council, despite a recommendation of denial by the Planning Commission.

Brad and Laura Husnik will be allowed to build a new house closer to the lake after demolishing their current house at 567 North Shore Drive. The variance allows them to exceed the maximum impervious surface coverage of 25 percent. The amount of such surfaces will jump 9 percent, from 4,040 to 5,741 square feet.

This increase is what concerned the Planning Commission, not the new structure’s closer proximity to the lake. The board’s findings of facts state there are several redevelopment options that would allow for a new house while remaining under 25 percent of impervious surface coverage. Demolishing a nonconforming, three-car, detached garage would reduce coverage by 1,006 square feet. Doing so and also moving the proposed house 10 feet back toward the street would combine to bring coverage under 25 percent.

Last Monday, the council disagreed with that recommendation.

“I try to follow the recommendations of the Planning Commission, but I have a hard time understanding why they recommended (it not be approved),” Johnson said.

Freer said the Planning Commission’s requests were unreasonable. He said the property owners looked at alternatives but are limited by a sewer line running through the middle of their property.

Councilwoman Susan Young cast the lone dissenting vote.

“As we talk about the lake and we get concerns from people and the lake association about water quality on the lake, the way it degrades is one property by one property,” she said. “Quite frankly, when we say yes to this one, we really do need to say yes to the rest of them. I think the Planning Commission worked really hard to come up with their recommendation and I think there are alternatives.”

The council’s approval included eight conditions suggested by the Planning Commission.

Developments unveiled

Community Development Director Doug Borglund unveiled a pair of upcoming building projects, one commercial and one residential.

St. Croix Cleaners plans to relocate from Lake Street to a new, two-tenant building at 341 SW 12th St., just south of AutoZone. At the 2,760-square-foot building, the dry cleaner will occupy the end with a drive-thru.

The council voted 4-0 to approve both a site plan review and a variance to reduce the rear setback from 35 to 27 feet. The variance was needed to allow for adequate parking and traffic flow.

The residential project regards the establishment of a subdivision with seven single-family lots.

“Subdivision – it’s a word we haven’t heard in a little while,” Borglund said.

The Scott Addition will encompass 5 undeveloped acres at the corner of 202nd Street North and Fenway Avenue North in southern Forest Lake. The lots will have driveway access off 202nd Street.

The council approved the concept plan on a 4-0 vote.

Airport update

Airport Commission members Rick Ashbach and Sam Husnik presented an annual update on the Daniel A. DePonti Memorial Airport.

Twenty-seven of the lots have been sold, with the 14th hangar under construction. Only two or three lots remain for sale.

The commissioners would eventually like to see the runway paved and extended 500 feet to 3,300 feet. They expect the state would pick up 80 percent of the cost, though some issues involving airspace regulations would need to be ironed out.

“We’ve had some comments from folks who say, ‘You know what? I’d go hangar there in a minute if we had a paved runway,’” Husnik said.

The airport typically closes for part of the spring due to the wet ground. Paving would allow it to remain open year-round. It would also pave the way for a symbiotic relationship with the airport industrial park, the commissioners said.

Another way to help the airport would be for the city to sell or lease some of the surrounding land, the commissioners said. In 1998, Tom and Kay Doherty sold the airport to Forest Lake Township as part of a 630-acre transaction.

The airport’s recent fly-in was the best in the history of the annual event, Ashbach said, with strong attendance.

Other business

The council also:

– Set Oct. 28 as the date for a public hearing on the creation of a tax increment financing district to aid in the redevelopment of the former Stock Lumber property at Broadway Avenue and Third Street Northwest into the Cherrywood Pointe senior living community.

– Approved a request from the Forest Lake Fire Relief Association to increase the annual benefit level for volunteer firefighters from $4,500 to $4,800 per year of service. The association’s pension fund is paid primarily through state pension aid and interest. The city will not pay more than the $500 per firefighter annual contribution it already makes. The city is responsible for any deficit if pension fund liabilities ever exceed assets.