Staff recommends that Council authorize the Mayor to execute the attached Compensation Agreement including oversizing and a $250,000 contribution to the extensions.

In order to obtain water and sanitary sewer service, Messinger Company, LLC will be extending a water and sanitary sewer main west from East Lane to Parcel 11A of Certificate Survey 1391, located along Harnish Boulevard.  The public mains will be larger than 12-inch diameter and the City's policy is to compensate and pay for oversizing of the mains above 12-inches in diameter. Compensation for the preferred route is estimated to be $181,000.00.  The compensation amount could be higher or lower depending on actual costs and the route chosen.  In addition to oversizing, staff is recommending that the City contribute $250,000.00 utilizing water and sewer funds to the public main extensions.  Multiple routes were evaluated for the water and sanitary sewer mains and staff is recommending that the additional contribution be made so that the most developable route is more amenable to the developer.

The Council may:

• Approve an Agreement for compensation from the City back to the Developer. 
• Approve an Agreement for compensation for oversizing but not the additional $250,000. This would not encourage the developer to extend through the most developable route.
• Not approve an Agreement for compensation from the City back to the Developer.  This would be inconsistent with current City policy of compensating and paying for oversizing of utility extensions.

Based on review of the quantities to be installed, staff estimated that $39,750 of sanitary sewer main and $141,250 of water main plus $250,000 will be eligible to be recovered by the Developer. The extent and timing of the City’s participation in the project costs is determined in conformance with the CIP approved by City Council and based on actual quantities installed.  The funds are budgeted annually from water and sewer funds specific to compensation agreements.