Consider approving revised Lower Rum River Watershed Management Organization Joint Powers Agreement.

Purpose:
The purpose of this case is to approve the revised (amended and restated) Joint Powers Agreement (JPA) for the Lower Rum River Watershed Management Organization (LRRWMO), which is attached to this case in both clean and redline versions.  The revised LRRWMO JPA as drafted by LRRWMO attorney Charles LeFevere with Kennedy & Graven clarifies certain provisions of the JPA related to the funding of capital improvement projects, updates citations to state law making the form of the citations uniform, provides for the consistent use of defined terms, cleans up typos and grammatical errors, remove all references to Coon Rapids since they are no longer a member city, and extends the term of the agreement another 10 years to January 1, 2025.

Background:
As has been discussed at numerous Council work sessions and meetings, the existing Lower Rum River Watershed Management Organization (LRRWMO) Joint Powers Agreement (JPA) provides for each member city to receive one vote on any matter requiring a vote. Since there are currently three member cities in the LRRWMO (Andover, Anoka, and Ramsey), each city receives one-third of the total vote. The City of Ramsey has historically paid about half of the LRRWMO's annual costs due to our large area of land within the Lower Rum River watershed and our net tax capacity. Comparatively, both Andover and Anoka pay considerably less. Considering our greater financial obligation it was discussed that Ramsey should receive a larger percentage of the total vote, especially when considering potential large capital improvement projects such as the proposed Anoka Dam reconstruction.

On October 8, 2013, Council member Kuzma proposed an amendment to the LRRWMO Board allowing for weighted voting whenever LRRWMO related capital improvement projects were to be considered. However, any time a simple majority vote would be required, Ramsey would still only receive an equal vote to the other two member cities. This amendment would have allowed capital improvement projects to be approved after receiving a minimum of 66% of the vote with each member city being allocated a percentage of the total vote equivalent to the amount contributed annually to the general fund. This proposal was discussed on several occasions but the LRRWMO Board did not adopt it. The Cities of Andover and Anoka both indicated they didn’t approve of the weighted vote as proposed.

On March 11, 2014, the City Council reviewed proposed amendments to the LRRWMO JPA as drafted by WMO attorney Charles LeFevere with Kennedy & Graven. A memo summarizing the purpose of the proposed amendments was also reviewed. The memo stated the proposed amendments were intended to clarify certain provisions of the JPA relating to the funding of capital improvement projects, as well as to clean up the JPA in several areas including updating citations to state law and making the form of the citations uniform, provide for the consistent use of defined terms, clean up typos and grammatical errors, remove all references to Coon Rapids since they are no longer a member city, and extending the term of the agreement another 10 years to January 1, 2025. The City Attorney reviewed the proposed amendments and felt that the revised document was an improvement, though more extensive changes could have been made to more clearly set forth the capital improvement project funding process. The City Attorney also felt the revised language would more clearly prevent member cities from being forced to pay a capital improvement project allocation. It was also discussed that if objections are raised to capital improvement project funding, the issue will go to non-binding arbitration, and if that fails, the capital improvements will be funded via Minnesota Statute section 103B.251 (County bonds).

On June 2, 2014, a revised version of the draft LRRWMO JPA drafted by WMO Attorney Charlie LeFevere was submitted to WMO Chair Todd Haas with the City of Andover, along with the following qualifying statements;

Attached is a revised version of the Lower Rum River Watershed Management Organization Joint Powers Agreement and a redline showing changes from the last draft.

In response to comments from the City of Andover, I have reduced the number of terms used to describe the Commission and its Members. References to the Commission are all changed to "LRRWMO". The Board of Commissioners is simply referred to as the “Board” and individual members of the Board are referred to as "Commissioners". The Member Cities are referred to throughout as “Member City” and the councils of those cities are referred to as “Member City Councils”.

The former draft of the Joint Powers Agreement contained provisions related to the funding of capital projects in both Article VII and Article VIII. The attached draft includes in Article VII provisions relating to how capital projects are to be funded, either by contributions from the Member Cities or a county tax levy under Minnesota Statutes, Section 103B.251. Provisions in Article VIII now deal only with how those payments are to be made by the cities for capital projects that are not fully funded from other sources.

Andover suggested that the Joint Powers Agreement should define in more detail what is considered to be a capital improvement project and more specific direction as to what is classified as member maintenance. The rules of BWSR at Minn. Rules, Part 8410.0020, subpart 3 defines "capital improvement" as "a physical improvement that is not directed toward maintenance of an in-place system during its life expectancy." Since this is in the state rules applicable to WMOs it may not be necessary to repeat it in the JPA. I don't have a good definition of maintenance. In my experience, joint powers WMOs don't generally own and operate capital improvements. Rather, they are owned maintained and operated by the host city. However, dealing with maintenance, repair and operation could be handled differently and this should be decided and agreed upon by the parties before constructing a capital project.

In correspondence from the city of Ramsey, it appears that their primary concern continues to be the fact that Ramsey, or Ramsey taxpayers, may be required to pay the cost of capital projects that it does not favor. Unfortunately, Minnesota Statutes does not allow joint powers agreements to require unanimous consent for capital projects. See Minnesota Statutes, Section 103B.211, Subd. 1 (c).

On June 3, 2014, Todd Haas submitted the revised version of the JPA to the City Administrators of the three member cities for distribution and review along with the following qualifying statements;

Attached is revised version (one is clean version and the other is a redline version) of the LRRWMO joint powers agreement that has been prepared by Charlie LeFevere, attorney for the LRRWMO.

Please review the agreement by Friday, June 27th and let me know one or another if any additional changes need to be considered by Charlie LeFevere. If there are no changes that need to be considered, I will send another e-mail to each of the Cities to move forward to having the joint powers agreement to be approved by your City Council.

At the June 17^th Council Work Session, the City Council reviewed and approved the revised JPA by consensus with one minor revision requested; change the word “may” to “shall” in the last sentence of the fourth paragraph of Subdivision 4.  This requested revision was accepted by the WMO attorney and is identified in the attached redlined version of the revised JPA.  The City Councils of the other two member cities, Andover and Anoka, reviewed and approved the revised JPA as attached with no additional revisions requested, and subsequently formally approved and executed the new JPA.  The City of Ramsey will be the last city to formally approve and execute the revised JPA upon Council approval.
 
If any additional revisions are requested by the Ramsey City Council the proposed revisions would again need to be reviewed and approved by the two other member cities before the existing JPA terminates on January 1, 2015.  If a new JPA is not executed by that time, the LRRWMO would be dissolved and Anoka County would assume the responsibilities of the WMO for the watershed, or they could petition the Board of Water and Soil Resources (BWSR) for creation of a watershed district. The County or watershed district would then assume all responsibilities of the WMO for surface water management within the Lower Rum River watershed area. The County or watershed district could then fund capital improvement projects within the watershed in any number of ways, but whichever way is used it would generally result in the taxpayers of the largest cities, or the cities having the highest tax value, paying the largest share of capital improvement projects.  In addition, none of the member cities would have a vote in any decisions made by the County or watershed district to undertake a capital improvement project.

No notifications are required for this case.

No alternatives are proposed for this case.

No funding is required for this case.  Any future stormwater related capital improvement projects would likely be funded from the Stormwater Fund, though funding sources for each project would be examined on a case by case basis.

Staff recommends approving the attached revised Lower Rum River Watershed Management Organization Joint Powers Agreement.

If no further revisions are desired, the City Council is requested to approve the attached revised JPA.