Review of Revised Lower Rum River Watershed Management Organization Joint Powers Agreement.

Purpose:
The purpose of this case is to review the latest draft of the revised Joint Powers Agreement (JPA) for the Lower Rum River Watershed Management Organization (LRRWMO), which is attached in both clean and redline versions.

Background:
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 45% of the LRRWMO's annual costs due to our large area of land within the LRRWMO and our net tax capacity. Comparatively, both Andover and Anoka pay considerably less. Considering our greater financial obligation it seemed reasonable to request that Ramsey 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 never adopted it.  The Cities of Andover and Anoka both indicated they didn’t approve of a weighted vote as proposed.
 
On January 14, 2014, the City Council was updated at a workshop on the status of the City’s proposal to allow the use of weighted voting when considering the approval of LRRWMO driven capital improvement projects.
 
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. He also felt the revised language more clearly prevents member cities from being forced to pay a capital improvement project allocation. If objections are raised to CIP 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 as 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.
 
If the three member cities are unable to agree on a proposed JPA amendment, the existing JPA terminates on January 1, 2015.  At that time, Anoka County would assume the responsibilities of the WMO and act as the WMO for the watershed, or they would 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 watershed area. This is an important point as the County or watershed district could 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. In other words, it would likely be better to accept and extend the terms of the current JPA then to let it lapse and let the County assume the responsibilities of the WMO.

This case is estimated to conclude in 30 minutes or less.

No funding is required for this case.

Council Member/LRRWMO Board Member Mark Kuzma will introduce the discussion on this item. City Attorney Joe Langel and City Engineer Bruce Westby will also be available to address questions as needed.

Requested changes to the proposed JPA language must be submitted to the Chair of WMO Board, Todd Haas, by Friday, June 27^th.  If no further revisions are requested by any of the three member cities, the City Council will be requested to approve the revised JPA at an upcoming regular meeting.