Adopt Resolution #18-236 Approving Final Plans and Specifications, Authorizing Advertisement for Bids, and Approving Development Agreement for Lazydays RV Expansion.

This case is a placeholder. This case will be updated with final documents on Friday, November 9.

The purpose of this case is to approve the following:

• Site Plan for Private Improvements
• Development Agreement for Private Improvements
• Plans and Specifications for Water and Sanitary Sewer Extensions
• Assessment Agreement for Sanitary Sewer Extension

Lazydays RV has purchased the former Shorewood RV located at 8390 Highway 10. Lazydays RV proposes to constuct a new 28,000 square foot service center on the south side of Riverdale Drive. Preliminary Site Plan Approval has been granted. Staff is seeking approval on revised plan sheets.

Staff will add the Development Agreement and Assessment Agreement on Friday, November 9 after verifying agreement with the Developer. If an agreement is not reached, this case will be pulled from the agenda.

Notification is not required.

Prelminary Approval was granted contingent upon finalizing utility plans. Utilities must be extended from Armstrong Boulevard to the east of the site. Originally, the Developer proposed to install these utilities and seek reimbursement over time. However, the original estimated cost from the Developer's Design Team was much lower. After extensive discussions, Staff believes that the City is best protect by installing these utilities and recouping costs through our standard process and avoiding a Reimbursement Agreement with the Developer.

Below are important definition of utility extensions to frame this case.

Trunk Utility. A Trunk Utility is a utility that is 'oversized' to accomodate multiple areas of development. This is the main artery of the utility. The most common trunk utilities are water and sanitary sewer. These trunk systems are typically constructed by the City, paid for by Trunk Fees paid for by new development. When the City constructs these utilities, it is not considered a subsidy or assistance to a project, as the funding was paid for by Developer Trunk Fees.

Lateral Utility. A Lateral Utility is a utility design to service an individual development. It is not part of the City's Trunk System, and therefore Trunk Fees are not utilized to pay for these invididual services. These improvements are typically installed by the Developer. However, depending on the complexity or scope of the Development, the City may choose to construct these improvements and assess the costs back to the benefitting properties.

Water Trunk Extension

The water service line planned for Riverdale Drive is part of the City's Trunk Water System. Therefore, the obligation for cost of installation is ultimately the City, funded by Trunk Fee Payments by new developments. Lazydays RV is responsible for Water Trunk Fee Payment based on acreage of the site.

This Water Trunk Line will benefit and is necessary for approximately 200 acres of developable area west of Llama Street in addition to the Lazydays RV site. Costs of this line will be reimbursed over time through future Trunk Fee payments. There are sufficient funds in the Water Enterprise Fund to complete this project as well as additional projects throughout the community. The Water Utility Working Capital Balance is $22M.

The Water Trunk System is a pressurized system, which allows the City to direct piping generally in any direction. This statement is offered to explain differences in the Water Trunk and Sanitary Sewer Trunk Systems explained later in this report. For flow and redunancy, water lines are typically 'looped' to avoid dead-end runs.

As a reminder, since the Trunk System is funded through Trunk Fee Payments for new development, this is not a subsidy to the Development. The costs of the improvement is approximately $260,000. Improvements over $175,000 must be competitively bid per Minnesota Statute.

Sanitary Sewer Lateral Extension

The Sanitary Sewer Line planned for Riverdale Drive will only primarily benefit Lazydays RV. This is due to topography, slope, and depth. Unlike the water system, the sanitary system relys on unpressurized gravity flow. When the system runs out of slope, it must lift the wastewater and send through a pressurized forcemain. Due to topography and depth of the existing system, the sanitary sewer line in Riverdale Drive does not qualify for a Trunk Line, as it cannot serve a broader area of the community.

However, one other parcel along Riverdale Drive would benefit, and is dependent upon this extension. Anoka County acquired 8175 Riverdale Drive for purposes of the Armstrong Boulevard Interchange. This interchange design was able to preserve the building itself, but resulted in the partial removal of the drainfield for the private septic system. In order to make functional use of this building, connection to the sanitary sewer extension is required. Additionally, there is a developable parcel on the south side of Riverdale Drive that would benefit from this sewer extension.

Since the City is proposed to construct the Water Trunk Line in the same location as the Sanitary Sewer Lateral Line, Staff recommends that the City construct both lines. Staff would recommend that Lazydays RV only be responsible for 2/3 the cost of this line, as one 0.75 acre parcel and one 1 acre parcel would benefit from the extension. Lazydays RV will pay their share up front (previously proposed to be assessed). The City could recoup its share through the connections of the additional benefitting properties at time of connection. The City could fund this cost through the Sanitary Sewer Enterprise Fund. The Sanitary Sewer Working Capital Balance is $12.5M.

Lazydays RV has now offered to pay their share of this cost up front, as opposed to assessing its share of the costs. The City's share of the project is for other benefitting properties and is planned to be paid for by future connection fees, and thus not a business subsidy. The cost of this improvement is estimated at $98,000 ($65,333 = Lazydays RV; $32,667 = City/reimbursed with future connection).

Requirement for Competitive Bid

Since the combined project is approximately $360,000, the project must be competitively bid under Minnesota Statutes. This evening, the action will be to simply authorize advertisement for bids. This does not obligate the City to move forward with the project. The City Council would consider authorizing the project in the next 45-60 days once bids are received. This is similar to the City Road Reconstruction Projects.

Examples of Previous Use

This process was most recently utilized in the Bunker Lake Industrial (PSD, LLC)/Riverstone Addition (Capstone Homes) as it relates to the Bunker Lake Boulevard and Puma Street Improvements.

The Developer is responsible for all costs associated with the private improvements. The Developer is also responsible for their share of the sanitary sewer lateral line. The costs of the sanitary sewer lateral will be fronted by the City (from the Sanitary Sewer Fund) and repaid back over a period of ten years through an Assessment Agreement, plus interest.

The City is responsible for the costs associated with the Water Trunk Line. The Water Trunk Line is funded by Water Trunk Fee Payments from new development, including Lazydays RV.

Staff recommends that the City Council adopt #18-236.

Motion to adopt Resolution #18-236 approving final plans and specifications, authorize the City to advertise for bids for utility extensions, and approve the Development Agreement related to the Lazydays RV expansion.