2008-01-11 Pond ProjectMichael C. Couri*
Andrew J. MacArthur
Robert T. Ruppe-~
*Also licensed in Illinois
**Also licensed in Cal~i~rnia
January 11, 2008
Mr. David Lenhardt
12725 43rd Street, N.E.
St. Michael, MN 55376
COURI,11IACARTHUR &
RUPPE, P.L.L.P.
Attorneys at Law
705 Central Avenue East
PO Box 369
St. Michael, MNSS376-0369
(763) 497-1930
(763) 497-2599 (FAX)
courimacarthur@earthlink. net
Re: City of Albertville; Albert Villas Pond Project.
Dear Dave:
Kristen H Carr
Kyle R. Hartnett
In February, 2006, the City of Albertville acquired an option on 40 acres of
property located immediately west of the Albert Villas subdivision for the purpose of
constructing a storm water pond to alleviate a flooding situation in the City of Albertville.
After discovering that Independent School District No. 885 had an interest in purchasing
this same property for school purposes, the City Council and the School Board made a
determination that it would be in the best interests of Albertville's residents and the
School District's residents for the two entities to collaborate on their planned construction
projects. As a result, on April 19, 2006, the City of Albertville and Independent School
District No. 885 signed an Option and Utility Services Agreement which assigned
Albertville's interest in a1140 acres to the School District but gave the City the option to
purchase property from the School District for ponding purposes.
On May 7, 2007, the City exercised its option to purchase fee simple title to the
property it needed for construction of a storm water pond that serves the Albert Villas
subdivisions. The storm water pond has been constructed, and the Albertville City
Engineer has recently finished his calculations as to how much land the City used in
construction of the pond and the ditch leading to the pond. I believe a summary of the
City Engineer's work has been sent to Dr. Ziegler.
The relevant cost items are as follows:
1. Paragraph 1B of the Option Agreement set the per acre price at the price the
School District paid for the entire 40 acre parcel it purchased, divided by the
number ofnon-wetland acres that were contained in that 40-acre parcel. The City
Mr. Dave Lenhardt
January 11, 2008
Page 2 of 5
Engineer's summary used $40,000 per acre as the acreage purchase price.
According to the Option Agreement, the per acre cost is to be the total amount the
City paid divided by the total non-wetland acreage. I understand the total option
land area to be 39.47 acres, with 2.55 acres of wetlands. At $40,000 per gross acre
paid by the School District, that would yield a per acre cost to the City of
$42,762.73. The City used 7.01 acres of pond area on Outlot A. In addition, the
City used .68 acres of land on Outlot B through which the City's discharge ditch
runs, for a total of 7.69 acres of pond and ditch. At $42,762.73 per acre, the City
owes the School District $328,845.40 for the land purchase.
2. The City used 13,760 s.f. of wetland credit that the School District created.
At $.70 per s.f. (this price was agreed to previously by the City and School Board),
this amounts to $9,632.00 due to the School District from the City.
3. The engineer has identified berm easement of ,9 acres and has initially
valued this land at $40,000.00 per acre (this berm is located in the wetland area
west of the pond). However, .47 acres of the berm was constructed in wetlands,
with .43 acres being constructed on non-wetland property. Paragraph 1B
specifically exempts wetland acreage used by the City from the purchase price
calculation. Accordingly, only the .43 acre non-wetland area is subject to the per
acre purchase price identified in paragraph 1 of this letter, rather than the .9 acres
identified by the City Engineer. At $42,762.73 per acre, the City owes the School
District $18,387.97 for the berm easement area.
4. The School District has located portions of two ponds in the City of
Albertville on City of Albertville easement property (immediately north of 53rd
Avenue and immediately south of 52nd Avenue). The City Engineer calculates the
acreage on these areas to be .37 and .35 of an acre, for a total of .72 acres. While
there is no underlying agreement beiween the Schooi District and the City
allowing the construction of these ponds over City easement areas, City Staff
believes it would be consistent with the intent of the Option Agreement to offset
this .72 acres against the 7.69 acres of land used by the City for ponding. That
offset would be $30,789.17 (.72 acres times $42,762.73). The City would provide
the School District with a permit for the ponds, subject to the City using these
areas for utilities that do not conflict with the School District's use of the area as a
pond.
5. Paragraph 2A of the Option Agreement required Albertville to provide the
School District with sewer and water service, and called for the School District to
pay Albertville Sanitary Sewer Trunk Line Fees and Municipal Water Trunk Line
•Mr. Dave Lenhardt
January 11, 2008
Page 3 of ~
Fees. The combined trunk charges are $3,000 per acre, applied to a maximum of
115 acres, for a total of $345,000.00. Paragraph 1B calls for the option purchase
price to be offset against the applicable trunk charges, with only the difference
being paid to the party to whom it is owed.
6. Paragraph 1 of the Option Agreement required the School District to pay
the City $5,000 for the City assigning the option to purchase the original 40 acre
parcel. According to City records, that $5,000 has not yet been paid.
7. Paragraph 4B required Albertville to pay the cost of road and waterline
construction between the westerly extension of 52"`~ Street south to the border of
the property. It is my understanding that this water line and road have already
been installed and Albertville has already paid the School District for these costs.
8. Albertville inadvertently paid the School District twice for the same
$1,250.00 Gries & Lenhardt's bill related to legal work on the ponds. A refund of
$1,250 is due the City from the School District for this overpaid invoice.
9. Albertville has incurred $3,267.00 in engineering bills from the City's
Engineer, Bolton & Menk, related to the installation of sewer and water utilities
for the School District's plat. Albertville would like to have these fees reimbursed
by the School District. This request is consistent with the $10,000 payment
Albertville has already made to the School District to work Albertville's ponding
plans and specifications into the School District's bidding documents.
10. Paragraph 3C requires the School District to utilize any borrow that is
needed on the site from the City's pond area. Apparently, the School District
mined borrow from two different locations on the site, neither of which was
located in the City's pond easement area as required by paragraph 3C. Had the
School District mined this material from the City's pond easement, the City would
have incurred less pond construction cost. However, rather than dispute this issue,
and in recognition that the City's actions in selling its option on this property to
the School District and the School District's actions in allowing the City to
purchase property needed for ponding have benefited both the School District and
the City, City staff would be willing to recommend to the City Council that the
City seek no remuneration from the School District as a result of this borrow
mining.
The financial summary for this transaction is as follows:
•Mr. Dave Lenhardt
January 11, 2008
Page 4 of 5
Land cost--pond
Wetland credits
Land cost--berm
Option
consideration
Due to Due to
School District City
$328,845.40 $ 30,789.17
$ 9,632.00
$ 18,387.97
$ 5,000.00
l~runk fees $345,000.00
Overpaid Invoice $ 1,250.00
Utility Engineering $ 3,267.00
Total $356,865.37 $385,306.17
Net due from School District to City $ 28,440.80
Because the City exercised its option to purchase the property in fee, the closing
will involve the School District providing a warranty deed to the City for Outlots A and
B, and an easement over the berm area, with the City providing an easement back to the
School District for ponding purposes over Outlots A and B, as well as the permits for the
two partial ponds located in Albertville's existing easements. I will be preparing the
easements shortly and will forward them to you when they are completed.
I would appreciate it if the School District would provide me with its original
abstract for this property for title exam purposes (I will return it after I have examined it).
Once you have had a chance to revie ~v t his issue r~itli the Dr. Siegler and 1`~Ir. Rego, I
would like to have the three of you meet with myself, the City Administrator and the City
Engineer to work out the timing and details of this transaction before we send it to the
City Council and School Board for their respective approvals. Please feel free to call me
with any questions you may have. Thank you.
Sincerely,
~~
Michael C. Couri
Couri, MacArthur & Ruppe, P.L.L.P.
•Mr. Dave Lenhardt
January 11, 2008
Page 5 of 5
Enclosures
Cc: Larry Kruse
Tina Lannes
Adam Nafstad
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