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Home My WebLink About05-346 Repealed Resolution Resolution No.05-346 RESOLUTION AUTHORIZING EXECUTION OF A PUBLIC IMPROVEMENTS CONSTRUCTION AGREEMENT WITH PINGREE LLC, PINGREE CREEK, LLC, WENNLUND FARM, LLC, MEIER FARM ASSOCIATES LIMITED PARTNERSHIP AND NESLER ROAD LIMITED PARTNERSHIP, WYNDHAM DEERPOINT HOMES, INC.,HPI-ELGIN LLC AND PII REAL ESTATE LLC FOR OTTER CREEK INTERCEPTOR SEWER PHASES 4A AND 4B AND OTTER CREEK INTERCEPTOR SEWER AND WATER MAIN PHASES 5A AND 5B BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Ed Schock,Mayor,and Dolonna Mecum,City Clerk,be and are hereby authorized and directed to execute a Public Improvements Construction Agreement with Pingree LLC,Pingree Creek,LLC, Wennlund Farm, LLC, Meier Farm Associates Limited Partnership and Nesler Road dLimited partnership, Wyndham Deerpoint Homes, Inc.,HPI-Elgin LLC and PII Real Estate LLC for Otter Creek Interceptor Sewer Phases 4A and 4B and Otter Creek Interceptor Sewer and Water Main Phases 5A and 5B, a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock,Mayor Presented: December 21, 2005 Adopted: December 21, 2005 Omnibus Vote: Yeas: 5 Nays: 0 Attest: s/Dolonna Mecum Dolonna Mecum, City Clerk GF F1/4.i G. ~ City of Elgin Agenda Item No. r Qat lll: _ it I 0, E L 0 IIS 1, G ' ` November 23, 2005 _ ri 11 p� Nk s TO: Mayor and Members of the City Council (1,492/ FINANCIALLY STABLE CITY GOVERNMENT E.FFK:IF.N7 SERVICES, v AND O W LIT Y INFFIASTRVCTV RE FROM: Olufemi Folarin, City Manager William A. Cogley, Corporation Counsel SUBJECT: Proposed Agreement Regarding Otter Creek Interceptor Sewer Phases 4A and 4B and Otter Creek Interceptor Sewer and Water Main Phases 5A and 5B PURPOSE The purpose of this memorandum is to submit to the Mayor and members of the City Council a proposed agreement regarding the construction of the Otter Creek Interceptor Sewer Phases 4A and 4B and the Otter Creek Interceptor Sewer and Water Main Phases 5A and 5B. RECOMMENDATION It is recommended that the City enter into the proposed public improvements construction agreement for a cost of$10,000,000. BACKGROUND The City has previously entered into Annexation Agreements with Pingree LLC (also known as Crown Community Development) and Pingree Creek, L.L.C. (also known as Shodeen) dated February 25, 2004. Sections 12, 13 and 14 of such annexation agreements provide that Crown and Shodeen shall construct certain sanitary sewer and water public improvements and that the City shall reimburse Crown and Shodeen for a portion of the costs of those improvements in an amount up to 8.5 million dollars. The sanitary sewer and water improvements provided for in the Crown and Shodeen annexation agreements consists of the Otter Creek Interceptor Sewer and Water Main Phases 5A and 5B. Such improvements commence at approximately Route 20 near Russell Road and extend northerly into the Shodeen development near the intersection of Highland and Damisch Roads. Section 12D of the City's annexation agreements with Crown and Shodeen provide that in the event the construction of the sanitary sewer line located south of Route 20 known as the Otter Creek Interceptor Sewer Phases 4A and 4B has not been completed by others within 18 months of the date of the annexation agreements, Crown and Shodeen may provide for the construction lam' of such portion of the Otter Creek Interceptor Sewer. In such event, the annexation agreements 4 Proposed Agreement Regarding Otter Creek Interceptor Sewer Phases 4A and 4B and Otter Creek Interceptor Sewer and Water Main Phases 5A and 5B November 23, 2005 Page 2 provide that the City agrees to reimburse Crown and Shodeen for a portion of the cost of the design and construction of such portion of the sanitary sewer line in the amount of the actual costs of such improvement but not to exceed a reimbursement from the City of 1.5 million dollars. The City's annexation agreements with Crown and Shodeen further provide that in the event the costs incurred by Crown and Shodeen in constructing the improvements exceed the amount of the reimbursements from the City that Crown and Shodeen may recapture from other benefited properties the additional costs incurred by Crown and Shodeen in the design and construction of the subject sewer and water improvements. A map depicting the Otter Creek Interceptor Sewer Phases 4A and 4B and the Otter Creek Interceptor Sewer and Water Main Phases 5A and 5B is attached hereto. Also attached is a proposed construction agreement which would provide for the construction of the entirety of the public improvements by Crown and Shodeen. The Wennlund Farm L.L.C. referred to in the agreement is an entity created by Shodeen and the successor in interest to a portion of the property of Shodeen's Pingree Creek L.L.C. Such agreement may be summarized as follows: 1) Crown and Wennlund Farm would provide for the construction of the improvements consisting of the Otter Creek Interceptor Sewer Phases 4A and 4B and the Otter Creek Interceptor Sewer and Water Main Phases 5A and 5B. 2) The total estimated cost for the public improvements is in the total amount of $18,994,657.37. A cost estimate for the Public Improvements is attached as an exhibit to the proposed agreement. Final engineering has not been completed for Phase 5B and the costs for this final phase are currently estimates. The City would agree to reimburse Crown and Wennlund Farm an amount not to exceed $10,000,000 for the public improvements. Crown and Wennlund Farm would be responsible and pay for all costs for the public improvements in excess of$10,000,000 subject to recapture as provided for in the agreement. 3) Crown and Wennlund Farm are required to commence construction of Phases 4A, 4B and 5A of the public improvements within sixty (60) days of the entry into the agreement. Crown and Wennlund Farm would be required to complete construction of such phases as soon as is reasonably practicable and no later than September 1, 2006. Crown and Wennlund Farm would be required to commence construction of Phase 5B of the public improvements on or before September 1, 2006 and complete same as soon as is reasonably practicable but no later than March 1, 2007. 4) Upon entry into the agreement, the City would adopt the recapture ordinance attached to the agreement as Exhibit 12. Such recapture ordinance would provide reimbursement from other benefited properties to Crown and Wennlund Farm of their costs advanced for • Proposed Agreement Regarding Otter Creek Interceptor Sewer Phases 4A and 4B and Otter Creek Interceptor Sewer and Water Main Phases 5A and 5B November 23, 2005 a"^ Page 3 the public improvements being the amount expended by Crown and Wennlund Farm in excess of the $10,000,000 reimbursement from the City. Developers of the other currently annexed properties in the area being Centex Homes, West Point Builders, Wyndham Deerpoint Homes and HPI-Elgin are parties to the agreement for the purpose of consenting and agreeing to such recapture ordinance and to make the recapture payments provided for therein. The recapture ordinance provides for repayments to Crown and Wennlund Farm in the amount of $1,800 per dwelling unit and $6,000 per acre for commercial and industrial properties until such time as Crown and Wennlund Farm have been reimbursed their costs advanced for the public improvements. The reimbursement amounts will increase at the rate of 5%per annum beginning July 1, 2006. Beginning with the completion of the phase of the subject improvements for which Crown and Wennlund Farm have paid costs advanced, interest shall accrue at the rate of 6.5% per annum on the reimbursed balance of such costs advanced until Crown and Wennlund Farm have been reimbursed by other benefited properties. 5) Upon Crown and Wennlund Farm being reimbursed their costs advanced plus interest by the other developers as provided for in the recapture ordinance referred to above, the City would adopt a Follow-On Recapture Ordinance which would have other property owners in the service area of the sewer and water improvements pay a fair proportionate share of the developer's costs advanced for such improvements. Payments would continue under 1.' the Follow-On Recapture Ordinance for a term of years as determined by the city or until the other developers who had reimbursed Crown and Wennlund Farm their costs advanced had been reimbursed the difference between their prior payments and their fair proportionate share of such costs advanced. 6) The agreement incorporates provisions existing in the Crown and Shodeen annexation agreements with respect to surcharges and fees by the City allowing the City to recapture or recover the City's costs for the subject public improvements. The City expects to place a surcharge on benefited properties in the area beyond the sewer rates or water rates charged other dwelling units or structures in the City. Such surcharges are limited to an additional surcharge not to exceed $30 per month for the ten year period commencing February 25, 2004, and after such ten year period, there is no limitation on additional surcharges on the sewer rates on the referenced properties. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. Proposed Agreement Regarding Otter Creek Interceptor Sewer Phases 4A and 4B and Otter Creek Interceptor Sewer and Water Main Phases 5A and 5B November 23, 2005 Page 4 gth,., FINANCIAL IMPACT The City is obligated to fund up to $10 million in water/sewer public improvements. The Sewer portion of the 2005 General Obligation Bond Sale contained $4.75 million in Capital Appreciation Bonds that will be used toward the construction of the water/sewer improvements. Furthermore, the 2006 Budget includes the sale of Capital Appreciation Bonds in the amounts of $1.4 and $3.85 million for water and sewer improvements, respectively, to fund the remainder of City's portion of the project. The annual principal and interest to retire the bonds will be paid from a surcharge of up to $30 assessed those benefited properties. n LEGAL IMPACT 1r,�O The City has previously agreed in the annexation agreements with Crown and Shodeen to reimburse Crown and Shodeen an amount up to 10 million dollars for the proposed public improvements. The annexation agreements also allow Crown and Shodeen to recapture from other benefited properties their costs expended in excess of such reimbursement by the City. ALTERNATIVES Given the City's previous agreements in the annexation agreements with Crown and Shodeen, "I) adoption of the agreement as presented or in a substantially similar form appears to be the only alternative. Respectfully submitted for Council consideration. WAC/bf Attachments