East Bethel to review utility assessments for local businesses

The owners of several businesses in the East Bethel municipal utilities project area appeared at an Oct. 16 public hearing to object to the assessment amounts proposed for their properties.

The common theme among the objections was that the assessments are too high in proportion to the benefit – if any – the property owners believe they are receiving from the new water and sewer access.

Roger Rickey, owner of Rogers Rod and Custom, said that the $15,409 assessment proposed for his property would create “a significant hardship on our business.”

Ripley doesn’t want or need to be connected to the city’s new water and sewer system, he said.

Jeff Gardas, owner of Northbound Woodworks, said he doesn’t need city water either.

“I have an eight-inch well that I paid over $100,000 for,” he told the council.

Gardas said he recently finished paying that off, and he is not looking forward to a new monthly payment once he connects to city utilities as required.

Property owners may continue to use their existing wells for irrigation after they hook up to the city system, but not for their domestic water supply.

Curt Strandlund of Classic Construction said he was concerned about the inconsistency with which equivalent residential units and assessments were apparently assigned, and he said he thinks it will be hard to bring new businesses to vacant properties with such high assessments.

According to a city memo, vacant properties are proposed at three equivalent residential units per acre, although the council has the option to reduce this assignment to one unit per acre.

Paul Johnson, owner of Aggressive Hydraulics, said his property’s proposed assessment amount “was a bit of a sticker shock.” He echoed Strandlund’s concerns about bringing in new business and also emphasized the importance of retaining existing businesses.

The proposed assessment amounts would be paid over a 20-year period and are based on the number of equivalent residential units assigned to each property, with each units representing an assessment of $7,704. For example, Gardas’ property is proposed at four units, which amounts to an assessment of $30,817.

“I don’t understand why it’s at four,” he told the council, pointing out that other businesses with similar water usage are only assigned two units.

The city has also received an objection from the Metropolitan Council in response to its proposed assessment of $15,409 for the wastewater treatment property.

The maximum total assessable amount for all properties in the water and sewer district is $1,104,030, which – if adopted at that maximum amount – would generate $90,000 annually over the next 20 years for payment on the 2010A and B bonds.

Another concern brought up at the hearing was whether the water mains are even large enough to support a commercial business district, and one property owner said his building had not even been provided access to the new utilities. The city plans to follow up on those issues with the engineering firm that designed the water and sewer system, Bolton & Menk, Inc.

City Administrator Jack Davis and all members of the council acknowledged that the city needs to fix the inconsistencies and determine what’s fair as far as the assessments go.

“I would agree with Mr. Johnson from Aggressive Hydraulics; we can’t drive existing business out of the city,” said Councilmember Bob DeRoche. “We cannot expect to recoup everything off of those businesses in the [water and sewer] district.”

“We need to go lot by lot and reassess all of them,” said Councilmember Ron Koller.

Just how the city should go about reassessing the properties is the tough question. The council is wrestling with how equivalent residential units should be determined. They could be based on acreage, square footage or water usage.

“There’s such a disparity,” said Councilmember Heidi Moegerle. “How do we figure the basis for spreading the cost?”

Davis said the city needs to find the fairest way to do it. “No matter what we do, we have to treat everyone the same,” he said.

City Attorney Mark Vierling told the council that the city is required by law to apply the assessments by a uniform method.

City staff will be providing the council with different options to consider for modifying the assessments. “The key question in this process is how much is [the city] council seeking in terms of assessments to apply to the project costs and what impact will the assessments have on the existing businesses and the marketability of the undeveloped property in the area,” Davis said.

The council voted to tackle the issue at a special work session Oct. 23. The final assessments the city decides on must be filed with Anoka County by Nov. 15, and those assessments may be lower, but not higher, than the preliminary assessment amounts that property owners were notified of in September.