Council Work Session


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Meeting Date: 07/06/2021  
TITLE:    Compensation Agreement - Mitchell Development
Department: Public Works  

The information is being presented to City Council to provide background and justification for the compensation agreement that will be on a future council agenda for approval.  No action is needed at this meeting.
BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)
The parcel in the southwest corner of the intersection of Alkali Creek Road and the planned Inner Belt Loop is being considered for development. The city's water and sanitary sewer systems both end at the city limits near Strawberry Lane. There is a gap of approximately 3,400 lineal feet of water and 3,650 lineal feet of sanitary sewer from the end of the existing systems to the property line of the property being planned for development.  The developers of the parcel have asked if the city can extend the lines through the county section of Alkali Creek to the edge of their property where they will be responsible to extend them along the frontage of their parcel.  If the city does not extend the lines, the land will likely develop in the county due to the fact that the lots will cost too much to develop in the city.  The city may recoup a portion of the cost of the extensions over time if adjacent properties develop or connect to the systems.  If this parcel develops in the county and the city decides to extend water and sanitary sewer along the Inner Belt Loop, the city would need to fund the extension in question in addition to extending along the frontage of the property which is another 3,700 lineal feet.  If the city decides not to extend lines along the Inner Belt Loop, this section of water line will still be beneficial to create a loop along Skyway Drive.  

In addition to the extension, the Water and Sewer Rules and Regulations state that the city will compensate the developer for the difference in cost for a 12" diameter pipe and the pipe size that is required. Initial evaluation shows that a 12" diameter water line and an 15" diameter sewer line will be required. If the final design has these sizes, there would be no oversizing compensation on the water and less than $200,000 oversizing compensation for sanitary sewer.

The compensation agreement for this development will be presented to the City Council for approval at a future meeting.  The compensation agreement will require annexation. 
No action is necessary at this meeting so there are no alternatives to consider.
The cost of the extension of water and sanitary sewer from the terminus of the existing city systems to the property being developed is estimated at $1,200,000 for water and $2,000,000 for sanitary sewer.  The oversizing of the sewer main along the frontage of the development is estimated at $200,000.  The compensation and oversizing are included in the FY22 budget. 


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