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     4.       
Meeting Date: 07/06/2021  
TITLE:    Compensation Agreement - Messinger Company
PRESENTED BY: Debi Meling
Department: Public Works  

RECOMMENDATION
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)
A parcel south of the Frontage Road, west of Harnish Boulevard is being considered for annexation and development.  The terminus of the existing city water system is near the intersection of Elysian Road and East Lane.  The terminus of the existing city sewer system is approximately 1,275 feet south of the intersection of Elysian Road and East Lane.  The developer of the parcel is required to extend both water and sanitary sewer lines to their parcel to get service.  The water extension will be approximately 5,100 lineal feet and the sewer extension will be approximately 4,300 lineal feet.  The extension of the utilities will allow for property along the route to develop in the city limits.  If a development connects to the city utilities, they will be required to reimburse the city for their proportionate share which will be paid to the Messinger Company in accordance to with the Water and Sewer Rules and Regulations.  A reimbursement agreement will be on a future council agenda for consideration.  The city is being asked to consider a contribution to the extensions in the amount of $250,000.  As stated above, these extensions will allow for future development of a significant section of land.  City staff would propose that the amount be split evenly between water and sanitary sewer if approved.

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. The water main is anticipated to be 16" diameter and the sewer is anticipated to be an 18" diameter. 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. 

The presentation to the City Council will include information about the development from Big Sky Economic Development Agency and a representative from the Messinger Company as well as an overview of the process for the development.
ALTERNATIVES
No action is necessary at this meeting so there are no alternatives to consider.
FISCAL EFFECTS
The developer is requesting a city contribution of $250,000 to extend the water and sanitary sewer from the terminus of the existing city systems to the property being developed.  The oversizing of the extended water main will be approximately $39,750 for the sewer main and will be approximately $141,250 for the water main and will be based on actual costs.  The FY22 budget does include funding for compensation agreements.


    

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