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2001-04-104 1 ^ AGENDA MOUND HOUSING AND REDEVELOPMENT AUTHORITY APRIL 10, 2001 6:30 P.M. 6:30 1. OPEN MEETING 2. APPROVE AGENDA, WITH ANY AMENDMENTS 3. APPROVE MINUTES: MARCH 13, 2001 4. PROJECT REPORTS A. POST OFFICE B. GREENWAY GRANT C. XCEL ENERGY ON SUBSTATION D. COUNTY ROAD 15 REALIGNEMENT, INCLUDING SET OPEN HOUSE: 4/26 (Meeting will be continued at this point to allow for an executive session that will be held concurrently with the city council executive session.) 5. EXECUTIVE SESSION: LAW SUIT BY POLSTON, ET AL 6. ADJOURN J , 'JIM RAMSTAD THIRD DISTRICT, MINNESOTA WAYS AND MEANS COMMITTEE TRADE SUBCOMMITTEE HEALTH SUBCOMMITTEE March 29, 2001 k '~~ . ~~s ^'1' c~ottgreg~ of tfje ~ttiteb ~tateg ~ou5e of ;l~e~regentatibe~ ~agfjittgton, ~~ 20515-2303 Sheila Meyers United States Postal Service 475 L'Enfant Plaza SW Room 10802 Washington, D.C. 20260 Dear Sheila: I am writing to bring an urgent situation to your attention affecting the city of Mound, Minnesota, in my Congressional District. WASHINGTON OFFICE-. 1O3 CANNON HOUSE OFFICE BUILDING WASHINGTON, DC ZOS1S 12021225-2871 DISTRICT OFFICE: R72O PENN AVENUE SOVTH, 1f152 BLOOMINGTON, MN 55431 (612)881-4600 The city of Mound is requesting that the construction of a replacement Post Office for the community be allowed to proceed. While Mound officials understand that the U.S. Postal Service recently announced a nationwide freeze on capital spending for new construction or repair of Postal Service facilities, city officials have advised me of a number of important factors which provide a very compelling case to allow the construction of the replacement Post Office facility to proceed. For the past several years, the city of Mound has been leading a modernization and redevelopment initiative of its downtown azea. The city received $600,000 under the Transportation Equity Act for the 21 S` Century (TEA-21) for the construction of a Greenway and hired a developer to prepaze and facilitate plans for construction. The can ent Mound Post Office facility, however, is located within the azea where the Greenway will be built. The city has been working with the Postal Service since 1997 to find a suitable location for the new Post Office and both parties agree that a downtown location is the best option for the Post Office. Working cooperatively, the city and the Postal Service have identified and evaluated alternative relocation sites, conducted soil and environmental reviews, and selected a location. In order to advance the relocation process, the city has purchased the selected site at a cost of $240,000, with the understanding that the property would be sold to the Post Office developer. The present Post Office building lease expires in September 2002 and the city has indicated they will not renew the lease. PRINTED ON RECYCLED PAPER Page 2 Proceeding with the construction of the new Post Office building will permit the relocation of the Mound Post Office, ensure the receipt of the TEA-21 funds for the construction of the Greenway, and allow the city of Mound to continue the redevelopment of its downtown area, retaining the Post Office in its new location as a convenience to its customers. I certainly hope you will give this matter your immediate attention. Please contact Yelena Vaynberg of my staff at 202-225-2871 if you have any questions about this matter. Si erely, JIM STAD Mem er of Congress Creative Solutions for Land Planning and Design Hoisington Koegler Group Inc. ©© ©® MEMO March 31, 2001 To: Mayor and City Council Mound, Minnesota CC: Kandis Hanson, City Manager John Cameron, MFRA Jim Strommen, Kennedy & Graven From: Bruce Chamberlain Mound Visions Coordinator Re: Burying of utility lines. One of the needs associated with downtown redevelopment is addressing existing overhead utilities. As you know, newly developing areas especially commercial districts have underground electric utility lines as opposed to the old pattern of poles and overhead wires. The public is becoming less and less tolerant of the aesthetic impacts of overhead utility lines and therefore, it is prudent for Mound to consider working with Xcel Energy to bury some degree of utility lines in the downtown district. City staff has been looking at options with Xcel for the past several months. This is what we have determined to date: • The existing substation cannot be feasibly moved to a new location outside of the downtown azea. • The substation will need to expand to some degree in the neaz future. Xcel recently purchased the land immediately west of the station for this purpose. • The substation, in its current location, will fit into downtown redevelopment plans -expansion to the west will not. • There is land owned by Balboa east of the substation, which could accommodate substation expansion. • Electrical distribution lines will be buried as a matter of course along with each redevelopment and roadway project. • Electrical transmission lines and poles extending west from the substation along the railroad will need to be upgraded in the near future to accommodate energy demand. • There will be some basic level of transmission line relocation necessary due to redevelopment regardless of whether lines are buried. 123 North Third Street, Suite 100, Minneapolis, MN 55401-1659 Ph (612) 338-0800 Fx (612) 338-6838 MEMO -Mound City Council March 31, 2001 Page 2 There are certainly cost implication to burying utility lines as Jim Strommen addresses in his attached memo. There aze also negative implications for redevelopment and consumer perception of downtown Mound if the utilities aze not buried. City staff recommends that the downtown redevelopment district (from Alder Road and post office site on the north to Cypress Lane on the east, to Our Lady of the Lake Church on the south, to Cottonwood Drive on the west) be identified as an overhead utility-free zone. This implies that Excel's option 2B would be followed in the burying of transmission lines. Staff suggests that four items be addressed in Council direction to Xcel Energy regazding this matter. 1. Mound requests Xcel Energy to conduct detailed cost and engineering exploration of burying transmission lines in the downtown district as identified. 2. Mound offers to negotiate purchase of Xcel land west of the substation and assist Xcel in acquiring land east of the substation. 3. Mound offers to work with Xcel to enhance the landscaping azound the substation. 4. Mound asks Xcel to determine the ratepayer impacts of this work. If you have any questions, I will be at the April 10 City Council meeting. M: I MO UND 19 9-2 41 DOCS I xce l l . d oc ,„ ~ r MEMORANDUM TO: Mayor and City Council cc: Kandis Hanson John Cameron Bruce Chamberlain FROM: Jim Strommen DATE: Apri13, 2001 RE: Electric Transmission and Distribution Line Undergrounding - Downtown Redevelopment I have been asked to prepare a memorandum that addresses considerations that may assist the council in selecting an undergrounding plan for the transmission and distribution lines connecting to the Xcel substation at the east end of the downtown area near county highway 15.. The relevant lines and options for undergrounding versus overhead have been prepared by Xcel and are depicted in the attached maps. Xcel has also provided rough, preliminary estimates of costs related to or different options: lA, 1B, 2A and 2B. The estimates are handwritten in the upper left- hand corner of the maps. The fifth map highlights the existing overhead lines, which must be relocated either overhead or underground in connection with this project. It is our understanding that each of the options are technically feasible. The issues are safety, aesthetics and cost or potential cost to the City, at its option, or to ratepayers of the City. It is important to note that bearer of the cost of these options is not a foregone conclusion. This is a matter currently under review at the Minnesota Public Utilities Commission ("PUC"). Standard and Special Facility Costs The downtown redevelopment is a public improvement project. It is carried out in the exercise of a city's police power. One of the rights granted public bodies in exercising police power is the authority to exercise it without the requirement of reimbursement to the object of that power. For example, the City can require Xcel to relocate its electric facilities overhead or underground at Xcel's own expense. This principle has been most recently reaffirmed in a case decided by the JMS-195197v 1 1 MU195-5 1..,.. ~. / a1 Minnesota Court of Appeals in 1999, NSP v. City of Oakdale, 588 N. W.2d 534 (Minn. Ct. App. 1999). The Oakdale case did not decide the issue of whether a city could require transmission lines to be placed underground, so it is possible that Xcel could be less cooperative with regard to the 69kV transmission lines at issue here. Regardless of the option selected by the City, and regardless of the cost, so long as it does not jeopardize safe and reliable electric service, Xcel must carry it out. If the City pays any amount for the cost of relocation, it will be at the City's sole option and not because it is required. The issue is whether the ratepayers will be required to pay for the cost, specifically ratepayers in the City. Whether ratepayers and the City are specially surcharged for the cost of relocation and undergrounding is influenced by the option chosen by the City and ultimately decided by the PUC. The rule is that a basic or "standard" relocation of overhead lines to another overhead line location is a general utility expense that is recoverable from the general ratepayers of Xcel. As a practical matter, if the cost of any of these options is deemed a standard relocation, it would not affect electric rates at all because Xcel has already been given an allowance for projects like this in its general rates. In other words, Xcel has already been compensated for an estimated number of these projects and rates would remain unchanged for all ratepayers if the project fit into that category. Xcel maintains that option 1 B (the least expensive) is the "standard" relocation that would be necessary. Option 1 A may also be considered a standard. At present, the PUC does not regard undergrounding of transmission or distribution lines to be standard except in certain limited circumstances. This is an unresolved issue in determining "special" cost and possible surcharge. There is an argument to be made that the standard facility should include significant undergrounding, for safety or other purposes. If the PUC regards undergrounding as purely for aesthetic purposes, it is likely that it would be regarded as a "special" facility surchargeable to a special class of ratepayers. Implications of Selecting Options 2A or 2B JMS-195197v1 2 MU 195-5 ~ ~ Xcel's estimate of Option 2A is just over one million dollars. The estimate of Option 2B is over two million dollars. These estimates are subject to modification upon further review. As I understand it, Option 2B is the complete underground of transmission lines (along the railroad) and distribution lines (near the substation). If the City were to select Option 2B, assuming the $2.SM price tag were to remain, the following would be the cost implication: 1. Assume that the cost of a "standard" relocation would be $150,000. (Option lA or 1 B). 2. The $150,000 would be subtracted from the $2.SM for a special incremental cost of $2.35M.. 3. Xcel would seek compensation for this $2.35M from the ratepayers of the City. It would petition the PUC for authority to surcharge. Attached also are rate surcharge impacts based on three different surcharge amounts and based on the Xcel customer mix in the City. Attachment 1 is a run on $1 M, Att. 2 on $2M and Att. 3 on $3M. They are based on a monthly surcharge at different rates for different classes of customers. Variables in Ultimate Surcharge Amount to City Ratepayers The following are factors that may affect the amount of the surcharge. While the City cannot negotiate on behalf of its ratepayers per se, it may either contest these issues or not object to Xcel's position on them. 1. What a standard relocation would cost and whether all Options should be standard and therefore a general expense to Xcel. This is a PUC decision. JMS-195197v 1 3 MU195-5 ~ r 2. The actual cost of the chosen Option. This would be the subject of auditor review of labor costs, facility costs and other factors. 3. Whether City ratepayers are the only benefiting class or whether a wider surcharge class is appropriate. This would involve seeking a wider area of ratepayer surcharge than just those Xcel ratepayers in the City. The above issues can be raised with Xcel and ultimately with the PUC if Xcel seeks a surcharge. The best case scenario for the City is if the entire cost of relocation and undergrounding were deemed to be appropriate as a standard, general expense. Since this is not a decided matter, it is not yet a given that City ratepayers would be surcharged. It is possible, even likely however, that any cost of undergrounding over and above a standard relocation of overhead lines would be surcharged. The City could choose to pay part or all of it or contest part or all of it on the above grounds. If you have any additional questions I am available at 612-337-9233, or by email at j strommen@kennedy-graven.com. 7MS-195197v 1 4 MU195-5 u NSP d/b/a Xcel Energy City Requested Special Facilities Surcharge Analysis Based on Feb-2001 data. Class Surcharge Levels Residential @ $1.00 up to $4.50 Sm C&I-Dmd @ 3 Times Residential Amount Lg C&I-Dmd @ 4 Times Residential Amount r~ Estimated No. of Customers Recovery Surcharge Months Scenario 1 - Recovery of Additio nal Costs at 3 Years Maximum Residential 4,140 $1,001,879 $6.72 36.0 Small C&I ND 198 $47,916 $6.72 36.0 Small C&I Demand 54 $39,204 $20.17 36.0 Large C&I 10 $9,680 $26.89 36.0 Street Lighting 3 $726 $6.72 36.0 Small Mun. Pump ND 28 $6,776 $6.72 36.0 Small Mun. Pump Demand 9 $6,534 $20.17 36.0 Large Mun. Pump Demand - $0 $26.89 36.0 Total 4,442 $1,112,715 36.0 Scenario 2 - Recovery of Additio nal Costs at 5 Years Maximum Residential - 4,140 $1,075,552 $4.33 60.0 Small C&I ND 198 $51,439 $4.33 60.0 Small C&I Demand 54 $42,087 $12.99 60.0 Large C&I 10 $10,392 $17.32 60.0 Street Lighting 3 $779 $4.33 60.0 Small Mun. Pump ND 28 $7,274 $4.33 60.0 Small Mun. Pump Demand 9 $7,014 $12.99 60.0 Large Mun. Pump Demand - $0 $17.32 60.0 Total 4,442 $1,194,539 60.0 Scenario 3 - Recovery of Additio nal Costs at 10 Years Maximu m Residential - 4,140 $1,274,026 $2.56 120.0 Small C&I ND 198 $60,932 $2.56 120.0 Small C&I Demand 54 $49,853 $7.69 120.0 Large C&I 10 $12,309 $10.26 120.0 Street Lighting 3 $923 $2.56 120.0 Small Mun. Pump ND 28 $8,617 $2.56 120.0 Small Mun. Pump Demand 9 $8,309 $7.69 120.0 Large Mun. Pump Demand - $0 $10.26 120.0 Total 4,442 $1,414,969 120.0 Mound-CRFS Summary.xls Pricing Planning/Liassou 04/03/2001 l 1 470 Pillsbury Center ~ 200 South Sixth Street ~ Minneapolis MN 55402 ~~ (612) 337-9300 telephone (612) 337-9310 fax C H A R T E R E D http://www.kennedy-graven.com Apri12, 2001 Kandis Hanson City Manager 5341 Maywood Road Mound, MN 55364-1627 Re: Reconstruction of Hennepin County Road 15 Dear Kandis: ROBERT J. LINDALL Attorney at Law Direct Dial (612) 337-9219 *Certified Real Property Law Specialist VIA FACSIMILE 952-472-0620 AND U.S. MAIL This is intended as afollow-up to the meeting which you, John Cameron, Bruce Chamberlain and I had with Bruce Polaczyk, Steve Theis and Mark Stafne of Hennepin County about the above matter on Thursday, March 27, 2001. The following is a revised schedule of tasks relating to the County Road 15 project as discussed March 29, 2001: TASK TARGET COMPLETION DATE Ci ublic meetin re ardin relimin lan A ri12~ 2001 City notice to County regarding public comment on preliminary lan Apri127, 2001 Ci send draft ri t of wa a eement to Count Aril 30, 2001 Ci order title evidence ivia i, 2001 Count finalize relimina lan and send to Cit Ma 1, 2001 Ci Council a royal of relimin lan Ma 8, 2001 Coun comment on draft ROW a eement Ma 15, 2001 Ci and Coun staff a eement on ROW a eement Ma 30, 2001 Ci and Coun order a raisals June 1, 2001 City and County letter to owners advising of inspection by a raisers June 5, 2001 Ci and Coun Order Phase I environmental re ort June 5, 2001 Ci Council a royal of ROW a eement June 12, 2001 Ci and Coun receive Phase I environmental re ort Jul 15, 2001 Henne in Count Board a royal of ROW a reement Jul 30, 2001 Ci and Coun receive a raisals Au ust 1, 2001 RJL-195472v1 MU220~ *Certified by Minnesota State Bar Association ' 'Kandis Hanson Ltr Apri12, 2001 Page 2 TASK TARGET COMPLETION DATE Ci and Coun order Phase II environmental investi ations Au ust 1, 2001 Ci and Coun execution of right of wa a Bement Au ust 10, 2001 Ci and County receive review a raisals Au ust 10, 2001 Ci and Coun determination of ~ust com ensation Au ust 15, 2001 Ci and Coun send offers to affected owners Au ust 17, 2001 City and County send notice of eligibility for relocation benefits to owners and occu ants August 17, 2001 Ci and Coun obtain volunt environmental ri hts of ent Au ust 20, 2001 C~and Coun adoption of eminent domain resolution _ _ __ _ August 30. 2001 __ _; ` C;it and t;oun commence eminent domain roceedin s ' Se tember 17, 2001 Ci and Coun send uick take notices Se tember 17, 2001 City and County serve petition, notice of hearing on petition and motion for order authorizing entry upon property by personal service September 22, 2001 Court hearin on motion for order authorizin ri ht of en October 10, 2001 Court hearing on public purpose and necessity and use of quick take November 1.5, 2001 Ci and Coun receive Phase II environmental re orts November 15, 2001 Count complete final plans and specifications December 1, 2001 _ ns Ci and Coun a rove final lans ands ecificatio December 15, 2001 _ City and County deposit or pay quick take amount ("Quick Take Date" December 17, 2001. Count solicit construction bids Janu 5, 2002 Ci start demolition #1 Janu 20, 2002 Coun receive construction bids Febru 1, 2002 Ci finish demolition #1 Febru 20, 2002 City begin environmental remediation #1 March 1, 2002 County award constructior_ contract City begin demolition #2 _ - March 1, 2002 March 30, 2002 __ Ci com lete environmental remediation #1 Aril 1, 2002 Ci be in environmental remediation #2 Aril 15, 2002 Ci com lete demolition #2 A ri130, 2002 Ci com lete environmental remediation #2 Ma 15, 2002 Construction start Ma 15, 2002 Construction com leted November 1, 2002 RJL-195472v1 MU220-4 ' Kandis Hanson Ltr Apri12, 2001 Page 3 Please let me know if there are items which should be added to the schedule or other changes which should be made. Very truly yours, Robert J. Lindall RJL:peb cc: Bruce Chamberlain, Hoisington Koegler Group, Inc. (via fax: 338-6838) John Cameron, McCombs, Frank, Roos (via fax: 763-476-8532) _~~ Prv ~~:,'_, ~hivi :u U. a .~J.~iLit~iiGis ~~ia 1CIx.. 6J 1-G:• ~-l3JJJ~ John Dean, Kennedy & Graven RJL-195472v1 MU220-4