Minnesota Session Laws - 1997, Regular Session

                            CHAPTER 181-S.F.No. 735 
                  An act relating to metropolitan government; modifying 
                  the metropolitan council cost allocation method for 
                  wastewater services; amending Minnesota Statutes 1996, 
                  sections 473.511, subdivision 4; 473.517; and 473.519. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1996, section 473.511, 
        subdivision 4, is amended to read: 
           Subd. 4.  [CURRENT VALUE OF EXISTING FACILITIES.] When the 
        council assumes the ownership of any existing interceptors or 
        treatment works as provided in subdivision 2 or 3, the local 
        government unit or units which paid part or all of the cost of 
        such facility, directly or pursuant to contracts for 
        reimbursement of costs, shall be entitled to receive a credit 
        against amounts to be allocated to them under section 473.517, 
        which may be spread over such period not exceeding 30 years as 
        the council shall determine, and an additional credit equal to 
        interest on the unused credit balance from time to time at the 
        rate of four percent per annum.  The amount of such credit shall 
        equal the current value of the facility computed by the council 
        in the manner provided in this subdivision at the time the 
        council acquires it.  The original cost of a facility shall be 
        computed as the total actual costs of constructing it, including 
        engineering, legal, and administrative costs, less any part of 
        it paid from federal or state funds and less the principal 
        amount of any then outstanding bonds which were issued to 
        finance its construction.  The original cost shall be multiplied 
        by a factor equal to a current cost index divided by the same 
        cost index at the time of construction, to determine replacement 
        cost.  The cost indices used shall be the Engineering News 
        Record Construction Cost Indices for facilities or parts thereof 
        completed before 1930, and the United States Public Health 
        Service Federal Water Pollution Control Values for Sewer and 
        Treatment Plant Construction, as applied to facilities or parts 
        thereof completed in or after 1930.  The current value of the 
        facility shall be the replacement cost depreciated by 2.50 
        percent per annum from the date of construction of treatment 
        works and 1.25 percent per annum from the date of construction 
        of interceptors; and decreased further by a reasonable allowance 
        for obsolescence if the council determines that the facility or 
        any part thereof will not be useful for council purposes for at 
        least the remaining period required to depreciate it fully, 
        assuming no salvage value.  The current value of each such 
        facility shall be credited to each local government unit in 
        proportion to the amount of the construction cost paid by that 
        unit, as determined by the council, taking into account 
        reimbursements previously made under contracts between any of 
        the local government units.  The council shall prepare an 
        itemized statement of the amount of credit each local government 
        unit is entitled to receive under this subdivision, and the 
        years and amounts of installments of principal and interest 
        thereon, and shall cause it to be mailed or delivered to the 
        governing body of each local government unit concerned.  All 
        credits allowed under this subdivision shall be used to finance 
        current costs allocated to the local government unit by the 
        council or for other sewer costs, and the credits shall not be 
        considered as proceeds from the sale of municipal property so as 
        to permit their use for other purposes.  At its option, the 
        council may make a periodic payment to each local government 
        unit in the amount of the credits provided pursuant to this 
        subdivision, in lieu of a credit against amounts to be allocated 
        to such local government units under section 473.517. 
           Sec. 2.  Minnesota Statutes 1996, section 473.517, is 
        amended to read: 
           473.517 [ALLOCATION OF CURRENT COSTS.] 
           Subdivision 1.  [CURRENT COSTS DEFINED ALLOCATION METHOD.] 
        Except as provided in subdivision 3, the estimated costs of 
        operation, maintenance, and debt service of the metropolitan 
        disposal system to be paid by the council in each fiscal year, 
        and the costs of acquisition and betterment of the system which 
        are to be paid during the year from funds other than bond 
        proceeds, including all expenses incurred by the council 
        pursuant to sections 473.501 to 473.545, are referred to in this 
        section as current costs, and shall be allocated in the budget 
        for that year to the respective local government units in the 
        metropolitan area as provided in subdivisions 2 to 6.  The 
        amount budgeted by the council for any year for a reserve or 
        contingency fund must be treated as a current cost and allocated 
        as a cost of operation and maintenance in accordance with this 
        section.  The reserve or contingency fund so established may not 
        exceed an amount equal to 7.5 percent of the council's waste 
        control operating budget in total shall be allocated among and 
        paid by all local government units which will discharge sewage, 
        directly or indirectly, into the metropolitan disposal system 
        during the budget year according to an allocation method 
        determined by the council.  The allocated costs may include an 
        amount for a reserve or contingency fund and an amount for cash 
        flow management.  The cash flow management fund so established 
        must not exceed five percent of the council's total waste 
        control operating budget. 
           Subd. 2.  [ALLOCATION OF TREATMENT, INTERCEPTOR COSTS; 
        ADJUSTED VOLUME.] Except as provided in subdivision 3, the 
        current costs of all treatment works and interceptors in the 
        metropolitan disposal system shall be allocated among and paid 
        by all local government units which will discharge sewage, 
        directly or indirectly, into the metropolitan disposal system 
        during the budget year, in proportion to the total volume 
        estimated to be so discharged by each local government unit, 
        adjusted as follows: 
           (a) increased or decreased, as the case may be, to the 
        extent the council determines, on the basis of such historical 
        and reasonably projected data as may be available, that the 
        sewage discharged by one unit will require more or less 
        treatment to produce a suitable effluent than that discharged by 
        others; 
           (b) decreased by any amount of surface water estimated by 
        the council to be discharged by a local government unit from a 
        combined storm and sanitary sewer system; 
           (c) increased by that volume of normal sanitary sewage 
        which is equivalent for treatment purposes to the volume of 
        surface water referred to in clause (b), as determined by the 
        council from available engineering data; and 
           (d) increased or decreased, as the case may be, by the 
        amount of any substantial and demonstrable error in a previous 
        estimate. 
           Subd. 3.  [ALLOCATION OF TREATMENT, INTERCEPTOR COSTS; 
        RESERVED CAPACITY.] In preparing each budget the council shall 
        estimate the current costs of acquisition, betterment, and debt 
        service, only, of the treatment works in the metropolitan 
        disposal system which will not be used to total capacity during 
        the budget year, and the percentage of such capacity which will 
        not be used, and shall deduct the same percentage of such 
        treatment works costs from the current costs allocated under 
        subdivision 2 1.  The council shall also estimate the current 
        costs of acquisition, betterment, and debt service, only, of the 
        interceptors in the metropolitan disposal system that will not 
        be used to total capacity during the budget year, shall estimate 
        the percentage of the total capacity that will not be used, and 
        shall deduct the same percentage of interceptor costs from the 
        current costs allocated under subdivision 2 1.  The total amount 
        so deducted with respect to all treatment works and interceptors 
        in the system shall be allocated among and paid by the 
        respective local government units in the metropolitan area for 
        which system capacity unused each year is reserved for future 
        use, in proportion to the amounts of such capacity reserved for 
        each of them.  
           Subd. 6.  [DEFERMENT OF PAYMENTS.] The council may by 
        resolution provide for the deferment of payment of all or part 
        of the current allocated costs of acquisition, betterment, and 
        debt service of estimated unused capacity which are allocated by 
        the council to a local government unit in any year pursuant to 
        subdivision 3, repayable at such time or times as the council 
        shall specify in the resolution, with interest at the 
        approximate average annual rate borne by council bonds 
        outstanding at the time of the deferment, as determined by the 
        council.  Such costs may be deferred only when the council 
        determines that a substantial portion of the territory of a 
        local government unit has not been connected to the metropolitan 
        disposal system, and that the amount of such costs or some 
        portion thereof is disproportionate to the available economic 
        resources of the unit at the time.  Such deferred costs shall be 
        allocated to and paid by all local government units in the 
        metropolitan area which will discharge sewage, directly or 
        indirectly, into the metropolitan disposal system in the budget 
        year for which the deferment is granted, in the same manner and 
        proportions as current costs are allocated under subdivision 2 1.
        When such deferred costs are repaid they shall be applied in 
        reduction of the total amount of costs thereafter allocated to 
        each of the local government units to which such deferred costs 
        were allocated in the year of deferment, in proportion to their 
        allocations thereof that year. 
           Subd. 9.  [ADVISORY COMMITTEES.] The council may establish 
        and appoint persons to advisory committees to assist the council 
        in the performance of its wastewater control duties.  If 
        established, the advisory committees shall meet with the council 
        to consult with such members concerning the acquisition, 
        betterment, operation and maintenance of interceptors and 
        treatment works in the metropolitan disposal system, and the 
        allocation of costs therefor.  Members of the advisory committee 
        serve without compensation but must be reimbursed for their 
        reasonable expenses as determined by the council. 
           Sec. 3.  Minnesota Statutes 1996, section 473.519, is 
        amended to read: 
           473.519 [FEDERAL WATER POLLUTION CONTROL ACT AMENDMENTS OF 
        1972; SYSTEM OF CHARGES.] 
           Each local government unit shall adopt a system of charges 
        for the use and availability of the metropolitan disposal system 
        which will assure that each recipient of waste treatment 
        services within or served by the unit will pay its proportionate 
        share of the current costs allocated to the unit by the council 
        under section 473.517, as required by the federal Water 
        Pollution Control Act amendments of 1972, and any regulations 
        issued pursuant thereto.  Each system of charges shall be 
        adopted as soon as possible and shall be submitted to the 
        council.  The council shall review each system of charges to 
        determine whether it complies with the federal law and 
        regulations.  If it determines that a system of charges does not 
        comply, the adopting unit shall be notified and shall change its 
        system to comply, and shall submit the changes to the council 
        for review.  All subsequent changes in a system of charges 
        proposed by a local government unit shall also be submitted to 
        the council for review.  
           Sec. 4.  [APPLICATION.] 
           This act applies in the counties of Anoka, Carver, Dakota, 
        Hennepin, Ramsey, Scott, and Washington. 
           Sec. 5.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment.  
        Sections 2 and 3 are effective January 1, 1998, for allocation 
        of costs on and after that date. 
           Presented to the governor May 17, 1997 
           Signed by the governor May 19, 1997, 7:30 p.m.