1.1                          A bill for an act 
  1.2             relating to metropolitan government; modifying the 
  1.3             metropolitan council cost allocation method for 
  1.4             wastewater services; amending Minnesota Statutes 1996, 
  1.5             sections 473.511, subdivision 4; 473.517; and 473.519. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1996, section 473.511, 
  1.8   subdivision 4, is amended to read: 
  1.9      Subd. 4.  [CURRENT VALUE OF EXISTING FACILITIES.] When the 
  1.10  council assumes the ownership of any existing interceptors or 
  1.11  treatment works as provided in subdivision 2 or 3, the local 
  1.12  government unit or units which paid part or all of the cost of 
  1.13  such facility, directly or pursuant to contracts for 
  1.14  reimbursement of costs, shall be entitled to receive a credit 
  1.15  against amounts to be allocated to them under section 473.517, 
  1.16  which may be spread over such period not exceeding 30 years as 
  1.17  the council shall determine, and an additional credit equal to 
  1.18  interest on the unused credit balance from time to time at the 
  1.19  rate of four percent per annum.  The amount of such credit shall 
  1.20  equal the current value of the facility computed by the council 
  1.21  in the manner provided in this subdivision at the time the 
  1.22  council acquires it.  The original cost of a facility shall be 
  1.23  computed as the total actual costs of constructing it, including 
  1.24  engineering, legal, and administrative costs, less any part of 
  1.25  it paid from federal or state funds and less the principal 
  2.1   amount of any then outstanding bonds which were issued to 
  2.2   finance its construction.  The original cost shall be multiplied 
  2.3   by a factor equal to a current cost index divided by the same 
  2.4   cost index at the time of construction, to determine replacement 
  2.5   cost.  The cost indices used shall be the Engineering News 
  2.6   Record Construction Cost Indices for facilities or parts thereof 
  2.7   completed before 1930, and the United States Public Health 
  2.8   Service Federal Water Pollution Control Values for Sewer and 
  2.9   Treatment Plant Construction, as applied to facilities or parts 
  2.10  thereof completed in or after 1930.  The current value of the 
  2.11  facility shall be the replacement cost depreciated by 2.50 
  2.12  percent per annum from the date of construction of treatment 
  2.13  works and 1.25 percent per annum from the date of construction 
  2.14  of interceptors; and decreased further by a reasonable allowance 
  2.15  for obsolescence if the council determines that the facility or 
  2.16  any part thereof will not be useful for council purposes for at 
  2.17  least the remaining period required to depreciate it fully, 
  2.18  assuming no salvage value.  The current value of each such 
  2.19  facility shall be credited to each local government unit in 
  2.20  proportion to the amount of the construction cost paid by that 
  2.21  unit, as determined by the council, taking into account 
  2.22  reimbursements previously made under contracts between any of 
  2.23  the local government units.  The council shall prepare an 
  2.24  itemized statement of the amount of credit each local government 
  2.25  unit is entitled to receive under this subdivision, and the 
  2.26  years and amounts of installments of principal and interest 
  2.27  thereon, and shall cause it to be mailed or delivered to the 
  2.28  governing body of each local government unit concerned.  All 
  2.29  credits allowed under this subdivision shall be used to finance 
  2.30  current costs allocated to the local government unit by the 
  2.31  council or for other sewer costs, and the credits shall not be 
  2.32  considered as proceeds from the sale of municipal property so as 
  2.33  to permit their use for other purposes.  At its option, the 
  2.34  council may make a periodic payment to each local government 
  2.35  unit in the amount of the credits provided pursuant to this 
  2.36  subdivision, in lieu of a credit against amounts to be allocated 
  3.1   to such local government units under section 473.517. 
  3.2      Sec. 2.  Minnesota Statutes 1996, section 473.517, is 
  3.3   amended to read: 
  3.4      473.517 [ALLOCATION OF ~~CURRENT~~ COSTS.] 
  3.5      Subdivision 1.  [~~CURRENT COSTS DEFINED~~ ALLOCATION METHOD.] 
  3.6   Except as provided in subdivision 3, the estimated costs of 
  3.7   operation, maintenance, and debt service of the metropolitan 
  3.8   disposal system to be paid by the council in each fiscal year, 
  3.9   and the costs of acquisition and betterment of the system which 
  3.10  are to be paid during the year from funds other than bond 
  3.11  proceeds, including all expenses incurred by the council 
  3.12  pursuant to sections 473.501 to 473.545, are referred to in this 
  3.13  section as current costs, and ~~shall be allocated in the budget~~ 
  3.14  ~~for that year to the respective local government units in the~~ 
  3.15  ~~metropolitan area as provided in subdivisions 2 to 6.  The~~ 
  3.16  ~~amount budgeted by the council for any year for a reserve or~~ 
  3.17  ~~contingency fund must be treated as a current cost and allocated~~ 
  3.18  ~~as a cost of operation and maintenance in accordance with this~~ 
  3.19  ~~section.  The reserve or contingency fund so established may not~~ 
  3.20  ~~exceed an amount equal to 7.5 percent of the council's waste~~ 
  3.21  ~~control operating budget in total~~ shall be allocated among and 
  3.22  paid by all local government units which will discharge sewage, 
  3.23  directly or indirectly, into the metropolitan disposal system 
  3.24  during the budget year according to an allocation method 
  3.25  determined by the council.  The allocated costs may include an 
  3.26  amount for a reserve or contingency fund and an amount for cash 
  3.27  flow management.  The cash flow management fund so established 
  3.28  must not exceed five percent of the council's total waste 
  3.29  control operating budget. 
  3.30     ~~Subd. 2.  [ALLOCATION OF TREATMENT, INTERCEPTOR COSTS;~~ 
  3.31  ~~ADJUSTED VOLUME.] Except as provided in subdivision 3, the~~ 
  3.32  ~~current costs of all treatment works and interceptors in the~~ 
  3.33  ~~metropolitan disposal system shall be allocated among and paid~~ 
  3.34  ~~by all local government units which will discharge sewage,~~ 
  3.35  ~~directly or indirectly, into the metropolitan disposal system~~ 
  3.36  ~~during the budget year, in proportion to the total volume~~ 
  4.1   ~~estimated to be so discharged by each local government unit,~~ 
  4.2   ~~adjusted as follows:~~ 
  4.3      ~~(a) increased or decreased, as the case may be, to the~~ 
  4.4   ~~extent the council determines, on the basis of such historical~~ 
  4.5   ~~and reasonably projected data as may be available, that the~~ 
  4.6   ~~sewage discharged by one unit will require more or less~~ 
  4.7   ~~treatment to produce a suitable effluent than that discharged by~~ 
  4.8   ~~others;~~ 
  4.9      ~~(b) decreased by any amount of surface water estimated by~~ 
  4.10  ~~the council to be discharged by a local government unit from a~~ 
  4.11  ~~combined storm and sanitary sewer system;~~ 
  4.12     ~~(c) increased by that volume of normal sanitary sewage~~ 
  4.13  ~~which is equivalent for treatment purposes to the volume of~~ 
  4.14  ~~surface water referred to in clause (b), as determined by the~~ 
  4.15  ~~council from available engineering data; and~~ 
  4.16     ~~(d) increased or decreased, as the case may be, by the~~ 
  4.17  ~~amount of any substantial and demonstrable error in a previous~~ 
  4.18  ~~estimate.~~ 
  4.19     Subd. 3.  [ALLOCATION OF TREATMENT, INTERCEPTOR COSTS; 
  4.20  RESERVED CAPACITY.] In preparing each budget the council shall 
  4.21  estimate the current costs of acquisition, betterment, and debt 
  4.22  service, only, of the treatment works in the metropolitan 
  4.23  disposal system which will not be used to total capacity during 
  4.24  the budget year, and the percentage of such capacity which will 
  4.25  not be used, and shall deduct the same percentage of such 
  4.26  treatment works costs from the current costs allocated under 
  4.27  subdivision ~~2~~ 1.  The council shall also estimate the current 
  4.28  costs of acquisition, betterment, and debt service, only, of the 
  4.29  interceptors in the metropolitan disposal system that will not 
  4.30  be used to total capacity during the budget year, shall estimate 
  4.31  the percentage of the total capacity that will not be used, and 
  4.32  shall deduct the same percentage of interceptor costs from the 
  4.33  current costs allocated under subdivision ~~2~~ 1.  The total amount 
  4.34  so deducted with respect to all treatment works and interceptors 
  4.35  in the system shall be allocated among and paid by the 
  4.36  respective local government units in the metropolitan area for 
  5.1   which system capacity unused each year is reserved for future 
  5.2   use, in proportion to the amounts of such capacity reserved for 
  5.3   each of them.  
  5.4      Subd. 6.  [DEFERMENT OF PAYMENTS.] The council may ~~by~~ 
  5.5   ~~resolution~~ provide for the deferment of payment of all or part 
  5.6   of the ~~current~~ allocated costs ~~of acquisition, betterment, and~~ 
  5.7   ~~debt service of estimated unused capacity~~ which are allocated by 
  5.8   the council to a local government unit in any year pursuant to 
  5.9   subdivision 3, repayable at such time or times as the council 
  5.10  shall specify ~~in the resolution~~, with interest at the 
  5.11  approximate average annual rate borne by council bonds 
  5.12  outstanding at the time of the deferment, as determined by the 
  5.13  council.  ~~Such costs may be deferred only when the council~~ 
  5.14  ~~determines that a substantial portion of the territory of a~~ 
  5.15  ~~local government unit has not been connected to the metropolitan~~ 
  5.16  ~~disposal system, and that the amount of such costs or some~~ 
  5.17  ~~portion thereof is disproportionate to the available economic~~ 
  5.18  ~~resources of the unit at the time.~~  Such deferred costs shall be 
  5.19  allocated to and paid by all local government units in the 
  5.20  metropolitan area which will discharge sewage, directly or 
  5.21  indirectly, into the metropolitan disposal system in the budget 
  5.22  year for which the deferment is granted, in the same manner and 
  5.23  proportions as ~~current~~ costs are allocated under subdivision ~~2~~ 1.
  5.24  ~~When such deferred costs are repaid they shall be applied in~~ 
  5.25  ~~reduction of the total amount of costs thereafter allocated to~~ 
  5.26  ~~each of the local government units to which such deferred costs~~ 
  5.27  ~~were allocated in the year of deferment, in proportion to their~~ 
  5.28  ~~allocations thereof that year.~~ 
  5.29     Subd. 9.  [ADVISORY COMMITTEES.] The council may establish 
  5.30  and appoint persons to advisory committees to assist the council 
  5.31  in the performance of its wastewater control duties.  If 
  5.32  established, the advisory committees shall meet with the council 
  5.33  to consult with such members concerning the acquisition, 
  5.34  betterment, operation and maintenance of interceptors and 
  5.35  treatment works in the metropolitan disposal system, and the 
  5.36  allocation of costs therefor.  Members of the advisory committee 
  6.1   serve without compensation but must be reimbursed for their 
  6.2   reasonable expenses as determined by the council. 
  6.3      Sec. 3.  Minnesota Statutes 1996, section 473.519, is 
  6.4   amended to read: 
  6.5      473.519 [FEDERAL WATER POLLUTION CONTROL ACT AMENDMENTS OF 
  6.6   1972; SYSTEM OF CHARGES.] 
  6.7      Each local government unit shall adopt a system of charges 
  6.8   for the use and availability of the metropolitan disposal system 
  6.9   which will assure that each recipient of waste treatment 
  6.10  services within or served by the unit will pay its proportionate 
  6.11  share of the ~~current~~ costs allocated to the unit by the council 
  6.12  under section 473.517, as required by the federal Water 
  6.13  Pollution Control Act amendments of 1972, and any regulations 
  6.14  issued pursuant thereto.  Each system of charges shall be 
  6.15  adopted as soon as possible and shall be submitted to the 
  6.16  council.  The council shall review each system of charges to 
  6.17  determine whether it complies with the federal law and 
  6.18  regulations.  If it determines that a system of charges does not 
  6.19  comply, the adopting unit shall be notified and shall change its 
  6.20  system to comply, and shall submit the changes to the council 
  6.21  for review.  All subsequent changes in a system of charges 
  6.22  proposed by a local government unit shall also be submitted to 
  6.23  the council for review.  
  6.24     Sec. 4.  [APPLICATION.] 
  6.25     This act applies in the counties of Anoka, Carver, Dakota, 
  6.26  Hennepin, Ramsey, Scott, and Washington. 
  6.27     Sec. 5.  [EFFECTIVE DATE.] 
  6.28     Section 1 is effective the day following final enactment.  
  6.29  Sections 2 and 3 are effective January 1, 1998, for allocation 
  6.30  of costs on and after that date.