SF 735

  1.1                          A bill for an act 
  1.2             relating to metropolitan government; modifying the 
  1.3             metropolitan council cost allocation system for 
  1.4             wastewater services; amending Minnesota Statutes 1996, 
  1.5             sections 473.511, subdivision 4; and 473.517, 
  1.6             subdivisions 1 and 2. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 1996, section 473.511, 
  1.9   subdivision 4, is amended to read: 
  1.10     Subd. 4.  [CURRENT VALUE OF EXISTING FACILITIES.] When the 
  1.11  council assumes the ownership of any existing interceptors or 
  1.12  treatment works as provided in subdivision 2 or 3, the local 
  1.13  government unit or units which paid part or all of the cost of 
  1.14  such facility, directly or pursuant to contracts for 
  1.15  reimbursement of costs, shall be entitled to receive a credit 
  1.16  against amounts to be allocated to them under section 473.517, 
  1.17  which may be spread over such period not exceeding 30 years as 
  1.18  the council shall determine, and an additional credit equal to 
  1.19  interest on the unused credit balance from time to time at the 
  1.20  rate of four percent per annum.  The amount of such credit shall 
  1.21  equal the current value of the facility computed by the council 
  1.22  in the manner provided in this subdivision at the time the 
  1.23  council acquires it.  The original cost of a facility shall be 
  1.24  computed as the total actual costs of constructing it, including 
  1.25  engineering, legal, and administrative costs, less any part of 
  1.26  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 under this 
  2.36  subdivision, in place of a credit against amounts to be 
  3.1   allocated to those local government units under section 473.517. 
  3.2      Sec. 2.  Minnesota Statutes 1996, section 473.517, 
  3.3   subdivision 1, is amended to read: 
  3.4      Subdivision 1.  [CURRENT COSTS DEFINED.] The estimated 
  3.5   costs of operation, maintenance, and debt service of the 
  3.6   metropolitan disposal system to be paid by the council in each 
  3.7   fiscal year, and the costs of acquisition and betterment of the 
  3.8   system which are to be paid during the year from funds other 
  3.9   than bond proceeds, including all expenses incurred by the 
  3.10  council pursuant to sections 473.501 to 473.545, are referred to 
  3.11  in this section as current costs, and shall be allocated in the 
  3.12  budget for that year to the respective local government units in 
  3.13  the metropolitan area as provided in subdivisions 2 to 6.  The 
  3.14  amount budgeted by the council for any year for a reserve or 
  3.15  contingency fund must be treated as a current cost and allocated 
  3.16  as a cost of operation and maintenance in accordance with this 
  3.17  section.  The reserve or contingency fund so established may not 
  3.18  exceed an amount equal to 7.5 percent of the council's waste 
  3.19  control operating budget in total.  The amount budgeted by the 
  3.20  council for any year for cash flow management must be treated as 
  3.21  a current cost and allocated as a cost of operation and 
  3.22  maintenance in accordance with this section.  The cash flow 
  3.23  management fund so established must not exceed the amount that 
  3.24  is five percent of the council's total waste control operating 
  3.25  budget. 
  3.26     Sec. 3.  Minnesota Statutes 1996, section 473.517, 
  3.27  subdivision 2, is amended to read: 
  3.28     Subd. 2.  [ALLOCATION OF TREATMENT, INTERCEPTOR COSTS; 
  3.29  ADJUSTED VOLUME.] Except as provided in subdivision 3, the 
  3.30  current costs of all treatment works and interceptors in the 
  3.31  metropolitan disposal system shall be allocated among and paid 
  3.32  by all local government units which will discharge sewage, 
  3.33  directly or indirectly, into the metropolitan disposal system 
  3.34  during the budget year, in proportion to the total volume 
  3.35  estimated to be so discharged by each local government unit, 
  3.36  adjusted as follows: 
  4.1      (a) increased or decreased, as the case may be, to the 
  4.2   extent the council determines, on the basis of such historical 
  4.3   and reasonably projected data as may be available, that the 
  4.4   sewage discharged by one unit will require more or less 
  4.5   treatment to produce a suitable effluent than that discharged by 
  4.6   others; 
  4.7      (b) decreased by any amount of surface water estimated by 
  4.8   the council to be discharged by a local government unit from a 
  4.9   combined storm and sanitary sewer system; 
  4.10     (c) increased by that volume of normal sanitary sewage 
  4.11  which is equivalent for treatment purposes to the volume of 
  4.12  surface water referred to in clause (b), as determined by the 
  4.13  council from available engineering data; and 
  4.14     (d) increased or decreased, as the case may be, by the 
  4.15  amount of any substantial and demonstrable error in a previous 
  4.16  estimate in the manner prescribed in this subdivision. 
  4.17     For each budget year, the council shall estimate the total 
  4.18  volume of sewage that will be discharged, directly or 
  4.19  indirectly, into the metropolitan disposal system during that 
  4.20  budget year.  Based on the estimate of total volume of discharge 
  4.21  for the budget year and on the current costs, the council shall 
  4.22  establish a cost per gallon of discharge into the metropolitan 
  4.23  disposal system.  During the budget year, the council shall 
  4.24  charge each local government unit on a monthly basis for the 
  4.25  current costs based on the per gallon rate established pursuant 
  4.26  to this section applied to the discharge volume allocated for 
  4.27  the month to each local government unit.  The discharge volume 
  4.28  allocated to each local government unit for each month of the 
  4.29  budget year shall consist of the average monthly discharge 
  4.30  volume for the local government unit, as measured, calculated, 
  4.31  or otherwise determined by the council, which occurred in the 
  4.32  annual quarter previous to the annual quarter that immediately 
  4.33  precedes the billing month.  If the council is unable to measure 
  4.34  or calculate the actual average monthly discharge for any local 
  4.35  government unit in the quarter, it may provisionally allocate 
  4.36  discharge volume in the billing month on the basis of estimated 
  5.1   discharge volume during the applicable annual quarter.  Then the 
  5.2   local government unit shall be credited or charged the 
  5.3   difference between the estimated and actual discharge volume in 
  5.4   the monthly billing that next occurs after determination of the 
  5.5   actual discharge volume. 
  5.6      Sec. 4.  [APPLICATION.] 
  5.7      Sections 1 to 3 apply in the counties of Anoka, Carver, 
  5.8   Dakota, Hennepin, Ramsey, Scott, and Washington. 
  5.9      Sec. 5.  [EFFECTIVE DATE.] 
  5.10     Sections 1 and 2 are effective the day after final 
  5.11  enactment.  Section 3 is effective January 1, 1998, for 
  5.12  allocation of costs on and after that date.