Cherokee City Administrator Don Eikmeier Tuesday night informed those present that the special meeting was called to consider extending city water and sewer lines approximately 900 feet to a private road to accommodate a future residential subdivision in the South Highland Addition.
The Council Tuesday approved a motion to extend city water and sewer lines to the private road located in the South Highland Addition, and to have the City Attorney draft an agreement between developer Gary Doherty and the city, stipulating a surcharge of $5,000 per lot be implemented to be collected at the time a building permit is issued for any of the lots. The Council voted unanimously for the measure.
In 2003, the City Council approved the construction of an unimproved roadway in this addition, with the residential lots to be served by Cherokee Rural Water and private septic systems, rather than city utilities. Eikmeier said that this decision in 2003 was a bad precedent to set when city water and sewer were in close enough proximity to run connections to the housing addition. The city does not want to allow any future developments within city limits to refrain from connecting to city utilities.
In the past, if water and sewer service was not directly abutting new development areas, the city brought it to the property boundary, usually utilizing TIF as an economic tool to recover the costs. In the case of a new business development, the new business is generally built in a year or two. That is not the case with a residential development, where the lots may not be built upon for five to 10 years.
The cost of extending the water line to the South Highland property ($16,000) can be covered by the city's water fund, however there are not adequate funds in the sewer fund to cover the $34,000 expense of running the sewer line to the housing addition. It is Eikmeier's recommendation to extend the water and sewer lines to the private road, with the city to pay the cost of the extension of both services, but the city will charge a surcharge of $5,000 per lot sold. There are currently four available lots in the South Highland Addition, with the potential of an additional three to be platted. With this surcharge to be collected at the time each lot is developed, the city will recover the cost of the sewer line extension. Eikmeier feels that since the installation of a septic system costs in excess of $8,000, and the lower cost of city water compared to rural water, buyers will find the added surcharge to be a good deal.
Councilmember Mick Mallory asked when the surcharge would be collected. Eikmeier replied that the surcharge would be collected at the time a building permit is issued for each lot.
Councilmember Linda Burkhart said that having city utilities available will make the lots more attractive to buyers, and that the buyers will come out ahead due to the high cost of installing and maintaining a septic system and the lower rates charged for city water as compared to rural water. It was also pointed out that the Environmental Protection Agency (EPA) continues to create new rules for septic tanks and possibly at some point in time they could be banned.
Citizen Ann Peck asked if the city was going require the road in the South Highland Addition to be paved, and if the city was going to pay for it. Eikmeier replied that there will be no action taken on the improvement of the road at this time, that if and when there is additional platting in the addition, the road will be discussed. Peck expressed concern that the city is spending a lot of money on the utility extensions and asked when will we get it back?
South Highland developer Gary Doherty stated that he could continue with rural water and septic systems serving the addition, but the city would gain no revenue from this. Peck asked why Gary had not come to the Council requesting water and sewer extensions back in 2003, when he built his new home. Gary replied that he had, but the city did not have the money in the water and sewer accounts at that time to fund the project.
Mayor Pam Pierce said that the city is fortunate to have expansion currently under way at both the Tyson Deli plant and Hy-Vee Warehouse, and that the city encourages employees to live in Cherokee. "We need to have the housing available for them so they don't go elsewhere," said Pierce. She said that providing city utility services is the city's responsibility as a community, and that we need to look to the future.
Councilmember Jim Peck said that due to government incentives offered, now is a good time to buy or build a new home.
Mallory stated the Council should not have allowed septic systems in the South Highland Addition back in 2003, and now is a good opportunity to correct this mistake. He feels the city is in a good position to see some growth with the Tyson/Hy-Vee expansions.
Councilmember Greg Stieneke also said that a mistake was made in 2003 by allowing the lots to be served with rural water and private septic systems. He expressed support for the extension of the city water/sewer to the South Highland Addition.
In other business, Eikmeier reported to the Council that the wastewater department has saved the city in excess of $30,000 by coming up with a way to remove the sludge from the industrial wastewater aeration tank. Eikmeier expressed his appreciation to the employees at the wastewater plant for their ingenuity and hard work.