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Farmington City Council outlines amendment to settlement agreement with school district

FARMINGTON — Amendment details were reviewed by Farmington City Council and Farmington School Board regarding a legal settlement 11 years ago.

"Earlier this year, representatives from Independent School District 192 and the city started discussions on a possible amendment to the settlement agreement," McKnight said at the Oct. 8 Farmington School Board work session. "The agreement calls for the city to construct and the school district to pay for an extension of 202nd and 208th streets in Farmington."

For the past few months, McKnight said legal teams for the School Board and city have worked collaboratively with staff to amend a legal settlement agreement.

The dispute began Sept. 18, 2005. Farmington School District filed complaints against the city after Farmington City Council voted against making zoning changes and amendments to the city's Comprehensive Plan. At the time, the Comprehensive Plan stated no new development should take place on Farmington High School land. Future housing development was envisioned to take place from 2015 to 2020.

The past litigation was resolved during a mediation process where Justice James Gilbert, a retired Minnesota Supreme Court associate judge, served as the mediator. Gilbert reported this legal case stood as the most complex case in any court or jurisdiction during his 34 years of practicing law.

Common ground broke from the mediation process May 6, 2007. The settlement initiated an amendment to the Comprehensive Land Use Plan that altered zoning ordinances to allow the new high school to be built on the western side Flagstaff Avenue on 110 acres known as the Christensen property.

The agreement stated the school district was responsible for costs on streets west of Flagstaff Avenue to the Lakeville and Farmington border. The city would collect assessments as authorized for connections to Flagstaff Avenue, future 208th Street, water main and sanitary sewer improvements in the benefit area.

Farmington School District 192 paid for the Flagstaff Avenue's sanitary sewer and water main project improvements that came in at $11,673,548.51.

The outstanding cost for the city to potentially reimburse the school district is estimated at $10,789,940.

McKnight reported the city has two mechanisms to cover the infrastructure costs — special assessments and availability charges. Minnesota state statute grants cities the authority to collect availability charges for water and sewer utilities to recover the construction costs of trunk and other capital improvements.

"This authority is not extended to road construction," McKnight said. "The only option the city has regarding covering costs for street improvements is the use of special assessments that requires the city to prove the benefit of the improvement to the property being assessed."

It is unlikely the city would be able to pass the special benefit test for the improvements in question, McKnight said, since the city of Farmington changed its assessment policy in May 2014.

The city projects adjusted potential reimbursements of $1,239,691 for sanitary sewer and $2,176,959 for the water main.

Proposed amendment

The proposed amendment states the school district's work related to the settlement agreement is complete.

"The city will take on responsibility for building and funding the 208th Street extension when it is prompted by development along 208th Street," McKnight said.

The city of Farmington will collect fees over time from properties in the benefit area to be invested in the current and future utility infrastructure system.

"The city has the ability to pass on portions for the future street construction costs to the landowner or developer the school district does not," McKnight said.

The map shows the future 208th Street calls for three-fourths of the street to be constructed on privately-owned land. The remaining one-fourth of future street costs will need to be paid. The city has discussed with the City of Lakeville about the possibility of making the future 202nd and 208th streets a MSA designated street.

City Council may vote to approve the amendment proposal during the Monday, Oct. 15 City Council meeting. The Farmington School Board may review the amendment later this month.