Reduction in fees could spur growth

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NYA Council members reviewed, but made no final decisions on, reducing sewer and water trunk fees to encourage townhome development in NYA. (Adam Gruenewald/The Times)

By Adam Gruenewald
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Seeking to spur some growth and maintain good relationships with local developers, NYA council members will likely decrease charges related to townhome development.
While no formal decisions were made at the April 10 meeting, council members indicated they will decrease both sewer and water trunk fees for townhome development from $3,900 to $2,500 each for a total savings of $2,800.
Mayor Carol Lagergren and council members spent considerable time discussing the figure, which will likely be finalized at a future meeting, in the efforts to assist developers after hearing an initial request in March from Scott Loomis of Loomis Homes.
Updating the council, City Administrator Steve Helget said that NYA continues to see about 15 permits for mostly new single-family homes a year in the Preserve and Meadows developments and elsewhere in town, but have not seen townhome developments.
“Last year we had 17 homes that applied for building permits, so 17 new homes were constructed last year,” he said. “None of those were townhomes. All were single-family homes. We haven’t actually had a townhome in several years, but there are a number of lots available yet in the Preserve.”
Helget highlighted that according to figures for a $200,000 home acquired by Administrative Assistant Alicia Menzel, the City of NYA remains high at an estimated $18,142.96 in terms of a variety of fees compared to Carver, Cologne, New Germany, Waconia, Mayer and Watertown which range from $10,370.72 to $16.270.18, although all of the fees were not complete.
“Ours is a little higher than most across the board,” he said, adding that the council had discussed the fees during budget workshops but sewer access charges of $2,331.80 and water access charges of $1,675.98 are unique to the Meadows and Preserve developments.
The trunk fees, adjusted for inflation, have been adjusted in the past, most recently in 2010, 2011 and 2012 to encourage home development.
“During those recession when there was little to no development going on, the city did scale back on trunk fees for water and sewer,” said Helget.
Council members discussed the issue at length, wondering if a slight decrease in fees for only townhomes would make a difference in the profit margins, before settling on the final figure of sewer and water trunk charges after reviewing overall fees from cities from the area.
“It doesn’t appear that single-family homes has been a problem,” said Helget. “I’ve had builders call me about that (single-family homes) but we’re still seeing development.”
The profit margins for townhomes is smaller though which has held multiple developers back, according to Helget.
Without builders and developers present, council member Dick Stolz and others considered the need for townhomes in the area.
“I think townhomes are a fairly large need in the community too,” he said. “If they have been building single-family homes, there is a demand for that. The market drives that stuff. They aren’t doing townhomes, so either the demand isn’t there or the profit margin is too narrow and they can’t make it work.”
Council member Craig Heher agreed, adding the exact number could be revisited during a public hearing.
“I would think we would do something to generate and get houses up, but what’s that magic number?” he said. “Coming down $2,000 to $3,000, is that the difference? That doesn’t seem like a lot on a $200,000 home.”
Mayor Carol Lagergren advocated for the reduction of trunk fees, which are somewhat controllable by the city, compared to inspection and other fees associated with home construction.
“It shows at least a good faith effort on the part of the city,” said Lagergren, “and there isn’t anything else we have control over.”
Council member Mike McPadden agreed.
“I don’t have a problem with lowering them, but in the end you want to make sure you got enough to put back into the sewer and water funds to improve that situation,” said McPadden. “You also want to do something to promote some townhomes.”
The council will likely make a final decision on the amount during the regular May 8 meeting
In other news, Mayor Carol Lagergren proclaimed the month of May as Yellow Ribbon month and May 13 as Yellow Ribbon Day, recognizing the efforts of the Beyond the Yellow Ribbon (BTYR) committee.
As part of the proclamation, Crystal Dammann updated the council on efforts of the nine-member BTYR committee.
“Things have been progressing last year or so,” said Dammann, highlighting community outreach at Taste of NYA and other events. “We’ve gotten more active.”
Dammann added that the BYTR continues to reach out to military children with gift cards and gifts because “children are just as important as our service members… they have strength” as well as the sending of care packages to local veterans. The group also has broadened their horizons and the network, working with other BTYR groups in the area, including Chaska and Shoreview.
“It’s amazing,” she said. “To be able to see the impact you have and talk to service members and their families, we’re here to help.”
The upcoming annual banquet on May 13, with guest speaker Heidi Gould of the Historical Society, will highlight Vietnam War veterans, Dammann said. Tickets can be purchased at Klein Bank, Citizens State Bank or at the door.
“We hope to see you all there,” she said.
Council members also accepted the resignation of Economic Development Commission member Sarah Molnau, OK’d the hiring of part-time custodian Jodi Miller, reviewed and accepted the city’s premium and coverages for property and liability insurance with Jeff Heibeisen of Citizens Insurance Services, authorized sending up to two council members to the League of Minnesota Cities annual conference held June 14 to 16, set a special meeting of April 26 for interviewing candidates for the public services technician position and heard, but made no direct action, on a request from Christian Pallansch regarding a potential nuisance violation related to inoperable vehicles on his property at 793 Tacoma Avenue.
Council members also noted that there remains two vacancies on both the Economic Development Commission and the Planning Commission, encouraging citizens to apply for those open positions at any time until they are filled.
The NYA City Council will next meet on at 6 p.m. for a work session and meeting on Monday, April 24.

Follow Adam Gruenewald on Twitter @adamgruenewald.