The Pequot Lakes City Council agreed Tuesday, June 1, to pursue a city housing task force idea to potentially waive sewer and water connection fees for new residential construction within a designated growth zone.

The concept would apply to new construction on vacant lots within the portion of the city that currently has city sewer and water service. The city has sewer and water availability charges, otherwise known as SAC and WAC fees.

The council did not decide to institute this idea at this time, but to have the task force look into it further. It will tie into a SAC and WAC rate and fee study the city is due to undertake.

Mark Jurchen, co-chair of the Pequot Lakes Housing Task Force, presented the idea as a potential workforce housing incentive. He said the task force talked to Crow Wing County Housing and Redevelopment Authority officials, who said this concept is used often in targeted zones, which would have to be determined.

“It also, I think, sends a message to the community and contractors, builders who are willing to work with these lots,” Jurchen said.

Jurchens estimated it would take three years for the city to recover the waiver, plus there’d be an increase in water and sewer usage resulting in revenue for that dedicated fund. He predicted a maximum of 40-50 homes and an estimated $160,000 in waived fees.

According to a memo to the council, the city would need to designate specific areas and/or lots that would be suitable for in-fill or expansion. Multiple unit dwellings would result in an increase in the SAC/WAC waiver, but also would result in an increase in tax revenue and water fee income.

Similar to tax abatement and tax increment financing, consideration would need to be given to the effect of such an incentive in relationship to the “if but for the incentive,” would the home be built.

The waiver may result in a lower price for the unit or increased incentive for the builder due to a $4,000 increase in profit on an affordable home, the memo said.

The primary objective is to increase year-round residents and year-round tax revenue through commercial and residential building.

“I really like this idea to promote a little incentive to a builder to get a break,” council member Dan Ronning said.

Jurchen said: “It’s the one that does not tax our budget, put pressure on our budget. It’s dollars we wouldn’t have gotten anyway.”

Council member Scott Pederson was absent June 1.

In other business June 1, the council:

• Heard from resident Jack Schmidt regarding the city’s SAC program. Schmidt asked questions about how the program works, and raised concerns and ideas about the program. Schmidt was told a rate study is on tap to do this year.

Council consensus was it would look at these charges and how they are applied.

• Approved annual tobacco licenses and liquor license renewals.

• Approved the 2020 audit after hearing a presentation from Schlenner Wenner & Co. certified public accountants and business consultants.

• Reclassified a parcel of tax forfeited property adjacent to Patriot Avenue and Lilac Drive to nonconservation so Crow Wing County can sell it at auction. The parcel is 80,469 square feet and contains four structures being used as storage units for lease.

• Learned firefighters had 15 calls in May, including mutual aid structure/grass fire in Pine River, mutual aid structure fire in Crosslake, grass fire in Pequot Lakes, storage shed fire in Loon Lake Township, house fire in Poplar Township, and all-terrain vehicle and auto accidents in Loon Lake Township, Pequot Lakes and Moose Lake Township.

• Learned police had 263 calls for service in April.

• Agreed to begin the process of vacating First Street.

• Adopted council bylaws.

• Discussed the possibility of a city marketing video.

• Met in closed session for a performance review for City Administrator Rich Spiczka, who started in that position Dec. 1, 2020.

Nancy Vogt may be reached at 218-855-5877 or nancy.vogt@pineandlakes.com. Follow her on Facebook and on Twitter at www.twitter.com/@PEJ_Nancy.