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Sherburne County

Notice of Amendment to the Subsurface Sewage Treatment System Low Interest Loan Program Ordinance

Ordinance No. 241

NOTICE IS HEREBY GIVEN that the Sherburne County Board of Commissioners amended the County’s Subsurface Sewage Treatment System Low Interest Loan Program Ordinance to allow for water supply well replacement when necessary to meet setbacks for SSTS replacements or repairs, and setting both a maximum and minimum interest rate for loans. The above Ordinance was adopted by the Sherburne County Board of Commissioners on Tuesday August 3, 2021 and effective upon date of publication, and reads as follows:

SECTION 1.0 PURPOSE, AUTHORITY

1.1. PURPOSE AND AUTHORITY

An Ordinance establishing standards and procedures for providing low interest loans to single family residential properties, and owners of small business properties that have received a Notice of Non-Compliance for failing septic systems, and setting forth loan process, eligibility criteria, and repayment processes all in order to promote the health, welfare and safety of the public, and to protect the environment. This Ordinance is enacted pursuant to Minn. Stat. § 115.57.

SECTION 2.0 DEFINITIONS

The following words and phrases shall have the meanings ascribed to them in this Section. If not specifically defined in this Section, terms used in this Ordinance shall have the same meaning as provided in the standards adopted by reference. Words or phrases that are not defined here or in the standards adopted by reference shall have common usage meaning. For purposes of this Ordinance, the words “must” and “shall” are mandatory and the words “may” and “should” are permissive.

County: Sherburne County, Minnesota.
Department: The Sherburne County Planning and Zoning Department.
Design Flow: The daily volume of wastewater for which an SSTS is designed to treat and discharge.
Individual Subsurface Sewage Treatment System or ISTS: means a subsurface sewage treatment system or part thereof, as set forth in Minnesota Statutes, sections 03 and 115.55, that employs sewage tanks or other treatment devices with final discharge into the soil below the natural soil elevation or elevated final grade that are designed to receive a sewage design flow of 5,000 gallons per day or less. ISTS also includes all holding tanks that are designed to receive a design flow of 10,000 gallons per day or less; sewage collection systems and associated tanks that discharge into ISTS treatment and dispersal components; and privies. ISTS does not include those components defined as plumbing under the Minnesota Plumbing Code, chapter 4714, except for a building sewer connected to a subsurface sewage treatment system.
Loan Application: means an application form as prepared by the Department, for which an Applicant is required to complete and submit when seeking a Low Interest Loan in accordance with this Ordinance.
Midsized Subsurface Sewage Treatment System or MSTS: means a subsurface sewage treatment system, or part thereof, as set forth in Minnesota Statutes, sections 115.03 and 115.55, that employs sewage tanks or other treatment devices with final discharge into the soil below the natural soil elevation or elevated final grade and that is designed to receive sewage design flow of greater than 5,000 gallons per day to 10,000 gallons per day. MSTS also includes sewage collection systems and associated tanks that discharge into MSTS treatment or dispersal components. MSTS does not include those components defined as plumbing under the Minnesota Plumbing Code, chapter 4714, except for a building sewer connected to a subsurface sewage treatment system.
MPCA: Minnesota Pollution Control Agency.
Notice of Noncompliance: A written document notifying a system owner that the owner’s onsite/cluster treatment system has been observed to be noncompliant with the requirements of this Ordinance.
Program Administrator: The Sherburne County Solid Waste Administrator, or its designee.
Single Family Residence: means a single-family residential structure meeting the requirements of the Sherburne County Zoning Ordinance.
SSTS: For the purpose of this Ordinance, means a subsurface sewage treatment system for a Single-Family Residence having a design flow of no more than 2,500 gallons per day, and a subsurface sewage treatment system for an Eligible Small Business having a design flow of no more than 10,000 gallons per day. SSTS having a design flow of more than 2,500 gallons per day are not eligible for the Low Interest Loan Program unless it is for an Eligible Small Business.

SECTION 3.0 LOAN PROCESS

3.1. ADMINISTRATION

The Sherburne County Solid Waste Administrator, or its designee, is the Administrator of this Ordinance and the Low Interest Loan Program. The Program Administrator will assume the responsibility for soliciting, collecting, and processing Low Interest Loan Applications, developing loan specifications, determining eligibility, and approving loan applications; and, monitor construction and approve disbursements of funds pursuant to this Ordinance and the Low Interest Loan Program.

3.2. ELIGIBILITY

A. Eligible Applicants. Owners of eligible properties may apply for a loan pursuant to this Ordinance to finance site evaluation, design, installation, repair and replacement of individual sewage treatment systems. All persons having an ownership interest in the property must join in the Loan Application. If a property is being sold on a contract for deed, both the vendor and vendee must sign the application. Applicants must provide proof that they are current in payment of all property taxes and in payment of any mortgage. No income or asset limitation shall apply to eligible applicants.

Eligible Small Businesses. Businesses must meet all of the following criteria to be eligible for a loan pursuant to this Ordinance:

(1) The business has a physical or industrial location (based on property tax classification) in Sherburne County.

(2) The business is registered with the Minnesota Secretary of State and not debarred by the State of Minnesota.

(3) The business has no more than fifty (50) full-time and/or part-time employees.

(4) The business generates less than $1,000,000 in average annual revenue from all sources.

(5) The business has no current tax liens on record with the Minnesota Secretary of State and all required licenses and permits are in good standing.

Eligible Properties. Loan Applications will only be accepted for improvements to Single Family Residential properties and Eligible Small Business properties, as determined by the Program Administrator. In addition, eligible properties must meet all of the following criteria as determined by the Program Administrator:

(1) With the exception of the noncompliance status of the SSTS serving the property, the Property be in compliance with all applicable local ordinances and permits, including, but not limited to, the applicable zoning ordinance and zoning permits, and the County’s Solid Waste Management Ordinance.

(2) The property must be improved with a permanent Single Family Residence or a commercial or industrial structure for an Eligible Small Business. Mobile homes are eligible only if they are located on a permanent foundation, have the wheels and axles removed, and are taxed as real property.

(3) The property must be located outside of an area that has a municipal sewer system and where extension of a municipal sewer system to serve the property is not imminent, as determined by the Program Administrator.

(4) The property must be located entirely within Sherburne County.

(5) The property is not delinquent on their property taxes and/or mortgage(s).

Eligible Improvements. Loan proceeds may only be used for the following improvements and expenses related to the replacement or repair of a failing or non-compliant SSTS (as determined pursuant to MPCA rules by a licensed septic inspector):

(1) SSTS design and construction costs.

(2) Plumbing and electrical costs directly related to and necessary for the SSTS.

(3) Replacement of tank(s) and/or drainfield repairs that will bring existing system into compliance with applicable MPCA rules (e.g. Minn. R. ch. 7080 to 7083).

(4) Seeding the SSTS installation area, only to extent required by MPCA rules.

(5) Placement of holding tank(s) may be an eligible cost only if no other SSTS can be installed at the property.

(6) Installation costs for a new water supply well on the applicant(s) property only if a new water supply well is necessary in order to meet setbacks to the SSTS as required in MN Rule 4725. All water supply well work shall be performed by a licensed well contractor in accordance with MN Rule 4725.

(7) If available as an alternative to replacement or repair of a failing or non-compliance SSTS, as determined by the Program Administrator, sewer access charges for connection to a municipal sewer system.

Ineligible Improvements. Loan proceeds may not be used for any expense that is not specifically identified as an eligible improvement or expense in this Ordinance. Loan proceeds may not be used for an SSTS to facilitate new building construction or a new dwelling unit. Loan proceeds may not be used to increase the capacity of an SSTS beyond what is reasonably required to serve the existing Single Family Residence, or Eligible Small Business.

With the exception of design costs, no improvements commenced or expenses incurred prior to the Department approving an application and issuing a Notice to Proceed will be considered to be an eligible expense. Notwithstanding the foregoing, the Program Administrator may allow proceeds to be used for improvements commenced prior to application if the Program Administrator determines that:

The improvements are otherwise eligible improvements under this Section 3.2(D);

The improvements were commenced as part of the same SSTS project for which a loan is being issued; and
The applicant has shown good cause for why the improvements were commenced prior to the application approval.

The Program Administrator’s decision as to whether or not to allow loan proceeds to be used for improvements commenced prior to application approval shall be final.

3.3 LOAN APPLICATION PROCESS

Loan Application. Owner(s) of eligible properties must complete a Loan Application form as prepared by the Department, and submit that form to the Department for review. Incomplete applications, as determined by the Department, will not be accepted. Loan Applications shall require the following information, at a minimum:

(1) Proof of ownership for all of the affected property;

(2) A copy of the last or most current mortgage statement or satisfaction of a mortgage;

(3) A copy of the Notice of Non-Compliance from a Minnesota Licensed SSTS Inspector for the septic system on the property;

(4) A non-refundable loan application fee as established in the County’s fee schedule; and

(5) For applications relating to an Eligible Small Business properties, a copy of the business’s signed federal tax returns for the two years prior to the application and, if requested by the Program Administrator, a copy of the business’s income statement/profit-loss for the two years prior to the application.

Application Review. The Program Administrator will review the Loan Application and determine eligibility. Loan Applications will be accepted throughout the entire length of the program or until funds are expended. The Program is discretionary by the County and is subject to the availability of funds. Applicants who do not qualify will be informed by the Department in writing as to why the Application was rejected. The Program Administrator’s determination of eligibility pursuant to this Ordinance shall be final.
Funding Priority. Because the Loan Program is subject to the availability of funds, the Department may prioritize loans for properties where the SSTS has been determined to be an Imminent Threat to Public Health or as Failing to Protect Groundwater, as those terms are used in MPCA Rules. In order to ensure that funding is available for priority projects, the Department may defer its decision on a Loan Application for any property that has transferred ownership within the preceding 12 months until the Department is reasonably able to determine whether funding will be available for priority projects during the budget year. No loan may be approved for any property that has transferred ownership after the effective date of this Ordinance, if a Certificate of Compliance is not provided to the Department at the time a Certificate of Real Estate Value is filed, as required by the County’s ordinances and applicable regulations.
Loan Documentation. If an application is approved, the Applicant(s) must submit the following documentation to the Department:

(1) A completed SSTS Permit Application, along with the required permit fee, or, if the property is located in a City or Township that issues its own SSTS permits , a copy of the approved SSTS permit issued by the local jurisdiction.

(2) A copy of the SSTS design for the SSTS permit application or for the approved SSTS permit, as prepared by a Minnesota Licensed Septic Designer.

(3) Lien Recording Fee and Satisfaction of Lien Fee.

(4) At least two (2) proposals from licensed SSTS installers itemizing the total costs of the proposed project. Applicants are not required to select the lowest proposal, but the information may be used by the Department in determining the total amount of the loan to be issued. Project costs that exceed the total amount of the approved loan shall be the sole responsibility of the Applicant(s). The County shall not be responsible for any amounts that exceed the total amount of the loan, as determined by the Program Administrator.

Special Assessment Agreement. A loan issued by the County pursuant to this Ordinance shall be a lien on the property and will be collected as a special assessment with the property’s real estate taxes. After approving a Loan Application, the Department will prepare a Loan and Special Assessment Agreement. All owners of the property shall sign the Loan and Special Assessment Agreement before any loan proceeds are disbursed. The Loan and Special Assessment Agreement will not be recorded until disbursement of the loan proceeds.
Loan Terms. A loan approved pursuant to this Ordinance shall be issued on the following terms:

Maximum Funding: Single-Family Residence: $20,000.

Eligible Small Business: 75 percent of SSTS loans up to $25,000; 80 percent of SSTS loans up to $50,000; 85 percent of SSTS loans up to $75,000; 90 percent of SSTS loans up to $100,000; and, 100 percent of SSTS loans exceeding $100,000 up to maximum of $150,000.

Interest Rate: Shall be determined annually on February 15^th based on the cumulative average percentage increase as set forth in the Consumer Price Index Midwest for all items (CPI-U Midwest), as published in the Bureau of Labor Statistics for the immediate current year, but shall not be less than 1.2 percent, nor greater than 3 percent.

Application Fee: Non-refundable fee per application.

Lien Recording Fee: $46.00.

Lien Satisfaction Fee: $46.00.

Repayment: Payable twice a year as a Special Assessment included with the Property’s real estate taxes. Property owners may prepay the loan at any time. The loan shall become immediately due and payable in full upon any sale, conveyance or other transfer of the Property.

Term of Repayment: Single-Family Residential properties: Payable twice a year over 5 years for loans up to $5,000. Loans greater than $5,000 shall be payable twice a year over 10 years.

Eligible Small Business properties: Payable twice a year over 5 years for total funding up to $25,000; Payable twice a year over 7 years for total funding up to $50,000; Payable twice a year over 10 years for total funding up to $75,000; Payable twice a year over 12 years for total funding up to $100,000; and, Payable twice a year over 15 years for total funding over $100,000, up to $150,000.

Income Limit: None for Single Family Residential properties.

Asset Limit: None.

Penalty for Ordinance Violation. If, during the term of any loan, a court determines that a violation of any Ordinance or land use permit or license exists on the property encumbered by a Loan and Special Assessment Agreement, the loan shall become immediately due and payable and the collection schedule for any assessment for the remaining outstanding balance shall be accelerated and shall become payable in full with the following year’s property taxes.
Notice to Proceed. After all documentation and fees required by the Ordinance have been received, the Department will issue a Notice to Proceed to the Applicant’s selected contractor. The Notice to Proceed will identify the total amount of the loan that has been approved.

SECTION 4.0 LOAN PAYMENT

4.1 VERIFICATION OF PROPER INSTALL

All SSTS improvements must be made in compliance with Minnesota Statutes, the rules and regulations of the Minnesota Pollution Control Agency and County and other local Ordinances. Prior to disbursing any loan funds, the Applicant or the Applicant’s contractor shall provide the Department with an invoice and copy of their SSTS as-built verifying that the SSTS was properly installed and approved by the applicable permitting authority.

4.2 LOAN DISBURSEMENT

Upon verification of completion and approval by the Department of the total project costs, the Department will disburse the approved loan funds jointly to the Applicant and the Applicant’s contractor. The Applicant’s contractor shall provide the Department with a lien waiver for the property. The lien waiver and the Loan and Special Assessment Agreement shall immediately be recorded with the County Recorder.

SECTION 5.0 GENERAL PROVISIONS

5.1 Liability

This Ordinance shall not relieve or lessen the responsibility or liability of any person owning, operating, controlling, or installing any sewage treatment system or disposing of septage for damage to persons or property or any other injury occasioned thereby. The Administrator assumes no responsibility for the proper, safe, and efficient functioning and performance of sewage treatment systems installed, renovated, or maintained pursuant to the requirements contained herein.

5.2 ABROGATION

It is not intended by this Ordinance to appeal, abrogate, annul, impair, or interfere with any existing easements, covenants, deeds, restrictions, agreements, Ordinances, rules, regulations, permits previously adopted, or issues pursuant to law. However, where this Ordinance imposes greater restrictions, the provisions of this Ordinance shall govern.

5.3 effective date

This Ordinance shall be effective after formal adoption by the County Board and publication according to law.

(Published in the Patriot: 08/07/21).