Sewer Availability Charge (SAC) Small Business Programs

• Sewer Availability Charge (SAC): a one-time fee when a residence or business connects to the regional wastewater (sewer) system for the first time. The Met Council may also charge SAC when a business grows or changes the use of its space, which may create more potential demand on the system.
• Determination: calculation of the amount of maximum potential wastewater capacity needed for the site created by the activities at the location (food preparation, dishwashing, floor cleaning, manufacturing, restroom use, etc.). The determination will be calculated by the Met Council.

Under the Program, the City of Bloomington will enter into an agreement with an eligible business and/or property owner to spread the SAC payments over a five-year term. Eligible businesses generally are any commercial business operating in Bloomington that generate less than ten (10) SAC units and is not a residential property, hotel, or assisted living facility. Eligible businesses will be required to pay at least 20 percent of the total fee plus the first monthly payment at the time of application. The business owner and/or property owner will be required to make monthly payments to the City’s Finance Department for a period of five (5) years for the outstanding balance. The interest rate applied to the deferral amount will be fixed at the rate determined by MCES, based on MCES’ average cost of debt, per statute. MCES’ average cost of debt is computed on December 31 each year; the City will use this same rate as the interest rate on all new deferrals entered into the following calendar year. The interest rate in 2024 is 2.06%.

Participants in the Program are allowed to defer a minimum of two (2) and a maximum of ten (10) SAC units. Businesses with SAC exceeding the Program limit and less than 25 SAC units will be considered on a case by case basis. If the business owner is a tenant, then the tenant and property owner must agree to participate and fill out an application form with the requested information and execute the Deferred Payment Agreement. The proposed deferral structure is outlined below.

• Met Council Sewer Availability Charge (SAC) Deferral: 5-year term; +/- 2.06% interest (updated annually, based on MCES’ average cost of debt; 2024 rate = 2.06%); up-front payment of at least 20% of the SAC fee plus the first monthly payment; secured by the Deferred Payment Agreement; eligible to a business with a SAC unit determination of at least two (2) units but no more than (10) units. This Program is established and regulated by a master deferral agreement executed between the City and the Metropolitan Council.

The City will collect the payments from the businesses. The City will then pay Met Council for the deferred SAC fees on an annual basis as required by their program.

Generally, any new building or existing building undergoing a significant renovation for a commercial business is eligible provided that the SAC determination is at least five (5) units but no more than ten (10) units before any credits are applied. Some industrial businesses may also be eligible provided that they do not discharge industrial wastewater as defined by the Metropolitan Council. 

The structure of the deferral includes, but is not limited to the following requirements:

1. The SAC determination for the business is at least two (2) units but no more than ten (10) units prior to SAC credits.
2. The property must be located in Bloomington.
3. The deferral term is five (5) years.
4. Interest rate will be fixed at +/-2.06% (subject to change annually).
5. A down payment, equal to 20% of the total fee for SAC after credits are applied, plus the first monthly payment is due at the time of application. A building permit will not be issued until the down payment is submitted and the Deferred Payment Agreement executed.
6. The business owner and/or property owner is required to make payments on a monthly basis. Payment is expected within 30 calendar days. A late fee will be added to payments received after 30 calendar days. There is no penalty for early payment of the outstanding balance.
7. The business owner and/or property owner must complete an application and execute the Deferred Payment Agreement to be eligible for the Program, including waiving the right to appeal assessments for unpaid fees.
8. In the event of a business closure, the business owner must notify the City’s Community Development Director. The City will verify the closure and notify the Metropolitan Council of the closure. Future payments will be waived after verification of the closure. In the event of a default for delinquent payments prior to business closure, any outstanding payments will be assessed to the property and the property owner waives the right to contest the assessment.
9. Any SAC credits available as a result of business closure or default are non-transferable; unless used by the developer for a future site development project, the credits will be deposited in the Building and Inspection Special Revenue Fund. These credits will be utilized throughout the City. 
10. In the case of a change of ownership, the full amount of the deferral will be due upon sale.

Applicants for the Program will be disqualified if any of the following conditions exist: 

• Any portion of the property is used for residential purposes. 
• The fee owner’s property taxes are delinquent. 
• The business is not in good standing with the State of Minnesota, or is in violation of Bloomington City Code. 
• The property is not located within the City of Bloomington. 
• The business does not meet the definition of eligible commercial properties in the Metropolitan Council’s SAC Deferral Program.

Below is a sample payment schedule for an eligible small business with a determination of four SAC units, before credits. The example includes the 2024 SAC unit fee of $2,485. The actual amount is updated annually by the Met Council. The example also uses a fixed interest rate of 2.14%, which is also updated annually, based on MCES’ average cost of debt. The remaining deferral payment will be repaid at a fixed rate of 2.14% over a five (5) year term.

*SAC fees and interest rates are determined annually and are subject to change.

1. The City reserves the right to determine and limit the amount of SAC credits that are applied for by any one applicant. This is to allow for the maximum utilization and benefit of the credits. Nothing herein shall imply or suggest that the City is under any obligation to provide incentives to any applicant.
2. Any applicant who is not in good standing with the City, in regards to licenses, fees or other specific charges, will not be considered for this Program.
3. Requests specific to construction of single-family homes are not eligible under this Program.
4. Funds for this Program are limited and shall be awarded to qualifying applicants on a firstcome, first-served basis.
5. If the benefiting building is sold within the period of the loan, the loan must be repaid. The Community Development Director may consider alternatives to immediate repayment, including but not limited to transfer of the loan to a new owner or a mutually agreeable loan repayment schedule.
6. The applicant may utilize this policy in conjunction with other City policies.
7. The City can deviate from this policy for projects that supersede the objectives identified herein.
8. The City reserves the right to modify, suspend or terminate the Program if the Metropolitan Council amends or terminates their program.

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Provide financial assistance to underserved businesses by making it more affordable to obtain a permit for their small business by helping offset the costs of SAC determination for their business during the permitting process. The City will do this by granting a maximum up to five (5) SAC units per eligible business.

• Sewer Availability Charge (SAC): a one-time fee when a residence or business connects to the regional wastewater (sewer) system for the first time. The Metropolitan Council may also charge SAC when a business grows or changes the use of its space, which may create more potential demand on the system.
• Determination: calculation of the amount of maximum potential wastewater capacity needed for the site created by the activities at the location (food preparation, dishwashing, floor cleaning, manufacturing, restroom use, etc.)
• SAC Unit: one SAC unit equals 274 gallons of maximum potential daily wastewater flow capacity; a freestanding, single-family residence is charged one SAC unit, a base unit. Other types of buildings pay a SAC fee based on the maximum potential demand on the wastewater system. The rate for one SAC unit in 2024 is $2,485.

To be considered for the application process, the applicant must meet the below criteria:

1. The business must be located within the City of Bloomington. Preference given to businesses within targeted commercial nodes of American and Portland, American and Nicollet, Old Shakopee and Nicollet, Old Cedar and Old Shakopee, Countryside Center, 90th and Penn, Amsden Ridge Center, and central Lyndale Avenue, etc.).
2. The business owner may only apply for one business within the same fiscal year.

• Requests specific to construction of single-family homes are not eligible under this policy.
• Any portion of the property is used for residential purposes.
• The fee owner’s property taxes are delinquent.
• The business is not in good standing with the State of Minnesota or is in violation of
  Bloomington City Code. 
• The property is not located within the City of Bloomington.

1. Funds for this policy are limited and shall be awarded to qualifying applicants on a first-come, first-serve basis.
2. Business owner/property owner may only apply once per year for a maximum of five (5) credits.
3. The City may consider granting the funds necessary for sewer availability charges (maximum 5 SAC units). This will be determined on a case-by-case basis. At any time, the City may discontinue the option to provide any assistance for these fees and approval is contingent upon funding.
4. Approvals are granted by the Community Development Director and processed by the Building and Inspections division for MCES payment and reporting purposes.
5. The City reserves the right to determine and limit the amount of SAC credits that are granted to any one applicant, allowing for the maximum utilization and benefit of the credits. Nothing herein shall imply or suggest that the City is under any obligation to provide incentives to any business owner/property owner.
6. The City can deviate from this policy for projects that supersede the objectives identified herein.

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