DEPARTMENT: Transportation
FILE TYPE: Consent Action
TITLE
title
Authorization To Execute Easement Agreement With Enterprise Terminals & Storage, LLC And Encroachment Agreement With Enterprise Products Operating, LLC For County Project 32-65 And Amend 2026 Transportation Capital Improvement Program Budget For Right Of Way
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PURPOSE/ACTION REQUESTED
• Authorize execution of an Easement Agreement with Enterprise Terminals & Storage, LLC.
• Authorize execution of an Encroachment Agreement with Enterprise Products Operating LLC.
• Authorize amendment of the adopted 2026 Transportation Capital Improvement Program (CIP) Budget for right of way.
SUMMARY
Dakota County and the City of Inver Grove Heights are proceeding with County Project (CP) 32-65, reconstruction of 117th Street East, which includes roadway, drainage, utility, and safety improvements. Enterprise Products Operating, LLC owns petroleum pipelines and facilities located within private easements that the project must cross. An Encroachment Agreement is required to define construction requirements and pipeline protection measures within the vicinity of the pipeline and facilities.
The County acquired permanent and temporary easements for County Project 32-65 through condemnation proceedings over a parcel owned by Enterprise Terminals & Storage, LLC (District Court File 19HACV242345). As part of the resulting just compensation settlement, the County and Enterprise Terminals & Storage, LLC negotiated specific conditions that must be documented in the Easement Agreement. These conditions include terms governing the use of the Permanent Road Easement, Drainage and Utility Easement, and Temporary Construction Easement; requirements to maintain access to Enterprise’s parcel during construction; obligations for the County to restore all disturbed areas; indemnification provisions to the extent permitted by law and consistent with Minn. Stat. § Ch. 466; and insurance requirements for the County’s contractor consistent with project specifications. These terms reflect the agreed-upon conditions incorporated into the settlement and are necessary to support construction activities within and adjacent to Enterprise’s easement areas.
Encroachment Agreement
• Required due to construction activity within 25 feet of the pipeline.
• Requires Enterprise Products Operating, LLC field representative on site for excavation or heavy equipment operations.
• Prohibits vibratory compaction within 25 feet of the pipeline.
• Requires minimum soil cover, controlled excavation, and pipeline support.
• Requires the County to restore and maintain areas impacted by construction.
• Contains indemnification (to the extent permitted by law and without waiving the limitations of Minn. Stat. § Ch. 466).
These agreements are necessary to proceed with construction in areas crossing Enterprise pipeline easements.
RECOMMENDATION
recommendation
Staff recommends execution of the Easement Agreement with Enterprise Terminals & Storage, LLC; execution of the Encroachment Agreement with Enterprise Products Operating LLC; and amendment of the adopted 2026 Transportation CIP Budget to provide the additional ROW funding necessary to support the Enterprise easement and encroachment requirements for CP 32-65.
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EXPLANATION OF FISCAL/FTE IMPACTS
A Capital Improvement Program (CIP) budget amendment is required for CP 32-65 because the combined cost of right of way appraisals and negotiated settlements is projected to exceed the currently programmed amount in the adopted 2026 Transportation CIP Budget. The appraised values for all required parcels and easements total $2,207,100, while the anticipated negotiated settlement amounts total $3,513,000, resulting in a funding gap and required budget amendment of $1,305,900. Additional right of way-related project costs, including title services, permit fees, attorney time, and potential condemnation proceedings, further contribute to the overall funding need.
Right of way acquisition costs are trending higher than initial estimates due to ongoing negotiations involving several large remaining parcels, which historically settle above their appraised values. Additional funding is necessary to continue right of way acquisition activities through summer 2026 and to maintain the project schedule, including the planned advertisement date of September 2026.
Therefore, a budget amendment of $1,305,900 is recommended to fully fund the anticipated settlement differences and associated right of way project costs.
Sufficient funds are available in the Transportation Sales and Use Tax (SUT) Fund to support this amendment.
County Project 32-65 - CIP Funding Summary
|
Funding Source |
Total Approved Budget |
Available Budget |
|
Transportation Sales & Use Tax |
$2,578,262 |
$0 |
|
2023 Transportation CIP (City) |
$534,000 |
$319,673 |
|
2024 Transportation CIP (City) |
$5,200,000 |
$0 |
|
2024 Transportation CIP (Federal) |
$8,000,000 |
$0 |
|
2024 Transportation CIP (Transportation Advancement Account) |
$1,678,410 |
$0 |
|
2024 SUT Transportation CIP |
$4,021,590 |
$0 |
|
2023 SUT Transportation CIP |
$1,026,000 |
$0 |
|
Total Approved Budget |
$23,038,262 |
$319,673 |
Budget Amendment
Additional Funding Needed: $1,305,900
Revised Total Project Budget: $24,344,162
☐ None ☐ Current budget ☐ Other
☒ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
body
WHEREAS, Dakota County (County) and the City of Inver Grove Heights are proceeding with County Project (CP) 32-65 to reconstruct 117th Street East to provide a safe and efficient transportation system; and
WHEREAS, Enterprise Products Operating, LLC owns and operates petroleum pipelines and related facilities within private easements that CP 32-65 construction activities must cross; and
WHEREAS, an Encroachment Agreement is required to define construction requirements, pipeline protection measures, restricted activities, and the presence of Enterprise Products Operating, LLC field representatives during construction activities on CP 32-65 occurring within or near the pipeline corridor; and
WHEREAS, the County acquired necessary permanent and temporary easements across Enterprise Terminals & Storage, LLC’s property through eminent domain (District Court File No. 19HA-CV-24-2345); and
WHEREAS, an Easement Agreement is required to document certain conditions negotiated as part of the just compensation settlement between the County and Enterprise Terminals & Storage, LLC for the acquisition of the permanent and temporary easements acquired over Enterprise Terminals & Storage, LLC’s property for CP 32-65; and
WHEREAS, right of way acquisition costs for CP 32-65, including appraisals, negotiated settlements, title services, fees, and potential condemnation proceedings, are projected to exceed the amount currently programmed in the adopted 2026 Transportation Capital Improvement Program (CIP) Budget; and
WHEREAS, the combined appraised value of required parcels/easements is $2,207,100, the anticipated combined negotiated settlement amount is $3,513,000, and additional project-related right of way costs create a total funding gap of $1,305,900; and
WHEREAS, sufficient funding is available in the Transportation Sales and Use Tax Fund to support a CIP amendment.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the County Board Chair to execute an Easement Agreement with Enterprise Terminals & Storage, LLC for County Project 32-65, subject to approval by the County Attorney’s Office as to form; and
BE IT FURTHER RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the County Board Chair to execute an Encroachment Agreement with Enterprise Products Operating, LLC for County Project 32-65, subject to approval by the County Attorney’s Office as to form; and
BE IT FURTHER RESOLVED, That the 2026 Transportation Capital Improvement Program Budget is hereby amended to include additional funds for County Project 32-65 as follows:
Expense
County Project 32-65 $1,305,900
Total Expense $1,305,900
Revenue
Transportation Sales and Use Tax $1,305,900
Total Revenue $1,305,900
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PREVIOUS BOARD ACTION
None.
ATTACHMENTS
Attachment: Location Map
BOARD GOALS
☒ Thriving People ☐ A Healthy Environment with Quality Natural Resources
☐ A Successful Place for Business and Jobs ☐ Excellence in Public Service
CONTACT
Department Head: Erin Laberee
Author: John Sass