The City of Waconia hereby divides the area within its limits into an urban service district and a rural service district, constituting separate taxing districts for the purpose of all municipal property taxes except those levied for the payment of bonds and judgments and interest thereon.

The urban service district shall include all properties within the limits of the City of Waconia, except those set forth by ordinance as included in the rural service district.

The rural service district shall include only such unplatted lands, which need not be contiguous to one another, as in the judgment of the city council at the time of adoption of the ordinance, are rural in character and are not developed for commercial, industrial, or urban residential purposes and for these reasons are not benefited to the same degree as other lands by municipal services financed by general taxation. The ordinance may designate lands outside the City of Waconia which, if annexed, shall be included in the rural service district. No parcel shall be included in the rural service district of ten acres or less and no parcel shall remain in the rural service district unless such parcel consists of ten (10) acres or more. Land in the rural service district must be open, rural in character and maintained in farm crops or seeded. Grading is not considered as development provided grading is limited to such as is required to minimize storm runoff problems and provided graded areas are cropped and reseeded within one (1) year. Any fill hauled in shall be graded off and seeded at least once each year.

The following lands are included in the rural service district:

Parcel No. 1: Government Lot Two (2) and the Southwest Quarter of the Northeast Quarter of Section 15, Township 116, Range 25, according to the plat of the corrected government survey on file and of record in the Office of the Register of Deeds in and for Carver County, Minnesota.

Also, Lot One (1), Section 14, Township 116, Range 25, excepting from said Lot 1 the following: Beginning at a point 1,153.04 feet West of the Southeast corner of the Southwest Quarter of the Northwest Quarter of Section 14, Township 116, Range 25; thence North, parallel with the East line of said Southwest Quarter of the Northwest Quarter to the shore of Clearwater Lake, also known as Waconia Lake; thence East, along the shore line of said Lake, to the East line of said Southwest Quarter of the Northwest Quarter; thence South along said East line of said Southwest Quarter of the Northwest Quarter to the Southeast corner of said Southwest Quarter of the Northwest Quarter; thence West along the South line of said Southwest Quarter of the Northwest Quarter a distance of 1,153.04 feet to the place of beginning.

Parcel No. 2: Government Lot 1 and all of the Southeast Quarter of Section 15, Township 116, Range 25, lying east of the following described line, viz:

A line run in the Southeast Quarter of said Section 15, Township 116, Range 25, 5th P.M. Carver County, Minnesota, as follows, to-wit:

Commencing at a point in the East and West center line of said Section 15, Township 116, Range 25, which point is 1,324.5 feet West from the East Quarter corner of said Section 15; thence South 27 degrees 07 minutes East along a fence, a distance of 242.4 feet; thence South 64 degrees 30 minutes West along fence a distance of 243.9 feet; thence South 28 degrees East along the fence a distance of 274.7 feet; thence South 56 degrees 45 minutes West along a fence a distance of 700 feet to the edge of a lake; thence South 66 degrees 30 minutes West a distance of 696 feet across said lake to the end of a fence on the lake's edge; thence South 87 degrees 30 minutes West along a fence a distance of 284 feet to a point in a North and South line marked by line of electric power poles which point is 1,403.8 feet North from the South line of said Section 15, Township 116, Range 25; thence South along an existing fence to the South line of said section.

Whenever any parcel of land included in the rural service district is platted in whole or in part; or whenever application is made for a permit for construction of a commercial, industrial, residential or agricultural building or improvement; or whenever such improvement or building is commenced without a permit the governing body shall make and enter an order by resolution transferring such parcel or part thereof from the rural service district to the urban service district. Any parcel within a rural service district for ten (10) years without development shall be considered by the city council for exclusion from the rural service district. By amendment hereof such parcel shall be transferred to the urban service district if any area adjacent thereto is determined by the city council to be substantially developed as urban property.

In the judgment of the city council, the approximate ratio which exists between the benefits resulting from tax supported municipal service to parcels of land of like full and true value, situated in the rural service district and the urban service district, respectively, is equal to the applicable mill rate of the township in which the lands situated in the rural service district are located plus the amount of any municipal property taxes levied for payment of bonds and judgments and interest thereon.

No city service beyond that normally provided by the townships of Carver County will be provided by the city in a rural service district, except fire, police and planning services.