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HomeMy WebLinkAbout5G - Maple Glen 2nd Addition ~ ~,,~ 4646 Dakota Street S.E. U "'W?:; Prior Lake, MN 55372-1714 ~ MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: ISSUES: CITY COUNCIL AGENDA REPORT FEBRUARY 17,2009 5G LARRY POPPLER, ASSISTANT CITY ENGINEER CONSIDER APPROVAL OF A RESOLUTION APPROVING PLANS AND SPECIFICATIONS AND AUTHORIZING ADVERTISEMENT FOR BIDS FOR THE MAPLE GLEN 2ND ADDITION IMPROVEMENTS Introduction The purpose of this agenda item is to seek approval from the City Council for the plans and specifications and authorize advertisement for bids for the Maple Glen 2nd Addition Improvements. Historv On October 3, 2005, the City Council approved the Development Contact for Maple Glen 2nd Addition. Construction of Maple Glen 2nd Addition with the exception of final paving (wear course) and individual lot landscaping was completed in the fall of 2006. On October 16, 2007 the City notified Tollefson Development Inc. (Developer) that streets in certain areas of the plat had settled and needed to be repaired, but due to poor soil conditions the City would prefer the Developer wait to complete the final paving when weather conditions permitted in 2008. On December 1, 2008 the City Council approved an amendment to the Development Contract for Maple Glen 2nd Addition. Due to problems with the Letter of Credit and the inability to secure additional funds, the Developer petitioned the City to complete the final wear course paving and landscaping and has agreed the cost will be specially assessed against the lots within the plat still owned by the Developer. The Developer waived their right to appeal the special assessments. At the January 20, 2009 Public Hearing, no one spoke opposing the completion of the project. Current Circumstances Because this project is complete with the exception of the final paving and landscaping, the costs determined in the Feasibility Report are limited to completion of those items. The project plans were previously approved by the City Council as part of the Development Contract. At this point the project design is complete and it is appropriate to seek City Council authority to advertise for bids. A copy of the plans is available in the Engineering Department for review. Once the bids are received, the City should hold the Assessment Hearing prior to award of the bid. ImDact of Foreclosure on the Assessment Process The City has received information suggesting that the lots still owned by the Developer may now be in foreclosure. Foreclosure is a lengthy process and www.cityofpriorlake.com R:\Council\2009 Agenda Reports\02 17 09\MlJifi~ ~~~~tr.t'bm)tg~dp:f&l,"~~44 7.4245 before the mortgage holder comes into ownership, the mortgagee has a period of time, prescribed by statute, to redeem the property. Neither a foreclosure nor a bankruptcy can wipe out property taxes or special assessments due and owing. Failure to pay property taxes or special assessments puts the property at risk of going into tax forfeiture. When the Council approved the amendment to the Development Contract, the bank holding the mortgage withheld its consent to the amendment. Based on this information, City staff will make sure that the bank receives notice as prescribed by Minn. Stat. Chapter 429, of the Special Assessment Hearing in order to provide it an opportunity to appeal, object, or otherwise express their views. ImDact of Tax Forfeiture on the Assessment Process Assuming the lots in Maple Glen 2nd Addition are foreclosed, in normal economic times, it would be unlikely that a bank would allow property it has recovered through foreclosure to go into tax forfeiture. These lots in Maple Glen 2nd Addition may be the only asset the bank has to recover the money loaned to the Developer. The lots will be more valuable when the streets and landscaping are improved. In the event of tax forfeiture, the State would take ownership of the property and direct the County on its behalf, to dispose of each parcel by auction, private sale or conveyance to a governmental body. The assessments on the property would still be valid however there could be a delay in payment of the assessment until the forfeiture process is complete and the property returns to private ownership. For that reason as noted below in the Financial Impact section the City will issue a 10 year bond which minimizes impact and liability to the City. FINANCIAL IMPACT: Conclusion Advertising for bids is the next step in the process for assessment of the remaining improvements. Once the bids are received the Special Assessment Committee will meet, review the bids, make a recommendation to the Council, the City would then hold the Assessment Hearing prior to awarding the bid. The Maple Glen 2nd Addition Project is proposed to be financed by special assessments. The total estimated project cost is $290,158. Assessment The Assessment Review Committee recommends the unit method of assessment for the Maple Glen 2nd Addition for the 23 Developer owned lots. The estimated assessment rate is proposed at $12,616/unit. Assessment Term Because of the nature of this project and the petition by the Developer, the Assessment Review Committee recommended that the assessment term be one year for this project. Upon further review with the City Attorney and financial consultants City Staff is recommending that the assessment be for a term of 10 years. Typically the City assesses road improvements over a 10 year term. This also allows the Developer additional time to pay for the improvements. By paying the assessments over a ten year period rather than paying for them in one year it reduces the risk of tax forfeiture. As a part of the Amendment to the Developers Agreement, building permits on a lot by lot basis will not be issued until the remaining assessment amount is paid in full. R:\Council\2009 Agenda Reports\02 17 09\Maple Glen Second acceptplans agenda report. doc While the City is utilizing bond capacity for this project, the entire cost of the improvements will be paid in full to the City through the assessment process. This includes the carrying costs for the project. ALTERNATIVES: The alternatives are as follows: 1. Approve Resolution 09-XX approving plans and specifications and authorizing advertisement for bids for the Maple Glen 2nd Addition Improvements 2. Deny this item for a specific reason and provide staff with direction. 3. Defer this item until a future date. RECOMMENDED A motion and a second to adopt a Resolution approving plans and specifications MOTION: and authorizing advertisement for bids for the Maple Glen 2nd Addition Improve ents. Reviewed b(1 4 ,~, Frank Boyles, City M agef R:\Council\2009 Agenda Reports\02 17 09\Maple Glen Second acceptplans agenda report. doc 4646 Dakota Street S.E. Prior Lake, MN 55372-1714 RESOLUTION 09-xx A RESOLUTION APPROVING THE PLANS AND SPECIFICATIONS AND AUTHORIZING THE ADVERTISEMENT FOR BIDS FOR THE MAPLE GLEN SECOND ADDITION PROJECT Motion By: Second By: WHEREAS, Pursuant to Resolution 09-020, adopted on January 20, 2009, the City Engineer has prepared plans and specifications for the Maple Glen Second Addition Project, NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The plans and specifications for the Maple Glen Second Addition Project, a copy of which is attached hereto and incorporated by reference herein, are hereby approved. 3. The City Manager shall prepare and cause to be inserted in the official newspaper of the City and in the Construction Bulletin an advertisement for bids for the making of the improvement pursuant to the attached plans and specifications. The advertisement shall be published not less than 21 days prior to the bid opening, shall specify the work to be done, and shall state that the bids will be received by the City Manager at which time the bids will be publicly opened at City Hall at 4646 Dakota Street SE by the City Engineer. No bids will be considered unless sealed and filed with the City Manager and accompanied by a cash deposit, cashier's check, bid bond, or certified check payable to the City of Prior Lake in the amount of five (5) percent of the amount of such bid. 4. The City reserves the right to reject any and all bids for any reason as determined solely by the City Council. PASSED AND ADOPTED THIS 1ih DAY OF FEBRUARY, 2009. YES NO Haugen Erickson Hedberg LeMair I Millar Haugen Erickson Hedberg LeMair Millar Frank Boyles, City Manager R:\Council\2009 Agenda Reports\02 17 09\Maple Glen Second acceptplans resolution.DOC www.cityofpriorlake.com Phone 952.447.9800 / Fax 952.447.4245