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HomeMy WebLinkAbout9A Amending the Special Assessment PolicyP�0 U \ 4646 Dakota Street SE Prior Lake. NW 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: SEPTEMBER 19, 2011 AGENDA #: 9A PREPARED BY: LARRY POPPLER, CITY ENGINEER / INSPECTIONS DIRECTOR PRESENTED BY: LARRY POPPLER AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AMENDING THE SPECIAL ASSESSMENT POLICY DISCUSSION: Introduction The purpose of this agenda item is to approve an amendment to the Assessment Policy. History The City's Assessment Policy was created in 1989. Since that time the City has amended the policy on numerous occasions incrementally. The last amendment was in 2003. The city attorney and staff have completed a comprehensive review of the policy and offered it for city council consideration at the September 6, 2011 meeting. On September 6, 2011, the City Council reviewed the Assessment Policy and asked for three modifications to the policy. 1. Add language in Section III regarding private streets and common driveways. 2. Add language in Section III regarding commercial properties with frontage on multiple streets. 3. Modify assessment rate language to provide more guidance on rates charged. The Assessment Review Committee members have expressed their position re- garding these modifications. The attached Assessment Policy includes the re- vised language. Current Circumstances The revisions to the assessment Policy are shown below: 1. ADD SENTENCE IN SECTION III C. - "In those instances where a lot(s) gain access from a common driveway or private street that abuts the im- provement, the front footage will be based on its frontage along the private street or common driveway." 2. ADD SENTENCE IN SECTION III C 9. DOUBLE FRONTAGE LOTS — "A commercial parcel with frontage on two streets will be assessed based on the adjusted front footage along each street." 3. REVISE SECTION V B. INTEREST RATE ON ASSESSMENTS — "The in- terest rate for the assessment shall be 2 percent higher than the "net inter- est cost" of the bonds that have been issued for the project or if no bonds were issued for the project the interest rate shall be 2 percent higher than the net interest cost of the most recent bonds sold by the City." Conclusion The proposed revisions address the City Council comments in the appropriate sections of the Assessment Policy. City Staff recommends that the City Council adopt the revised Assessment Policy as written. ISSUES: The City is in the process of amending the Assessment Policy. One of the items discussed is the interest rate. The Assessment Review Committee recommends that the Assessment Policy be amended to reflect an interest rate of 2% over the bond rate. The additional 2% covers assessment pre - payments or defaults. Bonding for the 2011 Improvement Project ( Boudins Phase 1) was authorized in August, 2011 and funding received in September, 2011. The projected special assessment revenues for the bonds issued were based on an interest rate of 6% as provided for in the special assessment policy that was in effect at the time of issuance. If the City Council chooses to charge 2% over the net interest cost of the bond, an additional estimated $69,000 would need to be paid by the tax levy. The City has three options to proceed with this project: 1. Charge 2% over the net interest cost of the bonds issued for both Boudins Phase I and II. (estimated additional $69,000 would need to be paid by the tax levy for bonds issued in conjunction with Phase 1) 2. Charge 6% for both Boudins Phase I and II. 3. Charge 6% for Boudins Phase I and charge 2% over the net interest cost of the bond issued for Boudins Phase II. If the City chooses to assess 6% for the Boudins Phase I or Phase II project, the language pertaining to the interest rate should not be altered until after the As- sessment Hearing for those projects. FINANCIAL This policy clarifies the use of assessments for the purpose of financing public im- IMPACT: provements. ALTERNATIVES: 1. Adopt a resolution accepting the revisions to the Assessment Policy as pro- posed. 2. Take no action or direct Staff to provide revisions or clarification to the pro- posed Assessment Policy. RECOMMENDED Alternative #1 MOTION: PRlO�� ' '4 � 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 11 -xxx A RESOLUTION AMENDING THE CITY ASSESSMENT POLICY Motion By: Second By: WHEREAS, Assessments are used in part of finance the cost of public improvements; and WHEREAS, The Assessment Policy provides guidance to City Staff, Assessment Review Committee, developers, and residents in applying assessments to properties benefitted by the improvements. 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 revised Assessment Policy with a revision date of September 19, 2011 is hereby adopted. PASSED AND ADOPTED THIS 19th DAY OF SEPTEMBER 2011. YES Eel M ser M ser Erickson Erickson Hedberg Hedber Keeney Keene - Soukup Souku Frank Boyles, City Manager CADocuments and Settingslcgreen\My Documents\SharePoint Drafts\Assessment Policy Resolution.doc PRI u x 4646 Dakota Street S.E. Prior Lake, MN 55372 -1714 ��ivrr PRIG\ U ni CITY OF PRIOR LAKE ASSESSMENT POLICY FOR PUBLIC & DEVELOPMENT INITIATED IMPROVEMENTS February 21, 1989 Adopted by City Council Revision Dates; 02/05/90 04/16/90 10/19/92 03/07/94 02/21/95 11/20/95 02/05/96 04/01/96 05/18/98 01/21/03 06/02/03 09/196/11 www.cityofpriorlake.com C;\Dgc�ments and Settin s\ r n\M D um ❑ts \Shan :a{�4`t O1 Table of Contents Section I. Section II. Section III. Section IV. Section V. Section VI. Section VII. Section VIII. General Policy Statement ---------- Definitions Methods of Assessment _____-- - - - - -- Types of Improvements ___________ __ Assessment Details Supplemental Policy Guidelines New Development ---------------------- Other Types of Assessments. - - -_ -- Page ---- - - - - -- 3 5 ------- - - - -. 15 17 199 --------- 218 232 CDocuments and Seningk rmaft Documents \SharePoint Draft5pecial Assessment Poligy doc HASPeeal- Asses a t- ;,;:� ��".a�^, 9/ 14/20119n4F2&4W14,2&1-� CITY OF PRIOR LAKE ASSESSMENT POLICY FOR LOCAL IMPROVEMENTS SECTION I - General Policy Statement The purpose of this Assessment Policy is to establish guidelines for the use of special assessments. This Policy describes the types of local improvements the City undertakes and the various methods used to calculate special assessments; including illustrations of how each method is applied depending on the type of property and type of improvement. This Policy establishes guidelines to address City participation in the cost of an improvement. Minnesota Statute Chapter 429 provides the authority for the City to construct local improvements. "The cost of any improvement, or any portion thereof, may be assessed upon property benefited by the improvement, based on the benefits received, whether or not the property abuts on the improvement." Minn. Stat. 429.051. The Chapter also sets out the procedures the City must follow in order to specially assess the cost of an improvement. Minnesota Statute Chapter 429, as amended from time to time, is adopted by reference herein. Although the Chapter authorizes the City to specially assess benefited properties for the cost of an improvement, it does not provide any guidance concerning how to determine, on a parcel specific basis, the amount of an assessment. This Policy is intended to aide the City Council in arriving at a fair and equitable method to distribute and assess the cost of an improvement against the benefited properties. To assist in that responsibility the Council has established an Assessment Review Committee. This Committee works with City Staff to review the allocation of project costs for each improvement and recommend a special assessment method based on the guidelines established in this Policy. There will be unique situations or circumstances that arise from time to time that are not addressed in this Policy and that will require special consideration by City Staff, the Assessment Review Committee and the City Council. It is important that assessments be implemented in a reasonable, consistent and fair manner. Three basic criteria must be satisfied in order for the cost of a project or improvement (hereinafter "improvement ") to be specially assessed against a particular parcel: A.) The land must have received a special benefit from the improvement. B.) The amount of the assessment must not exceed the special benefit. C.) The assessment must be uniform in relation to the same class of property within the assessment area. The test of whether a property has been benefitted by an improvement and whether the amount of the special assessment is legally sustainable is determined by the "Fair Market Value" test. The Fair Market Value test ( "FMV ") analyzes the FMV of the property before the improvement and FMV of the property after the improvement. The difference in the FMV before - and -after the improvement is defined as the "benefit" the property received from the improvement. The amount of a special assessment may not exceed the benefit of the improvement on the property. The actual cost to construct an improvement is not the determining factor in determining the amount to be assessed. In the event City staff has doubt as to whether or not the costs of the improvement will be equal to or exceed the special benefit to the properties served by the improvement, the City Council should obtain such appraisals as may be necessary to support the proposed assessment. The cost of an improvement project includes all project support costs both direct and indirect associated with the improvement and incurred by the City; including, but not limited to: a) Construction Cost b) Engineering c) Administrative d) Right of Way Acquisition/Condemnation Costs e) Legal f) Capitalized Interest g) Bonding Costs A local improvement may be initiated by the City Council or by a petition from owners of real property that abut any street named as the location of the improvement. If the improvement is initiated by the City Council a four -fifths (4 /5ths) vote of the Council is required to approve the project. If an improvement is initiated by petition of the property owners it must contain the signatures of not less than thirty-five percent (35 %) of the owners of real property abutting the streets named in the petition as the location of the improvement. A majority vote of the City Council is required to approve an improvement petitioned by not less than 35% of the property owners. The last way to initiate an improvement is for all owners of real property abutting upon any street named as the location of any improvement petition the City Council to construct the improvement and to assess the entire cost against their property. In this case, the City Council may by majority vote, without a public hearing, adopt a resolution determining such fact and order the improvement. 4 SECTION II — Definitions For the purpose of this Policy certain words and phrases have been defined below. If a word or group of words used in this Policy are not defined, the user should refer to the City Zoning and Subdivision Ordinances and Public Works Design Manuel to determine whether definitions are provided in those documents. Where the definition of a word or phrase is more clearly understood in the context of how it is applied in a particular situation its definition is included elsewhere in this Policy. ADJUSTED FRONT FOOTAGE The number of feet actually utilized in calculating an assessment for a particular property. This may differ from the actual front footage of the property. APARTMENT A multi - family structure where tenants rent from the owner of the building. Building characteristics include common hallways for access purposes and a common parking lot. ASSESSMENT AREA An area defined by the City Engineer which shall form the physical boundary where benefit exists within an area. ASSESSMENT REVIEW A committee established by the City Council to assist City COMMITTEE Staff in its analysis of the most equitable special assessment method to apply to a particular improvement project and to provide input on any issues relating to a particular property. The Assessment Review Committee also reviews the proposed assessment rolls. This committee consists of the City Manager, City Engineer and/or Assistant City Engineer, City Attorney, Finance Director and two members of the City Council appointed at the Council's Annual Meeting. COLLECTOR STREET Streets that connect individual neighborhoods to the minor arterial system. Streets are identified as major or minor collector streets by the Comprehensive Plan. CONDOMINIUM A form of individual ownership of a unit in a multi - family structure (similar to an apartment building). DRAINAGE DISTRICT An area defined by natural geographic features that form the boundaries for a drainage basin. Drainage district boundaries shall be determined by the City Engineer. DUPLEX A residential structure divided into two dwelling units for purposes of occupancy by ownership or rental. FLAG LOT A parcel of land shaped like a flag, with a narrow strip providing access to a public street and the bulk of the property containing no frontage. IMPROVEMENT AREA A defined area within which all properties are deemed to be served and receive benefit from an improvement project. LATERAL A sewer lateral is designed to collect the sewage from a project area for conveyance to a trunk facility. A water lateral is sized to provide water in sufficient volumes and pressure as required to serve a defined project area. The lateral line does not include the service for individual structures. MULTI - FAMILY A structure of more than two units. NET AREA FOR Net area is defined as the gross area of land within the DEVELOPMENT FEE proposed subdivision less any stormwater, ponding or CALCULATION wetland easements conveyed to the City. Internal street right -of -way is included in net area. Any road right -of -way necessary for County or State highway dedication are excluded for the purpose of applicable net area fee calculations. NUISANCE ABATEMENTS The elimination of a nuisance whereby the City acts on behalf of the public as authorized by ordinance to eliminate problems such as junk, weeds, dead trees, etc. The City may collect the charges for all or any part of the cost of eliminating any such nuisance by levying a special assessment against the property benefited. OVERSIZING A pipe that is designed and constructed larger and/or deeper than necessary to serve a specific improvement area or a street constructed wider than 36 feet. PROJECT SUPPORT COSTS Costs associated with the delivery of an improvement including surveying, testing, design, administration, bonding, construction staking, inspection, soil borings, publication, or other services. PUBLIC IMPROVEMENT An improvement undertaken by the City under the authority granted in M.S.A. 429.021 RESIDENTIAL EQUIVALENT Residential Equivalent Density units (RED) is defined as a DENSITY UNIT single family residential unit. STREET CONSTRUCTION The initial first time improvement of a street from a condition of no street or gravel to a paved street with concrete curb and gutter. 6 STREET RECONSTRUCTION Paved street replacement including all pavement, curb and gutter, base material, and storm sewer. STREET RESURFACING Replacement or overlaying of the pavement surface of a street with new asphalt. Street Resurfacing does not include the base material replacement. TOWNHOUSE Single family attached units in structures housing three or more contiguous dwelling units, sharing a common wall, individual front and rear entrances; the structure is that of a row -type house as distinguished from multiple - dwelling apartment buildings. TRUNK UTILITY PIPE A water or sewer pipe sized to provide sufficient capacity to serve an area larger than the immediate improvement area. Trunk sewer and water pipes are generally greater than 8" in diameter unless the development itself requires larger than 8" diameter pipe. SECTION III - Methods of Assessments This Section of the Policy describes the various assessment methods used by the City. The type of improvement determines the method of assessment. The objective is to choose the assessment method which will arrive at a reasonable, fair and equitable assessment and which will be uniform upon the same class of property within the improvement area. The most frequently used assessment methods are: the unit assessment, the area assessment, and the front footage assessment. Depending upon the individual type of improvement, any one or a combination of these methods may be utilized to arrive at an appropriate cost distribution. City Staff and the Assessment Review Committee will consider each assessment method and weigh its applicability to the improvement. A description of each assessment method and its corresponding policy application is presented below. In Section IV of this Policy the various types of improvement are described along with which assessment method is generally applied to a particular type of improvement. A. UNIT ASSESSMENT METHOD Unit Assessment A unit assessment is derived by dividing the total cost of the improvement by the number of Residential Equivalent Density (RED) units in the improvement area. A RED unit is defined as a single family residential unit. Each platted and unplatted property in the improvement area is assigned a RED unit value based on the underlying zoning. If the existing use of the land is less than the highest and best permitted use of the land permitted in the zoning district, the Council may consider the current use of the property as well as the potential future uses of the property in determining the appropriate number of RED units to assign to the property. The following chart specifies the number of RED units that will be assigned to a property based on use: Single Family 1.00 RED Duplex 1.00 RED Condominium 0.80 RED Multifamily 0.80 RED Townhouse 1.00 RED Commercial & Industrial RED units are determined based on appraisals and approved by the City Council RED units may be adjusted by the City Council to resolve inequities. The unit assessment method is the most commonly used method for assessing improvements in single family residential neighborhoods where the improvements largely benefit each property to the same degree and the cost of the improvement is not generally affected by parcel size. B. Area Assessment Method. The area assessment method is used when an improvement project benefits all properties within a specific geographic area. The assessable area shall be expressed in terms of the number of acres or the number of square feet subject to assessment. When determining the assessable area, the following exceptions may apply: 1. Ponding Assessment Consideration - Lakes, ponds and swamps are included in the assessable area of a parcel. If the lake, pond or swamp is suitable for integration into the City's storm water management system, a property owner may offer to provide the City with a storm water ponding easement for the land under the lake, pond or swamp. If the proposed area subject to the easement can be functionally integrated into the storm water management system the City may accept the easement, in which case the lake, pond or swamp area subject to the easement will be subtracted from the gross acreage of the parcel. A pond easement cannot be used to reduce the assessable area of the property below the required minimum lot standards. 2. Road Right -of -Way Assessment Consideration - Up to twenty percent (20 %) of the gross acreage within unplatted parcels of five (5) acres or more, depending upon the parcel configuration, may be deducted for street right -of -way purposes. Parcels of less than five (5) acres are not subject to the road right -of -way consideration because, in most instances, parcels of less than five (5) acres cannot support an internal road system. 3. Park Dedication Assessment Consideration - When land is dedicated for park purposes as part of a subdivision, as required by the Subdivision Ordinance, the developer shall not be assessed an acreage charge on the portion of land dedicated. C. Front Footage Assessment. The purpose of the front footage assessment method is to equalize assessment calculations for lots of similar size. Individual parcels, by their very nature, differ considerably in shape and area. The actual front footage abutting the improvement (i.e., street, sewer, water, etc.) is not used to calculate the assessment for a particular parcel. Rather, an "adjusted front footage" is used. In those instances where a lot (s) gain access from a common driveway or private street that abuts the improvement, the front footage will be based on its frontage g the private street or common driveway. The following procedures will apply to calculate the adjusted front footage of a parcel depending the specific configuration of the parcel. All measurements will be scaled from available plat and section maps and will be rounded down to the nearest foot dimension with any excess fraction deleted. Specific parcel configurations include: 1.) Standard Lots 2.) Rectangular Variation Lots 3.) Triangular Lots 4.) Cul -de -sac Lots 5.) Curved Lots 6.) Irregularly Shaped Lots 7.) Corner Lots 8.) Flag Lots 9.) Double Frontage Lots 10.) Large Tracts 0 1. Standard Lots. The adjusted front footage for standard rectangular lots will be the actual frontage of the lot. The front frontage is the lot width at the front lot line. [AIN AVENUE Adj. Front Footage 50' 1 90' 1 EXAMPLES Lot A - 50' Lot B - 90' I: 2. Rectangular Variation Lots. The adjusted front footage for a lot which is an approximately rectangular and uniform in shape is computed by averaging the width of the parcel at the front and rear lot lines. This method is used only where the difference between the front and rear lot lines is 20 feet or less. Adj. Front Footage EXAMPLES Lot A - 100' Lot B - 75' 3. Triangular Lots. The adjusted front footage for a triangular lot is computed by averaging the front and rear lot lines. The maximum distance between the front and rear lot lines (depth of the lot) may not exceed 150 feet. MAIN AVENUE Adj. Front Footage 100' 40' 120' EXAMPLES i[0, A B C Lot A- 70' 40' 130' Lot B - 85' ........................................................... ............................... Lot C -60' 10 4. Cul -de -sac Lots. The adjusted front footage for lots located in a cul -de -sac will be calculated based on determining a line at the most reasonably determinable position. This line will be determined by calculating and connecting the midpoints of the two side lot lines. If the configuration of the lots are similar a common lot width may be assigned based upon an evaluation of typical lots within the subdivision. Adj. Front Footage EXAMPLES Lot A - 75' Lot B - 110' Lot C -80' 5. Curved Lots In certain situations, such as those where lots are located along a meandering trail system or street, road patterns may create curvilinear frontages. In such instances, the adjusted front footage will be the width of the lot measured at the midpoint of the shortest side lot line. Adj. Front Footage EXAMPLES Lot A - 120' Lot B -90' Lot C - 150' 11 6. Irregularly Shaped Lots. The adjusted front footage of irregular shaped lots will be calculated by measuring the lot width at the 25 foot building setback line. Adj. Front Footage EXAMPLES Lot A - 115' Lot B - 140' Lot C - 125' 7. Corner Lots a. Residentially Zoned Corner Lots The adjusted front footage of a corner lot, regardless of whether the improvement abuts both sides of the property will be determined based on the footage abutting the shortest property line; unless the footage of the longer property line exceeds 150 feet. Where the footage of the longer property line exceeds 150 feet, the adjusted front footage will be calculated by adding the sum of the length of the shortest side of the property plus the length along the longest property exceeding 150 feet. A corner lot will not be subject to an assessment for subsequent types improvements until the term of previous assessments have expired. MAIN AVENUE 12 MAIN AVENUE Adj. Front Footage EXAMPLES b. Commercial & Industrial Zoned Corner Lots No allowance relief will be granted because of the higher inherent property value associated with improved traffic frontage and greater visibility along business district and industrial park intersections. The adjusted front footage calculation shall be the entire frontage measured along the setback line comprising the building envelope. Adj. Front Footage EXAMPLES Lot A - 280' Lot B - 390' 150'5 25 •' A 140' 115' B 130' 275' ....................... ................................... ............................... 25' 25' 155' 300' MAIN AVENUE 8. Flag L ots. A flag lot is a parcel shaped like a flag, with a narrow strip providing access to a street and the bulk of the property has no front footage. The adjusted front footage of a flag lot will be calculated at 86 feet, which is the minimum front footage set out in the Subdivision Ordinance for a single family lot in a residential district. If the driveway access of a flag lot is less than 125 feet the adjusted front footage will be measured at the building setback line from the access terminus. 20 ` MAIN AVE. Adj. Front Footage EXAMPLES 170' 13 Lot A - 86' Lot B - 90' 9. Double Frontage Lots a. Residential Lots A parcel, other than a corner lot, eligible for subdivision, with frontage on two streets, will be assessed based on an adjusted front footage for the footage along each street. For double frontage lots lacking the necessary depth to be subdivided, the adjusted front footage is the footage along the longer street. MAIN AVF. MAIN AVE 110' 80 A B 210' 75' 110' Adj. Front Footage EXAMPLES Lot A - 220' Lot B — 80' b. Commercial and Industrial Lots A parcel with frontage on two or more streets will be assessed based on the adjusted front footage along; each street. 10. Large Tracts of Land. An adjusted front footage of 150 feet will be applied to a large parcel of residential property, subject to subdivision, that has a front footage of 172 feet or greater, abutting an improvement. The assessment on the remaining frontage exceeding 150 feet will be deferred for a period of five years to allow for the planned and orderly development of the property. During the five -year deferral period, simple interest will accrue at the rate established in the resolution adopting the assessment roll. The deferral of the assessment will cease upon any of the following occurring: a. Five (5) year period expires b. Final platting of the property C. Sale or transfer of ownership. 14 SECTION IV - Types of Improvements A. Bridge Installation. The benefit of a bridge improvement is confined to a specific area. The area assessment method or the unit assessment method will be used to recover the assessable portion of the improvement. B. Sidewalk/Bike Path Installation. Although construction normally occurs only on one side of the street, the safety of pedestrian traffic is regarded as an overall neighborhood or regional benefit, therefore the City will not assess for this type of improvement unless the City is petitioned for said improvement. C. Street Construction. The cost of the original street construction including storm sewer improvement shall be recovered 100% by special assessment. The assessment method shall be determined by the Assessment Review Committee and City Council. D. Street Resurfacing and Sealcoating. Street resurfacing is commonly known and referred to as street overlaying whereby a new bed of road material such as bituminous is installed over an existing paved road to a specific thickness. Sealcoating is an application of oil and aggregate material over the existing paved road. Street resurfacing and sealcoating shall be treated as general maintenance activities and shall not be assessed unless the City is petitioned for the improvements. E. Street Reconstruction. The cost of a Street Reconstruction improvement including storm sewer improvements of presently paved streets in the City of Prior Lake shall be allocated on a 40/60 division. Forty percent (40 %) of the total project cost shall be assessed against the benefiting properties and the remaining sixty percent (60 %) shall be paid through the general ad valorem property tax paid by the entire community. F. Sanitary Sewer & Water Lateral Improvements All water and sewer lines, regardless of their size or designation, are considered as laterals to adjacent property. Lateral lines are normally not larger than eight inches in diameter in most residential areas. Original sewer and water improvements will be assessed at one hundred percent (100 %) of the cost of the improvements. The cost of repair or replacement of sewer and water laterals is treated as general maintenance and supported by utility fees and will not be assessed. G. Trunk Sanitary Sewer & Water Improvements. Trunk sewer and water mains are usually larger than 8 inches in diameter and are designed to carry large volumes of flow. Trunk lines are regional facilities designed to serve areas beyond the immediate property. The difference between a normal sized lateral and the actual sized trunk represents "trunk oversizing ". The cost in extra pipe sizing and depth shall be paid from the City's Trunk Reserve Fund. H. Trunk Storm Sewer Improvements. Trunk lines are regional facilities designed to serve areas beyond the immediate property. The difference between a normal sized storm sewer pipe and the actual sized trunk represents "trunk oversizing ". The cost in extra pipe sizing and depth shall be paid from the, Water Quality Fund, tax levy, or the Trunk Reserve Fund and will not be part of the assessment. 15 I. Drainage District Improvements. All land within a drainage area is considered to be benefited by a drainage improvement because all land contributes water runoff to the drainage system. The City Engineer shall establish a "drainage district" and all property within the "drainage district ", shall be assessed according to the area assessment method. Collector Street Construction. The City's designated Municipal State Aid system of roadways has evolved into a network of collector streets that route traffic to distribution points that connect with central trunk arteries such as State and County highways. While collector streets serve and benefit the entire community, certain aspects of their construction provide a more local benefit to a neighborhood and should be borne by that specific neighborhood. Benefitting properties will be assessed up to a 36 foot wide street. Street width above 36 feet will be paid from general ad valorem taxes, Municipal State Aid funds, or the Street Oversize Fund. 16 SECTION V - ASSESSMENT DETAILS A. Term of Assessments. Special assessments shall be collected in equal annual installments of principal for a period of years determined by the type of improvement. 1. Sidewalk Improvements - 10 years 2. Street Construction - 10 years 3. Street Resurfacing - 10 years 4. Street Reconstruction —10 years 5. Sanitary Sewer & Water Laterals - 20 years 6. Storm Sewer Improvements - 10 years 7. Nuisance Abatements - 1 year 8. Delinquent Connection Fees, Utilities - 1 year 9. Diseased Tree Abatement — 1 year ($1,000 or less), 5 years ($1,001 or more) B. Interest Rate on Assessments. The interest rate for the assessment shall be 2 percent higher than the net interest cost of the bonds that have been issued for the project or if no bonds were issued for the project the interest rate shall be 2 percent higher than the net interest cost of the most recent bond sold by the City. C. Payment of Special Assessments. A property owner has four (4) available options regarding the payment of assessments; including the option to: make annual installment payments that appear as part of the individuals property tax statement; pay the assessment in full within thirty (30) days from the adoption of the assessment without incurring any interest; pay the remaining balance on an assessment to the municipality at any time prior to November 15 of a given year with interest accrued to December 31 of the year paid; or apply for a payment deferral if the individual meets the age and income criteria set out in City Ordinance Section 111, as may be amended from time to time. Minnesota Statute Section 429.061 Subd. 3 deals with certification of the assessment roll to the county auditor and payment options. D. Reapportionment Upon Land Division When a tract of land against which a special assessment has been levied is thereafter divided or subdivided by plat or otherwise, the council may, on application of the owner of any part of the tract or on its own motion equitably apportion among the various lots or parcels in the tract all the installments of the assessment against the tract remaining unpaid and not then due if it determines that such apportionment will not materially impair collection of the unpaid balance of the original assessment against the tract. The council may, and if the special assessment has been pledged to the payment of improvement warrants shall, require the owner or owners, as a condition of such apportionment, to furnish a satisfactory surety bond fully protecting the municipality against any loss resulting from failure to pay any part of the reapportionment assessment when due. Notice of such apportionment and of the right to appeal shall be mailed to or personally served upon all owners of any part of the tract. In most cases, dividing the assessment balance evenly on a unit or lot basis would result in an equitable apportionment. The practice of unit assessment redistribution and recertification to the Scott County Auditor's Office will be followed when the amount of 17 the unit assessment exceeds One Thousand Dollars ($1,000.) In those instances when the property subdivision would result in smaller increments, the entire assessment shall be paid at the time the developer's agreement is approved. 18 SECTION VI — Supplemental Policy Guidelines A. Areas Partially Served By Utilities. Any large tract of land, lot or parcel whereby an improvement abuts or extends to the property shall be considered served and assessed accordingly. The current special assessment shall be calculated based on the adjusted front footage method. If an improvement benefits non - abutting properties which may be served by the improvement when later extensions or improvements are made but are not initially assessed, the City may reimburse itself based on the Section VII, New Development. B. Assessments Based On Preliminary Plat. Property and lots subject to an approved preliminary plat may be specially assessed only if the public hearing ordering the improvement project has not yet occurred. In the event this exists, assessment frontages may be calculated based upon the lot configurations in the approved the preliminary plat. C. Tax Exempt Property. There are three categories of tax exempt properties. Assessments are applied as follows: 1. Church and school property will be assessed in the same manner as commercial and industrial zoned property. 2. State land is normally exempt from assessment unless otherwise negotiated or agreed upon by the affected State agency. 3. County land is subject to assessment and will be assessed in the same manner as commercial and industrial zoned property. See also Minnesota Statute Section 429.061 Subd. 4. D. Municipal Property Assessments. City owned property is divided following three classifications for the purpose of determining assessment participation, Public Facility Land, Public Right of Way, and Park Land 1. Public Facility Land is defined as land utilized for public buildings such as city halls, fire halls, libraries, maintenance garages, municipal parking lots etc. Public facility property within an improvement area will participate in the total assessable cost of the improvement and will be treated in the same manner as any other benefitted parcel. 2. Public Right -of -Way property consisting of all City acquired easements, subject to fee title, for the specific purpose of utility placement or street construction will be exempt from assessment. 3. Park Land is categorized according to the following descriptions: a. Community Parks Community Parks are characterized by a high degree of public use and the area is relatively large in size. These parks are normally associated with athletic events and sporting activities i.e., softball, football, baseball, hockey etc. Park 19 lands of this nature will be subject to assessments. The cost of improvements to community parks will be recovered by a special levy upon the ad valorem taxes. b. Neighborhood Parks Neighborhood Parks provide open space within a residential development and include features such as playground structures. Because neighborhood parks are commonly used by the immediate residents of the area, such park land will not be assessed if the area of the park comprises less than twenty -five (25 %) of the area served by the improvement project. Larger parks, comprising an area greater than twenty -five (25 %) of the area served by the improvement project, will be included in an assessment in the same manner as community parks. E. Tax Forfeiture Assessments. When a parcel of tax forfeited land is returned to private ownership and the parcel is benefited by an improvement for which special assessments were canceled because of the forfeiture, the City may, upon notice and hearing as provided for the original assessment, make a reassessment or a new assessment as to the parcel in an amount equal to the amount remaining unpaid on the original assessment. F. First Serve Situations. If the plans of the City and a developer coincide for the installation of utilities, the plans of the City will prevail. When this situation occurs, the City may, upon notice and hearing, assess all lots in an approved preliminary plat, if the improvements are approved prior to approval of the final plat. G. Utili y Impact. Costs associated with the restoration for utility work will not be assessed for street improvement projects. H. Project Support Costs. Project support costs are part of the total cost of the improvement project and are included in the assessment calculation. Project support costs for utility or water quality improvements shall be charged to the associated funding source used to finance the improvements. I. Street Li htg ink. Street lighting costs are an assessable component of an improvement proj ect. Private Streets and Common Driveways. Properties accessed from a private street or common driveway within an improvement area or adjacent to the improvements will be assessed. 20