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Home My WebLink About10A 2011 Improvement ProjectPao U tr1 �INx�so�� 4646 Dakota Street SE Prior Lake. NM 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: SEPTEMBER 19, 2011 AGENDA #: 10A PREPARED BY: LARRY POPPLER, CITY ENGINEER / DIRECTOR OF INSPECTIONS PRESENTED BY: LARRY POPPLER AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION DECLARING COSTS TO BE AS- SESSED AND ORDERING PREPARATION OF AN ASSESSMENT ROLL FOR THE 2011 IMPROVEMENT PROJECT, AND ESTABLISHING THE DATE OF THE ASSESSMENT HEARING FOR THE 2011 IMPROVEMENT PROJECT ( #11 -011) DISCUSSION: Introduction This agenda item is necessary to set an assessment hearing and to establish the amount to be assessed for the 2011 Improvement Project History The 2011 Improvement Project #11 -011 was included in the 2011 -2015 Capital Improvement Program and has received numerous City Council approvals to date. At the June 6, 2011 Council Meeting, the Council awarded bids for the improve- ment projects. Project #11 -011 includes sanitary sewer, water main, storm sewer and street reconstruction within the Boudins Neighborhood. The Boudins Neigh- borhood will be reconstructed in two phases in 2011 and 2012. The City has ex- ecuted a contract with Pember Companies to construct the 2011 project. The project is under construction. Much of the street work, driveways, and sod have yet to be installed. The Assessment Review Committee met on November 8, 2010 and September 8, 2011 to review the project, assessment method, and the proposed assessments. While the project scope and assessment method remain the same, the proposed assessments have been adjusted based on the bid. Current Circumstances The Special Assessment Committee has reviewed and agrees with the assess- ment map, assessment rate, and method of assessment. The unit method for the assessment is used due to the uniformity of benefit received by the benefited par- cels and the relative consistency in parcel size. Conclusion The City Council should confirm which assessment method should be applied. Since the special assessment hearing date is proposed for October 17th, individu- al property owner notices must be sent to the property owners by September 27th. The amount to be assessed must be included in the mailed notice. 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 net interest cost of the bond. The additional 2% covers assessment pre - payments or defaults. Bonding for the 2011 Improvement Project was authorized in August, 2011 and funding received in September, 2011. The projected special assess- ment revenues for the bonds issued were based on an interest rate of 6% as pro- vided for in the special assessment policy that was in effect at the time of is- suance. 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 projects. (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 11. 3. Charge 6% for Boudins Phase I and charge 2% over the net interest cost of the bond issued for Boudins Phase II. The commercial properties near Timothy Avenue and Boudin Street were eva- luated by Nagell Appraisal and Consulting. They have determined that these commercial properties show no value benefit as the access for these properties are not part of the improvements. Therefore they are not proposed to be as- sessed. On the other hand the appraisals affirm the proposed special benefit in all cases for the residential properties which are part of this project. The City tries to employ strategies to keep the overall costs and assessments low. These strategies include keeping the street widths on this project at 24 feet for some streets, reducing street widths on other streets, and minimizing the con- struction limits. The assessment calculation has been computed in a manner consistent with the latest calculation methods and the Assessment Policy. Subtractions from the as- sessment calculation include: private driveway reconstruction, Crossroads devel- opment contribution, trunk stormwater, utility impacts, the Rutgers signal compo- nents, and the parking area for Boudins Park. The assessment calculation was based on 40% of the costs for street and storm sewer construction of both phases of the Boudins reconstruction. The sum of the cost is divided by the total number of units in both project phases. The 2012 project assessment would be the same amount. FINANCIAL The total project cost for Project #11 -011 is $2,737,588.54 This cost is proposed IMPACT: to be funded through tax levy, water fund, sewer fund, water quality fund, grants, and special assessments. Of the total project costs including water quality improvements, sanitary sewer and watermain improvements, $2,002,754.14 or 73% will be paid through sources oth- er than special assessment. The proposed amount to be assessed against the benefiting properties is $734,834.40. There are 87.2 benefiting units in the project area that are being assessed at 40% of the street and storm sewer improvements. 2 (The fractional unit occurs because the fourplex in the development is considered to be 3.2 units pursuant to our special assessment policy.) Based on the fore- going, the proposed assessment is $8,427 per unit. This compares with the origi- nal assessment estimate of $8,182 per unit. Staff recommends that the City Council declare the costs to be assessed, order preparation of the assessment roll, and establish the Assessment Hearing date as October 17 2011 for the 2011 Improvement Project (Boudins Phase I Recon- struction) including Grayling Circle, Rutgers Street, and Watersedge Trail and au- thorize the required notice of public hearing to be published as per the attached resolution. The Council approved the issuance of general obligation street improvement bonds in August, 2011 and initial transfers from the Water & Sewer and Water Quality Funds in August, 2011 for this project. A final project reconciliation will be prepared when the project is completed. The anticipated completion date is Fall 2012. Two resolutions have been included with this agenda report. The first resolution reflects the interest rate at 6% per annum. The second resolution reflects the in- terest rate at 2% over the net interest cost of the bond. Bonds were issued at a net interest cost (for the portion of the bond associated with the 2011 Improve- ment Project #11 -011) of 2.06 %; therefore, the second resolution reflects an in- terest rate of 4.06 %. ALTERNATIVES: The alternatives are as follows: 1. Approve a resolution declaring the costs to be assessed, ordering the prepara- tion of the proposed assessment rolls for the 2011 Improvement Project #11 -011, and establishing October 17, 2011 for the assessment hearing date. 2. Deny the Resolutions for a specific reason and provide staff with direction. 3. Table this item for a specific reason. RECOMMENDED Staff recommends alternative #1. MOTION: PRIO /r Fy U tr! 4646 Dakota Street SE NxESO Prior Lake, MN 55372 RESOLUTION 11 -xxx A RESOLUTION DECLARING COSTS TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL FOR THE 2011 IMPROVEMENT PROJECT 11.011 AND ESTABLISHING THE DATE OF THE ASSESSMENT HEARING AND PUBLICATION THEREOF Motion By: Second By: WHEREAS, A contract has been let and costs have been determined for the improvement of the 2011 Improvement (Boudins Phase 1), Project 11 -011, the City cost for the improvements are $2,737,588.54; and WHEREAS, The City Manager notifies the City Council that such proposed assessment will be completed and filed in the City Manager's office for public inspection. 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 portion of the cost of such improvements to be paid by the City is hereby declared to be $2,002,754.14, and the portion of the cost to be assessed against benefited property owners is declared to be $734,834.40. 3. Assessments shall be payable on an equal principal installment method extending over a period of 10 years for street improvements. The first installment shall be the annual principal plus interest calculated from the public hearing date to the end of this year plus twelve months of the next year and shall bear interest at the rate of 6% per annum from the date of the adoption of the assessment resolution. 4. The City Manager, with the assistance of the City Engineer shall forthwith calculate the proper amount to be specially assessed for such improvements against every assessable lot, piece or parcel of land within the district affected, without regard to cash valuation, as provided by law, and shall file a copy of such proposed assessment in the office of the City Manager for public inspection. 5. The City Manager shall upon the completion of such proposed assessment notify the City Council thereof. 6. A public hearing shall be held on the 17th day of October, 2011, in City Council Chambers at 7:00 P.M. to pass upon such proposed assessment and at such time and place all persons owning property affected by such improvement will be given the opportunity to be heard with reference to such assessment. 7. The City Manager is hereby directed to cause a notice of the public hearing on the proposed assessment to be published once in the official newspaper of the City at least two weeks prior to the hearing, and the City Manager shall also cause mailed notice to be given to the owner of each parcel described in the assessment roll not less than two weeks prior to the hearing. 8. The owner of any property so assessed may, at any time prior to certification of the assessment to the County Auditor, pay the whole of the assessment on such property, with interest accrued to the date of payment, to the City Finance Director, except that no interest will be charged if the entire assessment is paid within 30 days from the adoption of the assessment. The owner may, at any time thereafter, pay 61Documents and Settingslcareen\My DocumentsMarePoint Drafts\2011 street recon resolution.doc to the City Finance Director the entire amount of the assessment remaining unpaid, excepting the installment portion appearing upon the current year's property tax statement. PASSED AND ADOPTED THIS 19th DAY OF SEPTEMBER 2011. YES NO ser M ser Erickson Erickson Hedberg Hedber Keeney Keene Soukup Souku Frank Boyles, City Manager 2 / O~ P " U trf ��,, 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 11 -xxx A RESOLUTION DECLARING COSTS TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL FOR THE 2011 IMPROVEMENT PROJECT #11.011 AND ESTABLISHING THE DATE OF THE ASSESSMENT HEARING AND PUBLICATION THEREOF Motion By: Second By: WHEREAS, A contract has been let and costs have been determined for the improvement of the 2011 Improvement (Boudins Phase 1), Project 11 -011, the City cost for the improvements are $2,737,588.54; and WHEREAS, The City Manager notifies the City Council that such proposed assessment will be completed and filed in the City Manager's office for public inspection. 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 portion of the cost of such improvements to be paid by the City is hereby declared to be $2,002,754.14, and the portion of the cost to be assessed against benefited property owners is declared to be $734,834.40. 3. Assessments shall be payable on an equal principal installment method extending over a period of 10 years for street improvements. The first installment shall be the annual principal plus interest calculated from the public hearing date to the end of this year plus twelve months of the next year and shall bear interest at the rate of 4.06% per annum from the date of the adoption of the assessment resolution. 4. The City Manager, with the assistance of the City Engineer shall forthwith calculate the proper amount to be specially assessed for such improvements against every assessable lot, piece or parcel of land within the district affected, without regard to cash valuation, as provided by law, and shall file a copy of such proposed assessment in the office of the City Manager for public inspection. 5. The City Manager shall upon the completion of such proposed assessment notify the City Council thereof. 6. A public hearing shall be held on the 17th day of October, 2011, in City Council Chambers at 7:00 P.M. to pass upon such proposed assessment and at such time and place all persons owning property affected by such improvement will be given the opportunity to be heard with reference to such assessment. 7. The City Manager is hereby directed to cause a notice of the public hearing on the proposed assessment to be published once in the official newspaper of the City at least two weeks prior to the hearing, and the City Manager shall also cause mailed notice to be given to the owner of each parcel described in the assessment roll not less than two weeks prior to the hearing. 8. The owner of any property so assessed may, at any time prior to certification of the assessment to the County Auditor, pay the whole of the assessment on such property, with interest accrued to the date of payment, to the City Finance Director, except that no interest will be charged if the entire assessment is paid within 30 days from the adoption of the assessment. The owner may, at any time thereafter, pay CADocuments and SetGnWagreeffly Documents\SharePoint Drafts12011 street recon resolubonldoc to the City Finance Director the entire amount of the assessment remaining unpaid, excepting the installment portion appearing upon the current year's property tax statement. PASSED AND ADOPTED THIS 19th DAY OF SEPTEMBER 2011. YES NO M ser M ser Erickson Erickson Hedberg Hedber Keeney Keene Soukup Souku Frank Boyles, City Manager 2 A � PRIG b i~ b-4 01 \INNES�� 4646 Dakota Street SE Prior Lake, MN 55372 NOTICE OF PUBLIC HEARING ASSESSMENT HEARING 2011 PUBLIC IMPROVEMENT PROJECT (BOUDIN'S NEIGHBORHOOD, PHASE I) UTILITY IMPROVEMENTS, AND APPURTENANT WORK IN THE CITY OF PRIOR LAKE, SCOTT COUNTY, MINNESOTA Notice is hereby given that the City Council of the City of Prior Lake, Minnesota will meet in the Council Chambers at City Hall, 4646 Dakota Street SE, on Monday, the 17 of October, 2011 at 7:00 P.M. to consider the assessment of the following street: PROJECT DESCRIPTION: Reconstruction of Grayling Circle NE, Rutgers Street NE, and Watersedge Trail NE, including constructing sanitary sewer, storm sewer, streets and appurtenant work. The area proposed to be assessed consists of every lot, piece or parcel of land benefitted by said improvement, which has been ordered made and is as follows: Grayling Circle, NE, Rutgers Street NE, and Watersedge Trail NE in the City of Prior Lake, Minnesota. The area proposed to be assessed is every lot, piece, and parcel benefitting from said improvements, whether abutting or not, within the following described areas: Portions of the North half of Section 30, Township 115, Range 21 East, Scott County, Minnesota. Specific property descriptions included in the above described area, but not inclusive, are as follows: Property abutting including: Boudin's Manor Boudin's Manor 2 ° Addition Boudin's Manor 4` Addition The Harbor S 30, T 115, R 21 part of Gov't Lot 2 S 30, T 115, R 21 part of Gov't Lot 3 Part of S 30, T 115, R 21 The estimated total of the assessment roll is $734,834.40. The Council proposes to proceed under the authority granted by Chapter 429 M.S.A. The proposed assessment roll is on file in the City Manager's office and any written or oral objections will be considered at the public hearing. No appeal may be taken as to the amount of any assessment unless a signed, written objection is filed with the City Manager prior to the hearing or presented to the presiding officer at the hearing. An appeal to district court may be made by serving notice upon the Mayor or City Manager within 30 days after adoption of the assessment roll and filing such notice with district court within 10 days after service upon the Mayor or City Manager. The City also has adopted a deferred assessment ordinance whereby the City Council may defer the payment of special assessments for those individuals who are permanently disabled or have Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com attained the age of 65 or older. Guideline criteria and applications are available at City Hall. Applications must be made within 30 days following the adoption of the assessment roll by the City Council. Dated: September 19, 2011 By Order of the City Council Frank Boyles City Manager (Published in the Prior Lake American on Saturday, September 24, October 1, and October 8, 2011.) City of Prior Lake Minnesota m F :, 2011 City Project 11 -011 & 12 -011 Property Assessments mm Phase 1 (2011) 87.2 Units Phase II (2012) 64 Units f Properties to Assess 1 Unit Unless Otitemise Noted 151.2 Units Total D so tto — F.., ��-� _..n I uroi