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HomeMy WebLinkAbout8B Adopt Assessment Roll Sunset Avenue O .� PRip � x U t� 4646 Dakota Street SE `�r�so'�A Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: AUGUST 12, 2013 AGENDA #: 8B PREPARED BY: SENG THONGVANH, PROJECT ENGINEER • PRESENTER: SENG THONGVANH AGENDA ITEM: CONDUCT A PUBLIC HEARING TO CONSIDER A RESOLUTION ADOPTING THE ASSESSMENT ROLL FOR THE SUNSET AVENUE IMPROVEMENTS PROJECT #13-011 DISCUSSION: I ntroduction This agenda item is necessary to adopt the assessment roll for the Sunset Avenue Improvements Project (City Project #13-011). Histo The City uses the Five Year Capital Improvement Program to plan its infrastructure improvements and the financing for capital improvements. The Sunset Avenue and County Road 12 projects propose to extend utility connections to properties on Sunset Avenue and on County Road 12�west of Stemmer Ridge Road. Many of these properties are experiencing failing septic systems and desire City services. In July of 2012, this area was annexed into the City of Prior Lake as part of the Orderly Annexation agreement known as the 6.2 area. At its August 27, 2012 meeting the City Council adopted Resolution 12-124 , authorizing staff to prepare a Feasibility Report for the 2013 Sunset Avenue Improvements Project as outlined in the CIP and required for the Minnesota Statutes Chapter 429 process. The Minnesota Statutes Chapter 429 process is required because the City Council intends to specially assess for the improvements. The Sunset Avenue neighborhood is considered in the report and includes improvements to Sunrise View, Sunrise View 1St Addition, and Part of Gov't lots 1& 2 S8, T114, R22. A portion of these properties were originally platted and developed in 1927. The proposed improvements include the extension of sanitary sewer and watermain, street reconstruction, storm sewer, storm water quality, concrete curb and gutter, and appurtenant work. The recommendation of the Feasibility Report was to proceed with the project. On October 8, 2012, Councit adopted Resolution 12-167 accepting the Feasibility Report and calling for a Public Hearing on November 13, 2012 for the 2013 Improvement Project. At the November 13, 2012 Public Hearing, a number of people spoke regarding the project. In addition to the Public Hearing, the City has held three informational meetings to discuss the project. The last informational meeting was held on April 17, 2003 after bids were received for the project. On February 25, 1013 the City Council approved the project plans and specifications and authorized the advertisement for bids for the Sunset Avenue Improvements Project. The City received bids on March 27, 2013 for this project. A total of three bids were received for the project. The Assessment Review Committee met on several occasions to discuss this project. Most recently the Assessment Review Committee met on July 31, 2013 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 bids received and the grant proceeds approved for the Sunset Avenue project. Current Circumstances All benefitting property owners have been mailed a Statement of Special Assessments, which included information pertinent to their property such as the total proposed assessment amount and the assessment rate. The Notice of the Special Assessment Hearing was published in the newspaper on July 20, July 27, and August 3, 2013. Under State Statute, the City may only assess a prope�ty up to the amount the property is specially benefitted by the public improvement. Special ; benefit is defined as the difference between fair market value before and after the project. Appraisals were conducted several properties on the project. The appraisals suggest that the benefit exceeds the assessment. The property owners who believe that the proposed assessment exceeds the speciat benefit have a right to appeal their assessments in District Court. In order to perfect their right to appeal their assessment a property owner must submit their written and signed objections to the proposed assessment to the City Manager prior to the Assessment Hearing or present it to the City Council at the Assessment Hearing. Within 30 days of the Assessment Hearing, the property owner must also file the appeal in District Court. No appeals were received at the time this report was prepared. We have apprised each of the property owners of our Deferred Assessment Program. Conclusion The Council should open the public hearing at the time set forth in the notice, receive public input and then close the public hearing. If certain issues need additional study, those issues could be referred to the Assessment Review Committee for evaluation and recommendation; otherwise, it would be appropriate to approve the attached resolution. Statute requires that special assessments be certified to the County by November 30t Since property owners must be allowed 30 days to pay off their assessments interest free. ISSUES: The assessment calculation has been computed in a manner consistent with the latest calculation methods and the Assessment Policy. The property owners are proposed to be assessed 100% for all costs associated with the proposed sanitary sewer and watermain improvements. 2 The City will use Trunk Sewer Fund to fund oversizing of sanitary sewer. Existing properties will be assessed 40% of the street and storm sewer improvement costs for Sunset Avenue. The proposed future lots will be assessed 100% of the street and storm sewer improvements. The remaining 60% of the street and storm sewer costs will be paid through the tax levy. Also included in the tax levy will be any septic system, credits per the orderly annexation agreement. The City received a grant from the Public Facilities Authority for the sanitary sewer system connections. This grant program brings $110,919.39 towards the project cost. Because the grant proceeds have a direct bearing on the amount of the assessments, the City needed to wait to declare the amount to be assessed until the final grant amount was authorized. The MPCA certified the grant amount on June 27, 2013. FINANCIAL IMPACT: The proposed amount to be assessed against the benefiting properties is $798,786.84. There are 26 benefiting units in the project area that are being assessed at 40% of the street and storm sewer improvements. Another 10 units that make up the proposed future lots will be assessed 100% of the street and storm sewer improvements. Based on the foregoing, the proposed street and storm sewer assessment is $9,138.34 per unit for the existing properties and $22,845.86 for proposed future lots. This compares with the original assessment estimate of $10,000 per unit and $25,200 per unit, respectively. There are a total of 36 utility connections. After the trunk costs and grant ' proceeds were subtracted, the final assessment amount for water was determined to be $4,865.58 and sanitary sewer to be $4,522.79. Initial estimates calculated the water assessment to be $5,700 and sanitary sewer to be $3,100. The Assessment Policy states that interest rates charged should be 2% over the bonding rate. Interest rates for this project are proposed at 4.25%. The Sunset Avenue Improvements Project is proposed to be financed by Special Assessments, Tax Levy, Sewer Trunk Fund, and a Clean Water Grant. Funding sources and amounts are as shown below: Assessments $798,786.84 Tax Le $361,645.40 Clean Water Grant $110,919.39 Trunk Fund $1,962.00 Pro'ect Total Cost* $1,273,313.63 *Includes indirect costs The Council approved the issuance of general obligation street improvement bonds on July 22, 2013 and initial transfers from the Water & Sewer and Water Quality Funds for this project. A fina� project reconciliation will be prepared when the project is completed. The anticipated substantial completion is Fall 2013. 3 ALTERNATIVES: The alternatives are as follows: 1. Approve a resolution adopting the assessment roll as submitted. 2. Approve a resolution subject to Council approved changes. 3. Close the hearing and direct the Special Assessment Review Committee to examine issues or concerns raised at the hearing and provide a recommendation for Council action at a future meeting. RECOMMENDED Alternative #1. MOTION 4 O .� PRlp� t: � U � 4646 Dakota Street SE '�i�v� Prior Lake, MN 55372 RESOLUTION 13-xxx A RESOLUTION ADOPTING ASSESSMENTS FOR THE SUNSET AVENUE IMPROVEMENTS PROJECT, CITY PROJECT #13-011 Motion By: Second By: WHEREAS, Pursuant to proper notice duly given as required by law, the Council has met and heard and passed upon all objections to the proposed assessments for the Sunset Avenue Improvements Project, City Project # 13-011. 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 proposed assessment for the Sunset Avenue Improvements Project, City Project #13-011, a copy of which is attached hereto and made part hereof, is hereby accepted and shall constitute the special assessment against the lands named therein, and each tract of land therein included is hereby found to be benefitted by the proposed improvement in the amount of the assessment levied against it. 3. The assessment shall be payable on an equal principal method extending over a period of ten (10) years for street and storm improvements and a period of twenty (20) years for sanitary sewer and water 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 four and twenty-five hundredths (4,25) percent per annum from the date of adoption of this assessment resolution. To the first installment shall be added one hundred forty-two (142) days of interest on the entire assessment from the date this resolution is adopted to December 31, 2013. To each subsequent installment when due shall be added interest for one year on all unpaid installments. 4. 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 the payment, except that no interest will be charged if the entire assessment is paid within thirty (30) days, and the individual may at any time thereafter, pay to the City's Finance Director the entire amount of the assessment remaining unpaid, excepting the installment portion appearing upon the current year's property tax statement. 5. The Finance Director shall forthwith transmit a certified duplicate of this assessment to the County Auditor to be extended on the property tax lists of Scott County. Such assessments shall be collected and paid to the City in same manner as other municipal taxes. PASSED AND ADOPTED THIS 12TH DAY OF AUGUST, 2013. 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