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HomeMy WebLinkAbout7A - Public Hearing Mushtown Maple Lane Panama PRlp ti 4646 Dakota Street SE ` � r � so ,� e . Prior Lake, MN 55372 41 INNEs5t 1 ') CITY COUNCIL AGENDA REPORT MEETING DATE: MARCH 10, 2014 AGENDA #: 7A PREPARED BY: SENG THONGVANH, PROJECT ENGINEER PRESENTED BY: SENG THONGVANH AND LARRY POPPLER AGENDA ITEM: ADDITIONAL PUBLIC HEARING TO CONSIDER APPROVAL OF A RESO- LUTION ORDERING THE MAPLE LANE, MUSHTOWN ROAD, AND PAN- AMA AVENUE STREET IMPROVEMENT PROJECT (PROJECT #14 -011) AND ORDERING PREPARATION OF PLANS AND SPECIFICATIONS DISCUSSION: Introduction The purpose of this agenda item is to receive additional public input to con- sider approval of a resolution ordering the Maple Lane, Mushtown Road, and Panama Avenue Improvement Project and the preparation of plans and speci- fications. A super majority (4/5) is needed to approve the resolution. If this project proceeds, the City intends on using the M.S. Chapter 429 pro- cess as this process applies to all projects that will be financed in whole or in part through special assessments or bond proceeds. History Each year the City reconstructs street segments that are scheduled for recon- struction as part of its Capital Improvement Program (CIP) and have ex- ceeded their useful design life. The City uses the Capital Improvement Pro- gram and its Pavement Management Program to plan for infrastructure im- provements and the financing for capital improvements. At its September 9, 2013 meeting the City Council adopted Resolution 13 -126 authorizing staff to prepare a Feasibility Report for the Maple Lane, Mushtown Road, and Pan- ama Avenue Improvement Project as outlined in the CIP. The Maple Lane / Mushtown Road / Panama Avenue neighborhood is consid- ered in the report and includes improvements to Maple Acres, O'Rourke Addi- tion, Parts of S 11, T 114, R 22 and Parts of S 2, T 114, R 22. These proper- ties were platted and developed in the 1950's and 1960's. A map of the pro- ject area (Figure 1) is included in the Feasibility Report. The proposed im- provements include street reconstruction, sewer and water construction, storm sewer, storm water quality, concrete curb and gutter, and appurtenant work. The Feasibility Report also includes total estimated costs, preliminary assessment amounts, and a project financing summary. Also included in the report are design criteria, estimates and information on watermain, sanitary sewer, storm sewer, and streets. Details on each can be found in the Feasi- bility Report. On November 12, 2013, the City Council accepted the feasibility report and scheduled the public hearing. The public hearing was held on December 9, 2013. Staff presented the origi- nal project plus three (3) options prior to the public hearing. A dozen or so residents spoke at the public hearing in opposition to the project. While it was recognized that Mushtown Road is in poor condition, the cost for the project as a whole was the major point of objection. The City Council tabled their dis- cussion after closing the public hearing. The City Council communicated support for Option 3. Therefore, staff has re- flected the estimated savings of approximately $10,000 in the overall project costs and estimated special assessments included in this report. The City Council also asked for the following additional information be brought back on January 27th, 2014. 1. Representative Appraisals 2. Options to reduce project assessment 3. Septic System Credit information 4. Information on Age and Condition of the Existing Septic Systems on the Project 5. Additional Traffic Information for Mushtown Road Each of these items are addressed below and were presented at the January 27th meeting. Current Circumstances Appraisals Representative appraisals were completed. The appraisals measured the added benefit of completing the project for 5 properties in the project area. We carefully selected the properties to include one on the lake on Panama, one off the lake on Panama, one on Maple Lane, one on Mushtown Road, and the final one is a commercial property on Mushtown Road. We utilized an ap- praisal firm which has extensive experience in property appraisal for this pur- pose. They understand that their professional opinions as to value are likely to be questioned in an appeals or court proceeding. The benefit appraisals com- pleted for this project support the proposed assessment. For obvious reasons the appraisal information is confidential. Assessment Reduction Measures A fair amount of cost for this project comes from the utility extension along Panama Avenue. Not only does this segment of pipe require easement ac- quisition, but because of Crystal Lake, the number of properties fronting this segment of pipe is minimal. The Comprehensive Plan suggests that, eventu- ally this pipe will serve properties south of 174th Street which are presently in the township but not in the orderly annexation area. Due to the high rate of the estimated assessment amounts, the City Council directed the Assessment Review Committee at the January 27th meeting to re- view the City's Assessment Policy as well as those of surrounding communi- ties. A separate agenda item has been considered this evening as part of the consent agenda which allows the use of trunk fund dollars or other funds to better address projects of this nature as explained below. 2 A contribution from the Trunk Fund could be considered by the City Council since this pipe will serve a greater area than this specific project per the re- vised Assessment Policy. The Assessment Review Committee recommends using Trunk Fund contribution of approximately $262,000. If the Trunk Fund were used the utility assessment is reduced by approximately $7,500 for each of the 38 properties in the project. These costs are based on a preliminary engineer's estimate and would likely change once project plans and bids have been received. The project bid would dictate the final project cost and as- sessment amounts. Since Mushtown Road is a collector street within the City's roadway system, staff has analyzed project bid items further for those items that could be con- sidered more of a regional roadway improvement and therefore would be funded through the Street Oversize Fund as well as the Water Quality Fund. Although such detailed analysis is completed after the completion of plans and receipt of bids, assessment rate concerns identified in January have ad- vanced the process. In review of the cost estimates, Water Quality Fund items could increase by $12,588 to $42,588. The Street Oversize Fund could increase by an estimated $75,034 to $131,186. The increase contribution of these funds would lower the total assessment amount as well as the general tax levy. The additional contributions from the Water Quality Fund and Street Oversize Fund would reduce the street & storm assessment by an estimated amount of $1,300 per unit. Septic System Credits Since this area was annexed into the City from Spring Lake as a part of the Orderly Annexation Agreement, they are eligible for septic system credits. Based on a review of the existing septic system in this area, the project can anticipate as much as $46,500 in credits for specific properties on this project if all the eligible systems are compliant. Property owners requesting such credits would be required to have a septic system inspection accomplished at their cost of $300 to $500 per property and submit the results to the City and the County. The appropriate credits per property would be calculated at that time. The tax levy would be utilized to fund these credits. Age and Condition of Existing Septic Systems City Staff met with Mr. Peter Schmitt, Scott County to discuss the age and condition of the existing septic systems in this area. Mr. Schmitt has provided a memo detailing their experience with systems in this area. They have re- viewed their septic system files in greater detail. They do not have information on all septic systems as some were likely constructed before the County be- gan keeping records. In other cases there may be no records as permits were not taken. Their records show the following: 1. Most systems were installed after 1978. 2. Septic systems have two components, a tank and a drain field. 3. Borings are the most conclusive way to determine if septic system drain field is functioning. 4. All septic systems in the project area are in the shoreland area which means they must have three feet of vertical separation between the saturated soil and the bottom of the drain field. Because this is more 3 strict separation requirement it is believed that many of the systems in- stalled since 1978 would fail this requirement. This requirement is in- tended to protect nearby water features. 5. Fourteen systems on record have failed a compliance inspection or are known or suspected of having non - compliant tanks. Since writing the memo on this topic Mr. Schmitt has identified two more. 6. Three of the systems have already exceeded the deadline for correc- tion. Two others have future deadlines to make corrections. 7. The County has delayed enforcement action on the three because they understood that municipal utilities are imminent. 8. The number of noncompliant systems will increase considering that % of the systems are over 20 years old and a good portion of those some are over 30 years old. 9. Septic systems require setbacks including 50' from domestic wells, 10' from property lines, 20' from any structure, 150' from any natural envi- ronmental lake like Crystal. 10. Many of the lots in this area are small and recognizing that contours must also be considered, locating a new septic system will be difficult to say the least. 11. Variances are possible, but costly, time consuming and undesirable given the mission is to promote public health and natural resources. 12. 9 of the 14 systems known or suspected of being noncompliant are ei- ther partly or totally within the 150' setback to Crystal Lake. Maps have been submitted to illustrate this point. 13. Residents have claimed that when their system was pumped they re- ceived a certificate of compliance. The form they receive is a County form for the sole purpose of which is to communicate to the county and other concerned parties that pumping of the system has occurred. The form is not a certificate of compliance, it is simply a record of pumping. 14. Scott County staff supports the project as proposed. If the proposed improvements are not completed, septic systems located within the area will need to be replaced eventually. When the time comes for septic system replacements, many of the lots would need variances due to constraints as outlined above. Due to constraints of lot sizes, well locations, natural features, and locations of existing septic systems, it is anticipated that standard septic systems (type I) would not be feasible and that other types would be necessary. These include type II (holding tanks), type III (disturbed soil), type IV (pretreatment), and type V (experimental). Each type of system have different requirements and monitoring needs. If it is determined that a holding tank system is required or feasible, the cost for installation is estimated to be approximately $5,000. Holding tanks would also require periodic pumping. Depending on the size of the holding tank and household usage, it is estimated that pumping would be needed every 2 weeks at a cost of $200 /pump. The yearly cost for pumping is estimated at $5,200. The pumping cost would be in perpetuity or until sewer and water service is provided. For comparison purposes, it is worth noting the assessment pay- ments which pay for sewer and water both would equal to $3,554 for the first 4 year based on the proposed assessment amounts. The payments would re- duce on a yearly basis down to $1,200 after 10 years. The assessments would be completely paid off after 20 years. Mr. Pete Schmitt and /or Ms Kate Sadlacek have agreed to be present at the City Council meeting Monday night to offer testimony and respond to city council questions. . Mushtown Road Traffic Mushtown Road is a major collector as designated on the City's Comprehen- sive Plan. Current average daily traffic is 940 vehicles per day. When the nearby Ponds Athletic Complex or Thomas Ryan Parks are used for large tournaments, the average daily traffic increases to an estimated 1,890 vehi- cles per day. Speeds on Mushtown Road are also a concern as the average speed exceeds the 30 mph speed limit. The project would include traffic calming measures to help address this concern. Property Acquisition Property acquisition on public improvement projects can be a long process. Property acquisition services are a special service which cannot be completed by City Staff. In anticipation of the project, the City solicited pricing from WSB and Associates for property acquisition services. WSB and Associates re- cently performed property acquisition services for the Arcadia Improvement Project and the Welcome Avenue Improvement Project. WSB and Associates provided a quote in the amount of $24,020 for these services. The City has evaluated the quote and believes the costs to be reasonable. Of course each dollar the City spends for property is tacked onto the project and paid through the funding sources for the project including assessments. Conclusion In summary, the project is feasible from an engineering and economic stand- point. If the preparation of the plans and specifications is approved, the work will be completed by City staff. Typical City projects do not provide for the numerous benefits that this project provides. Many times projects are completed only to address only one issue such as roadway deterioration. From a staff perspective, the merits of com- pleting this project are detailed below: 1. Road Deterioration - Mushtown Road and Maple Lane are in dire need of reconstruction due to their deteriorated condition. Maintenance of a roadway in this condition provides limited value. The roads require complete replacement and not a short term overlay solution. Public Works estimates approximately $30,000 in short term repairs would be needed every other year to maintain the roadway. 2. Safety - Speed studies suggest 85th percentile speeds exceeding the 30 mph speed limit on this collector route. Enforcement will help but road improvements are the most dependable and cost effective method of addressing this issue day in and day out for the long term. We recognize though that there is no perfect solution. 3. Sanitary Sewer - The memo provided by Scott County regarding septic systems suggests that the project be done due to the conditions of the 5 septic systems in this area. If the project is further delayed the conclu- sion of the County is that more systems than the three which are al- ready delinquent will occur. Given that the minimum cost of a new sys- tem is $15,000 these property owners will most certainly oppose a fu- ture project if they make corrections to their septic systems. 4. Water Quality — As a part of the project, water quality Improvements are proposes and would benefit Crystal Lake which is tributary to Prior Lake. Water quality improvements include the proposed storm water features as well as removal of possible failed septic systems. 5. Watermain — Municipal water extension provides fire protection and continually tested domestic water service to homes. 6. Utility Extension - The extension of utilities south on Panama Avenue will provide for future extension to the south consistent with the City's 2030 Comprehensive Plan. One of the goals of the 2030 Vision and Strategic Plan is to complete projects outlined in the City Capital Improvement Plan. A primary purpose of City gov- ernance is to provide municipal services and safe roadways. Under the Com- munity Assets section of the 2030 Vision and Strategic Plan the following par- agraph can be found: "Quality infrastructure (municipal utilities, parks, building, roadways, etc.) is the essential capital cornerstone of a great and vibrant community. Such infrastructure must be completed in a timely manner using specifi- cations which emphasize longevity and cost effectiveness. Once in- stalled, the City must maintain these assets to maximize productive life. The interconnection of infrastructure with neighbors is desirable to pro- tect against system failures and improve cost effectiveness." Considering the merits of this project and the City's overall guiding docu- ments, the 2030 Vision and Strategic Plan, and 2030 Comprehensive Plan, this project should be completed. ISSUES: The delay in ordering this project will have an effect on the schedule for com- pletion. If the City Council proceeds tonight, a portion of the work can be built in 2014, but it is unlikely all the work can be performed. Property acquisition can take upwards of 9 months. Since the City is looking to acquire easement for the utilities along Panama Avenue, this segment of the project would likely be delayed until 2015. If the project is ordered, City Staff will focus on swift design of the project for bidding and work with a consultant to begin easement negotiations. The Assessment Review Committee met on six occasions at which time all or some of the following issues were discussed: The Assessment Review Committee met on February 12th, at which time they recommended changes to the Assessment Policy and using approximately $262,000 of the Trunk Fund (based on option 3) for utilities along Panama Avenue. As discussed above, this would reduce the utility assessment by ap- proximately $7,500 per property. In addition to this the Assessment Review Committee recommended additional contribution from the Street Oversize Fund and Water Quality Fund for the Mushtown Road street improvements as 6 discussed above. This additional change would reduce the street assess- ment by an estimated $1,300. Assessment Map The Assessment Review Committee recommends assessing the properties as shown on the assessment map but believes that the Trunk Funds be uti- lized to facilitate service to this area as well as property to the south. Watermain and Sanitary Sewer As a first time improvement, pursuant to the Assessment Policy, the water - main and sanitary sewer will be assessed at 100% of the project costs subject to the comments above. Street and Storm Sewer Reconstruction Pursuant to the Assessment Policy, the street and storm sewer reconstruction should be assessed at up to 40% of the total project cost against the benefiting properties. The remaining amounts should be recovered through the general ad valorem property tax. Assessment Method The Assessment Review Committee recommends the unit method of assess- ment due to the fact that the lots in the project area are of similar size and /or value. The estimated assessment rate is proposed at $16,906 / unit for utili- ties and $9,959 / unit for street improvements on Maple Lane and Mushtown Road. Due to the long stretch of pipe on Panama Avenue which is necessary to extend water and sewer to the Panama residents, the Assessment Review Committee recommends using Trunk Funds per the revised Assessment Pol- icy. Review Lift Station Options As a way to reduce easement acquisition and reduce cost, the Assessment Review Committee asked for further analysis of a lift station option. Two lift station options were analyzed. Both options ended up costing more money, raising the assessment rate. A third option was reviewed which reduces wa- termain and sanitary sewer pipe but increases necessary easements. At this point in the process, a resolution ordering the improvements and plans and specifications is before the City Council. Once the design is complete and bids are received, the City Council will have the oppor- tunity to decide if the project should move forward or determine if addi- tional funding changes are is warranted. Given the level of property owner interest, we will conduct a neighbor- hood meeting once the design plans are complete to solicit input. Once bids are received and the Assessment Review Committee has evaluated the use of alternative funding sources then the special assessment hearing will be conducted at which time the property owners will have an opportunity to share their perspectives and confirm their intent to ap- peal the proposed assessment if desired. 7 FINANCIAL IM- The Maple Lane, Mushtown Road, and Panama Avenue Street Improvement PACT: Project was originally proposed to be financed by Special Assessments, tax levy, Street Oversize Fund and Water Quality Fund. The following table reflects the original funding sources and amounts as well as the revised sources and amounts based on Option 3 and the alternative funding sources as recom- mended by the Assessment Review Committee at their February 12, 2014 meeting: ' Funding Source Original Option 3* Change Assessments $1,217,294 $906,388 ($310,906) Street Oversize Fund $56,152 $131,186 $75,034 Water Quality Fund $30,000 $42,588 $12,588 Tax Levy $437,300 $388,384 ($48,916) Trunk Fund $0 $262,000 $262,000 Estimated Project Total $1,740,746 $1,730,546 ($10,200) Cost Utilities Assessment (Per $24,362 $16,906 ($7,456) Unit) Street & Utilities Assessment $35,575 $26,865 ($8,710) (Per Unit) *With alternative funding sources as recommended by the Assessment Re- view Committee as outlined in this report. ALTERNATIVES: 1. Approve Resolution 14 -XX ordering the Maple Lane, Mushtown Road, Pan- ama Avenue Improvement project and preparation of plans and specifica- tions. 2. Deny this item for a specific reason and provide staff with direction. 3. Table this item until some date in the future. RECOMMENDED Staff recommends alternative #1. MOTION: 8 Oi p � O 4 ti 4646 Dakota Street SE 40 NNESOl -> ' Prior Lake, MN 55372 RESOLUTION 14 -xxx ORDERING IMPROVEMENTS AND PREPARATION OF PLANS AND SPECIFICATIONS FOR MAPLE LANE, MUSHTOWN ROAD, AND PANAMA AVENUE (PROJECT #14.011); FINANCING THE MAPLE LANE, MUSHTOWN ROAD AND PANAMA AVENUE IMPROVEMENT PROJECT TO BE UNDERTAKEN BY THE CITY AND ESTABLISHING COMPLIANCE WITH REIMBURSEMENT BOND REGULATIONS UNDER THE INTERNAL REVENUE CODE Motion By: Second By: WHEREAS, the Prior Lake City Council on its own initiative has determined that it desires to complete the Public Improvement Project to Maple Lane, Mushtown Road, and Panama Avenue; and WHREAS, on November 12, 2013; the City Council adopted Resolution 13 -168 accepting the Feasibility Report and calling for a Public Hearing to be held on the Maple Lane, Mushtown Road, and Panama Avenue Improvement Project which includes sanitary sewer, watermain, storm sewer, aggregate base, concrete curb and gutter, bituminous surfacing, and appurtenant work; and WHEREAS, ten days mailed notice and two weeks published notice of the hearing was given, and the hearing was held on the 9th day of December, 2013, at which time all persons desiring to be heard were given an opportunity to be heard thereon; and WHERES, since the project was initiated by the City Council it must be approved by 4 /5ths vote in accordance with Minnesota Statutes 429.031 Subdivision 1(0; and 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. Such improvement is necessary, cost - effective, and feasible as detailed in the feasibility report. 3. The City Engineer is hereby authorized to prepare plans and specifications for the improvements delineated in City Council Resolution 13 -168 adopted on November 12, 2013 and by the required statutory 4 /5ths vote does hereby order the project. 4. The City Engineer is hereby designated as the Engineer for these improvements and is authorized to record engineering expenses in the Construction Fund ( #501 - 48378). 5. The Mayor and City Manager are authorized to execute the City's Standard Professional Services Contract with WSB and Associates for property acquisition Services for the Maple Lane, Mushtown Road, and Panama Avenue construction project for a base price in the amount of $24,020 and the unit pricing rates shown in the proposal and attached to the City's Standard Professional Services Contract. Funding for these engineering services will be drawn from the Construction Fund Account #501- 48378- 505. 6. The Engineer shall prepare plans and specifications for the making of such improvements for Maple Lane, Mushtown Road, and Panama Avenue. 7. The City Council authorizes the following preliminary funding sources and corresponding transfers to the Construction Fund for the project: Funding Source Option 3 Assessments $906,388 Street Oversize Fund $131,186 Water Quality Fund $42,588 Tax Levy $388,384 Trunk Fund $262,000 Project Total Cost $1,730,546 8. The City has determined to make a declaration of official intent ( "Declaration ") to reimburse certain estimated costs for this project from proceeds of bonds in accordance with the Internal Revenue Service Reimbursement Regulations (Treasury Reg. 1.150 -2). 9. The City may declare other separate statements of reimbursement intent in connection with specific public improvements projects as they are initiated under Minnesota Statutes Chapters 429 and 444, or for other capital projects, with the understanding that such additional declarations of reimbursement intent will supplement this resolution. AD reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement under Section 1.150- 2(d)(3) of the Reimbursement Regulations. 10. This Declaration has been made no later than 60 days after payment of any original expenditure to be subject to a reimbursement allocation with respect to the proceeds of bonds, except for the following expenditures: a. costs of issuance of bonds; b. costs in an amount not in excess of $100,000 or five percent of the proceeds of an issue; or c. "preliminary expenditures" up to an amount not in excess of 20 percent of the aggregate issue price of the issue or issues that are reasonably expected by the City to finance the project for which the preliminary expenditures were incurred. The term "preliminary expenditures" includes architectural, engineering, surveying, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation of a project other than land acquisition, site preparation, and similar costs incident to the commencement of construction. 11. This Declaration is an expression of the reasonable expectations of the City based on the facts and circumstances known to the City as the date hereof. The anticipated original expenditures for the Projects and the principal amount of the bonds are consistent with the City's budgetary and financial circumstances. No sources other than proceeds of bonds to be issued by the City are, or are reasonably expected to be reserved, allocated on a long term basis, or otherwise set aside pursuant to the City's budget or financial policies to pay such Project expenditures. 12. This Declaration is intended to constitute a Declaration of the Official Intent for the purposes of the Reimbursement Regulations. 2 PASSED AND ADOPTED THIS 10TH DAY OF MARCH 2014. YES NO Hedberg Hedberg Keeney Keeney McGuire McGuire Morton Morton Soukup Soukup Frank Boyles, City Manager 3