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HomeMy WebLinkAbout5I Order Assessment Roll - Maple Lane, Mushtown Road & Panama Avenue of ERIN 0ti u rn 4646 Dakota Street SE Prior Lake, MN 55372 4frivNESol,A CITY COUNCIL AGENDA REPORT MEETING DATE: SEPTEMBER 14, 2015 AGENDA#: 51 PREPARED BY: SENG THONGVANH, PROJECT ENGINEER PRESENTED LARRY POPPLER, CITY ENGINEER/INSPECTIONS DIRECTOR BY: AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION DECLARING COSTS TO BE ASSESSED, ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL AND ESTABLISHING THE DATE OF THE ASSESSMENT HEARING AND PUBLICATION THEREOF FOR THE MAPLE LANE, MUSHTOWN ROAD, PANAMA AVENUE IMPROVEMENT PROJECT (TRN14-000001) DISCUSSION: Introduction This agenda item is necessary to set an assessment hearing and to establish the amount to be assessed for the Maple Lane, Mushtown Road, Panama Avenue Improvement Project. History At its September 9, 2013 meeting the City Council adopted Resolution 13-126 authorizing staff to prepare a Feasibility Report for Maple Lane, Mushtown Road, Panama Avenue Improvement Project as outlined in the CIP and re- quired for the Minnesota Statutes Chapter 429 process. The Minnesota Stat- utes Chapter 429 process is required because the City Council intends to spe- cially assess for the improvements. The Maple Lane/Mushtown Road / Panama Avenue neighborhood is consid- ered in the report and includes improvements to Maple Acres, O'Rourke Ad- dition, Parts of S 11, T 114, R 22 and Parts of S 2, T 114, R 22. These prop- erties 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 assess- ment 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 Feasibility Re- port which is available upon request. 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 original project plus three (3) options prior to the public hearing. A dozen or so resi- dents 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. Phone 952.447.9800 / Fax 952.447.4245/www.cityofpriorlake.com The City Council communicated support for Option 3, which eliminated sani- tary sewer and watermain on Maple Lane and provided services through a proposed easement between two properties on Maple Lane. It was estimated that the cost savings would be approximately $10,000 for this option. The City Council also asked that the following additional information be brought back on January 27, 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 the items were reviewed and presented at the January 27th meeting. An additional Public Hearing was held on March 10, 2014. Staff presented the proposed improvements, funding mechanisms, and estimated assessment amounts based on the various funding contributions. There were five residents that spoke at the public hearing. Each of the comments or concerns were addressed at the public hearing. At the Public Hearing the City Council Or- dered the project. In accordance with MN Statutes 429, bids must be accepted within one year of the date the project was ordered. In addition to the Public Hearings, the City has held two informational meetings to discuss the project. The last informational meeting was an open house held on May 20, 2014 and offered residents the opportunity to comment on the proposed plans. At the open house persons from 21 homes were represented. City Staff explained the proposed design and passed out information regard- ing the various programs available. Another informational meeting is proposed to be held prior to the Assessment Hearing to share bid results and engage the property owners prior to the hearing. On October 13, 2014 the City Council approved the project plans and specifi- cations and authorized the advertisement for bids for the Maple Lane, Mush- town Road, Panama Avenue Improvement Project. The City received 6 bids on January 14, 2015 for this project. The lowest bid was from Chard Tiling and Excavating for $1,497,936.98. The bid was awarded to Chard Tiling and Excavating on February 9, 2015. On January 26th, 2015 the City Council directed that the declaration of costs to be assessed be delayed until the final grant amount was determined and costs further defined by completion of the work (Fall of 2015). Current Circumstances The project included storm sewer, sanitary sewer, watermain, concrete curb and gutter, aggregate base, bituminous surfacing, and appurtenant work. The construction of this project is now substantially complete. 2 The project construction costs can now be appropriately distributed amongst the funding sources according to the formula discussed in previous City Coun- cil meetings and recommended by the Assessment Review Committee. The funding source table shown in the financial consideration section of this report shows the funding distribution according to this formula. Conclusion Staff recommends that the City Council declare the costs to be assessed, or- der preparation of the assessment roll, and establish the Assessment Hearing date as October 12th, 2015 for the Maple Lane, Mushtown Road, Panama Av- enue Improvement Project and authorize the required notice of public hearing to be published as per the attached resolution. To allow for property owners to submit "Agreements of Assessment Waiver" for inclusion of their connection charge into the assessment, it is recom- mended that the City Council hold the Assessment Hearing on October 12th, close the Public Hearing, and direct that the final assessment roll be brought back to the City Council on October 26th, 2015. This will allow staff to adjust the assessment roll to include those properties who choose to include the con- nection charges into the assessment. ISSUES: While the actual construction progressed well, the property owners have con- sistently communicated that the cost of the assessment is overly burdensome. Over the course of project planning, the assessment amount was reduced by the use of Trunk Funding, grant proceeds, Street Oversize Fund, tax levy, and Capital Park Fund. The Assessment Review Committee has reviewed and agrees with the as- sessment 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 parcels and the relative consistency in parcel size. On September 30, 2014, the City learned that they were successful in securing an estimated $249,930 in grant dollars for sanitary sewer components. The final amount was determined to be $255,742. The original funding computa- tions did not assume that the City would be successful in receiving grant pro- ceeds. Instead, the Assessment Review Committee recommended that Trunk Sanitary Sewer and Water Funds be utilized to reduce assessments. While the watermain and sanitary sewer pipes are of minimum size, they will also be utilized to serve acreage to the south. The Assessment Review Committee recommends that the grant proceeds be utilized to reduce the assessment amounts but also reduce the sanitary sewer trunk allocation. Aside from the assessments, each property owner will also incur additional costs associated with hookup charges and private property work. Based on the 2015 fee schedule for a typical 5/8" water meter, hookup charges are cal- culated at $5,746. This permit fee is normally due at the time connection per- mits are pulled. In addition, private work to hook up the house to the service stubs will be at the property owner's expense. The cost of the private work will be dependent on individual site conditions and how existing pipes are laid out for each house. The Assessment Review Committee has discussed that these one-time charges could be a large burden at one time for property owners. An 3 option to assist the homeowners would be to allow the hookup charges be assessed to the property owners for a 5 year term. The interest rate charged would be the same as the rates charged for street and utilities assessment. In order to take advantage of this option, the property must consent to waive their rights for appeal of the special assessment before or at the assessment hear- ing. With this option, the property owner still must secure a permit from the City, but their fees for the permit would have already been charged per the assessment. If the permit fees change in 2016 or if the property owner re- quests a larger meter, the property owner would pay the difference at the time they secured a permit from the City. The declaration of costs to be assessed includes the connection charge for each property owner. This adds $189,618 to the assessment amount. Some property owners may choose not to include the connection charges into the assessment. The final assessment roll will be adjusted to include only those properties who choose this option. In order to include the connection charges into the assessment, the City must assume all properties are interested in this option and thus the amount to be assessed would be $955,931. FINANCIAL The assessment calculation has been computed in a manner consistent with IMPACT: the latest calculation methods and the Assessment Policy. The property own- ers are proposed to be assessed 100% for all costs associated with the pro- posed sanitary sewer and watermain improvements after subtracting trunk amounts and the grant proceeds. Existing properties on Maple Lane and Mushtown Road will be assessed 40% of the street and storm sewer improve- ment costs for this project after street oversizing and water quality components are subtracted. The remaining 60% of the street and storm sewer costs will be paid through the tax levy. Any septic system credits for this project will be paid through the Sewer Fund. The Maple Lane, Mushtown Road, and Panama Avenue Street Improvement Project was originally proposed to be financed by Special Assessments, tax levy, Street Oversize Fund and Water Quality Fund. The following table re- flects the original funding sources, interim funding sources, and recommended funding sources per the Assessment Review Committee meeting held on Jan- uary 16, 2015 and on September 3, 2015. It is also proposed that the trail construction, which is part of the Trail Gaps Analysis, be funded through the Capital Park Fund exclusively. Construction Costs: Street and Storm Sewer $1,031,329.51 Sanitary Sewer $572,625.76 Watermain $302,558.72 Total $1,907,513.99 4 Construc- OriginalFunding Source Interim As Bid** tion Cost Estimate Estimate Estimate Tax Levy $437,300 $388,384 $441,570 $411,695 Assessments $1,217,294 $906,388 $804,190 $766,313*** Street Oversize Fund $56,152 $131,186 $122,537 $137,884 Water Quality Fund $30,000 $42,588 $61,918 $19,724 Sewer Fund**** $0 $0 $0 $36,248 Trunk Sewer Fund $0 $262,000 $196,500 $196,500 Capital Park Fund $0 $0 $62,356 $83,408 Clean Water Grant $0 $0 $249,930 $255,742 Project Total Cost* $1,740,746 $1,730,546 $1,939,000 $1,907,514 Utilities Assessment (Unit) $24,362 $16,906 $13,416 $13,897 Street & Utilities Assessment (Unit) $35,575 $26,865 $24,738 $24,454 * Includes project support costs **As recommended by the Assessment Review Committee at the January 16, 2015 meeting *** Does not include connection charges of $189,618 which will be added to the declaration of the costs to be assessed. ****Assessment Review Committee recommended that the septic system credits be removed from the Tax Levy Of the total project costs including sanitary sewer and watermain improve- ments, $1,141,201 or 60% will be paid through sources other than special as- sessment. The proposed amount to be assessed against the benefiting prop- erties is $766,313 plus $189,618 for a total of $955,931 for the resolution de- claring the amount to be assessed. There are 26 benefiting units in the project area proposed to be assessed at 40% of the street and storm sewer improve- ments after applicable subtractions. There are 38 benefiting units in the project area proposed to be assessed at 100% of the sanitary sewer and watermain improvements after applicable subtractions. The final assessment amounts are shown in the table above. ALTERNATIVES: 1) Approve as part of the consent agenda a resolution declaring the costs to be assessed, ordering preparation of proposed assessment roll and es- tablishing the date of the assessment hearing and publication thereof for the Maple Lane, Mushtown Road, Panama Avenue Improvement Project (TRN14-000001). 2) Deny the Resolutions for a specific reason and provide staff with direction. 3) Table this item for a specific reason. 5 RECOM- A motion and a second for approval of Alternative #1. MENDED MOTION: 6 O� PRIp� 4646 Dakota Street SE 41INVso* Prior Lake, MN 55372 RESOLUTION 15-xxx A RESOLUTION DECLARING COSTS TO BE ASSESSED, ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL AND ESTABLISHING THE DATE OF THE ASSESSMENT HEARING AND PUBLICATION THEREOF FOR THE MAPLE LANE, MUSHTOWN ROAD, AND PANAMA AVENUE IMPROVEMENT PROJECT #TRN14-000001 Motion By: Second By: WHEREAS, Costs have been determined for the improvement of Maple Lane, Mushtown Road, and Panama Avenue, Project #TRN14-000001, the City cost for the improvements are $1,907,514; 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$1,141,201, and the portion of the cost to be assessed against benefited property owners is declared to be $967,142.55. This assessment amount includes $200,830 for connection charges. 3. Assessments shall be payable on an equal principal installment method extending over a period of 10 years for street improvements, 20 years for sewer and water improvements, and 5 years for connection charges. 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 4.44% 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 12th day of October, 2015, 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 to the City Finance Director the entire amount of the assessment remaining unpaid, with interest accrued to December 31 of the year in which such payment is made. Such payment must be made before November 25 or interest will be charged through December 31 of the succeeding year. PASSED AND ADOPTED THIS 14th DAY OF SEPTEMBER 2015. VOTE Hedberg Keeney McGuire Morton Thompson Aye ❑ E ❑ ❑ ❑ Nay ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ E E Absent ❑ ❑ ❑ ❑ ❑ Frank Boyles, City Manager 2