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HomeMy WebLinkAbout7B Maple Lane, Mushtown Road, Panama Avenue Assessment Roll ril O4 PRtp4 U ' ., ni 4646 Dakota Street SE Prior Lake, MN 55372 44NNEsc0" CITY COUNCIL AGENDA REPORT MEETING DATE: OCTOBER 12, 2015 AGENDA #: 7B PREPARED BY: SENG THONGVANH, PROJECT ENGINEER PRESENTED SENG THONGVANH BY: LARRY POPPLER, CITY ENGINEER/INSPECTIONS DIRECTOR AGENDA ITEM: PUBLIC HEARING TO CONSIDER A RESOLUTION ADOPTING THE AS- SESSMENT ROLL FOR THE MAPLE LANE, MUSHTOWN ROAD, PANAMA AVENUE IMPROVEMENT PROJECT (TRN14-000001) DISCUSSION: Introduction This agenda item is necessary to receive public testimony and adopt the assess- ment roll 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 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 Maple Lane/Mushtown Road/Panama Avenue neighborhood is considered in the report and includes improvements to Maple Acres, O'Rourke Addition, Parts of S 11, T 114, R 22 and Parts of S 2, T 114, R 22. These properties were platted and developed in the 1950's and 1960's.A map of the project area (Figure 1) is included in the Feasibility Report. The proposed improvements 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 pro- ject 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 Report 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 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 discussion after closing the public hearing. The City Council communicated support for Option 3, which eliminated sanitary sewer and watermain on Maple Lane and provided services through a proposed Phone 952.447.9800 / Fax 952.447.4245/www.cityofpriorlake.com 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 pro- ject 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 ad- dressed at the public hearing. At the Public Hearing the City Council Ordered 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 a number of informational meetings to discuss the project. The last informational meeting was held on Oc- tober 1, 2015 to provide property owners assessment information prior to the Public Hearing. Additional information regarding the assessment waiver and building permit process for hookup was also provided. On October 13, 2014 the City Council approved the project plans and specifica- tions and authorized the advertisement for bids for the Maple Lane, Mushtown 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). The Assessment Review Committee met on several occasions to discuss this project. Most recently the Assessment Review Committee met on September 3, 2015 to review the project, assessment method, funding sources, and proposed assessment amounts. While the project scope and assessment method remain the same, the proposed assessments have been adjusted based on the actual construction costs and funding allocations as shown in the table below. 2 Current Circumstances All benefitting property owners have been mailed a sample payment schedule which included information pertinent to their property such as the total proposed assessment amount and assessment rate. The Notice of Hearing on Proposed Assessment was published in the newspaper on September 19, September 26, and October 3, 2015. Under State Statute, the City may only assess a property up to the amount the property is specially benefitted by the public improvement. Appraisals were con- ducted on 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 special 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 Man- ager prior to the Assessment Hearing or present it to the City Council at the As- sessment 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. The project included storm sewer, sanitary sewer, watermain, concrete curb and gutter, aggregate base, bituminous surfacing, and appurtenant work. The con- struction of this project is now substantially complete. The project construction costs can now be appropriately distributed amongst the funding sources according to the formula discussed in previous City Council meetings and recommended by the Assessment Review Committee. The fund- ing source table shown in the financial consideration section of this report shows the funding distribution according to this formula. Conclusion To allow for property owners to submit "Agreements of Assessment Waiver" for inclusion of their connection charge into the assessment, it is recommended 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 connection charges into the assessment. State Statute requires that special assessments be certified to the County by November 30th. Since property owners must be allowed 30 days to pay off their assessments interest free, the assessment roll must be adopted prior to Novem- ber 1, 2015. 3 ISSUES: While the actual construction progressed well, property owners have consistently communicated that the cost of the assessment is burdensome. Consequently, 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 Cap- ital Park Fund. 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 computations did not assume that the City would be successful in receiving grant proceeds. In- stead, 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 incur costs associated with hookup charges and private property work. Based on the the 2015 fee schedule for a typical 5/8"water meter, hookup charges are calculated at $5,738. This permit fee is normally due at the time connection permits are pulled. In ad- dition, private work to hook up the house to the service stubs will be at the prop- erty 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 Assess- ment Review Committee has discussed that these one-time charges could be a large burden at one time for property owners. An 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 hearing. With this option, the property owner still must secure a permit from the City, but their fees for the permit would have al- ready been charged per the assessment. If the permit fees change in 2016 or if the property owner requests 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 assess- ment, the City must assume all properties are interested in this option and thus the amount to be assessed would be $955,931. The Assessment Review 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 parcels and the relative consistency in parcel size. FINANCIAL The assessment calculation has been computed in a manner consistent with the IMPACT: latest calculation methods and the Assessment Policy. The property owners are 4 proposed to be assessed 100% for all costs associated with the proposed sani- tary 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 improvement costs for this project after street oversizing and water quality components are subtracted. The remain- ing 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 reflects the original funding sources, interim funding sources, and recommended funding sources per the Assessment Review Committee meeting held on January 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 Assessment Review Funding Source Original Interim As Bid** Committee Estimate Estimate Proposed Funding 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 Trunk Sewer Fund $0 $262,000 $196,500 $196,500 Sewer Fund $0 $0 $0 $36,248 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 5 * 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. Of the total project costs including sanitary sewer and watermain improvements, $1,141,201 or 60% will be paid through sources other than special assessment. The proposed amount to be assessed against the benefiting properties is $766,313 plus $189,618 for a total of $955,931 for the resolution declaring the amount to be assessed. There are 26 benefiting units in the project area pro- posed to be assessed at 40% of the street and storm sewer improvements after applicable subtractions. There are 38 benefiting units in the project area pro- posed to be assessed at 100% of the sanitary sewer and watermain improve- ments after applicable subtractions. The final assessment amounts are shown in the table above. The Council approved the issuance of general obligation bonds and initial trans- fers from the Water Fund and Sewer Fund in the spring of 2015 for this project. The interest rate for this project is proposed at 4.44%. A final project reconcilia- tion will be prepared when the project is completed. The anticipated completion date is Fall 2016 after the final lift of asphalt is completed. ALTERNATIVES: 1) Close the Public portion of the Hearing and direct staff to revise the assess- ment roll for adoption on October 26, 2015. 2) Continue the Public Hearing and direct staff to revise the assessment roll for adoption on October 26, 2015. 3) Table this item for a specific reason. RECOM- A motion and a second for approval of Alternative #1. MENDED MOTION: 6