HomeMy WebLinkAbout7A 2016 Improvement Project Report and Presentation
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL AGENDA REPORT
MEETING DATE: JANUARY 11, 2016
AGENDA #: 7A
PREPARED BY: SENG THONGVANH, PROJECT ENGINEER
PRESENTED BY: SENG THONGVANH
AGENDA ITEM: PUBLIC HEARING TO CONSIDER APPROVAL OF A RESOLUTION ORDER-
ING THE IMPROVEMENTS FOR THE 2016 IMPROVEMENT PROJECT, CITY
PROJECT #TRN16-000001
DISCUSSION: Introduction
The purpose of this agenda item is to hold the Public Hearing to consider approval
of a resolution ordering the 2016 Improvement Project. A super majority (4/5) is
needed to approve the resolution.
History
The City uses the Five Year Capital Improvement Program and its Pavement Man-
agement program to plan its infrastructure improvements and the financing for
capital improvements. The 2016 Improvement Project proposes to reconstruct the
street and upgrade utilities on Manitou Road, Black Oak Road, Hidden Pond Trail,
Raspberry Ridge Road, and Timberglade Circle. The proposed project also in-
cludes bituminous overlay of Appaloosa Trail and Highland Court. At its August
24, 2015 meeting the City Council adopted Resolution 15-137 authorizing staff to
prepare a Feasibility Report for the 2016 Improvement Project as outlined in the
CIP.
The M.S. Chapter 429 process applies to all projects that will be financed in whole
or part through special assessments or bond proceeds.
The Manitou Road and Raspberry Ridge neighborhoods are considered in the re-
port and includes improvements to Kopps Bay Addition, Kopps Bay Second Addi-
tion, Mary Margaret 1st Addition, Raspberry Ridge Addition, Raspberry Ridge 1st
Addition, Raspberry Ridge 2nd Addition, and Raspberry Ridge 3rd Addition located
in Sections 26 & 25, Township 115, Range 22. These properties were platted and
developed from 1950’s to 1990’s. A map of the project area (Exhibit 1) is included
in the Feasibility Report. The proposed improvements include street reconstruc-
tion or reclamation, storm sewer, storm water quality, sanitary sewer, watermain,
concrete curb and gutter, and appurtenant work.
On November 23, 2015, the City Council accepted the Feasbility Report, sched-
uled the public hearing, and directed staff to evaluate two additional options for
cost savings.
The two additional options were evaluated by Staff and presented to City Council
at the December 14, 2015 Council Workshop. Both options included improve-
ments to Manitou Road, lining of the 15” RCP sanitary sewer, and different options
addressing the larger watermain pipes within the Raspberry Ridge Neighborhood.
2
Option “C” proposes to use open cut replacement for the 16” watermain and re-
construction of the street sections that contains the 16” watermain pipes. This op-
tion would assess for street reconstruction per the assessment policy. Option “D”
proposes to use trenchless technology (lining) to rehabilitate the existing 16” wa-
termain and no reconstruction of the existing streets within the Raspberry Ridge
Neighborhood. After discussion of all the options, the Council directed staff to pro-
ceed with Option D.
Current Circumstances
The properties deemed to specially benefit from the improvements, in most cases
the properties abutting the streets located in the project area, are subject to as-
sessment. Each of the affected property owners have been notified in accordance
with the statute regarding tonight’s Public Hearing.
A Public Informational Meeting was held on December 16, 2015 to provide the
property owners an opportunity to discuss the project in an informal setting prior to
the Public Hearing. Meeting notices were sent to all properties located on Manitou
Road as well as those within the Raspberry Ridge Neighborhood. Staff provided
an update on the additional options, proposed improvements, project costs, esti-
mated assessments and answered general questions regarding the project.
Conclusion
City Staff is prepared to discuss each of the concerns presented at the Public
Hearing. If the Council deems the issues that have been brought up need to be
addressed in the project plans and specifications, direction could be given to staff.
The purpose of this Public Hearing is to determine project elements or whether the
project should move forward at all. Completion of plans and specifications is the
next step and will provide greater information about expected project cost and,
therefore, the assessments associated with the improvements. Once the plans
and specifications are completed, they will be submitted to the City Council for ap-
proval and authorization to advertise for bids. The Council could decide not to
continue with the project upon receipt of bids. A separate Assessment Hearing
will be conducted following review of the proposed assessments by the City Coun-
cil’s Assessment Review Committee.
In summary, the project is feasible from an engineering and economic standpoint.
If the project is approved, City staff will continue to work on completion of plans
and specifications.
ISSUES: The Assessment Review Workgroup met on October 20th, 2015, and recommended
that the Feasibility Report review the two options shown, the assessment map, as-
sessment method, and other report details. The Assessment Review Workgroup
also recommended that the Assessment Policy be amended to clarify assessment
for reclamation / rehabilitation.
Since the Assessment Review Workgroup meeting, two additional options have
been evaluated further and presented to the City Council. Direction to proceed with
Option D will impact the assessment map and estimated assessment amount as it
would eliminate reconstruction of the streets within the Raspberry Ridge Neighbor-
hood. The estimated assessment amount is shown in the funding table below.
3
As part of the second informational meeting, below are some of the key items that
were brought up and discussed at the meeting:
Street lights
Residential street lights are proposed for the project and will be installed per the
City’s guidelines. Support for street lights were mixed, with some approving the
proposal while others did not want street lights installed.
Street Alignment
Generally, streets in older neighborhoods are not centered within the the public
right-of-way. For reconstruction projects, the City has made efforts to center the
street within the right-of-way where it is practical and if existing topography allows.
This method creates equity for the properties on each side of the street. A number
of residents voiced their disapproval of this methodology and stated that they would
like the street to stay in the same alignment. If the street is left in its current location,
there are areas where the street encroaches onto private property.
Assessment Rate
Residents shared their concern that the assessment rate was high and they are
hoping for lower assessments once the bids have been received. They also voiced
their concern with econonmy of scale and that higher assessments were due to the
Raspberry Ridge Neighborhood being removed from the project.
FINANCIAL
IMPACT:
The 2016 Improvement Project is proposed to be financed by Special Assess-
ments, tax levy, Sewer Fund, Water Fund, and Water Quality Fund. Funding
sources for various options are shown in the Feasibility Report. It should be noted
that each option utilizes different funding sources based on the improvement
types. The funding of each option and the corresponding estimated amounts are
shown in the table below. Please note that staff is moving forward with Option D
unless through the Public Hearing process this option is amended.
2016 IMPROVEMENT PROJECT - FUNDING
Funding Source Option A Option B
Option C
Option D
Ad Valorem $1,622,069
$1,353,644
$1,223,927
$761,681
Assessment (40%)
$1,018,685
$839,887
$815,951
$507,787
Utility Fund – Sewer
$1,064,812
$1,005,319
$1,052,195
$1,020,630
Utility Fund – Water
$1,190,050
$1,861,240
$1,006,418
$1,169,900
Water Quality Fund
$27,908
$29,962
$24,978
$12,193
Assessment (Per Unit)
– Reclamation
$6,533
Assessment (Per Unit)
– Reconstruction
$10,395
$10,873
$10,597
$11,039
Total
$4,923,524
$5,090,052
$4,123,469
$3,472,191
4
As part of the 2016 Budget process the staff shared with the city council the pro-
jected 2017 tax impacts for debt service from projects the city council approves
and completes in 2016. If the city council elects to move forward with this pro-
ject as proposed in Option D then the estimated debt service levy impact will
be 0.9% after you factor in bonding costs. While the staff supports this project
to assure that we maintain city infrastructure, the council should be aware that ac-
tion to approve this project begins to establish the tax levy you will consider later
this year.
Earlier tonight the city council conducted a work session on bonding, sewer and
water rates. This discussion will impact the 2016 Improvement Project as well as
future improvement projects. If the city council did not reach a conclusion at the
work session with regard to bonding and utility rates, it may be worthwhile to con-
duct this public hearing and either close the public portion of the hearing or con-
tinue the hearing to a future meeting pending a review and recommendation from
the Special Assessment Work Group with respect to these topics and how they
should be addressed as part of the financing of this project.
ALTERNATIVES: 1. Conduct the public hearing and either close the public portion of the hearing or
continue the hearing pending a recommendation from the Special Assessment
Work Group with respect to bonding and utility rates.
2. Approve a Resolution by 4/5 vote ordering the 2016 Improvement Project.
3. Deny this item for a specific reason and provide staff with direction.
4. Table this item until some date in the future.
RECOMMENDED
MOTION:
As determined by the city council.
4646 Dakota Street SE
Prior Lake, MN 55372
RESOLUTION 16-xxx
ORDERING IMPROVEMENTS FOR THE 2016 IMPROVEMENT PROJECT (PROJECT #TRN16-000001);
FINANCING THE 2016 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 Improvements for the 2016 Improvement Project ; and
WHEREAS,
WHEREAS,
WHEREAS,
On November 23, 2015; the City Council accepted the Feasibility Report and called for a
Public Hearing to be held for the 2016 Improvement Project which includes sanitary
sewer, watermain, storm sewer, aggregate base, concrete curb and gutter, bituminous
surfacing, and appurtenant work; and
Ten days mailed notice and two weeks published notice of the hearing was given, and the
hearing was held on the 11th day of January, 2016, at which time all persons desiring to
be heard were given an opportunity to be heard thereon; and
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(f); 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 Council by the required statutory 4/5ths vote does hereby order the project and Option D as
outlined in the feasibility report and amendment.
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 -43500.00-55020-TRN16-000001).
5. The Engineer shall prepare plans and specifications for the making of such improvements for the 2016
Improvement Project.
6. The City Council authorizes the following preliminary funding sources and corresponding transfers to the
Construction Fund for the project:
2
Tax Levy $761,681
Assessments $507,787
Sewer Fund $1,020,630
Water Fund $1,169,900
Water Quality Fund $12,193
Project Total Cost $3,472,191
7. 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).
8. 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. All reimbursed expenditures will be capital expenditures, costs of
issuance of the bonds, or other expenditures eligib le for reimbursement under Section 1.150-2(d)(3) of
the Reimbursement Regulations.
9. 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.
10. 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.
11. This Declaration is intended to constitute a Declaration of the Official Intent for the purposes of the
Reimbursement Regulations.
3
PASSED AND ADOPTED THIS 11TH DAY OF JANUARY 2016.
VOTE Hedberg Keeney McGuire Morton Thompson
Aye ☐ ☐ ☐ ☐ ☐
Nay ☐ ☐ ☐ ☐ ☐
Abstain ☐ ☐ ☐ ☐ ☐
Absent ☐ ☐ ☐ ☐ ☐
______________________________
Frank Boyles, City Manager
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