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HomeMy WebLinkAbout8B Rolling Oaks Assessment Report 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: SEPTEMBER 5, 2017 AGENDA #: 8B PREPARED BY: LARRY POPPLER, CITY ENGINEER/INSPECTIONS DIRECTOR PRESENTED BY: LARRY POPPLER AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION DECLARING COSTS TO BE AS- SESSED AND ORDERING PREPARATION OF AN ASSESSMENT ROLL AND ESTABLISHING THE DATE OF THE ASSESSMENT HEARING FOR THE ROLLING OAKS IMPROVEMENT PROJECT (PROJECT #TRN13-000006) DISCUSSION: Introduction This agenda item is necessary to set an assessment hearing and to establish the amount to be assessed for the Rolling Oaks Road Improvement Project. History The City uses the Five Year Capital Improvement Program to plan its infrastruc- ture improvements and the financing for capital improvements. The Rolling Oaks Improvement project proposes to extend utility connections and improve the road- way for properties within the project area. In 2014, a feasibility report for this project was prepared. On April 28, 2014, the City Council approved a resolution accepting a feasibility report for the project. On May 27th, 2014, the City Council held a Public Hearing and on June 23rd author- ized the preparation of plans and specifications. Soon after these authorizations were approved, the developer for the neighboring property retracted their develop- ment application. Since the developer contribution was an important funding source for the Rolling Oaks project, work on the city project for Rolling Oaks stopped. As a further detriment to the project a city grant application was submit- ted to the Minnesota Public Facilities Authority but was not selected for funding. The developer has now returned to complete the platting of what is now known as Trillium Cove. The developer is once again amenable to providing a contribution to this project as there is mutual benefit. On May 9th, the City met with property own- ers from Rolling Oaks. After much discussion, there was consensus that a feasi- bility report update was needed to fully evaluate options for a project. At its May 22, 2017 meeting the City Council adopted Resolution 17-074 authoriz- ing staff to prepare a Feasibility Report for the Rolling Oaks Improvement Project as outlined in the CIP. In this case a feasibility report was originally prepared in 2014 and a memo amendment was prepared to update the feasibility report. On June 12, 2017, the City Council adopted Resolution 17-090 accepting the fea- sibility report and calling for the public hearing. The City Council also adopted Resolution 17-091 authorizing the preparation of plans and specifications for the project. 2 The M.S. Chapter 429 process applies to all projects that will be financed in whole or part through special assessments or bond proceeds. Rolling Oaks Circle is considered in the report and includes first time improve- ments to Rolling Oaks located within the Northeast quarter of section 26, Town- ship 115 North, Range 22 West, Scott County Minnesota. Structures in this area were built in the 1960s and 1970s. A map of the project area (Exhibit 1) is in- cluded in the original Feasibility Report. The proposed improvements include street construction, storm sewer, storm water quality, sanitary sewer, watermain, concrete curb and gutter, and appurtenant work. On July 24th, 2017 the City Council held the public hearing for the project. One person spoke at the hearing asking for clarification on the connection charge for future lots and the inclusion of his property as a part of the sewer and water com- ponent of the assessment. Current Circumstances The proposed improvements include street construction, storm sewer, storm water quality, sanitary sewer, watermain, concrete curb and gutter, and appurtenant work. Bids were received on August 24th and are subject to approval tonight with City Council Agenda item 8A._Construction of the project is planned for the fall of 2017. ISSUES: The Assessment Review Work Group 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. The Assessment Review Work Group is recommending assessing ten units at the proposed assessment rate ($26,900 a unit) and when lots are subdivided, each new lot would incur a separate connection charge in the amount in effect at the time of development. This connection charge is currently $18,000 on the 2017 City Fee Schedule and is subject to change each year. Initially the funds necessary to pay for the project which are not reimbursable by special assessment will be drawn primarily from the trunk fund. The future collec- tion of connection fees would be deposited back into the Trunk Fund. Lastly, the Assessment Review Work Group is recommending that hookup fees for the nine developed units in Rolling Oaks project, as was done for the Mushtown Road project, be allowed to be assessed over a 5 year period if the property owner waives their right to appeal all the assessments on their property and connects within the one year of the assessment. This option allows property owners to spread out the connection charges over a five year period which may assist them with cash flow for the initial year. The authorized assessment amount will include the hookup fees ($6,549) for 9 properties which adds $58,941. The plumber’s costs are not assessable as was the case with the Mushtown Road project. With approval tonight, the City will send waiver forms to property owners for signature. These forms must be returned to us prior to the Assessment Hearing. 3 For first time improvement projects it is common to approve the assessment be- fore work has occurred. This provides the City an opportunity to review any ap- peals before significant work has occurred. If the number of appeals are signifi- cant, the City can review these before expending significant funds for the improve- ment. The assessment is based on the bid for the work and the City holds the risk on the project should the contractor encounter field conditions which add cost. Funding for added cost would be provided by sources other than assessments. FINANCIAL IMPACT: The funding table below for the Rolling Oaks Circle Improvement Project shows contribution from the following sources: Assessments, Trunk Fund, Street oversize Fund, developer contribution, developer-paid deferred assessment, and the Water Quality Fund. There is no question that if financed in this manner this project will set a funding precedent for future projects. On the other hand, the city council carefully considered the necessity of completing the project at this time and the fact that owing to the small number of parcels, terrain and other factors that the project would require greater financial assistance. Funding source amounts are shown for the original feasibility report and current option: Funding Source Original Amount Bid Amount* Assessments (Current) $819,431 $269,000 Street Oversize Fund $60,000 $67,200 Water Quality Fund $25,000 $112,000 Trunk Fund $8,000 $200,000 Developer Contribution $123,200 Developer Paid Deferred As- sessments $184,729 Project Total Cost* $912,431 $956,129 *The funding amounts shown were updated based on the low bid for the project but doesn’t include optional inclusion of hookup fees added to the assessment. Adding all possible properties adding hookup fees to their assessment would add $58,941 to the assessment to bring the total to $327,941. An amount of $58,941 will be added to the assessment amount until we know how many property owners wish to add hookup fees to the assessment. ALTERNATIVES: 1. Approve a resolution declaring the costs to be assessed, ordering the prepara- tion of the proposed assessment rolls for the Rolling Oaks Road Improvement Project #TRN13-000006, and establishing October 2, 2017 for the assessment hearing date. 2. Deny this item for a specific reason and provide staff with direction. 3. Table this item until some date in the future. RECOMMENDED MOTION: Motion and second for approval of alternative #1. 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 17-___ A RESOLUTION DECLARING COSTS TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL FOR THE ROLLING OAKS ROAD IMPROVEMENT PROJECT #TRN13-000006 AND ESTABLISHING THE DATE OF THE ASSESSMENT HEARING AND PUBLICATION THEREOF Motion By: Second By: WHEREAS, Costs have been determined for the improvement of Rolling Oaks Circle, Project #TRN13-000006, the City cost for the improvements are $1,015,070; 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 $687,129, and the portion of the cost to be assessed against benefited property owners is declared to be $327,941. 3. Assessments shall be payable on an equal principal installment method extending over a period of 10 years for street 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 3.8% 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 2nd day of October, 2017, 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 2 the year in which such payment is made. Such payment must be made before November 11 or interest will be charged through December 31 of the succeeding year. Passed and adopted by the Prior Lake City Council this 5th day of September, 2017 VOTE Briggs McGuire Thompson Braid Burkart Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐☐ ☐ ☐ ☐ Absent ☐☐ ☐ ☐ ☐ ______________________________ Frank Boyles, City Manager