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HomeMy WebLinkAbout7A Rolling Oaks Adopt Assessments Report 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: OCTOBER 2, 2017 AGENDA #: 7A PREPARED BY: JASON WEDEL, PUBLIC WORKS DIRECTOR/CITY ENGINEER PRESENTED BY: JASON WEDEL AGENDA ITEM: PUBLIC HEARING TO CONSIDER APPROVAL OF A RESOLUTION ADOPT- ING THE ASSESSMENT ROLL FOR THE ROLLING OAKS CIRCLE IM- PROVEMENT PROJECT (PROJECT #TRN13-000006) DISCUSSION: Introduction This agenda item is necessary to adopt the assessment roll for the Rolling Oaks Circle 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 roadway 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 au- thorized the preparation of plans and specifications. Soon after these authoriza- tions were approved, the developer for the neighboring property retracted their development application. Since the developer contribution was an important funding source for the Rolling Oaks project, work on the city project for Rolling Oaks stopped. In 2017 the development petition was once again pursued for Trillium Cove for- merly known as Meadowlawn. On May 9, 2017th, 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 author- izing staff to prepare a Feasibility Report for the Rolling Oaks Improvement Pro- ject 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 feasibility 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. The M.S. Chapter 429 process applies to all projects that will be financed in whole or part through special assessments or bond proceeds. 2 Rolling Oaks Circle is considered in the feasibility report as a first-time improve- ment located within the Northeast quarter of section 26, Township 115 North, Range 22 West, Scott County Minnesota. Structures in this area were built in the 1960s and 1970s, are served by wells, septic system and a gravel road. A map of the project area (Exhibit 1) is included 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 since he has been connected to municipal services since 2002. Current Circumstances The proposed improvements include street construction, storm sewer, storm wa- ter quality, sanitary sewer, watermain, concrete curb and gutter, and appurtenant work. Bids were received on August 24th and approved by the City Council on September 5, 2017. Construction of the project is planned for substantial com- pletion this fall and final completion in the spring of 2018. ISSUES: 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 par- cels 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 effect at the time of development of that parcel. This connection charge is currently $18,000 on the 2017 City Fee Schedule and is subject to change each year 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 Mush- town Road project, be allowed to be assessed over a five-year period if the prop- erty 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 included the hookup fees ($6,549) for 9 properties which would have added $58,941 if all of the eligible properties pursued this agreement. The City sent waiver forms to all of the property owners for signature and only two have signed and returned the agreement. Signed requests and appeal waivers for property owners desiring to take advantage of this offer would have to be re- ceived before the end of the public hearing on October 2, 2017. 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 commencing the work. If the number of appeals are significant, the 3 City can review these before expending funds for the improvement. The assess- ment is based on the approved bid for the work and the City holds the risk on the project should the contractor encounter field conditions which add cost. Added cost would be funded by sources other than assessments. Property owners may express concern about the fact that they are being as- sessed before they can see what they are paying for. The reason for the October Hearing is also to provide the statutorily mandated 30 days to allow property owners the option to pay their assessments in full with no interest charged. There is a unique circumstance associated with the property at 14071 Rolling Oaks Circle which should be addressed as part of the assessment hearing. This property paid the applicable fees and connected to the City sanitary sewer and watermain in 2001. This was possible due to their proximity to the existing utili- ties stubbed at the intersection of CSAH 42 and Rolling Oaks Circle. The agree- ment between the City and the property owner for that connection included a $9,000 fee in lieu of an assessment for the sewer and water connection. The property owner believes the $9,000 should be deducted from their $26,900 as- sessment for the current improvements. The funding for this project was presented to the City Council on June 12, 2017 as part of the updated feasibility report. Below is a copy of the funding table that was included in the staff memo at that meeting. The funding sources identified in the left-hand column of the table originally included assessments for sanitary sewer and watermain. However, there was an option presented that did not in- clude assessment for sanitary sewer and watermain and was identified as the “Connection Charge Option”. Ultimately, the Assessment Review Work Group selected the “Connection Charge Option” and those costs were updated for 2017. The column highlighted in yellow is what has been agreed upon and does not currently include assessments for sanitary sewer or watermain. The assess- ment amount of $26,900 is strictly for street and storm sewer. As a result, it could be reasoned that no credit should be issued as none of the $26,900 assessment is for sewer and water. Other information to consider for this property is that when the current project is complete, all ten properties will have the same access to City sanitary sewer and watermain. Nine of those properties will have paid $26,900 and the property at 14071 Rolling Oaks Circle will have paid $9,000 + $26,900 = $35,900. The dif- ference is that the property at 14071 Rolling Oaks has had access to City sani- tary sewer and watermain 16 years prior to the other properties. If the City Council approves the deduction of the $9,000 from the assessment for 14071 Rolling Oaks Circle an alternate funding source will need to be identified to cover the difference. 4 Item Original 2014 Con- nection Charge Op- tion 2017 Con- nection Charge Op- tion Future Standard Project 2017 Pricing Street and Storm Sewer Assess- ment $25,759 $27,000 $26,900 $24,661 Sanitary Sewer Assessment $6,383 $0 $0 $5,272 Watermain Assessment $5,652 $0 $0 $4,151 Street and Storm Sewer Assess- able Units 22 10 10 20 Sanitary and Water Assessable Units 21 0 0 19 Total Utilities Assessment $12,035 $0 $0 Total Streets & Utilities Assess- ment $37,794 $27,000 $26,900 $34,084 FINANCIAL IMPACT: The funding table below for the Rolling Oaks Circle Improvement Project shows contribution from the following sources: Assessments, Trunk Fund, Street over- size Fund, developer contribution, developer-paid deferred assessment, and the Water Quality Fund. There is no question that if financed in this manner this pro- ject will set a funding precedent for future projects. 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 $185,308 Project Total Cost* $912,431 $956,708 *The funding amounts shown were updated based on the low bid for the project but do not include optional inclusion of hook-up fees added to the assessment. Including all possible properties adding hook-up fees to their assessment would have added $58,941 to the assessment to bring the total to $327,941. However, only four properties signed the hook-up fee agreement so the total assessment amount is $269,000 + 26,196 = $295,196. ALTERNATIVES: 1. Conduct the public hearing and if no new substantive information is offered, approve a resolution adopting the assessment roll as submitted or with amend- ments for the Rolling Oaks Road Improvement Project #TRN13-000006. 5 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 ADOPTING ASSESSMENTS FOR THE ROLLING OAKS IMPROVEMENT PROJECT (CITY PROJECT #TRN13-000006) Motion By: Second By: WHEREAS, Pursuant to proper notice duly given as required by law, the Council has met and heard and passed upon all objections to the proposed assessments for the Rolling Oaks Improvement Project, City Project #TRN13-000006. 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 proposed assessment for the Rolling Oaks Improvement Project, City Project #TRN13- 000006, a copy of which is attached hereto and made part hereof, is hereby accepted and shall constitute the special assessment against the lands named therein, and each tract of land therein included is hereby found to be benefitted by the proposed improvement in the amount of the assessment levied against it. 3. 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 $275,549 4. Assessments shall be payable on an equal principal installment method extending over a period of ten (10) years for the street improvements and over a period of five (5) years for the connection fees. 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 following year and shall bear interest at the rate of 3.8% per annum from the date of the adoption of the assessment resolution. 5. 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 the payment, except that no interest will be charged if the entire assessment is paid within thirty (30) days, and he/she may, at any time thereafter, pay to the city treasurer 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 15 or interest will be charged through December 31 of the next succeeding year. 6. The Finance Director shall forthwith transit a certified duplicate of this assessment to the County Auditor to be extended on the property tax lists of Scott County. Such assessments shall be collected and paid to the City in the same manner as other municipal taxes. C:\Users\aschroeder\Desktop\17-XXX Rolling Oaks Adopt Assessments.docx 2 Passed and adopted by the Prior Lake City Council this 2nd day of October 2017 VOTE Briggs McGuire Thompson Braid Burkart Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ ______________________________ Frank Boyles, City Manager ASSESSMENT ROLL TRN13-00006 (PROJ. #14-013) ROLLING OAKS CIRCLE IMPROVEMENTS PID PROPERTY OWNER PROPERTY ADDRESS CITY STATE ZIP NUMBER OF UNITS STREET ASSESSMENT CONNECTION FEES TOTAL ASSESSMENT AMOUNT 250520080 BUCHHOLZ EDITH 14070 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $6,549.00 $33,449.00 250520100 ERICKSON GORDON R & LAQUITA M 14071 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $26,900.00 250520060 JARZYNA TOM & CAROL 14150 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $26,900.00 250520040 LUNSER ALLEN C & NANCY M 14170 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $6,549.00 $33,449.00 250520130 MEADOWLAWN DEVELOPMENT CORP 14175 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $26,900.00 250520050 HALLQUIST CHAD 14160 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $26,900.00 250520090 SAMES PATRICK R & MARGARET E 14030 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $26,900.00 250520070 CICHOSZ MARK & KELLY 14100 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $6,549.00 $33,449.00 250520020 MITCHELL ANDY 14188 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $6,549.00 $33,449.00 250520110 STONE CURTIS & SALLY 14111 ROLLING OAKS CIR NE PRIOR LAKE MN 55372 1 $26,900.00 $26,900.00 10 $295,196.00