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Home My WebLink About8E - Adopt a Street Reconstruction Plan 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 CITY COUNCil AGENDA REPORT MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: AUGUST 21, 2006 BE LARRY POPPlER, ASSISTANT CITY ENGINEER PUBLIC HEARING TO CONSIDER THE PROPOSAL TO ADOPT A STREET RECONSTRUCTION PLAN AND ISSUE GENERAL OBLIGATION STREET RECONSTRUCTION BONDS DISCUSSION: Introduction The purpose of this agenda item is to take public input on the proposed reconstruction plan with the intent to issue general obligation street reconstruction bonds for these projects. Historv In 2002, the Legislature made a variety of changes in the powers of local governments to issue bonds and incur other forms of debt. A new subdivision 3b was added to Minnesota Statutes, Section 475.58 authorizing municipalities to issue bonds without a referendum under street reconstruction programs (see also, Laws of Minnesota for 2002, Chapter 390, Section 18). The 2003 Legislature clarified that street reconstruction bonds may be issued for utility replacement and relocation and other activities incidental to the street reconstruction, but does not include the portion of project cost allocable to widening a street or adding curbs and gutters where none previously existed. Granting municipalities the authority to issue bonds under Minnesota Statutes, Chapter 475 for street reconstruction without regard to election requirements affords cities the opportunity of financing this type of improvement without having to specially assess at least 20% of the project costs. The bonds may only be issued if the following conditions are met: a unanimous council vote that the work to be done is part of the reconstruction plan, a public notice is provided, reverse referendum is authorized, and the amount to be financed is subject to the municipalities net debt limit, even if they would be exempt under another law. The law authorizes issuance of obligations without an election for reconstruction of streets, if the bonds are issued under a 5-year Street Reconstruction Plan and the conditions provided above are met. The following table identifies the financing elements of the Street Reconstruction Plan: Proiect County Road 21 - Franklin to Adelmann County Road 12/ TH 13 - TH 13 to Elm Avenue R:\Agenda Reports\Aug 21 2006\street recon plan PH agenda.doc www.cityofpriorlake.com Year 2007 City Cost $1,000,000.00 $300,000.00 2007 Phone 952.447.4230 / Fax 952.447.4245 2008 Itasca Avenue, Summer Street, $2,160,000.00 Robinson Circle, and Franklin Circle 2009 Brooks Circle, Filmore Avenue, $2,685,000.00 and Mandan Avenue 2009 County Road 21 North $790,000.00 2010 Industrial Circle and Welcome $2,280,000.00 Avenue 2010 County Road 12 $2,640,000.00 2011 Shady Beach Trail south segment $2,585,000.00 and Bayview Circle Total $14,440,000.00 Current Circumstances Issuing general obligation bonds is another mechanism to fund street reconstruction projects. Adopting a Street Reconstruction Plan with the intent to issue general obligation street reconstruction bonds does not require the City to utilize this mechanism. The City could elect to specially assess for these projects even if the City Council approves this resolution. The City must also follow Minnesota State Statutes 429 for projects which the City intends to specially assess. Conclusion Adopting a Street Reconstruction Plan is necessary to utilize general obligation street reconstruction bonds for any of the projects identified in the Street Reconstruction Plan. However, State Statutes requires a unanimous (5-0) vote of the City Council in favor of the attached resolution. Since the full Council is not present, action on this item needs to be deferred to the next Council meeting on Tuesday, September 5, 2006. Staff recommends that the Street Reconstruction Plan be adopted at the next City Council meeting. FINANCIAL IMPACT: Assessments for some of the upcoming County Road projects may not reach the 20% threshold for special assessment. In those cases this mechanism can be utilized to fund the City's portion of the improvements. ALTERNATIVES: 1. Approve a resolution adopting the Street Reconstruction Plan. 2. Table this agenda item for a specific reason. 3. Deny this agenda item for a specific reason and provide staff with direction. RECOMMENDED MOTION: Alternative # 1. Reviewed by: ( , Steve Albrecht, Public Works Director/City Engineer R:\Agenda Reports\Aug 21 2006\street recon plan PH agenda.doc 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 RESOLUTION 06-xx Motion By: Second By: WHEREAS, The following table identifies the City of Prior Lake Street Reconstruction Plan financing elements: Year Project City Cost 2007 County Road 21 - Franklin to Adelmann $1,000,000.00 2007 County Road 12/ TH 13 - TH 13 to Elm $300,000.00 Avenue 2008 Itasca Avenue, Summer Street, Robinson $2,160,000.00 Circle, and Franklin Circle 2009 Brooks Circle, Filmore Avenue, and $2,685,000.00 Mandan Avenue 2009 County Road 21 North $790,000.00 2010 Industrial Circle and Welcome Avenue $2,280,000.00 2010 County Road 12 $2,640,000.00 2011 Shady Beach Trail south segment and $2,585,000.00 Bayview Circle Total $14,440,000.00 WHEREAS, Issuing general obligation bonds is another mechanism to fund street reconstruction projects. Adopting a Street Reconstruction Plan with the intent to issue general obligation street reconstruction bonds does not require the City to utilize this mechanism. WHEREAS, Street reconstruction is necessary to provide residents the opportunity of safe travel while commuting throughout the City. 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 City Council authorizes the adoption of the Street Reconstruction Plan with the intent to issue general obligation street reconstruction bonds. PASSED AND ADOPTED THIS 21ST DAY OF AUGUST 2006. YES NO I Haugen I Dornbush I Erickson I LeMair I Millar Haugen Dornbush Erickson LeMair Millar Frank Boyles, City Manager R:\Agenda Reports\Aug 21 2006\street recon plan PH resolution.doc www.cityofpriorlake.com Phone 952.447.4230 / Fax 952.447.4245 2007 through 2011 Five-Year Street Reconstruction Plan for the City of Prior Lake Prepared by: Engineering Department City of Prior Lake 4646 Dakota St. S.E. Prior Lake, MN 55372 (952) 447-9830 Table of Contents I. INTRODUCTION ............ .... ...... ... ........... .... ............... ......... .......... ............. ............. 3 II. PU R POSE ........ ...... .......... ......... .... ....... .... .... ....... ... ....... ... ... .......... ........ ................. 4 III. THE STREET RECONSTRUCTION PLANNING PROCESS................................. 5 IV. PROJ ECl SU MMARY .. .......... ..... ........ .... .... ........................ ......... ..... ........ ......... ... 6 v. FINANCING THE STREET RECONSTRUCTION PLAN ....................................... 8 PROJ ECT COSTS.......... ...... ..... ... ....... ..... ... ......... ........... ............... ..... APPEN DIX A City of Prior Lake Page 2 City of Prior Lake Five-Year Street Reconstruction Plan 2007 through 2011 I. INTRODUCTION Minnesota Statutes, Section 475.58, Subdivision 3b (the "Act") generally exempts city bonds issued under a street reconstruction program from the referendum requirements usually required for bonding expenditures. City of Prior Lake Page 3 II. PURPOSE Street reconstruction requires a major expenditure of city funds. Street reconstruction may include utility replacement and relocation, public safety street modifications, and other incidental costs, turn lanes and other improvements having a substantial public safety function, realignments, other modifications to intersect with state and county roads, and the local share of state and county road projects. Except in the case of turn lanes, safety improvements, realignments, intersection modifications, and local share of state and county road projects, street reconstruction does not include the portion of project costs allocable to widening a street or adding curbs and gutters where none previously existed. A Street Reconstruction Plan (SRP) is a document designed to anticipate street reconstruction expenditures and schedule them over a five-year period so that they may be purchased in the most efficient and cost effective method possible. A SRP allows the matching of expenditures with anticipated income. As potential expenditures are reviewed, the city considers the benefits, costs, alternatives and impact on operating expenditures. The City of Prior Lake (the "City") believes the street reconstruction process is an important element of responsible fiscal management. In these financially difficult times good planning is essential for the wise use of limited financial resources. The Street Reconstruction Plan is designed to be updated on an annual basis. In this manner, it becomes an ongoing fiscal planning tool that continually anticipated future capital expenditures and funding sources. City of Prior Lake Page 4 III. THE STREET RECONSTRUCTION PLANNING PROCESS The street reconstruction planning process is as follows: the City Council authorizes the preparation of the Capital Improvement Program (CIP). The City staff is instructed to assemble the capital expenditures to be undertaken within the next five years. The City then reviews the expenditures according to their priority, fiscal impact, and available funding. From this information, a preliminary street reconstruction plan is prepared. A public hearing is held to solicit input from citizens and other governmental units. Changes are made based on that input, and a final project list is established. The City then prepares a plan based on the available funding sources. If general obligation bonding is necessary, the City works with its financial advisor to prepare a bond sale and repayment schedule. Over the life of the SRP, once the funding, including proceeds from the bond sales becomes available; the individual capital expenditures can be made. In subsequent years, the process is repeated as expenditures are completed as new needs arise. Street reconstruction planning looks five years into the future. For a City to use its authority to finance expenditures under the Act, it must meet the requirements provided therein. Specifically the City must approve the sale of street reconstruction bonds by a unanimous vote of its membership. In addition, it must hold a public hearing for public input. Notice of such hearing must be published in the official newspaper of the City at least 10, but not more than 28 days prior to the date of the public hearing. The City must approve the SRP unanimously following the public hearing. Although a referendum is not required, a reverse referendum is allowable. If a petition bearing the signatures of at least 5 percent of the votes cast in the last general election requesting a vote on the issuance of bonds is received by the municipal clerk within 30 days after the public hearing, a referendum vote on the issuance of the bonds shall be called (if a vote is taken and the referendum passes, the taxes would be levied on market value rather than tax capacity). City of Prior Lake Page 5 IV. PROJECT SUMMARY The expenditures to be undertaken with this Street Reconstruction Plan (SRP) are limited to those listed in Appendix A. All other foreseeable capital expenditures within the City government will come through other means. The following expenditures have been submitted for inclusion in this SRP: 2007 Exoenditures . Approximately $1,300,000 for the proposed improvements to one mile of road in the City of Prior Lake. The roads being considered for improvements are shown on the next page. Any additional expenditures for 2007 and expenditures for 2008 through 2011 are not anticipated at this time. City of Prior Lake Page 6 "'C -\...------ -" - ) It?- L Jj ) I ~-=- - - : I I , , \~ (;.-" II' if. III- ."llf f WII.II - 1 It I' t11 !IJ ~II JI. n Hull L, Ii!; ill; UII;~; !! !2~~~~ 1;1 u ~ I !II.... Illii ~-----\ <II /\ I I ?(_ ,. l I ' J_u- -----.-.. _ ED' -, rft') l ~-II~-' ": ""\. ') It .J J - - \ 1...... - --:- - / - ~/ - I --.- ~ < -\ \ / ~II i ~ .r- > !j City of Prior Lake Page 7 V. FINANCING THE STREET RECONSTRUCTION PLAN The total amount of estimated expenditures under the Street Reconstruction Plan is $1,300,000. If these expenditures are to be funded, that amount of money is anticipated to be generated through the sale of approximately $1,300,000 General Obligation Street Reconstruction Plan Bonds, Series 2007 (the "Bonds"). In the financing of the Street Reconstruction Plan, one statutory limitation applies. Under Chapter 475, with few exceptions, cities cannot incur debt in excess of 2% of the assessor's taxable market value for the City. In the City, the TMV is $2,495,870,476. Therefore, the total amount of outstanding debt cannot exceed $49,917,410. As of December 31, 2006 the City had $17,435,000 subject to the legal debt limit. Under the Street Reconstruction Plan, the City may sell the Bonds to finance the Planned 2007 Street Reconstruction Project. The Bonds are planned to be repaid over a 10-year period. The structure of the Bonds (including issuance costs) will be set forth in a Resolution of the City Council to be considered at the time the bonds are sold. City of Prior Lake Page 8 Continuation of the Street Reconstruction Plan This Street Reconstruction Plan should be reviewed annually by the City Council using the process outlined in this Plan. It should review proposed expenditures, make priority decisions, and seek funding for those expenditures it deems necessary for the City. If deemed appropriate, the City Council should prepare an update to this Plan. City of Prior Lake Page 9 2007 CAPITAL BUDGET and 2008 - 2011 CAPITAL IMPROVEMENTS I. Description and Location: Street Reconstruction: 2007 - Ida Circle, Mushtown Road and Panama Avenue Feasibility Study 2008 - Brooksville Hills (Phase I) 2009 - Brooksville Hills (Phase II) 2011 - Shady Beach II. Purpose: To reconstruct street to a 7 ton standard. Department: Project Title: Public Works Street Improvements Project Number: Project Useful Life: 20 Years III. Needs Assessment: H Priority Rating: 1 IV. CostlBenefit Impact Statement: Improved streets will reduce maintenance for the streets and for vehicles. Pro,iect Financing: 2007 2008 2009 2010 2011 Property TaxffIF Pro.iect Levy 950,000 984,000 1,173,000 Special Assessments 630,000 656,000 782,000 Federal State County City MSA Funds Capital Park Fund Fund Balance/(Utility Fund) 20,000 500,000 965,000 550,000 Street Oversize Fund Grant/Contributions Other/(Water Quality) 80,000 80,000 80,000 Total 20,0001 2,160,0001 2,685,0001 I 2,585,000 Project Expenditures: 2007 2008 2009 2010 2011 Construction (New) 20,000 2,160,000 2,685,000 2,585,000 Renovation/Repairs Land Acquisition Buildine;s and Plant Equipment Vehicles Other Total 20,0001 2,160,0001 2,685,0001 1 2,585,000 CIP20 2007 CAPITAL BUDGET and 2008 - 2011 CAPITAL IMPROVEMENTS I. Description and Location: Cooperative Agreements: 2007 - CR 12 / TH 13 Intersection 2009 - CSAH 21 north extrension from CSAH 42 2010 - CR 12 (Spring Lake Park & Stemmer to CSAH 17) 2009 - Dump Site Reimbursement ($90,000) 2010 - Dump Site Reimbursement ($90,000) II. Purpose: These are Scott County reconstruction projects. City will participate in storm sewer and other improvements on a cost sharing basis through a cooperative agreement. Department: Project Title: Public Works Street Reconstruction Project Number: Project Useful Life: 20 Years III. Needs Assessment: H Priority Rating: 1 IV. Cost/Benefit Impact Statement: These County Highway Improvement Projects will restore the driving surface and improve storm drainage in these respective areas. Pro.ieet Financing: 2007 2008 2009 2010 2011 I 75,000 Property TaxlTIF Proiect Levy Special Assessments 50,000 300,000 Federal State County 3,260,000 5,400,000 3,450,000 Citr MSA Funds 630,000 630,000 Capital Park Fund Fund Balance/(Utility Fund) 100,000 350,000 Street Oversize Fund 25,000 70,000 170,000 Grant/Contributions 90,000 90,000 other/(Water Quality) 50,000 1,100,000 Total 1 3,560,0001 1 6,190,0001 6,090,0001 Pro,iect Expenditures: 2007 2008 2009 2010 2011 Construction (New) 3,560,000 6,100,000 6,000,000 , RenovationlRepairs Land Acquisition Buildine;s and Plant Equipment Vehicles Other/(Dump Site) 90,000 90,000 Total 1 3,560,0001 1 6,190,0001 6,090,0001 CIP27 2007 CAPITAL BUDGET and 2008 - 2011 CAPITAL IMPROVEMENTS I. Description and Location: Fish Point Road and CR 21 Intersection Improvements including connection to Credit River Road. Department: Project Title: Public Works Intersection Improvements Project Number: Project Useful Life: 20 Years III. Needs Assessment: H Priority Rating: 1 IV. CostJBenefit Impact Statement: Exisiting development and future development benefits by providing a safer intersection. II. Purpose: To signalize existing intersection experiencing significant traffic volumes. Pro,ject Financing: 2007 2008 2009 2010 2011 Property Tax/TIF 430,000 Pro.iect Levy Special Assessments 287,000 Federal State County City MSA Funds 83,000 Capital Park Fund Fund Balance/(SpecUjlJ Street Oversize Fund 100,000 Grant/Contributions Other/(Trunk Reserve) 100,000 Total 1 1,000,0001 Project Expenditures: 2007 2008 2009 2010 2011 Construction (New) 1,000,000 RenovationlRepairs Land Acquisition Buildinl[s and Plant Equipment Vehicles Other Total I 1,000,0001 CIP 31 2007 CAPITAL BUDGET and 2008 - 2011 CAPITAL IMPROVEMENTS '1. Description and Location: Extension of sanitary sewer and watermain to Industrial Circle, including street improvements. Department: Project Title: Public Works Welcome Avenue/Industrial Circle Street & Utility Improvements J Project Number: Project Useful Life: 20 Years III. Needs Assessment: H Priority Rating: 1 II. Purpose: IV. CostlBenefit Impact Statement: To construct Industrial Cir to a 7 ton standard and provide Improved streets will reduce maintenance for the streets utilities to adjacent property owners. and for vehicles. Note: 100% assessed as a first-time improvement. Pro,ject FinancinR: 2007 2008 2009 2010 2011 Property Tax/TIF Pro_iect Levy -- --.-- 2,000,000 Special Assessments Federal State County City MSA Funds Capital Park Fund Fund Balance/(Specify) Street Oversize Fund 200,000 Grant/Contributions Ofhe-r/(Water Quality) 80,000 ,. 1 2,280,0001 Total Pro.ject Expenditures: 2007 2008 2009 2010 2011 Construction (New) 2,280,000 RenovationlRepairs Land Acquisition ---.,.--.....- ----. Buildines and Plant Equipment Vehicles Other -,-,-- T~tal-''''-- \ 2,280,0001 CIP41