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HomeMy WebLinkAbout9C - Industrial Park Improvements MEETING DATE: May 7,2007 AGENDA #: 9C PREPARED BY: LARRY POPPLER, ASSISTANT CITY ENGINEER AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION ACCEPTING FEASIBILITY REPORT FOR INDUSTRIAL PARK IMPROVEMENTS AND DIRECTING STAFF TO PURSUE PROJECT IMPLEMENTATION BY DEVELOPMENT AGREEMENT DISCUSSION: Introduction The purpose of this agenda item is to accept the Feasibility Report and direct staff to pursue Industrial Park project implementation by development agreement. The Industrial Park includes Welcome Avenue, Industrial Circle and Credit River Road. History On September 18, 2006, the City Council placed the Welcome Avenue Industrial Park Utility Extension Project in the 2007 Capital Improvement Program (CIP). This project covers Industrial Circle, Credit River Road and Welcome Avenue. The existing Industrial Park is not served by City utilities. Currently properties are served by individual wells, septic systems and sewage holding tanks. The Council noted the Industrial Park's location in the Wellhead Protection Area and potential for redevelopment as reasons for inclusion. On January 16, 2007, the City received a petition from 39% of the property owners with frontage on Credit River Road and Welcome Avenue within the Industrial Park area for preparation of a Feasibility Study to construct public improvements using the special assessment provisions provided for in Minnesota Chapter 429. A minimum of 35% of the properties must sign a petition requiring the City to undertake the improvements. The petition also included signatures from Industrial Circle. Including Industrial Circle the petition included 35% of the property frontage in the Industrial Park. At the February 5, 2007, City Council meeting, Council adopted Resolution No. 07-019 authorizing staff to prepare a Feasibility Report for the Industrial Park Utility Extension Project. On February 20, 2007, City Council adopted Resolution No. 07-028 authorizing the Mayor and City Manager to enter into a professional services contract with Bolton and Menk, Inc. for the Industrial Park Utility Extension Project Feasibility Study. The 429 Improvement Process applies to all projects that will be financed in whole or part through special assessments or bond proceeds. Typically, once the Feasibility Report is accepted by the City Council, the next step in the process is for the Council to schedule a Public Hearing for the proposed improvements. www.cityofpriorlake.com Phone 952.447.9800 I Fax 952.447.4245 Current Circumstances The attached Feasibility Report prepared by Bolton and Menk, Inc. indicates the total estimated costs and proposed assessments for the project. At the end of the Feasibility Report, a project financing summary is included to show project estimated costs, funding, and proposed assessment rates. The total estimated cost of the project is $3,006,550.00. Welcome Avenue and Industrial Circle both have 28' wide rural road sections with an aggregate (gravel) surfaces. Credit River Road is 23' wide rural section with a bituminous surface. The typical roadway section is shown on Exhibit 2 of the Feasibility Report. It includes 1.5 inches of bituminous wear course, 2.5 inches of bituminous base course, 9 inches of Class 5 aggregate base, and 2 feet of granular borrow. Welcome Avenue and Industrial Circle would both be constructed to a 28' width with B618 concrete curb and gutter. Credit River Road would be constructed to a 32' width and have B618 concrete curb and gutter. These streets in this area are flat to minor rolling. The proposed design would include positive grade that will reduce the potential for ponding in these corridors. Easements or right of way purchasing is required to construct the cul- de-sacs at the endpoints of Welcome Avenue and Industrial Circle. There is currently no sanitary sewer in the project area. All properties are serviced by individual septic systems. Proposed 8-inch PVC pipe will be installed on Industrial Circle and Welcome Avenue. New 6-inch PVC sanitary services will be installed from the main to the property line. It will be the sole responsibility of the property owners to connect sanitary service from the property line to each individual building. Sanitary manholes will be installed according to City standards. Three alignment options were studied for the sanitary sewer as a part of the Feasibility Study process. The first alignment option was to extend sanitary sewer from the existing manhole at the intersection of Credit River Road and Adelmann Street. With this option Credit River Road and Industrial Circle are able to be served. This option received no further consideration due to its inability to serve the entire project area. The second alignment option that was studied included using an existing easement north of the project site to serve Welcome Avenue. Further investigation revealed that this easement did not fit the needs of this project. An existing force main along this easement path would need to be replaced and additional easement in this area would need to be obtained. The terrain along this easement path is very rugged. Based on these considerations, this option was determined to not be feasible and therefore received no further consideration. The final alignment option and the recommendation of the Feasibility Report is to connect the existing manhole at the lift station at the old Public Works Garage property. The alignment would proceed east, then south up the slope at the north end of Industrial Circle. The sanitary sewer will extend approximately 400' south along Industrial Circle and turn east and run along a proposed 60' easement to serve Welcome Avenue. The depth of the sanitary sewer was increased to allow for future connection to the sanitary sewer system by properties located east of the industrial park. The additional cost for this oversizing would be funded by the Trunk Sewer and Water Fund and is included in the financial impact portion of the report. There is currently no watermain on Welcome Avenue and most of Credit River Road. The watermain is complete on Industrial Circle. Currently the properties located in the project area are served by wells. Proposed improvements include the installation of 12-inch ductile iron pipe (DIP) on Credit River Road. The oversizing for larger diameter pipe on Credit River Road would be funded by the Trunk Sewer and Water Fund. The project assessment will be based upon estimates for 8" DIP costs. Proposed watermain improvements along Welcome Avenue include the addition of 8" DIP mainline watermain the entire length of the street. In addition to the mainline, the watermain will be "looped" along the proposed utility easement, to the existing watermain along Industrial Circle. Looping the watermain will provide sufficient fire flow protection to all properties within the project area. New hydrants and gate valves will be installed in accordance with the spacing guidelines outlined in the Public Works Design Manual. Six inch water services will be installed from the main to the property line. It will be the sole responsibility of the property owners to connect water service from the property line to each individual building. Currently all of the streets in the project area have rural street sections and rely on ditch and overland drainage. The drainage for this area eventually flows to Markley Lake. The proposed improvements would include the construction of a storm sewer pipe system and construction of rate and volume control ponds. The pipe network would include catch basins which would allow the drainage flow into the pipe network and into the proposed ponds. Two ponds are proposed as part of the Feasibility Report. These ponds are located in low, likely un-developable areas near Markley Lake. Pond A is located directly north of the Public Works Garage and Pond B is located directly north of Welcome Avenue. Since both of the proposed ponding areas are not owned by the City, easements must be purchased prior to construction. The ponding areas proposed allow for the expansion of the ponds to accommodate the future needs of the Industrial Park. As a part of the project, the project estimate includes costs for building a larger pipe network and larger ponds to accommodate stormwater rate control and water quality needs of future development. If the property owners for the proposed ponding locations are not willing to grant easements for this project, the location of the ponds proposed can be adjusted to other locations. These ponding locations were chosen because of their likely un-developable nature assuming a lower cost for easement purchase. Markley Lake is a landlocked basin with sensitive volume concerns. As you may be aware, the City of Prior Lake has been involved in a lawsuit regarding this landlocked lake. Because of the sensitive nature, the City applies additional hydrology rules to this drainage area. While volume control is a requirement for the entire City, landlocked basins receive additional review. Volume control will be provided for this project utilizing two City approved volume control Best Management Practices (BMP's): wetland storage and extended duration storage. Standard volume reduction will be employed to remove 0.5 inches of rainfall over the project's new impervious surfaces. Based on the project location, additional rate and volume control measures are included to meet the requirements of the City Ordinance for surface drainage to landlocked basins (Markley Lake). The volume control proposed with this project does not accommodate the future re- development needs of the Industrial Park. As sites develop they must create BMP's for volume control which meet City requirements. The Industrial Park is located within the City's High Vulnerability Zone of the Wellhead Protection Area. This area is highly vulnerable to potential groundwater contamination. The existing septic systems and wells are considered potential contamination sources for the groundwater. Based on the proximity of City utilities, Scott County, which is responsible for the permitting and monitoring of onsite sewage treatment systems in the City, has indicated that no additional septic systems will be allowed if a utility extension is not planned. Without the extension of sewer to the Industrial Park no additional development or redevelopment can be permitted. The attached Feasibility Report outlines the costs for the improvements and what portion will be assessed to the benefiting properties. If the Council approves the Feasibility Report, the Chapter 429 special assessment process requires a public hearing be conducted prior to proceeding with the project to determine if it is to move forward. ISSUES: The following table outlines the assessment costs using a unit method of assessments and evaluating the project as a first time improvement with 100% of the costs assessed. TOTAL ASSESSMENT IMPROVEMENTS ASSESSABLE UNIT COST (16 TRUNK FUNDS COST UNITS) STREET $640,321.00 $40,020.00 STORM SEWER $529,394.00 $33,087.00 WATERMAIN $312,334.00 $19,521.00 $29,799.00 SANITARY SEWER $300,120.00 $18,758.00 $24,795.00 INDIRECT COSTS $400,000.00 $25,000.00 SUBTOTAL $2,159,688.00 $134,981.00 $54,594.00 EASEMENTS * $769,828.00 $48,114.00 TOTAL ESTIMATED COST $2,951,956.00 $184,497.00 $54,594.00 * Easements calculated assuming $4/sf purchase price. ** Estimated cost to complete Credit River Rd. from Welcome Av. to Adelmann St. is approx. $493,786 (Assessable to 17 units at a rate of $29,046 I unit). The Assessment Review Committee met on April 9, 2007, at which time the following issues were discussed and recommendations made: Assessment The Assessment Review Committee feels that the 100% assessment rates for the improvements for the industrial park exceed expectations of the area. They question whether the benefit of the improvements exceed the calculated assessment rate. The Assessment Review Committee recognized a number of important City benefits for the Industrial Park Improvement. They include: . Elimination of wells and septic systems within the City's Wellhead Protection High Vulnerability Zone . Developers willing to invest in the Industrial Park . Future lack of suitable commercial properties within Prior Lake . Opportunity to develop areas to a higher use . Opportunity to develop areas to the east . Paving of these roadways reduce erosion issues and maintenance of gravel surfaces. A 2-3 year improvement process should be pursued to assure that the project meets the City's long term objectives. The Assessment Review Committee met again on Monday April 30th, 2007. At that meeting the committee recommended investing approximately $100,000 to extend the sanitary sewer from the lift station, through an undeveloped parcel to the border of the Industrial Park. Once the sanitary sewer is extended to the property line, Developers in the area will have the opportunity to connect to City services. From there, the Assessment Review Committee recommended that as development occurs, Developers would extend the sanitary sewer and watermain through the Industrial Park. At a point where the utilities are roughly 75% completed, the City would initiate a project to finish the utility improvements and complete the street and stormwater improvements. This incremental approach allows time for the following to occur: . City easement acquisition for future ponding . Pursuit of economic development options . Determine wellhead protection requirements . Developer investment into the Industrial Park It is estimated that the incremental approach may take up to five years for utility expansion in the Industrial Park. This Feasibility Report estimates approximately $50,000 per unit for sanitary sewer and water extension. Any parcel which develops prior to the City initiated project, must extend the utility services to their property at a cost to each equivalent to $50,000 under the terms of a development agreement executed by both parties. Conclusion In summary, the project is feasible from an engineering but not an economic standpoint. Approval of the Feasibility Report does not grant final approval of the project. The City Council should give guidance on whether the incremental approach is appropriate for this project. FINANCIAL Following the City's Assessment Policy, the property owners are proposed to be IMPACT: assessed 100% for all cost associated with the proposed improvements. The City will use the Sewer and Water Fund to fund oversizing of the watermain on Credit River Road and for the additional costs for the sanitary sewer improvements to serve the area east of the Industrial Park. Funding sources and amounts are as shown below: ESTIMATED CONSTRUCTION COSTS STREET IMPROVEMENTS $640,321.00 STORM SEWER IMPROVEMENTS $529,394.00 WATERMAIN IMPROVEMENTS $312,334.00 SANITARY SEWER IMPROVEMENTS $300,120.00 INDIRECT COSTS $400,000.00 SUBTOTAL ESTIMATED CONSTRUCTION COST $2,182,128.00 WATERMAIN OVERSIZING $29,801.00 SANITARY SEWER OVERSIZING $24,775.00 TOTAL ESTIMATED CONSTRUCTION COST $2,236,722.00 EASEMENT ACQUISITION COST ESTIMATE $769,828.00 TOTAL ESTIMATED PROJECT COST $3,006,550.00 ALTERNATIVES: The alternatives are as follows: 1. Approve Resolution 07-XX accepting the Feasibility Report and directing staff to develop a long term process for the Industrial Park Utility Extension Project. 2. Table the Resolution for a specific reason. 3. Deny the Resolution. RECOMMENDED Alternative #1 MOTION: Frank Boyles, City, r ReViewe1~ Motion By: Second By: WHEREAS, Pursuant to Resolution 07-019, the City Council, on February 5,2007, ordered a Feasibility Report to be prepared by the City's Engineering Department with reference to the improvement of the Industrial Park; and WHEREAS, The report provides information regarding whether the proposed project is necessary, cost effective, and feasible; and WHEREAS, Due to the estimated assessment rates, a public initiated project is not economically feasible at this time; and WHEREAS, The City Council recognizes a number of important reasons for the Industrial Park improvement project including: elimination of wells and septic systems within the City's Wellhead Protection High Vulnerability Zone; developers willing to invest in the Industrial Park; future lack of suitable commercial properties within Prior Lake; opportunity to develop area to a higher use; opportunity to develop areas to the east; and paving of these roadways reduce erosion issues and maintenance of gravel surfaces; and WHEREAS, Extension of sanitary sewer to the Industrial Park property line would allow Developers the opportunity to extend utilities within the Industrial Park to serve their properties 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 hereby accepts the Feasibility Report as submitted. 3. The City Council directs Staff to extend the sanitary sewer to the Industrial Park property limits. 4. The City Council authorizes Staff work with Developers to complete utility extensions through the Industrial Park utilizing the City's Standard Development Contract. 5. The City Council authorizes Staff to pursue easement acquisition for future ponding expansion. 6. The City Council authorizes Staff to pursue economic development options for the Industrial Park. 7. The City Council approves up to a five year timeline for Developer initiated utility extensions. By 2013, a City initiated street and utility project must be initiated. PASSED AND ADOPTED THIS 7TH DAY OF MAY 2007. YES NO Hauaen Hauoen Erickson Erickson Hedbera Hedbero LeMair LeMair Millar Millar Frank Boyles, City Manager www.cityofpriorlake.com Phone 952.447.9800 / Fax 952.447.4245