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HomeMy WebLinkAbout8B - Ida Circle - Project. #06-11 CITY COUNCIL AGENDA REPORT MEETING DATE: AGENDA #: PREPARED BY: December 3,2007 8B LARRY POPPLER, ASSISTANT CITY ENGINEER SPECIAL ASSESSMENT PUBLIC HEARING FOR IMPROVEMENTS ON IDA CIRCLE AND TRUNK HIGHWAY 13 (CITY PROJECT #06-11) AGENDA ITEM: DISCUSSION: Introduction This agenda item is necessary to receive public input on the Ida Circle and Trunk Highway 13 Improvement Project. Historv Ida Circle was annexed into the City of Prior Lake in 2004 as part of the Orderly Annexation Agreement. On September 30, 2005 a petition containing seven of nine households was received by the City. The petition specifically requests the City extend and install sanitary sewer and watermain improvements to serve properties on Ida Circle. Properties on TH 13 were not part of the petition. Resolution 07-089 ordering preparation of plans and specifications for the project was approved by the City Council on May 7,2007. A public informational meeting was held on March 14, 2007, to provide affected property owners an opportunity to discuss the project. A Public Hearing was conducted on May 7, 2007. A second open house meeting was held on July 12, 2007. City staff was in attendance at all three meetings to answer questions from the public. On August 20, 2007 the City Council authorized the advertisement for bids on this project. On October 10, 2007 the City received bids for this project. At the November 5, 2007 City Council meeting the City Council declared the costs to be assessed and scheduled the Assessment Hearing for December 3, 2007. Current Circumstances The project includes storm sewer, sanitary sewer, water main, concrete curb and gutter, aggregate base, bituminous surfacing, and appurtenant work. The construction of this project is proposed to be funded through assessments, tax levy, and Trunk Sewer and Water Fund. The City received bids from 12 different contractors. The lowest bid was 25% or $85,000 below the engineer's estimate. Dividing the lowest bid among the impacted properties results in a per-unit cost of $11,159.00 for utilities and $6,653.00 for street and storm sewer. This means that the cost for property owners on Ida Circle would be $17,812.00 and the cost for property owners on TH 13 would be $11,159.00. Assessments resulting from the project will not be applied to the property taxes until 2009. www.cityofpriorlake.com RICouncillAgenda Reports12007\12 03 0711da PubliPHCWl~95~~EfJt:~s:60oc/ Fax 952.447.4245 All benefiting property owners have been mailed a Statement of Special Assessments, which included information pertinent to their property such as the total proposed assessment amount and the assessment rate. The Notice of the Special Assessment Hearing was published in the newspaper on November 10, 17, and 24, 2007. Under state statute, the City may only assess a property up to the amount the property is specially benefited by the public improvement. Special benefit is defined as the difference between fair market value before and after the project. The Property owners who believe that the proposed assessment exceeds the special benefit have a right to appeal their assessments as per Minnesota Statutes Chapter 429. Written objections must be signed and filed with the City Manager prior to the Assessment Hearing or presented to the Council at the Hearing on December 3, 2007. Within 30 days of the hearing, the owner must also file the appeal in District Court. No appeals were received at the time this report was prepared. We have apprised each of the property owners of our Deferred Assessment Program. ISSUES: The Assessment Review Committee met on August 9, 2007 at which time the following issues were discussed and recommendations made: SlfeetReconslfuction The Assessment Review Committee recommends that the costs relating to the reconstruction of street and storm sewer be assessed to properties on Ida Circle. Reconstruction of the street does not provide special benefit to properties located on Trunk Highway 13. Consistent with the City's Special Assessment Policy, the Assessment Review Committee recommends assessing 40% for all costs associated with the street and storm sewer improvements. The remaining 60% will be paid from the general tax levy. Septic system credits, which were part of the orderly annexation agreement, will also be paid through the tax levy. The amount of the credit is dependent on the age and compliance with existing standards as outlined in the agreement. The assessment for the street and storm sewer improvements will be repaid over a 10-year period. The Committee also recommends 100% assessment for sanitary sewer and waterman improvements. The assessment for the sanitary and watermain improvements will be repaid over a 20-year period. In summary, Ida Circle residences will be assessed 40% of the street and storm sewer improvements and 100% for sanitary sewer and watermain improvements per unit. TH 13 residences will be assessed 100% for sanitary sewer and watermain improvements per unit. Assessment Method The Assessment Review Committee recommends the unit method of assessment for Ida Circle and TH 13 due to the fact that the lots in the project area are of similar size and/or value. Street and storm sewer improvements are proposed to be assessed to the nine units on Ida Circle. Sanitary sewer and watermain improvement costs will be assessed based on 13 units. The assessment rate does not include connection charges of approximately $4,605/unit. This charge will be due when each property connects onto the City's system. RICouncillAgenda Reportsl2007112 03 07\lda Public Assessment Hearing Agenda.doc Proiect Timeline . November 28, 2007 - Neighborhood Informational Meeting . December 3,2001- Assessment Hearing . December 17, 2007 - Adopt Assessment Roll . January 21,2008 - Award Bid . Spring 2008 - Start Construction In order to allow property owners a chance to submit septic system compliance information, adoption of the assessment roll is scheduled for December 17, 2007. Property owners must submit septic system compliance information prior to December 17, 2007 to receive the additional credit on their assessment. Conclusion The Assessment Review Committee believes the increase in fair market value resulting from the project will support the unit method and the assessment amounts. The assessment term is ten (10) years for paving and twenty (20) years for utilities. Added to the first installment (2009) will be an additional 214 days of interest, which accounts for the interest accrued starting on June 1, 2008 for the remainder of 2008. An interest rate of 6% will be charged in accordance with the City Assessment Policy. Upon adoption of the assessment roll, property owners may prepay the assessment until June 1, 2008, at which time it will be applied to the property tax statement. The focus of tonight's hearing is whether the affected properties have received special benefit equivalent to the proposed assessment for each property, and whether the assessment has been calculated accurately and in accordance with City Assessment Policy. FINANCIAL IMPACT: The property owners are proposed to be assessed 100% for all costs associated with the proposed sanitary sewer and watermain improvements. The City will use the Sewer and Water Fund to fund oversizing of the watermain on TH 13. Ida Circle properties will be assessed 40% of the street and storm sewer improvements on Ida Circle. The remaining 60% will be paid through the tax levy. PROJECT FUNDING TABLE PROJECT ASSESSMENT* $191,069.00 PROJECT LEVY* $103,692.00 SEWER AND WATER FUND* $21,497.00 TOTAL PROJECT COST* $316.258.00 * Includes Indirect Costs Also included in the tax levy are any septic system credits per the orderly annexation agreement. Included in the above table are septic system credits in the amount of $13,875.00. At the December 17, 2007 City Council meeting, once all septic system compliance certificates are submitted, the project funding table will be updated. RICouncillAgenda Reports12007\12 03 07\lda Public Assessment Hearing Agenda.doc The Council should open the Public Assessment Hearing, receive public input and then close the Public Assessment Hearing. If certain issues need additional study, those issues could be referred to the Assessment Review Committee for evaluation and recommendation. ALTERNATIVES: The alternatives are as follows: 1. Conduct and close the Special Assessment Hearing and direct that this matter be scheduled for City Council consideration at the December 17, 2007 meeting. 2. Defer this item until a future date. RECOMMENDED Alternative #1 MOTION: R\CouncillAgenda Reports\2007\12 03 07\lda Public Assessment Hearing Agenda.doc