Purpose:
The purpose of this case is to review the most current draft of the Special Assessment Policy for City of Ramsey improvement projects, and to provide input to City Staff for revising the draft Policy.
 
Background:
On May 20^th the Public Works Committee directed Staff to develop a draft Special Assessments Policy to establish how special assessments will be levied against properties benefiting from various types of City improvement projects, including street reconstruction projects. As discussed at the time, even if special assessments are not needed to fund improvement projects it would be advantageous to the City to have an adopted assessment policy. The Committee also directed staff to research other cities special assessments policies to see how other cities address specific situations and apply special considerations in assessing property owners for public improvements.
 
On June 25^th the Charter Commission voted to amend Section 8.4.5 of the City Charter, increasing the percentage of property owners required to petition against Council initiated public improvements utilizing special assessments as a funding source from greater than 50% to greater than 60%.  While this action will make it slightly more difficult for the public to petition against Council initiated improvement projects, it will still not prevent property owners from petitioning against Council initiated public improvements utilizing special assessments as a funding source.

On August 14^th the Public Works Committee reviewed the draft Special Assessment Policy but since Chairperson Backous and Councilmember Kuzma were absent Staff was directed to bring the draft Policy back at a later date for the full Committee to weigh in on.  However, several comments were from the Committee members in attendance as follows.  If MSA funds are applicable they should be applied to the City’s share of the project costs, City Staff needs to ensure there are no conflicts between the Policy and the City Charter, and the Policy should provide as much flexibility as possible in considering existing property sizes, shapes, development status (developed vs. undeveloped), etc.
 
Attached is the draft Special Assessment Policy as reviewed by the Committee on August 14^th.  Text highlighted in yellow will require revisions based on existing Charter provisions and/or input from the Public Works Committee.  Staff also proposes to delete all text in red strikethrough format, and blue underlined text is new language as proposed by Staff.  The draft Policy is based on the model Special Assessments Policy prepared by Ehlers and Associates, Inc. as posted on the League of Minnesota Cities (LMC) web site.  The model Policy has been amended to address special considerations relevant to the City of Ramsey. A list of these considerations is included below. Should the Public Works Committee consider any of these considerations to be irrelevant or unnecessary they can be deleted from the draft Policy. Conversely, additional considerations can be added to the draft Policy per direction from the Committee.

The following considerations are addressed in the attached draft Special Assessments Policy.
 

• Subgrade corrections
• Rural to urban street conversions
• Double fronting properties
• Corner properties
• Property classification/zoning
• Property size/density (large lot vs. small lot)
• Property shape/configuration
• Front footage versus per unit rate application

Staff requests Committee direction on whether any of these considerations should be deleted from the list, or whether more should be added.  Staff is also seeking direction at this time on which assessment method is preferred for residential properties versus commercial and industrial properties. For example, commercial and industrial properties often vary greatly in size and shape so most cities use a front footage method for assessing improvements against commercial and industrial properties, whereas residential properties are most often assessed based on per unit or area method.

As previously discussed, special assessments at the minimum rate of 20% for street reconstruction projects may exceed $10,000 on larger properties, particularly on properties an acre in area or greater, of which there are many. This is significantly more than property owners in the City of Ramsey have been assessed in the past for seal-coat and overlay projects, which have generally been $2,000 or less for residential properties and $7,000 or less for commercial/industrial properties.

Per Public Works Committee direction on May 20^th, Staff obtained assessment policies from numerous cities that apply special assessments to fund public improvement projects. Attached are copies of assessment policies from Andover, Blaine and Champlin.  These contain many of the same considerations included in the attached draft Policy.  Assessment policies from numerous other cities will also be available for review at the meeting. Attached for reference is a tabulation of pertinent information from other cities assessment policies.

Staff has completed a cursory review of the attached draft Policy as related to potential conflicts with City Charter language.  When the Public Works Committee feels a solid draft Policy has been prepared, the City Attorney will be asked to review it to ensure there are no conflicts between the draft Policy and the City Charter, in addition to other matters of policy.

Also attached is a Special Assessments Guide developed and distributed by LMC. This guide defines special assessments, discusses a cities authority to levy special assessments for certain improvements and the process that must be followed, and provides other relevant information and web site links that can assist in developing the City of Ramsey’s Special Assessment Policy.

Also attached is Appendix B as prepared for the January 19, 2010 Public Works Committee case. This attachment lists the Street Maintenance Program assessment practices used at the time and references some of the dates those practices were effective.

Once formal direction is received on the percentage of costs to be specially assessed for future street reconstruction projects, Staff will finalize the Garnet Street/168^th Avenue Feasibility Report since this project is included in the CIP for 2015 construction.  The Andrie Street/164^th Lane Feasibility Report will be finalized at a later date as this project is included in the CIP for construction in 2016, which fits nicely with Elk River’s proposed reconstruction of Jarvis Street in 2015.

The draft Policy is being developed in-house as part of Staff's normal duties.  The City Attorney will need to review the draft Policy one or more times prior to adoption, particularly to ensure it does not conflict with any City Charter provisions. And depending on whether additional research is requested by the Public Works Committee and/or the City Council, some assistance from consultants may be required before finalizing the policy, though this is not anticipated.  Costs for the City Attorney to review the Policy will be paid from the general budget.