Adopt Resolution #16-03-058 Accepting Feasibility Report and Ordering Public Hearing for Improvement Project #16-00, Division B; 2016 Mill and Overlay Improvements

Purpose:
The purpose of this case is to consider adopting Resolution #16-03-058 accepting the Feasibility Report and ordering a Public Hearing for Improvement Project #16-00, Division B; 2016 Mill and Overlay Improvements, to be conducted at the next regular meeting of the City Council scheduled for 7 pm on April 12^th, 2016.

Background:
City Improvement Project 16-00 Division B proposes to mill and overlay 2 inches of bituminous pavement on Sunwood Drive between Sunfish Lake Boulevard and the bridge east of 147th Lane and west of Krypton Street, along with other necessary appurtenant improvements as outlined in the attached Feasibility Report.  This segment of Sunwood Drive is generally located in the southeast portion of the City as shown in Exhibit 1 of Appendix A of the attached report.  Appendix A also includes a proposed improvements map showing a more detailed scope of the proposed improvements.
 
City staff typically rates the pavement sections of all city streets annually using the Pavement and Surface Evaluation Rating (PASER) system.  Current PASER ratings for this segment of Sunwood Drive include a rating of 4 for the segment between Sunfish Lake Boulevard and 145^th Lane, and a rating of 5 for the segment from 145^th Lane to the bridge.  This information is shown in the street segments summary in Appendix B of the attached report.  Overlay improvements are typically proposed for streets having PASER ratings of 3, 4, or 5.
 
On February 8th, 2016, the Ramsey City Council ordered the attached feasibility report to explore the necessity, feasibility and cost-effectiveness of the proposed mill and overlay improvements by examining the scope of the improvements, exploring estimated costs and available funding sources, defining a preliminary project schedule, and determining whether the improvements should be completed as proposed or in connection with another improvement.
 
The engineer’s opinion of probable costs for this project is $301,000.  Estimated costs include 5% contingency costs, plus 14% indirect costs for administrative, engineering, finance and legal costs.  The improvements proposed with this project are identified in the City’s current 5-year Capital Improvement Program, and can be funded using a combination of General Obligation Street Reconstruction and Overlay Plan bond funds, special assessments to benefiting properties, and utility enterprise funds.  Appendix C in the attached report includes a preliminary assessment roll and map showing three properties proposed to be specially assessed $950 each for eligible improvement costs.  The City would therefore be responsible for funding the remaining improvement costs, estimated at $298,150.
 
The proposed improvements are necessary, feasible, and cost-effective from an engineering standpoint, and can be constructed as proposed in the attached Feasibility Report.  The proposed improvements would be most cost-effectively constructed as a separate project and not in connection with other proposed improvements due to the specific nature of the improvements.

Notifications were not required for this case.

Upon approval of Resolution #16-03-058, staff will publish a Public Hearing Notice in the Anoka Union Herald on Friday, March 25th. Staff will also mail Public Hearing Notices to the three properties proposed to be assessed for the improvements.

Lastly, staff will schedule a public information meeting for April 5th and will mail meeting notices directly to properties that will be most significantly impacted by the proposed improvements, depending primarily on alternative routes of access.

Observations:
Project Evaluation / Selection
In early 2015, City staff developed a five-year (2015 through 2019) Street Reconstruction and Overlay Plan (SROP) to allow the City to secure GO bond funding for proposed street reconstruction and overlay improvements.  The plan identified two street segments as prime candidates for overlay improvements in 2016 based on their PASER ratings.  The segments included Sunwood Drive from Ramsey Boulevard to Bunker Lake Boulevard, and Sunwood Drive from Sunfish Lake Boulevard to Krypton Street/Court.
 
When the five-year SROP was developed it was intended to be updated annually to allow it to become an ongoing fiscal planning tool to continually anticipate future capital expenditures and funding sources.  While preparing the Feasibility Report, staff evaluated whether the two segments of Sunwood Drive identified above were still the best candidates to receive overlays in 2016, or whether other street segments in the five-year SROP would be better 2016 overlay candidates.  Upon completing the evaluation, a decision was made to delay overlaying the segment of Sunwood Drive between Ramsey Boulevard and Bunker Lake Boulevard until 2017 or later.  This decision was based on factors including available funding, impacts to adjacent properties, coordination with other proposed pavement maintenance projects, and overall cost-effectiveness of the proposed overlay improvements.  More specifically, when considering the large project costs for the 2016 street reconstruction project (Andrie Street and 164^th Lane), the fact that one of the larger businesses along Sunwood Drive is considering a building expansion project this summer, and knowing that Anoka County plans to reclaim and repave Bunker Lake Boulevard between Ramsey Boulevard and Basalt Street this summer, staff felt completing an overlay project on this segment of Sunwood Drive would put an undue burden on abutting businesses.
 
Staff continues to evaluate remaining street segments proposed to receive overlay and reconstruction improvements during the life of the five-year SROP to determine when improvements should be completed on each segment to most cost-effectively maintain the pavement sections. This information will then be communicated to the public via the City’s website and other available venues.  Staff is also evaluating the magnitude of potential impacts to adjacent properties based on the remaining projects in the five-year SROP, including financial impacts, so staff can share such information with impacted property owners as far in advance of the improvements as possible. This is particularly relevant to the segment of Sunwood Drive between Ramsey Boulevard and Bunker Lake Boulevard which abuts several large properties which could have significant assessments levied against them when an overlay project occurs.
 
Other Considerations
Bituminous trails exist along both sides in numerous locations, including pedestrian curb ramps which connect the trail to abutting streets.  As many as 20 pedestrian curb ramps exist along the proposed improvements corridor, most if not all of which are not compliant with current ADA standards.  Staff would therefore need to evaluate each ramp during preparation of plans and specifications to see if upgrades are needed to any or all of the ramps.
 
No public utility improvements are anticipated with this project, other than gate valve and structure casting adjustments.
 
Funding
The City’s Special Assessments Policy allows 25% of pavement overlay project costs to be specially assessed against benefiting properties. In addition, the City Charter and Minnesota Statutes Chapter 429 allow special assessments to be levied against benefiting properties when a Feasibility Report is prepared and accepted by the City Council in conjunction with the required Public Hearing process. The purpose of the Feasibility Report is to advise the Council in a preliminary manner as to whether the proposed improvements are necessary, cost-effective, and feasible, and as to whether the overlay improvements should be made as proposed or in connection with other improvements. The report also includes estimated costs for the recommended improvements, as well as a preliminary funding program and project schedule. Staff therefore requests that Council adopt Resolution #16-03-058 accepting the attached Feasibility Report and ordering a Public Hearing for Improvement Project #16-00, Division B, at the next regular meeting of the City Council scheduled for 7 pm on April 12^th, 2016.  

Alternatives:
Alternative Action #1 – Motion to adopt Resolution #16-03-058 accepting the Feasibility Report and ordering a Public Hearing for Improvement Project #16-00, Division B; 2016 Mill and Overlay Improvements.
 
Alternative Action #2 – Motion to deny adoption of Resolution #16-03-058 at this time.

The attached Feasibility Report was prepared in-house as part of staff’s regular duties.

The engineer’s opinion of probable costs for this project is $301,000.  Estimated costs include 5% contingency costs plus 14% indirect costs for administrative, engineering, finance and legal costs.  The proposed improvements are identified in the City’s current 5-year Capital Improvement Program, and can be funded using a combination of General Obligation Street Reconstruction and Overlay Plan bond funds, special assessments to benefiting properties, and utility enterprise funds.
 
In accordance with the City’s Special Assessments Policy, chapter 8 of the City Charter, State Statute Chapter 429, and applicable City codes, assessments are proposed to be levied against 3 properties that have direct access to the improved street segment.  Each property is proposed to be assessed based on the “per lot” method as each property will receive approximately the same benefit due to the proposed improvements.  Preliminary assessments for this project are proposed in the amount of $950 per lot, resulting in a total assessment amount of $2,850.  This is less than 1% of the total eligible project costs.  This amount is consistent with representative assessments previously levied against benefiting properties receiving similar overlay improvements.  Final assessments will be adopted by the City Council after final project costs are known and an assessment hearing is held on October 11^th, 2016.  At that time, the City Council may choose to reduce the amount of the assessments if final project costs are less than estimated costs.  Appendix C of the attached report includes a preliminary assessment roll and map.
 
The City’s contribution to the project is proposed to include all funding in excess of the amount collected through special assessments to benefiting properties, which totals $298,150.  The City’s contribution will be funded using the 5-year General Obligation Street Reconstruction and Overlay Bond funds, and utility enterprise funds can be used if any utilities infrastructure improvements are required, though none are proposed at this time other than adjustment of castings in the pavement.
 
No funds were budgeted for this project in 2016, but this improvement project is included in the City’s current 5-year Capital Improvement Plan.

Staff recommends approval of Alternative Action #1 to allow the 2016 mill and overlay improvements to be completed in a timely, cost-effective manner.

Adopt Resolution #16-02-033 ordering Feasibility Report for Improvement Project #16-00, Division B; 2016 Street Maintenance Program Overlay Improvements.