Adopt Resolution #18-187 Ordering Assessment Roll and Calling Assessment Hearing for Improvement Project #18-00, Stanhope Terrace Street Reconstructions

Purpose:
The purpose of this case is to adopt Resolution #18-187 ordering preparation of an assessment roll and calling for an Assessment Hearing at 7 p.m. on October 9, 2018 for Improvement Project #18-00, Stanhope Terrace Street Reconstructions.

Background:
City Improvement Project 18-00 involved reconstructing Ute Street, 154th Avenue, and 153rd Court within the Stanhope Terrace residential neighborhood.  These street segments total approximately 2,800 linear feet, or 0.53 miles.  A map showing the scope of the improvements is included as Figure 1 in Appendix A of the attached Feasibility Report.

Pre-Existing Conditions
These street segments in the Stanhope Terrace neighborhood were constructed in 1991. The bituminous pavement section ranged from 1.6 to 6.1 inches thick, with an average of 2.9 inches. The aggregate base section ranged from 2.1 to 10.6 inches thick, with an average of 4.9 inches. The road section was built on sandy subgrade material generally considered suitable for pavement support. The streets were constructed with bituminous curb at 29-foot wide from face-of-curb to face-of-curb. The streets are generally centered within a 66 foot wide right-of- way.  Ute Street and 154th Lane was cracksealed and sealcoated in 1996, and 153rd Court was cracksealed and sealcoated in 1998.  The street segments have regularly received spot patching on an as-needed basis.
 
In the fall of 2017, the pavement sections of the above-referenced street segments had PASER ratings of 3, meaning they were past the point of overlaying and instead required complete reconstruction.
 
The existing storm sewer system consists of catch basins along 154th Lane which drain runoff from the street to a low-lying area with storm sewer and utility easements located on the northern 75 feet of 4851 154th Lane. Stormwater runoff not collected by the catch basins is carried to Roanoke Street and collected within its storm sewer system.
 
Municipal sanitary sewer and water utilities do not exist under any of these streets.

Completed Improvements
All streets were reconstructed matching their existing widths and locations.
 
The existing bituminous curb and gutter was replaced with concrete curb and gutter.  The existing bituminous pavement sections were reconstructed using the Full Depth Reclamation (FDR) process.  This involved grinding the existing bituminous pavement with an inch or more of existing aggregate base (pavement reclamation), then placing and compacting some of the reclaimed material on top of the reshaped and compacted existing aggregate base.  Then, 2-inches of bituminous base course and 1½-inches of bituminous wear course was placed and compacted on top of the compacted reclaim material to provide a pavement section with a 7-ton structural capacity and a 60-year design life. 
 
Storm sewer castings were reset after replacing adjusting rings and grouting the insides of the catch basins.
 
Public Input
Staff met with several of the property owners prior to construction to discuss the improvements and their preliminary assessments.  Most generally understood the need for the improvements, though some of the property owners questioned the use of special assessments to help pay for the improvements.
 
Staff met with numerous other property owners during construction to coordinate construction of various improvements adjacent to or otherwise impacting the use of their properties.
 
Staff was contacted by one property owner who purchased their home after the project was awarded and was unaware of the project. Staff plans to contact this property owner directly after they receive their Hearing notice in the mail to make sure they understand the process.

Following Council approval, an Assessment Hearing Notice will be published in the City’s official newspaper on Friday, September 21st.  Assessment Hearing Notices will also be mailed to all benefiting property owners as required per State Statute.
 
Anoka County requires that assessments be certified to the County Auditor by November 16th for collection on next year’s taxes. This deadline will be met by conducting the Assessment Hearing at the October 9th City Council meeting, which will also allow adequate time for publication and mailing of Hearing notices.

Observations:
At the time this report was prepared, construction of this project was complete with only punch list item work remaining and Staff was calculating final construction costs to assist in determining final assessment amounts for use in publishing and mailing notices for the Assessment Hearing.

Alternatives:
Alternative #1 – Motion to adopt Resolution #18-187 ordering preparation of an assessment roll and calling for an Assessment Hearing at 7 p.m. on October 9, 2018 for Improvement Project #18-00, Stanhope Terrace Street Reconstructions.

The construction contract amount for this project is $303,756.46.  Street reconstruction project costs include actual construction costs plus 23% indirect costs for administrative (6%), engineering (15%), finance (1%), and legal (1%) costs.  Upon adding 23% for indirect costs, the contracted project cost would be $373,620.45.  The engineer’s estimate in the Feasibility Report was $430,934.81.
 
Staff is calculating final construction costs and believes these costs will be slightly less than the construction contract amount.  No significant quantity revisions or change orders occurred during construction.  Final project costs will be reviewed at the Assessment Hearing.
 
These improvements were included in the City’s Capital Improvement Plan for 2018 construction.  Funding sources include a combination of Street Reconstruction and Overlay Program (SROP) bond funds, special assessments to benefiting properties, and stormwater utility funds.
 
Special Assessments
The City’s Special Assessments Policy (attached) calls for special assessments to pay for 25% of eligible street reconstruction improvement costs. Special assessments are calculated using methods resulting in reasonable and equitable distribution of assessments that are uniform upon the same class of properties within the assessable area. The test for determining the validity of a special assessment is whether the improvement for which the assessment was levied has increased the market value of the property against which the assessment was levied in at least the amount of the assessment.

Ramsey’s Special Assessments Policy identifies three optional methods for calculating assessments; Adjusted Front Footage, Area, and Per Lot.  The Feasibility Report for this project identified 16 benefiting residential properties that are proposed to be assessed up to 25% of eligible project costs. On all previous residential street reconstruction projects, the Per Lot assessment method was applied so Staff recommends using the Per Lot method for this project.
 
All project costs are eligible for special assessments since streets were reconstructed to their pre-existing widths and structural capacities.  The preliminarily approved assessment amount was $6,733.36 per parcel, with total assessments amounting to $107,733.70.
 
A Special Benefit Consultation report is being prepared for this project by the property appraisal and valuation firm of Patchin Messner Dodd and Brumm.  This report will help provide proof of benefit to benefiting properties based on the completed improvements.  The results of this report, along with the final special assessment amounts as determined by final construction costs, will be discussed with the City Council and the Public during the Assessment Hearing on October 9, 2018.

Staff recommends Alternative #1.

Motion to adopt Resolution #18-187 ordering preparation of an assessment roll and calling for an Assessment Hearing at 7 p.m. on October 9, 2018 for Improvement Project #18-00, Stanhope Terrace Street Reconstructions.