PUBLIC HEARING: Adopt Resolution #18-213 Adopting Assessment Roll Certifying Assessments for Improvement Project #17-02, River's Bend Street Reconstructions

Purpose:
The purpose of this case is to adopt Resolution #18-213 adopting the final assessment roll certifying assessments for Improvement Project #17-02, River's Bend Street Reconstructions.

Background:
City Improvement Project 17-02 involved reconstructing the following street segments within the River’s Bend residential neighborhood;

• 147th Lane from the west River’s Bend plat line to Waco Street,
• 148th Avenue from the west River’s Bend plat line to Xkimo Street,
• Xkimo Street between 147th Lane and 149th Avenue/Sunwood Drive, and
• Yakima Street between 148th Avenue and 149th Avenue/Sunwood Drive.

These street segments total approximately 2,774 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 River’s Bend neighborhood were constructed in 1985 with between 2 and 3½-inches of bituminous pavement, 4-inches of class 5 aggregate base, surmountable concrete curb and gutter, and concrete storm sewer. The streets were 30-
foot wide from face-of-curb to face-of-curb, and were centered within a 60-foot wide right-of-way.  The pavement was cracksealed and sealcoated in 1988 and in 1995. Spot patching
was applied on an as-needed basis since.
 
In the fall of 2016, 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 consisted of concrete catch basins and pipes, which drain runoff from the street to adjacent low-lying areas.  Based on design calculations completed by City staff, no modifications were required to the existing storm sewer system.
 
Municipal sanitary sewer and water utilities existed under many of the pavement sections.  The existing utilities were inspected and were found to be in good condition therefore no improvements were required before reconstructing the pavement.

Completed Improvements
All streets were reconstructed matching their existing widths and locations.
 
After damaged concrete curb and gutter sections were removed and replaced, 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 30-plus year design life. 
 
Storm sewer castings were reset after replacing adjusting rings and grouting the insides of the catch basins.
 
Municipal sanitary sewer and water utility castings were adjusted and reset.

Notice for this Assessment Hearing was published in the City’s official newspaper, the Anoka Union Herald, on Friday, September 21, 2018.  Assessment Hearing Notices were also mailed to all property owners proposed to be assessed for the improvements as required per Minnesota State Statute Chapter 429.  Attached is a copy of the Assessment Hearing Notice as mailed to benefiting property owners.
 
Anoka County requires that assessments be certified to the County Auditor by November 16, 2018 for collection on 2019 taxes. This deadline will be met by conducting the Assessment Hearing at the October 9th City Council meeting.

Observations:
Public Comment
Staff met with several benefiting property owners prior to construction to discuss the improvements and their preliminary assessments.  Most generally understood the need for the improvements, and a few questioned the use of special assessments to help pay for the improvements.
 
Staff met with numerous property owners during construction to coordinate construction of various improvements adjacent to or otherwise affecting the use of their properties.
 
Before this case was published, no formal comments or objections regarding final proposed assessments had been received by Staff.  If any formal comments or objections are received after this case is published, Staff will share this information with Council prior to the Public Hearing.
 
Alternatives:
Alternative #1 – Motion to adopt Resolution #18-213 adopting the final assessment roll certifying assessments for Improvement Project #17-02, River's Bend Street Reconstructions.
 
Alternative #2 – Motion to deny adoption of Resolution #18-213 at this time.

Funding sources for this project include a combination of Street Reconstruction and Overlay Program (SROP) bond funds, special assessments to benefiting properties, some stormwater utility funds, and a small amount of sewer and water funds.  A more detailed cost accounting will be presented prior to the Assessment Hearing.
 
Street Reconstruction and Overlay Program (SROP) bond funds
These bond funds will initially pay for all project costs not covered by stormwater utility funds and sewer and water funds.  Over the next 10 years, all special assessments collected for this project, which could total up to $61,454.80, will be applied to offset a portion of the bond payments.
 
Special Assessments
Construction of this project is complete, and the Contractor and City project inspector have agreed upon final construction costs in the amount of $199,853.23.  Final project costs, which include final construction costs plus 23% indirect costs to cover administrative (6%), engineering (15%), finance (1%), and legal (1%) costs, were used to calculate the final proposed assessments.

The final proposed assessment amount for this project is $1,396.70 per each of the forty-four (44) benefiting properties, resulting in a total project assessment of $61,454.80.  Each of the properties proposed to be assessed has their primary access onto an improved street section.  The preliminarily assessment amount adopted by Council as found in the attached Feasibility Report was $1,714.42 per benefiting property.  Attached are copies of the final assessment map and roll for this project.
 
The City’s Special Assessments Policy calls for special assessments to recover 25% of eligible street reconstruction and overlay improvement costs. On this project, all project costs are eligible for assessments.  The final assessments as proposed recover 25% of eligible project 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.

The City’s Special Assessments Policy identifies three optional methods for calculating assessments; adjusted front footage, area, and per lot. Because each assessable property generally received the same benefit from the project improvements, assessments are proposed to be spread equally among benefiting properties using the “per lot” method.
 
The proposed final assessments conform to the requirements set forth in Minnesota Statutes Chapter 429, Chapter 8 of the City Charter, applicable City code, and the City’s adopted Special Assessments Policy.  Attached are copies of Minnesota Statutes Chapter 429, the City’s adopted Special Assessments Policy, and Chapter 8 of the City Charter that provides additional controls on the use of special assessments for public improvements within the City of Ramsey.
 
Final assessments for this project are proposed to carry a 10-year term at an interest rate of 5.22%.  A schedule of payments showing annual payments including principal and interest is included on page 3 of the attached Assessment Hearing Notice.
 
No assessment deferral requests were received for this project.

The Special Benefit Consultation report completed for this project by the firm of Patchin Messner Dodd & Brumm anticipates that all benefiting properties will be enhanced in value between $7,000 and $7,500 per property.  A copy of the report is not attached to this case but will be available at the Assessment Hearing.

Staff recommends Alternative #1.

Motion to adopt Resolution #18-213 adopting the final assessment roll certifying assessments for Improvement Project #17-02, River's Bend Street Reconstructions.