PUBLIC HEARING: Adopt Resolution #18-214 Adopting Assessment Roll Certifying Assessments for Improvement Project #18-00, Stanhope Terrace Street Reconstructions

Purpose:
The purpose of this case is to adopt Resolution #18-214 adopting the final assessment roll certifying assessments 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 were 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.

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 of the 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 #18-214 adopting the final assessment roll certifying assessments for Improvement Project #18-00, Stanhope Terrace Street Reconstructions.
 
Alternative #2 – Motion to deny adoption of Resolution #18-214 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, and some stormwater utility 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 $91,364.80, 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 $297,119.28.  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 $5,710.30 per each of the sixteen (16) benefiting properties, resulting in a total project assessment of $91,364.80.  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 $6,733.36 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 $8,500 and $9,500 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 #18-214 adopting the final assessment roll certifying assessments for Improvement Project #18-00, Stanhope Terrace Street Reconstructions.