PUBLIC HEARING: Adopt Resolution #18-215 Adopting Assessment Roll Certifying Assessments for Improvement Project #18-03, 2018 Street Overlay Improvements

Purpose:
The purpose of this case is to adopt Resolution #18-215 adopting the final assessment roll certifying assessments for Improvement Project #18-03, 2018 Street Overlay Improvements.

Background:
City Improvement Project 18-03 completed 2-inch bituminous pavement overlay improvements to approximately 63,449 square yards of public streets within The North Forty 2nd, The North Forty 3rd, Northfork Itasca Shores, Northfork, Northfork 2nd, Northfork 3rd, Northfork Oaks, and Woodland Green residential neighborhoods, along with miscellaneous appurtenant improvements as outlined in the attached Feasibility Report.  Maps showing the scope of the improvements are included in Appendix A of the Feasibility Report.
 
Each year City staff visually inspects the pavement condition of all public streets and rates them using the Pavement and Surface Evaluation Rating (PASER) method. A numerical PASER rating between 1 and 10 is assigned to each street segment. Streets with a PASER rating of 1 are considered to need a complete reconstruct, while streets with a PASER rating of 10 are considered new pavement sections. The latest PASER rating for each
street segment that received an overlay with this project is included in the street segments
summary in Appendix B of the Feasibility Report.  Based on these PASER ratings, these street segments were determined to be reasonably good candidates for receiving overlay improvements in 2018. Staff anticipates that the overlay improvements will extend the life of the pavement sections 15 to 20 years, at which time Staff will re-evaluate the pavement sections to determine whether another overlay is appropriate, or whether reconstruction is required.

Pre-Existing Conditions
Appendix B of the Feasibility Report includes information regarding the original year of construction, lengths, widths, and maintenance history for all street segments that received an overlay in 2018.

Completed Improvements
The existing bituminous pavement sections received 2-inch bituminous pavement overlay improvements.  Adjacent existing pavement sections were milled 18-inches back to provide a smooth transition.

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 conducted a public information meeting prior to the Improvement Hearing.  Only one property owner attended and they were supportive of the project as proposed for their neighborhood (Woodland Green).  This was the only public comment received by Staff.
 
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 #18-215 adopting the final assessment roll certifying assessments for Improvement Project #18-03, 2018 Street Overlay Improvements.
 
Alternative #2 – Motion to deny adoption of Resolution #18-215 at this time.

These improvements are proposed to be funded using a combination of 2015 – 2019 Street Reconstruction and Overlay Program (SROP) bond funds, special assessments to benefiting properties, 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/or sewer and water funds.  Over the next 10 years, all special assessments collected for this project, which could total up to $143,531.60, 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 $503,622.53.  Final project costs, which include final construction costs plus 14% indirect costs to cover administrative, engineering, finance and legal costs, were used to calculate the final proposed assessments.

Final proposed assessments for this project vary by project area as follows;
 

Project Area (Development Name)	Final Per Lot Assessment	No. Lots Assessed	Total Assessment Amount
The North Forty 2nd	$856.50	15	$12,847.50
The North Forty 3rd	$1,425.20	26	$37,055.20
Northfork 2nd & 3rd	$1,395.90	18	$25,126.20
Northfork	$958.40	12	$11,500.80
Northfork Itasca Shores	$932.70	11	$10,259.70
Northfork Oaks	$750.80	11	$8,258.80
Woodland Green	$1,241.40	31	$38,483.40
Totals		124	$143,531.60

 
This project has a total of 124 benefiting properties, resulting in a total project assessment amount of $143,531.60.  Each property proposed to be assessed has its primary access onto an improved street section.  The assessment amounts preliminarily adopted by Council are shown in the attached Feasibility Report.  Attached are copies of the final assessment maps and rolls 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 in each of the project areas, assessments are proposed to be spread equally among benefiting properties in each project area 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.
 
At the time this case was published one deferral request had been received for this project.

The Special Benefit Consultation report completed for this project by the firm of Patchin Messner Dodd & Brumm anticipates that benefiting properties will be enhanced in value per project area as follows; 
 

Project Area (Development Name)	Final Per Lot Assessment	Minimum Enhanced Value	Maximum Enhanced Value
The North Forty 2nd	$856.50	$1,800	$2,000
The North Forty 3rd	$1,425.20	$1,800	$2,000
Northfork 2nd & 3rd	$1,395.90	$2,000	$2,200
Northfork	$958.40	$2,000	$2,200
Northfork Itasca Shores	$932.70	$2,200	$2,400
Northfork Oaks	$750.80	$2,200	$2,400
Woodland Green	$1,241.40	$1,800	$2,000

 
Since the proposed final assessments are less than the minimum enhanced values in each project area Staff believes the proposed final assessments are defendable.  A copy of the Special Benefit Consultation report is not attached to this case but will be available at the Assessment Hearing.

Staff recommends Alternative #1.

Motion to adopt Resolution #18-215 adopting the final assessment roll certifying assessments for Improvement Project #18-03, 2018 Street Overlay Improvements.