Adopt Resolution #20-141 Authorizing Use of Anoka County Housing and Redevelopment Authority Funds for Puma Street Improvements, Improvement Project #20-04

Purpose:
The purpose of this case is to adopt Resolution #20-141 authorizing the use of Anoka County Housing and Redevelopment Authority Funds for Puma Street Improvements, Improvement Project #20-04.

Background:
The proposed Puma Street Improvements will support two residential developments that will access Puma Street, south of Alpine Drive.  The two developments include Alpha Development by Paxmar/AKM Farms on the east side of Puma Street, and Riverstone 4th Addition by Capstone Homes on the west side.  On June 23, 2020, bids were accepted and a Contract for construction was awarded to Douglas-Kerr Underground, L.L.C. in the amount of $622,062.11 for the Puma Street Improvements, Improvement Project #20-04.
 
The improvements generally consist of reconstructing the northerly 1,050 feet of Puma Street and the adjacent regional trail south of Alpine Drive, including a realignment of Puma Street to align with Okapi Street north of Alpine Drive.  The existing temporary pavement section will be replaced with a permanent street section including a 9-ton bituminous pavement section, concrete curb and gutter, storm sewer, and associated appurtenant improvements.  Trunk sanitary sewer and watermain will also be extended under Puma Street, allowing these developments to be served by municipal utilities. 

Notifications are not required for this case. 

Alternative #1 – Motion to adopt Resolution #20-141 authorizing Staff to request $490,000 in Anoka County Housing and Redevelopment Authority funds for street and trail project costs for Puma Street Improvements, Improvement Project #20-04. 

Douglas-Kerr Underground, L.L.C. was the lowest responsible bidder and was awarded the Contract for construction for the Puma Street Improvements in the amount of $622,062.11.  Adding indirect costs in the amount of 25-percent for administrative, engineering, finance and legal costs results in total project costs of $777,577.64.
 
Project costs are proposed to be funded in part by the City, and in part by two developers, Capstone Homes and Paxmar/AKM Farms.  The proposed cost contributions for each party are outlined in the attached spreadsheet. These costs are based on the low bid.
 
The City is proposed to contribute $19,268.77 for the 4.10 net acres of real property it owns fronting Puma Street, plus another $143,100 since Puma Street is a collector street on the City’s Municipal State Aid Street system and therefore provides regional public benefit.  The City’s total contribution is therefore proposed to be $162,368.77.
 
It is proposed that Capstone Homes contribute $182,021.01 for the 38.97 net acres of real property they own fronting Puma Street.
 
It is proposed that Paxmar/AKM Farms contribute $142,795.31 for the 30.50 acres of real property they own fronting Puma Street.
 
Capstone Homes has requested that the City assess them for the share of project costs benefiting their property. Conversely, Paxmar/AKM Farms does not support being assessed at this time so the Chapter 429 assessment process must be followed, including the Assessment Hearing on October 13, 2020.  However, since assessments will not be paid in advance and will instead be paid over time, the City must fund all of the improvements up front. This will include project costs for trunk municipal utilities construction, which total $290,392.55 based on the low bid, as well as project costs for street and trail construction, which total $487,185.09 based on the low bid.  Since these costs may change based on actual construction costs Staff recommends requesting $490,000 in ACHRA funds.
 
Trunk municipal utilities project costs will be paid through City sewer and water funds. The developer’s share of these costs will be recovered through development trunk fees.
 
Funding sources available to the City to pay for street and trail project costs include Anoka County Redevelopment Authority (ACHRA) funds, Public Improvement Revolving (PIR) funds, and Municipal State Aid (MSA) funds. Staff proposes to use ACHRA funds since MSA funds will be in high demand to cover future MSA street overlay and reconstruction project costs plus eligible improvements along Highway 10, and PIR funds are identified as a funding source for numerous Capital Improvement Plan improvements. According to Anoka County the City’s current ACHRA fund balance is $1,401,903.59 (not including first half 2020 property tax settlement), which is sufficient to cover the street and trail project costs.
 
Staff is working with Capstone to finalize their assessment payment plan.  The assessment payment plan for Paxmar/AKM Farms will be formalized at the time they develop their property.  The details of all assessment payments will be discussed at the Assessment Hearing on Tuesday, October 13, 2020. 

Staff recommends alternative #1 to support current and continued development in the area.

Motion to adopt Resolution #20-141 authorizing Staff to request $490,000 in Anoka County Housing and Redevelopment Authority funds for street and trail project costs for Puma Street Improvements, Improvement Project #20-04.