PUBLIC HEARING: Adopt Resolution #20-229 Adopting Assessment Roll Certifying Assessments for Improvement Project #20-04, Puma Street Improvements

Purpose:
The purpose of this case is to conduct the required Assessment Hearing and adopt Resolution #20-229 adopting the final assessment roll certifying assessments for Improvement Project #20-04, Puma Street Improvements.   
 
Background:
The improvements proposed with this project are the last in a series of improvement projects providing street, trail and trunk utility improvements to serve numerous commercial and residential developments in the general area. 
 
Original Conditions
In 2006, Bunker Lake Boulevard was improved west of Armstrong Boulevard. The easterly 2,650 feet was constructed with trunk 18-inch polyvinyl chloride (PVC) sanitary sewer and 16-inch ductile iron pipe (DIP) watermain under a permanent bituminous pavement section. The westerly 1,400 feet of Bunker Lake Boulevard to Puma Street, as well as all of Puma Street between Bunker Lake Boulevard and Alpine Drive, was constructed without trunk utilities and only a temporary pavement section generally consisting of 3 inches of aggregate base under 2 inches of bituminous pavement. Based on future demand, trunk utilities were ultimately proposed to be extended to and along Puma Street, after which the temporary pavement sections would be replaced with permanent pavement sections.

In the fall of 2017, approximately 1,400 linear feet of municipal trunk utility extension improvements were constructed along the west end of Bunker Lake Boulevard, east of Puma Street. These trunk utilities were required to serve portions of the new Riverstone residential development west of Puma Street, as well as a portion of the new Bunker Lake Industrial Park development south of Bunker Lake Boulevard.

In late 2017 through early 2018, trunk utility improvements were extended along Puma Street, north of Bunker Lake Boulevard. These utility improvements were required to serve a majority of the Riverstone residential development, future commercial and residential development east of Puma Street, plus some undeveloped land in the Northfork development, west of the Riverstone development. These developments are designated as municipal urban service areas (MUSA) thereby requiring service by City sewer and water.

In the summer/fall of 2018, permanent street and trail improvements were constructed on the sections of Bunker Lake Boulevard and Puma Street where trunk utility improvements were previously constructed.


Completed Improvements
The proposed Puma Street Improvements are being driven by two proposed residential developments abutting Puma Street south of Alpine Drive, including 40.06 acres of the Riverstone (Capstone Homes) development west of Puma Street, and 30.50 acres of Alpha Development (AKM Farms/Paxmar) east of Puma Street. Figures showing the location and scope of both the Alpha Development and Riverstone residential developments are attached.

In the spring of 2020, Capstone Homes began development of the 4^th Addition of the Riverstone residential development, west of Puma Street. There are currently no plans to begin construction of Alpha Development, east of Puma Street.

Streets and Trails
Approximately 1,000 feet of Puma Street and the adjacent regional trail south of Alpine Drive were realigned and reconstructed to replace the existing temporary street section with a permanent street section including bituminous pavement, concrete curb and gutter, storm sewer, and associated appurtenant improvements.

All street, storm sewer and trail improvements meet all applicable State Aid standards including curb and gutter design, pavement structural capacity, horizontal and vertical curves, lane and shoulder widths, and clear zones. Puma Street meets a 9-ton all-weather pavement design.

Trunk Watermain
Trunk 16-inch ductile iron pipe watermain was extended north along Puma Street to Alpine Drive to serve the Riverstone and Alpha Development residential developments with water, and to ultimately provide a looped watermain system along Puma Street and Alpine Drive.  Looped watermain will more reliably serve properties in the area, provide better fire flows, and provide better water quality by removing a dead end. Alpine Drive is scheduled to be reconstructed in 2025 per the City’s current Capital Improvement Program (CIP).  At that time, trunk watermain will be extended along Alpine Drive to connect the existing trunk watermain running parallel to Armstrong Boulevard to the watermain installed under Puma Street with this project.

Trunk Sanitary Sewer
Trunk 8-inch poly-vinyl chloride sanitary sewer was extended north along Puma Street to serve the Riverstone and Alpha Development residential developments with sanitary sewer. The sewer is not designed to serve properties north of Alpine Drive with municipal sewer. Those properties can be served in the future, if needed, from a proposed trunk sewer line along Armstrong Boulevard.

Storm Sewer
The Puma Street improvements included construction of a permanent urban street section with concrete curb and gutter and storm sewer improvements, including connections to an adjacent stormwater pond in the Riverstone development.
 
Public Comment
AKM Farms/Paxmar has shared via email that they do not generally support being assessed at this time, but no formal objections have been received to date. Should any formal public comments be received prior to the Assessment Hearing these comments will be shared with the City Council before the Assessment Hearing is opened.  
 

Notice for this Assessment Hearing was published in the City’s official newspaper, the Anoka Union Herald, on Friday, September 25, 2020.  Assessment Hearing Notices were also mailed to the two benefiting property owners as required by Minnesota Statute Chapter 429.  A copy of Statute 429 is attached to this case, as are copies of the notices mailed to the benefiting property owners.
 
Anoka County requires that assessments be certified to the County Auditor by November 16, 2020 for collection on next year’s (2021) taxes.  Property owners must therefore prepay their special assessments in full by November 16, 2020 to avoid paying interest.   

Observations:
Construction of this project is substantially complete.  Only punch list work remains, which will be completed next year. As is standard practice on street improvement projects, the City does not issue final payment to the contractor until the following year so punch list work can be completed to the satisfaction of the City and abutting property owners, which often includes turf establishment work thereby requiring the work to be completed during the following year’s growing season. 
 
Alternatives:
Alternative #1 – Adopt Resolution #20-229 adopting the final assessment roll certifying assessments for Improvement Project #20-04, Puma Street Improvements.

Alternative #2 – Deny adoption of Resolution #20-229 at this time.  
 

Project Costs
The preliminary cost estimate for the Puma Street improvements per the Feasibility Report was $990,000.  Preliminary assessments were adopted by the City Council on March 24, 2020, in the amounts of $283,015.00 for Capstone Homes, and $222,025.00 for Paxmar.
 
On June 23, 2020, the City Council accepted bids and awarded a contract to Douglas-Kerr Underground, L.L.C. of Mora, Minnesota, per their low bid of $622,062.11.  Total project costs include construction costs plus 25% indirect costs for administrative, engineering, finance, and legal costs, which resulted in a contract project cost of $777,577.64.
 
As noted earlier, at the time this report was prepared construction was substantially complete with only punch list work remaining. Even though final payment has not been issued, final construction costs are assumed to be known at this time.  These costs were used to calculate final assessment amounts before publishing and mailing Assessment Hearing notices.
 
The final construction cost has been calculated at $636,586.19, resulting in a final project cost of $795,732.74.  This is 2.33% more than the contract project cost and is primarily attributable to quantity increases for unanticipated utility improvements and minor paving cost overruns.
 
Based on final project costs, final assessments are proposed in the amounts of $184,818.90 for Capstone Homes, and $140,733.65 for AKM Farms/Paxmar.  These proposed final assessment amounts are identified in the Assessment Hearing notices mailed to the benefiting property owners, which are attached for reference.
 
The adopted preliminary assessments and the proposed final assessments are tabulated below for comparison. 
 
Property Owner              Adopted Prelim. Assessment           Proposed Final Assessment
Capstone (Riverstone)              $ 283,015.00                                $ 184,818.90
Paxmar (AKM Farm)               $ 222,025.00                                $ 140,733.65
 
Funding Sources
This project is being funded in part by the City, in part by Capstone Homes (Riverstone), and in part by AKM Farms/Paxmar (Alpha Development), using a combination of special assessments, Anoka County Redevelopment Authority funds as authorized pursuant to Resolution #20-141, utility enterprise funds, and stormwater funds.
 
The City is contributing to the project costs for two reasons.  First, the City owned 4 acres of real property fronting Puma Street.  Second, Puma Street is a collector street on our Municipal State Aid System, which benefits more than the immediate area.
 
Special Assessments
The final assessment roll is included in the attached assessment calculations spreadsheet and below.
 

Final Assessment Roll
Property/Party	Net Acreage	Percentage	Assessment Amount
Paxmar/AKM Farms (Outlot A, Alpha Development)	30.50	41.5%	$140,733.64
City (Outlot B, Alpha Development 2nd Addition)	2.91	4.0%	$13,564.69
Capstone/Riverstone (Outlot H, Riverstone = 38.97 Acres + Outlot A, Alpha Development 2nd Addition = 1.09 Acres)	40.06	54.5%	$184,818.88
Total	73.47	100.0%	$339,117.21

 
Capstone Homes requested that the City assess them for all project costs benefitting their property. However, AKM Farms/Paxmar is generally not supportive of being assessed at this time for these improvements. The Chapter 429 assessment process is therefore being followed, which requires an Assessment Hearing and publishing and mailing the hearing notices.  Copies of the City’s Special Assessments Policy, State Statute Chapter 429, and Chapter 8 of the City Charter are attached for reference.
 
Over the last five years, special benefit consultation reports have typically been prepared for street reconstruction projects, with the results of these reports being used to defend final assessment amounts. Each report generally costs $6,500 and is accounted for as an indirect project cost. A special benefit consultation report was prepared for this project since the Chapter 429 assessment process is being followed, and since this year’s assessments are being levied against large lot undeveloped parcels so the results from past reports are not directly applicable to this project. The table below shows the range of indicated special benefit to benefiting properties per the report completed for this project.
 

Property	Gross Land Size	Resulting Indicated Range of Special Benefit
Northfork Meadows East of Puma Drive	30.50 AC	$240,000	to	$334,000
City Property East of Puma Drive	4.10 AC	$38,500	to	$50,500
Riverstone 4th Addition West of Puma Drive	38.97 AC	$467,000	to	$618,000

 
Anoka County Redevelopment Authority Funds
The City’s share of street and trail project costs are being funded from Anoka County Redevelopment Authority (ACHRA) funds.
 
Utility Enterprise Funds
Trunk utility project costs are being paid from City sewer and water funds. The developer’s share of trunk utility costs will be recovered through trunk fees at the time of development.
 
Stormwater Funds
Storm sewer project costs are being paid from stormwater funds. 

Staff recommends adopting Resolution #20-229 adopting the final assessment roll certifying assessments for Improvement Project #20-04, Puma Street Improvements.  

Adopt Resolution #20-229 adopting the final assessment roll certifying assessments for Improvement Project #20-04, Puma Street Improvements.