Adopt Resolution #15-08-193 Approving Assessment Agreement for Ridgepoint Residential Development Improvements, Improvement Project #15-21

Purpose:
The purpose of this case is to approve the attached Assessment Agreement providing for repayment of 100% of City funds used to construct the proposed Ridgepoint seven (7) unit single-family residential development improvements, Improvement Project #15-21.

Background:
Village Bank owns the real property upon which the Ridgepoint seven (7) unit single-family residential development is proposed to be constructed, and has requested that the City of Ramsey construct the required stage 1 and stage 2 improvements for the Ridgepoint development and assess all costs back to them over a period of three (3) years per the attached draft Assessment Agreement.  Village Bank is not comfortable funding construction of the required improvements themselves due to certain regulatory language that prohibits banks from speculating in real estate.  On May 26, 2015, the City Council reviewed and approved a draft Assessment Agreement, which did not yet include specific costs since the project had not yet been bid.
 
Village Bank utilized the engineering consulting firm of Hakanson Anderson to complete the final design and to prepare plans and specifications for the proposed improvements. Council approved final plans and specifications and authorized bids on May 26, 2015.  Bids were opened on July 1, 2015, and cannot be withdrawn for a period of 60 days.  The lowest bid received was $544,925.55 which was approximately 15% higher than the engineer’s estimate of $482,222.
 
The attached Assessment Agreement prorates the lowest bid price for the proposed improvements across each of the seven residential properties based on property size.  The attached Assessment Agreement incorporates 10% contingency costs to help ensure the assessments will cover the actual construction costs.

The City of Anoka will pay up to $130,000 to the City of Ramsey for constructing public utilities (sanitary sewer and watermain) through the Ridgepoint development per the approved Joint Powers Agreement.  These costs are therefore not included in the attached Assessment Agreement.

On May 19th the Public Works Committee reviewed the draft Assessment Agreement with representatives from Village Bank and unanimously voted to recommend Council approval of the draft agreement.  The attached Assessment Agreement includes all revisions as previously requested by the Public Works Committee and the City Council.

Observations:
In addition to assessing the property owner for the improvement construction costs, assessments will be levied for City staff time required to administer and inspect construction which is estimated at 5.5% of construction costs, and for construction testing which is estimated at 2% of construction costs.
 
The contractor who submitted the lowest bid believes they can complete construction in 2015 if the City Council also awards a contract for construction later this evening.

Alternatives:
Alternative #1 – Motion to adopt Resolution #15-08-193 approving the attached Assessment Agreement for Ridgepoint Residential Development Improvements, Improvement Project 15-21.

Alternative #2 – Motion to deny adoption of Resolution #15-08-193 at this time.