Public Hearing - Adopt Resolution #15-10-253 Adopting Assessment Roll Certifying Garnet Street and 168th Avenue Reconstruction Assessments; Improvement Project #13-10

Purpose:
The purpose of this case is to adopt Resolution #15-10-253 adopting the assessment roll certifying Garnet Street and 168th Avenue Reconstruction assessments; Improvement Project 13-10.

Background:
City of Ramsey Improvement Project 13-10 involves reconstructing two paved street segments including Garnet Street between 167th Street and the north plat line of Now & Then Estates, and 168th Avenue between Garnet Street and the west plat line of Now & Then Estates. The reconstructed segment of Garnet Street measures approximately 1,350 feet in length, and the reconstructed segment of 168^th Avenue NW west of Garnet Street measures approximately 670 feet in length. The total length of these two street segments is approximately 2,020 linear feet, or 0.38 miles. A map showing the location and scope of both streets is attached as Figure 1.

Existing Conditions
Both streets were constructed in 1988 using bituminous pavement and curbing. The existing soils in this area are predominantly a mixture of silty sands and clays which do not provide good structural support for pavements. No storm sewer or public utilities exist under the streets, except at the north and south ends of Garnet Street where trunk water and sanitary sewer stubs exist, and a storm sewer culvert that exists under Garnet Street just north of 168^th Avenue. Both streets received one sealcoat application in 2006. Both streets are relatively flat so they are not able to efficiently shed stormwater runoff, resulting in stormwater runoff pooling on the pavement for extended periods of time which strips oil from the pavement leading to accelerated pavement degradation.

Both streets had a Pavement and Surface Evaluation Rating (PASER) of 1 ranking them as two of the worst streets in the City in terms of pavement condition. In fact, several areas of Garnet Street were missing bituminous pavement and were maintained as an aggregate surface.

Proposed Improvements
Subgrade corrections were completed along both streets to provide a uniform, stable subgrade base to ensure the new pavement sections can achieve a 60-year design life with regular, cost-effective maintenance.  The subgrade corrections consisted of excavating 3-feet of unsuitable subgrade materials and backfilling the voids with clean imported select granular borrow.

Both streets were reconstructed to match the existing width of 31-feet from back-of-curb to back-of-curb.  Concrete curb and gutter and storm sewer were added to both streets to better facilitate drainage and to protect the edges of the new pavement.  Six-foot wide concrete sidewalks are being constructed within City right-of-ways along the east side of Garnet Street and the north side of 168^th Avenue.  The new sidewalk will connect the existing 6-foot concrete sidewalk east of Garnet Street between the dead-end sidewalk stub south of 169^th Lane and the existing concrete sidewalk north of 167^th Avenue, as well as to the new sidewalk constructed with Brookfield 6^th Addition this year.  The new sidewalks will all connect to the regional bituminous trail west of CSAH 5, closing a significant gap in the existing pedestrian facilities in this developing area.
 
Public utilities were also constructed with this project including 8-inch DIP watermain under Garnet Street and 168^th Avenue with 1” copper water service lines extended into each property, and 8-inch PVC trunk gravity sanitary sewer with 4” PVC sewer service lines extended into each property.


Preliminary Assessments
The City’s adopted Special Assessments Policy targets special assessments amounting to 25% of eligible street reconstruction project costs.  However, the 12 benefiting residential properties abutting the improved streets all have large lot sizes (2+ acres) and property frontages (200+ linear feet) so the preliminary special assessments were approved at an amount much less than 25% of eligible street reconstruction project costs.  Staff received input from certified real estate appraisers who were subsequently retained to complete a special benefit consultation report with Council approval.  The appraisers recommended targeting an assessment rate less than $7,000.  The assessment rate was therefore preliminarily approved at a flat rate of $6,500 per each property accessing an improved street, regardless of property location, size, length of frontage, or number of accesses.
 
Per the City’s adopted Special Assessments Policy, the costs to correct unsuitable subgrade soils, construct new sidewalks, and construct public utilities, are not eligible special assessment costs.  These costs must therefore be paid with City funds.
 
Public Comment
A Public Information Meeting was conducted for this project on January 29, 2015.  Property owners from 7 of the 12 assessable properties attended the meeting.  The general consensus at the meeting was that this project was long overdue.  Most questions pertained to the installation of public utilities including whether services would be stubbed to each property, whether property owners would be assessed for them, and what impacts they might have on a property owner’s ability to subdivide their parcel.  Other questions pertained to the intent of the proposed sidewalk, and whether property owners would be assessed for them and/or required to maintain them. Any questions not addressed at the meeting were followed up on afterwards by providing additional or updated information via email, by meeting with the property owner at City Hall, or by visiting the property owner on site to discuss their concerns.
 
An Improvement Hearing was held for this project on February 10, 2015.  No comments were received at the hearing.

Notice for this hearing was published once in the City’s official newspaper, the Anoka Union Herald, on Friday, September 25^th.  Individual notices of the hearing were also mailed to property owners proposed to be assessed for the improvements.  Attached is a copy of the Assessment Hearing Notice that was mailed to residents on September 25^th, which exceeded the 2 week notice requirement as defined by State statute.

Observations:
Construction is not yet complete but the project will be substantially complete within the next few weeks.  However, since the vast majority of work is complete and because the remaining work is easily quantifiable, Staff is confident the final construction costs will be very close to the project bid price of $823,126.51.  Final project costs will be presented in detail at the time that Council is requested to approve final payment, but this will not occur until next spring as time is needed to verify that turf establishment was completed properly, and to allow approval of all punch list work items following final inspection in the spring.
 
Proposed Assessments
The 12 benefiting residential properties are proposed to be assessed using the preliminarily approved assessment rate of $6,500 per property accessing improved streets, resulting in a total assessment of $78,000.  The proposed interest rate for special assessments is 4.16%, and assessments are proposed to carry a 10 year term.  The attached hearing notice includes a schedule of payment showing annual payments including principal and interest. Also attached are assessment rolls and maps showing the locations of the 12 properties proposed to be assessed.
 
As the City continues to implement the long-term street maintenance program, including annual street reconstruction projects, Staff will continue to define reasonable assessment amounts for street reconstruction projects.  Based on the findings of the special benefit consultation report, which is not attached per the request of the appraisal firm that completed the report, it is anticipated that properties benefiting from the improvements and proposed to be assessed will be enhanced in value by approximately $23,000 to $26,000 per property.  While a significant difference exists between the proposed special assessment amount and the anticipated property value enhancement identified in the special benefit consultation report, it should be noted that a significant portion of the benefit noted in the special benefit consultation report is due to benefit received from the availability of public utilities.  Though the availability of utilities does add significant value to a property, given the City Charter’s restriction on requiring property owners to connect to utilities such benefit would only be realized at the time a property owner chooses to connect to the utilities.  At that time, trunk and lateral fees will be collected by the City thereby recovering much of the enhanced value not being collected with special assessments as part of this project.  For reference, sewer and water trunk and lateral connection fees for a typical property in this area currently amounts to approximately $12,500.
 
Based on the findings of the special benefit consultation report for this project, Staff will likely recommend increasing residential assessment rates on future street reconstruction projects slightly.  However, this will be explored in greater detail within the Feasibility Report for each future street reconstruction project since assessment rates are project specific based on proposed improvements.
 
No assessment deferrals have been requested, or are being proposed with this project.
 
No assessments are proposed to any of the Feldspar Street properties for the permanent cul-de-sac improvements that were completed as part of this project under alternative bid #1.
 
Public Comment
At the time this report was written, no additional comments regarding special assessments were received following the February public hearing.
 
Anoka County requires that assessments be certified to the County Auditor by the end of November for collection on next year’s taxes.  This deadline will be met by conducting the Assessment Hearing this evening.
 
Alternatives:
Alternative Action #1 – Motion to adopt Resolution #15-10-253 adopting the assessment roll certifying Garnet Street and 168th Avenue Reconstruction assessments; Improvement Project 13-10.

Alternative Action #2 – Motion to deny adoption of Resolution #15-10-253 at this time.

This improvement project is included in the City’s 5-year Capital Improvement Plan for construction in 2015 and is proposed to be funded using a combination of street reconstruction and overlay bond funds, special assessments to benefiting properties, and sewer, water and stormwater funds.  Estimated funding splits based on bid prices are shown below.  Please note that indirect costs for administration, engineering, legal, and finance, which are estimated at 25% of final construction costs, are excluded from these costs.
 
 

• Special Assessments               = $  78,000.00
• Street Reconstruction Bonds  = $ 405,586.41
• Sanitary Sewer Funds             = $ 118,033.41
• Watermain Funds                    = $ 155,232.84
• Stormwater Funds                   = $   66,273.85

                  Total Bid Costs   = $ 823,126.51


 

Staff recommends Council approval of alternative action #1.

Approve or deny adoption of Resolution #15-10-253 adopting the assessment roll certifying Garnet Street and 168th Avenue Reconstruction assessments; Improvement Project 13-10.