Public Hearing - Adopt Resolution #15-10-255 Adopting Assessment Roll Certifying Jarvis Street Reconstruction and Railroad Quiet Zone Improvement Assessments; Improvement Project #15-20

Purpose:
The purpose of this case is to adopt Resolution #15-10-255 adopting the assessment roll certifying Jarvis Street Reconstruction & Railroad Crossing Quiet Zone Improvements; Improvement Project 15-20.

Background:
City of Ramsey Improvement Project 15-20 involves the reconstruction of Jarvis Street between Highway 10 and 165th Avenue, which is mutually owned and maintained by the cities of Elk River and Ramsey, and improvements to the Burlington Northern Santa Fe railroad crossing to allow future establishment of a quiet zone.  The City of Elk River is the lead agency for this project as the improvements to Jarvis Street are being completed as part of their overall 2015 Street Improvement Project.  A Joint Powers Agreement (JPA) was executed between the two cities to define the obligations of each in regards to constructing and funding the project.

Existing Conditions
The existing shared segment of Jarvis Street was a 22-foot wide rural bituminous pavement section with up to 2-foot wide aggregate shoulders, shallow ditches, driveway culverts, and no public utilities (watermain or sanitary sewer). This segment of Jarvis Street had a Pavement and Surface Evaluation Rating (PASER) of 2 based on 2014 field ratings which warrant a total reconstruction.

Proposed Improvements
Jarvis Street was reconstructed as a 36-foot wide urban section with two 12-foot through lanes and two 6-foot bike lanes, concrete curb and gutter on both sides, storm sewer culverts under driveways (as needed), and curb cuts with concrete flumes to direct stormwater runoff from the street into roadside ditches. No public utilities were constructed since the City does not plan to extend utilities to serve this area in the foreseeable future.
 
Preliminary Assessments
The City’s adopted Special Assessments Policy targets special assessments amounting to 25% of eligible street reconstruction project costs.  However, the 10 benefiting residential properties abutting the improved street are large lots with significant frontages, plus the City of Ramsey is only responsible for reconstructing half of Jarvis Street, plus no utilities were proposed with this project, therefore 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 $4,500 per each property accessing the 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 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 February 18, 2015.  Property owners from 2 of the 10 assessable properties attended the meeting.  The general consensus at the meeting was that this project was long overdue.  A question was raised as to why B618 concrete curb and gutter was being proposed, and whether leaving the curb and gutter off would reduce project costs, and therefore their assessments.  The residents were informed that City Staff recommends installing the concrete curb and gutter to better facilitate drainage, and to help protect the edges of the new pavement, and that the Public Works Committee supported this recommendation.  It was also discussed that the amount of their assessment would likely not be affected if the curb and gutter was removed since their assessments were not set at 25% of project costs.
 
An Improvement Hearing was held for this project on February 24, 2015.  Comments received at the hearing again supported the project in general, but questions were again raised as to the need for B618 concrete curb and gutter and the impact this could have on providing reasonable access to properties.  At that time it was discussed that Staff would work with property owners to ensure that accesses will be reasonably accommodated as allowed by City code while constructing concrete curb and gutter with the project as proposed.

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 of this project is substantially complete.  Bituminous pavement wear course is proposed to be paved the week of October 19^th.  Regarding the railroad crossing quiet zone improvements, the required agreements between Elk River and BNSF were recently executed which means BNSF can now complete the crossing gate work and surface widening at the 165th Avenue and Jarvis Street crossings.  However, Elk River still has not received a schedule from BNSF as to when this work will be done, but Elk River will continue to push for the work to be done as soon as possible.  At this point it appears the quiet zone improvements will not be completed until 2016, meaning the quiet zones at Jarvis Street and 165^th Avenue will not be established until the fall of 2016 or later.
 
Proposed Assessments
The 10 benefiting residential properties are proposed to be assessed using the preliminarily approved assessment rate of $4,500 per property accessing the improved street, resulting in a total assessment of $45,000.  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 10 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 $7,500 to $8,000 per property. 
 
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 at the October 13^th City Council meeting, which will also allow adequate time for the publication and mailing of notices as required per Minnesota State Statute Chapter 429.

Alternatives:
Alternative Action #1 – Motion to adopt Resolution #15-10-255 adopting the assessment roll certifying Jarvis Street Reconstruction & Railroad Crossing Quiet Zone Improvements; Improvement Project 15-20.

Alternative Action #2 – Motion to deny adoption of Resolution #15-10-255 at this time.

This improvement project is listed in the City’s current 5-year Capital Improvement Plan and is proposed to be funded using a mix of Public Improvement Revolving (PIR) funds, special assessments, and stormwater utility funds.

The total estimated cost participation for the City of Ramsey for this project is $575,779.22 which accounts for 50% of the costs to reconstruct the shared segment of Jarvis Street, and 50% of the costs to complete required railroad crossing quiet zone improvements including moving the railroad crossing arms and extending the width of the crossing surface which must be completed by Burlington Northern Santa Fe (BNSF).  It should be noted that the JPA does not identify specific costs, but rather obligates the City of Ramsey to funding 50% of the identified project improvements. However, the JPA also obligates the City of Elk River to paying the City of Ramsey’s share of the project costs up-front with an interest-free payback period of 3-years for calendar years 2016, 2017, and 2018.

Staff recommends Alternative Action #1.

Approve or deny adoption of Resolution #15-10-255 adopting the assessment roll certifying Jarvis Street Reconstruction & Railroad Crossing Quiet Zone Improvements; Improvement Project 15-20.