PUBLIC HEARING: Adopt Resolution #17-02-044 Accepting Feasibility Report and Ordering Plans and Specifications for Improvement Project #17-00, Sunwood Drive Reconstruction

Purpose:
The purpose of this case is to conduct a Public Hearing and adopt Resolution #17-02-044 accepting the Feasibility Report and ordering Plans and Specifications for Improvement Project #17-00, Sunwood Drive Reconstruction.

Background:
City Improvement Project 17-00 proposes to reconstruct the segment of Sunwood Drive between Ramsey Boulevard/County State Aid Highway (CSAH) 56 and Bunker Lake Boulevard /County Road 116 which is approximately 3,050 linear feet (0.58 miles) in length. A map showing the scope of the proposed improvements is included as Figure 1 in Appendix A of the attached draft Feasibility Report.

City staff evaluates and rates the pavement condition of all city streets on an annual basis using the Pavement and Surface Evaluation Rating (PASER) system. In the fall of 2016, this segment of Sunwood Drive received PASER ratings of 3 to 4 which means the pavement is in very poor condition and past the point of applying mill and overlay improvements. Pictures of this street segment are located in Appendix A of the attached Feasibility Report.

Existing Conditions
Based on record plans, this segment of Sunwood Drive was constructed in 1996 using B618 concrete curb and gutter at a consistent width of 40 feet from face-of-curb to face-of-curb, centered within an 80 foot wide right-of-way. Record plans show that 3½ inches of bituminous pavement was constructed over 5 inches of class 5 aggregate base.  However, recently completed soil borings and pavement corings revealed an average of about 4¾ inches of bituminous pavement along the corridor.  Also, 8 foot wide parking lanes are delineated along both sides of the street using 4 inch wide white striping.
 
A storm sewer system consisting of concrete catch basins and pipes drain runoff from the street to adjacent low-lying areas.  Sanitary sewer and watermain also exist under the pavement section.
 
An off-street bituminous trail exists along the north side of Sunwood Drive but the trail is in relatively good condition so no improvements are proposed to the trail as part of this project.

A total of four pavement corings were completed by WSB and Associates (WSB) to assist with the preparation of this report. In addition, eleven soil borings were completed by Northern Technologies, Inc. (NTI).  Copies of WSB’s and NTI’s reports are included in Appendix D of the attached draft Feasibility Report.

Proposed Improvements
Damaged sections of existing concrete curb and gutter will be removed and replaced, including concrete cross gutters at driveways and intersections which facilitate drainage to prevent pockets of standing water which can freeze in the winter resulting in unsafe conditions for drivers and pedestrians.

The existing bituminous pavement is proposed to be reconstructed using a process called Stabilized Full Depth Reclamation (SFDR). The SFDR process would include milling the top 3 inches or so of existing bituminous pavement and disposing of the millings off site. All remaining existing bituminous pavement will then be reclaimed (ground up and mixed) along with most of the existing class 5 aggregate base. Approximately 1 inch of reclaimed material will need to be removed from site.  The remainder of the reclaim material will be spread on top of the existing subgrade and a stabilizing agent will then be mixed into the reclaim material. This stabilized reclaim material will be shaped and compacted into a 5 inch lift, then 4 inches of bituminous pavement will be placed on top of the compacted stabilized reclaim material. This new pavement section will result in a 10-ton pavement design meeting current State Aid pavement design standards.

The existing storm sewer system is in good condition and based on preliminary review appears to meet all applicable current State Aid design standards meaning no improvements are proposed, other than necessary casting adjustments.

The existing sanitary sewer and watermain appear to be in good condition but inspections will completed during final design to ensure no repairs are needed prior to completing the proposed improvements.

Estimated Costs
The engineer’s opinion of probable costs for completing the proposed improvements on Sunwood Drive as outlined in the attached draft Feasibility Report is $607,000. Estimated costs include 23% indirect costs for administrative, engineering, finance and legal costs. A summary of the engineer’s opinion of probable costs is included in Appendix B of the Feasibility Report.

Funding Sources
The improvements are proposed to be funded using a combination of Street Reconstruction and Overlay Program (SROP) bond funds, stormwater utility funds, and special assessments to benefiting properties. The majority of the proposed improvements will be funded using SROP bond funds, which will be paid back over a 10 year term using the general fund. This cost is estimated at $447,950 in the Feasibility Report. Stormwater utility funds will pay for required storm sewer improvements estimated to cost $7,300. Special assessments are proposed to fund up to 25% of eligible construction costs totaling $151,750 per the City’s adopted Special Assessments Policy. A total of 9 parcels receive special benefit from the improvements as identified in the attached revised preliminary assessment map and roll.

Special Assessments
Per the City’s adopted Special Assessments Policy special assessments can be used to pay for 25% of eligible street reconstruction improvement costs, which equals $151,750 for this project. Preliminary assessments are calculated using methods that result in reasonable and equitable distribution of assessments that are uniform upon the same class of properties within the assessable area.  The test for determining the validity of a special assessment is whether the improvement for which the assessment was levied has increased the market value of the property against which the assessment was levied in at least the amount of the assessment.

The City’s adopted Special Assessments Policy identifies three optional methods for calculating assessments. The 9 identified benefiting properties are zoned E1 or E2 (industrial).  Only two assessment methods are recommended for assessing industrial parcels, these being the “adjusted front footage” and “area” methods. Staff initially reviewed both methods as they would be applied in the current context of the policy.  This review showed that the adjusted front footage method results in less variance between assessments ($9K - $40K), while the area method resulted in assessments that are more variable ($3K - $42K) and therefore appeared to better assign benefit based on lot geometry, which includes significant differences in lot depths.
 
Staff therefore first applied the area method to calculate assessments.  In doing so, Staff reviewed all assessable parcels to determine whether any appreciable differences existed between parcels that might impact the benefit received from the proposed improvements. Staff identified two appreciable differences that might impact the benefit received.  The first was whether a parcel has direct access onto the improved street.  The second was whether the parcel abuts other City streets that could result in future assessments to the parcel.  Similar adjustments can be found to varying degrees in other cities assessment policies. Staff therefore applied the following adjustments to the area method of assessment to develop a revised assessment roll.
 

• Properties abutting Sunwood Drive only with access onto Sunwood Drive were proposed to be assessed for 100% of their property area.
• Properties abutting Sunwood Drive and other City streets, with access onto Sunwood Drive, were proposed to be assessed for 75% of their property area.
• Properties abutting Sunwood Drive with no access onto Sunwood Drive were proposed to be assessed for 50% of their property area.

Staff presented the revised preliminary assessment roll to 6 of 7 assessable property owners.  While most property owners did not specifically object to their proposed preliminary assessment, one property owner did object to their preliminary assessment and recommended the use of another method based on assessable property value which would significantly reduce their preliminary assessment.
 
Based on feedback received, Staff contacted the appraisal firm that prepared the benefit appraisal consultation reports for all recent street reconstruction projects in Ramsey to discuss optional assessment methods for industrial parcels.  Based on this discussion, Staff revised the assessment roll by applying the front footage method to calculate special assessments for all assessable properties.  The appraiser also calculated estimated special benefits for each assessable property which was also  added to the revised assessment roll.  Then the lesser of the calculated front footage assessment and estimated special benefit was used for the proposed preliminary assessment for each property.  A copy of the revised assessment roll is attached.
 
All costs for this project are eligible for special assessments since the street is proposed to be reconstructed at its existing width, which meets current State Aid standards, and since the existing and proposed pavement sections both meet 10-ton design standards and are therefore equivalent sections.

Public Input
Below is a very brief and general summary of the comments received from each assessable property owner.
 

• Altron, Inc. – Does not generally oppose the proposed improvements or their proposed assessment, but supports postponing the public hearing to allow more time to review their proposed assessment with City staff before the public hearing.
• B & F Fastener Supply – Does not generally oppose the proposed improvements or their proposed assessment, and they do not plan to attend the public hearing.
• Class C Components – Does not generally oppose the proposed improvements but supports postponing the public hearing to allow more time to review their proposed assessment with City staff before the public hearing.
• Connexus Energy – Does not generally oppose the proposed improvements but supports postponing the public hearing to allow more time to review their proposed assessment with City staff before the public hearing.  They are specifically requesting that their assessment be reduced because their property is undeveloped (except for the driveway that provides access onto Sunwood Drive).
• In’Tech, Industries – Does not generally oppose the proposed improvements or their proposed assessment, and does not object to postponing the public hearing.
• Vision Ease – Does not generally oppose the proposed improvements but supports postponing the public hearing to allow more time to review their proposed assessment with City staff before the public hearing.
• Anderson Dahlen – No feedback has been received to date but Staff is working to schedule a meeting prior to the Public Hearing.

To ensure Staff will be able to meet with all assessable property owners prior to the Public Hearing to review the attached revised assessment roll, Staff recommends postponing the public hearing until March 14, 2017.  Another two week delay should not significantly impact bids and will not prevent the project from being completed in 2017.

Public Hearing Notices were published in the Anoka Union Herald on January 27^th and February 3^rd, 2017, were mailed to all property owners proposed to be assessed for a portion of the improvements, and was posted in City Hall as required by State Statute.  Postponing the public hearing does not require additional publications.

Observations:
This project would best be constructed as a stand-alone project and is necessary, feasible, and cost-effective from an engineering standpoint, and can be constructed as proposed in the Feasibility Report.

The proposed pavement design is anticipated to provide a life of at least 30 years, assuming proactive, regular pavement maintenance treatments are performed throughout the life of the pavement. While a 60-year design life is typically targeted for reconstructed streets, this project is not proposing a full reconstruction due to the good condition of the majority of existing 20 year old curb and gutter. At the time the existing curb and gutter that is left in place needs to be reconstructed, which will likely occur 30 years or more in the future, Staff will evaluate whether it would be cost-effective to reconstruct the pavement section again.

The preliminary Assessment Map and Roll included in Appendix C of the Feasibility Report were preliminarily approved by Council on January 24th.  On February 14^th Council approved revising the Feasibility Report to incorporate a revised assessment map and assessment roll.  Staff is currently revising the Feasibility Report to fully address the attached revised assessment map and roll.  The revised report will be attached to the Council case for the Public Hearing on March 14, 2017.

Alternatives:
Alternative #1 – Motion to deny adoption of Resolution #17-02-044 at this time and to postpone the public hearing for Improvement Project #17-00, Sunwood Drive Reconstruction, until March 14, 2017.

Alternative #2 – Motion to deny adoption of Resolution #17-02-044 at this time.

City staff prepared the Feasibility Report in-house as part of staff’s normal duties.

The engineer’s opinion of probable costs for the proposed improvements on Sunwood Drive as outlined in the Feasibility Report is $607,000. Assessable industrial parcels are preliminarily proposed to be assessed for up to 25 percent of eligible project costs totaling $151,750. The City will pay the remaining 75% of project costs including $447,950 from the 5 year Street Reconstruction and Overlay Program bond funds, and $7,300 from stormwater utility funds.
 
NTI completed a Geotechnical Exploration and Engineering Review at a cost of $4,400 which is included in Appendix D of the Feasibility Report. WSB and Associates, Inc. completed Pavement Evaluations and Recommendations at a not-to-exceed cost of $2,687.50 which is also included in Appendix D.

Staff recommends Alternative #1. Staff does not support Alternative #2.

Motion to deny adoption of Resolution #17-02-044 at this time and to postpone the public hearing for Improvement Project #17-00, Sunwood Drive Reconstruction, until March 14, 2017.