PUBLIC HEARING: Adopt Resolution #17-11-284 Approving Updated Feasibility Report and Ordering Plans and Specifications for Improvement Project #17-02, River's Bend Street Reconstructions

Purpose:
The purpose of this case is to adopt Resolution #17-11-284 approving updated Feasibility Report and ordering Plans and Specifications for Improvement Project #17-02, River’s Bend Street Reconstructions.

Background:
City Improvement Project #17-02 proposes to reconstruct four street segments within the River’s Bend residential neighborhood including;

• 147th Lane between the west River’s Bend plat line to Waco Street,
• 148th Avenue between the west River’s Bend plat line to Xkimo Street,
• Xkimo Street between 147th Lane and 149th Avenue/Sunwood Drive, and
• Yakima Street between 148th Avenue and 149th Avenue/Sunwood Drive.

These streets total approximately 2,774 linear feet or 0.53 miles in length.  A map showing the location and scope of the proposed improvements is included as Figure 1 in Appendix A of the Feasibility Report, which is included as an attachment to this case.
 
According to available data, these street segments were all constructed in 1985 using approximately 2 to 3.5 inches of bituminous pavement, 4 inches of class 5 aggregate base, and surmountable concrete curb and gutter.  All streets are 30 feet wide from face-of-curb to face-of-curb, centered within 60-foot wide right-of-ways.  The existing storm sewer system consists of four catch basins located at a low point on Xkimo Street, which drains stormwater runoff from the street into the Rum River via concrete storm sewer pipes.
 
City staff evaluates and rates the condition of pavement sections on all city streets on an annual basis using the Pavement and Surface Evaluation Rating (PASER) system.  In the fall of 2016, these street segments received PASER ratings of 3.  This indicates these street segments are past the point of applying overlay improvements. The current condition of these streets requires City staff to patch the streets annually, particularly before winter so the streets can be plowed without further damaging pavement in the process.  Pictures of these street segments are located in Appendix A of the Feasibility Report.
 
Proposed improvements include removing and replacing all damaged concrete curb and gutter sections, and reconstructing the existing bituminous pavement section using the Full Depth Reclamation (FDR) process.  The FDR process involves milling the entire existing bituminous pavement section, along with an inch or more of existing underlying aggregate base. This reclaim material would then be spread over the reshaped and compacted subgrade between the curb and gutter, and then the top 3½ inches of reclaim material would be removed and hauled off site.  Then 3½ inches of new bituminous pavement would be installed over the remaining compacted reclaim material, resulting in a 7-ton pavement design, which is standard for residential streets.
 
The existing storm sewer system is in good condition.  Only casting adjustments and catch basin grouting work is proposed.
 
The engineer’s opinion of probable costs for completing the proposed improvements on River’s Bend as outlined in the Feasibility Report is $301,738.31.  Estimated project costs include 5-percent contingency costs and 23-percent 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.
 
Forty-four (44) parcels have been identified as receiving special benefit from the improvements. These parcels are identified in the preliminary Assessment Map and Roll, which are included in Appendix C of the Feasibility Report.
 
Twelve (12) pavement corings were completed by WSB and Associates (WSB) to assist with the preparation of the Feasibility Report.  WSB offered pavement design recommendations, which were considered and incorporated to varying degrees within the report. A copy of WSB’s report is attached in Appendix D of the Feasibility Report.
 
This improvement project, which is listed in the City’s current Capital Improvement Program, is proposed to be funded using a combination of special assessments to benefiting properties, street reconstructions bond proceeds, and stormwater utility funds.
 
Staff recommends using special assessments to pay for 25-percent of eligible improvement costs in accordance with the City’s Special Assessments Policy.  Assessments are proposed to be equally applied across 44 benefiting parcels using the “per lot” method of assessment, which is the typical method of assessment applied to single-family parcels of roughly the same size.
 
All costs for this project are eligible for special assessments since the street is proposed to be reconstructed at its existing width, and since the existing and proposed pavement sections both meet 7-ton design standards meaning they are equivalent sections.  This project does not include any ineligible project costs related to the use of special assessments.
 
Staff recommends ordering a special benefit consultation report for this project to verify that the proposed assessment amounts will not exceed the amount of benefit to any of these properties. If the report concludes that the benefit to any of the properties is less than the proposed preliminary assessment rate, Staff would propose to lower the assessment rate accordingly at the Assessment Hearing.  However, if the special benefit consultation report verifies that the assessment rates as proposed are justified, Staff would propose to adopt the final assessment roll using the rate as preliminarily proposed.
 
On January 24, 2017, the City Council directed Staff to postpone the River’s Bend Street Reconstructions project until the 2018 construction season, allowing the project to be constructed in conjunction with the Stanhope Terrace Street Reconstructions project.  The intent of this direction was to provide for the most cost-effective project by combining it with a similar project in close proximity, thereby potentially realizing a cost savings due to economies of scale. 
 
This project was initially intended to be a mill and overlay project, but after learning that the existing bituminous pavement section would not allow for a mill and overlay due to pavement thicknesses in some locations of 2-inches, the project was converted to a full pavement reconstruction.

This project is necessary, feasible, and cost-effective from an engineering standpoint, and can be constructed as proposed in the Feasibility Report.  Staff proposes to bid and construct the proposed improvements in conjunction with the other street reconstruction projects proposed for 2018 in the Stanhope Terrace and North Forty developments.

In accordance with State Statutes, the attached Notice of Public Hearing was published in the Anoka Union Herald on October 27 and November 3, 2017, and Public Hearing Notices were mailed to all benefiting property owners identified in the preliminary assessment role.

Observations:
The proposed design should provide a minimum pavement life of 30 years, assuming that proactive, regular pavement maintenance treatments are performed during the life of the pavement. While a 60-year design life would typically be targeted for a reconstructed street, this project is not proposing a full street reconstruction due to the good condition of the majority of existing 30-year old curb and gutter. Then when the time comes for the remaining existing curb and gutter to be replaced, which will likely be 30 or more years in the future, the reconstructed pavement section should be re-evaluated.

Developed properties along the project corridor may have private irrigation systems. Impacts to these systems may occur where existing curb and gutter is being replaced. Staff will notify property owners in writing of the pending construction as far in advance of construction as possible to allow them time to move their irrigation system components out of the construction area, after which they may replace the components in their original locations.
 
Public Comment
On November 2, 2017, Staff conducted a Public Information Meeting from 5:30 - 7:00 pm at City Hall.  Notices for this meeting were mailed to all benefiting property owners.  Eight (8) property owners attended the meeting.  The meeting was conducted as an open house forum, with Staff responding to questions one-on-one from 5:30 – 6:00 pm, and again from 6:45 – 7:00 pm.  A formal presentation was provided by Staff from 6:00 – 6:45 pm, which addressed all aspects of the project including project purpose, scope, and schedule, existing conditions, proposed improvements, estimated project costs, proposed funding sources, including special assessments, and a primer on the Public Hearing.
 
In general, the main comment received was that special assessments should not be used to pay for a portion of the project costs, and that the project should be funded in full through the general fund. One resident questioned whether the project was needed, stating that the pavement in front of their house on Yakima Street does not need to be reconstructed, and that an overlay should be sufficient.  Staff addressed this by stating that it would not be cost-effective to overlay a couple hundred feet of pavement when reconstructing the remaining one-half mile of pavement. In addition, due to the existing depth of pavement, it would likely not be possible to match grades between the overlay section and the reconstructed sections. The property owner then suggested that the City not do anything to the street segment in front of his property, and that it could be done at some other time when it in worse condition.  Staff explained that this would again not be a cost-effective approach and would end up costing him, and the other taxpayer’s in the City, more in the end.
 
Any comments received after this case was prepared will be presented to Council before the Public Hearing is opened.

Alternatives:
Alternative #1 – Motion to adopt Resolution #17-11-284 approving updated Feasibility Report and ordering Plans and Specifications for Improvement Project #17-02, River’s Bend Street Reconstructions.

Alternative #2 – Motion to deny adoption of Resolution #17-11-284 at this time.

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

WSB and Associates, Inc. prepared a Pavement Evaluations and Recommendations report at a not-to-exceed cost of $3,290.

The engineer’s opinion of probable project costs is $301,738.31.  A total of 44 residential parcels will benefit from the proposed improvements and are preliminarily proposed to be assessed for 25-percent of eligible project costs, which totals $75,434.58.  This equates to preliminary assessments of $1,714.42 per parcel. The City will fund the remaining 75% of project costs, which totals $226,303.73.  These costs will be paid by Street Reconstruction and Overlay Program bond funds, as well as a small amount of Stormwater Utility Funds.
 
Assessments are proposed to be assessed over a term of ten years, with interest rates proposed at two percent above the bond interest rate.
 
Staff proposes to request Council authorization to order a benefit appraisal consultation for this project in accordance with the City’s Special Assessments Policy at the time Council awards a construction contract.

Staff recommends Alternative #1 to allow the project to be constructed as part of the 2018 Street Maintenance Program, and to allow for the use of special assessments to pay for a portion of the project costs per the applicable provisions of Chapter 8 of the City Charter, the City’s Special Assessments Policy, and Minnesota Statute Chapter 429.

Motion to adopt Resolution #17-11-284 approving updated Feasibility Report and ordering Plans and Specifications for Improvement Project #17-02, River’s Bend Street Reconstructions.