Adopt Resolution #18-188 Ordering Assessment Roll and Calling Assessment Hearing for Improvement Project #18-03, 2018 Street Overlay Improvements

Purpose:
The purpose of this case is to adopt Resolution #18-188 ordering preparation of an assessment roll and calling for an Assessment Hearing at 7 p.m. on October 9, 2018 for Improvement Project #18-03, 2018 Street Overlay Improvements.

Background:
City Improvement Project 18-03 completed 2-inch bituminous pavement overlay improvements to approximately 63,449 square yards of public streets within The North Forty 2nd, The North Forty 3rd, Northfork Itasca Shores, Northfork, Northfork 2nd, Northfork 3rd, Northfork Oaks, and Woodland Green residential neighborhoods, along with miscellaneous appurtenant improvements as outlined in the attached Feasibility Report.  Maps showing the scope of the improvements are included in Appendix A of the Feasibility Report.
 
Each year City staff visually inspects the pavement condition of all public streets and rates them using the Pavement and Surface Evaluation Rating (PASER) method. A numerical PASER rating between 1 and 10 is assigned to each street segment. Streets with a PASER rating of 1 are considered to need a complete reconstruct, while streets with a PASER rating of 10 are considered new pavement sections. The latest PASER rating for each
street segment that received an overlay with this project is included in the street segments
summary in Appendix B of the Feasibility Report.  Based on these PASER ratings, these street segments were determined to be reasonably good candidates for receiving overlay improvements in 2018. Staff anticipates that the overlay improvements will extend the life of the pavement sections 15 to 20 years, at which time Staff will re-evaluate the pavement sections to determine whether another overlay is appropriate, or whether reconstruction is required.

Pre-Existing Conditions
Appendix B of the Feasibility Report includes information regarding the original year of construction, lengths, widths, and maintenance history for all street segments that received an overlay in 2018.

Completed Improvements
The existing bituminous pavement sections received 2-inch bituminous pavement overlay improvements.  Adjacent existing pavement sections were milled 18-inches back to provide a smooth transition.
 
Public Input
Staff conducted a public information meeting prior to the Improvement Hearing.  Only one property owner attended and they were supportive of the project as proposed for their neighborhood (Woodland Green).  This was the only public comment received by Staff.

Following Council approval, an Assessment Hearing Notice will be published in the City’s official newspaper on Friday, September 21st.  Assessment Hearing Notices will also be mailed to all benefiting property owners as required per State Statute.
 
Anoka County requires that assessments be certified to the County Auditor by November 16th for collection on next year’s taxes. This deadline will be met by conducting the Assessment Hearing at the October 9th City Council meeting, which will also allow adequate time for publication and mailing of Hearing notices.

Observations:
At the time this report was prepared, construction of this project was complete with only punch list item work remaining and Staff was calculating final construction costs to assist in determining final assessment amounts for use in publishing and mailing notices for the Assessment Hearing.

Alternatives:
Alternative #1 – Motion to adopt Resolution #18-188 ordering preparation of an assessment roll and calling for an Assessment Hearing at 7 p.m. on October 9, 2018 for Improvement Project #18-03, 2018 Street Overlay Improvements.

The construction contract amount for this project is $546,224.86, which includes a change order in the amount of $2,000.  Street overlay project costs include actual construction costs plus 14% indirect costs for administrative, engineering, finance, and legal costs.  Upon adding 14% for indirect costs, the contracted project cost would be $622,696.34.  The engineer’s estimate in the Feasibility Report was $585,460.78.
 
Staff is calculating final construction costs and believes these costs will be approximately equal to the construction contract amount.  Final project costs will be reviewed at the Assessment Hearing.
 
These improvements were included in the City’s Capital Improvement Plan for 2018 construction.  Funding sources include a combination of Street Reconstruction and Overlay Program (SROP) bond funds, special assessments to benefiting properties, and stormwater utility funds.
 
Special Assessments
The City’s Special Assessments Policy (attached) calls for special assessments to pay for 25% of eligible street overlay improvement costs. Special assessments are calculated using methods resulting 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.

Ramsey’s Special Assessments Policy identifies three optional methods for calculating assessments; Adjusted Front Footage, Area, and Per Lot.  The Feasibility Report for this project identified 124 benefiting residential properties that are proposed to be assessed up to 25% of eligible project costs. On all previous residential street overlay projects, the Per Lot assessment method was applied so Staff recommends using the Per Lot method per each project area.
 
The preliminarily approved total assessment amount was $146,365.19.  Individual assessment amounts varied by project area as shown in Appendix C of the Feasibility Report, with a low assessment amount of $766.54, and a high assessment amount of $1,515.72.
 
A Special Benefit Consultation report is being prepared for this project by the property appraisal and valuation firm of Patchin Messner Dodd and Brumm.  This report will help provide proof of benefit to benefiting properties based on the completed improvements.  The results of this report, along with the final special assessment amounts as determined by final construction costs, will be discussed with the City Council and the Public during the Assessment Hearing on October 9, 2018.

Staff recommends Alternative #1.

Motion to adopt Resolution #18-188 ordering preparation of an assessment roll and calling for an Assessment Hearing at 7 p.m. on October 9, 2018 for Improvement Project #18-03, 2018 Street Overlay Improvements.