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Home My WebLink About2.B. Engineering and Public Infrastructure Installation 4ROSEMEXECUTIVE SUMMARY CITY COUNCIL City Council Work Session Date: November 19, 2013 AGENDA ITEM: Engineering and Public Infrastructure AGENDA SECTION: Installation Discussion PREPARED BY: Dwight Johnson, City Administrator AGENDA NO Kim Lindquist, Community Development Director ATTACHMENTS: City Survey on Infrastructure, Council APPROVED BY: Packet and Minutes July 2, 1996, Council Packet and Minutes May 12, 2010, Prestwick Place 7th Construction Schedule, Generalized Preliminary Development Schedule, Woodbury Policy on Public Infrastructure Improvements for New Residential Development goi RECOMMENDED ACTION: Provide Staff Direction. ISSUE The Mayor recently inquired about the basis for having City engineering and City installation of public improvements for new development projects. He indicated that a local developer had stated that the developer could do the project cheaper and also in a shorter duration than the City. It was indicated that this time and cost savings would be a benefit to the developer. In response to the developer's specific comments about the City time delay relating to installation of infrastructure in Prestwick Place 7th Addition, there is a memo attached providing a timeline of events. Staff also spoke with a representative of DR Horton and Lennar to get feedback about design and installation of public infrastructure and the entire City review and approval process. Given the Council's interest in promoting development in the community,it was determined that the Council should have a discussion about the current process and whether there should be a modification to the existing policy, Policy E-2. HISTORY On July 2, 1996, the City Council approved a resolution adopting a public infrastructure installation policy relating to engineering and installation of public improvements. The policy clarified that"it is in the best interest of the City that all new streets and utilities added to the public system shall be designed and inspected by engineers employed by the City."There were five reasons for adopting the policy: 1. To ensure consistency and compatibility with the City's existing utility system. 2. To ensure consistency and compatibility with the City's Comprehensive Plan,including the Storm water Management Plan, the Sanitary Sewer Plan, the Potable Water System Plan, the Transportation Plan and its Wetland Management Plan. 3. To ensure maximum control by the City of system components that will ultimately be operated, maintained and reconstructed by the City. 4. To ensure quality construction acceptable to the City Standards. 5. To ensure that the City's tax dollars are not spent in educating numerous design personnel about City ordinances, standards and procedures. On May 12, 2010, the City Council discussed a request by Warren Israelson to allow him to engineer and install infrastructure in the community,which would be inconsistent with the adopted public infrastructure policy. After discussion with the Council,it was determined that the City would not vary from the policy but would have staff work with Mr. Israelson to determine correct cost estimates and sureties. DISCUSSION Engineering Staff has received responses from 46 communities that were asked about their process for installation and engineering of public improvements. The survey found 24 cities have only the developer design the infrastructure project,with review by the City. Eight communities have the City do all engineering design, and eight allow the developer to do the design or they can petition the City to do the work. There were also four more communities which had additional comments. As noted in the 1996 policy, the reasons for the City taking the lead on engineering is the control of the project and the knowledge of the various infrastructure systems and plans that must be considered when doing the design work. The City also has the opportunity to review the infrastructure plan to maximize benefit to adjoining properties. In a recent subdivision, a developer was advocating a revision to the sanitary sewer plan,which would reduce initial construction cost but did not serve properties to the west as initially intended. This would have required additional cost and work later,when the western properties came on line. Staff is concerned that the City in the "reviewer" role creates a more adversarial situation than the current practice. This may result in more time being taken and perhaps a perceived lack of customer service. While there are potential conflict points during the design phase, that potential exists at the back end of the project when the City will want as-built information to GIS specifications and GPSing of information to fit into the City's library of electronic plan information. Developers have indicated that there could be some cost savings if the project is engineered by their own engineering firm. It is unclear if this is accurate, as we don't have any information affirming or disproving this statement. The cost to the developer would be their engineer plus the cost of City review,whereas now, the cost is the city engineer. While it certainly may be possible that costs are reduced for the developer on the front end,it is also dependent upon the engineering firm commissioned. The performance of the developer's engineer and their adherence to the city standards will impact engineering costs, as the City Engineer's role continues to be one of review and approval of plans. Should the City engineer and the developer's engineer disagree, the City engineer would be the final decision-maker. In other words, the cost and cost savings may be variable depending upon the developer's initial engineered plans, their compliance with city standards, and receptivity to system needs. For example, staff contacted the City of Woodbury which had the City engineer and install all public improvement projects in the 1980-90's. In early 2000's the City changed their policy to allow developer's engineers do the public infrastructure design work and also install public infrastructure.According to the Assistant City Engineer,Paul Kauppi, around 2008, the City modified their policy to again take infrastructure design back in-house. The reasons given were that the City had adopted strict standards and found that developer engineers were not meeting those standards. It was felt that a lot of city engineering time was taken trying to get the plans to comply with those standards and in the format 2 desired to fit into their geographic system. Specifically,he mentioned they had to spend a lot of staff time "training"in new engineers and the resulting cost to the developer for the city staff time was higher than anticipated. He mentioned that they did not believe the developers, on the whole, saved much money if at all, between the cost of the developer's engineer and city review. It is assumed if the review process requires more plan rework, there would not be time saved. The Lakeville Engineer indicated they allow the developer's engineer to do all the design work. He felt the key to avoid as much conflict as possible is to be up front with the expectations of the city and they require pre-submittal meetings to start the process. He indicated they get very little feedback about cost. He has received some feedback that the City has on occasion taken too long for review, or that the city has new or different comments than the last review. Overall,he felt the process worked well and the developers like having control over their schedules and costs to the extent possible. When asked,he did indicate that the City of Lakeville does not have the in-house capacity to design all the infrastructure projects that come in and therefore additional staff would be needed or the consultants used. He acknowledged with the arrangement Rosemount has with WSB, the ability to access the amount of engineering time needed for plan design,it is a very different situation than in a community which has its own in-house engineering staff. PROS of having the City engineer infrastructure plans Compatibility and consistency with existing utility system Consistency and compatibility with adopted systems plans Ensure City tax dollars are not spent in educating numerous design personnel about city standards, procedures and ordinances Ensure plans maximize capacity of properties within community Receipt of data in the format consistent with the current system in place CONS of having the City engineer infrastructure plans Cost of engineering for developer Possible time savings Infrastructure Installation For similar reasons as having the city engineer create the infrastructure plans, the city currently has a process for city installed public infrastructure. The reasons are to have City control of the project,and specifically the contractor. This allows the City to directly address the person doing the installation should there be problems with the project or potentially negative impacts on adjoining property owners. Out of the 46 communities who responded to the survey, twenty-three cities have the developer install the public improvements. Four communities have City installation only, and eleven allow the developer to install although the developer can petition the City to install. In some discussions it also appears that Cities do more public installation of collector roads or trunk facilities which may be because they assess a portion of the project. Over time, staff has received comments that the current public infrastructure process takes too long and is more costly than what a developer can do with their own contractor. It is true that the public process is structured and certain steps must be completed in a specific manner. This could take longer than if the developer commissioned their own contractor. It is unclear if the cost would be more or less when privately installed versus publically installed. Any contractor who installs infrastructure for a private developer can also bid on the public projects.Additionally,installation by the private contractor would require inspection by the City to ensure compliance with city standards. The inspection costs are paid by the developer. 3 One of the items frequently criticized is the sureties the City requires in either a Letter of Credit (LOC) or performance bond format. Developers have indicated the surety ties up money for an extended period of time. Should the Council choose to have the developer's contractor install public infrastructure, a surety would continue to be required for the City's protection. The City Attorney indicated that the contractor would provide a surety to the developer about their performance. However, the City wouldn't be a party to that surety, and would require a separate surety from the developer. This would allow the City to approach the developer about issues that could arise during the installation process. This surety or some other mechanism would also need to be in place during the two year warranty period. Staff spoke with the City Engineer in Lakeville who indicated that the City requires the developer to install all public infrastructure. He indicated that they have had this process in place since the 1980's and therefore developers are used to the system. They require the developer to pay for all inspection costs and also administer a 3% engineering administration fee,based upon the estimated construction costs, for all projects. He indicated they vary the amount of inspection depending upon the quality of the construction company and do not have a prequalification standard. He did indicate the City is looking at having public installation of a collector road and round-about due to the regional benefit of the project and the 429 process allows the developer to apply the costs to his entire landholdings (approx.. 300 acres) versus just the first final plan (20 acres).This would represent a variation in their standard operations, and he doesn't expect City installation of public infrastructure to become the norm. PROS of having the City install public infrastructure Ensure control of the public system components that will be owned and operated by the City Ensure quality construction acceptable to City standards Allows 429 process and assessment of public infrastructure (recent assessments include Greystone 1 &2 (Ryland) Prestwick 3 &7 (Lennar) Prestwick 2 (DR Horton) and future Bella Vista 2 (Lennar) Customer service for non-developer neighbors CONS of having the City install public infrastructure Reduced time to proceed with public infrastructure installation Possible reduced cost of infrastructure installation CONCLUSION There are several options available to the Council: 1. Have City design and install public infrastructure consistent with the current condition. There are some minor modifications staff can implement that could save approximately two weeks during the public bidding process. This would result in an eleven week process from the start of final design to construction start, for a typical infrastructure project with a developer who performs their responsibilities;grading, payment of fees, filing of plat and easements,in a timely manner. However, because it is a formal legal process there are certain requirements that must be met which set the schedule. Often staff provides a schedule to the developer in time for them to adequately meet their infrastructure installation needs.As the representative from DR Horton mentioned, they would prefer to do their own infrastructure work but they know the schedule and that's just part of the project management. 4 2. Have developer's engineer design and developer's contractor install public infrastructure. This option represents the biggest change in how the city currently operates related to new development. This would mean the City wouldn't allow assessments for projects. The developer's contractors would fulfill all engineering and infrastructure installation with review and inspections by the City;with City costs billed to the developer. A policy change like this may affect the current engineering contract with WSB. 3. Have City design infrastructure and the developer's contractor install infrastructure. For all the reasons previously mentioned, the City retains infrastructure design in-house but allows the developer's contractor to install infrastructure.While the initial comment which precipitated this review was about timing, developers have also complained about the cost of public bidding. While the developer's contractor has the ability to bid on any public project,it seems that developers continue to believe their relationship with a contractor will net in reduced costs. It is unclear how much their overall costs would be reduced, as they will have the added inspection fees for the City inspector, to ensure City standards are met. 4. Have City design infrastructure and the install public infrastructure with some consideration under certain circumstances, that developer's contractors can install public infrastructure. In discussions with the City Attorney, staff questioned if there could be certain criteria that a contractor would need to meet before the City would allow them to install public infrastructure. Therefore any person with a backhoe and time on their hands couldn't be authorized to install public infrastructure, even if the developer guaranteed their performance.The City Attorney stated that some minimum qualifications could be required to allow installation of public infrastructure. Further, the City of Woodbury provided their policy which indicates there are several criteria evaluated when determining if the improvements will be privately installed: • Financial wherewithal of the developer to adequately secure the project and of the institution providing the security on the developer's behalf. • Type of security provided (i.e. Letter of credit, cash escrow, third party agreement, etc.). • Developer's and/or contractor's prior experience and proven ability to successfully complete a similar project in Woodbury and/or other community including reference checks if necessary. • Ability to provide 2-year warranty bond. • Necessity of incorporating other benefitted properties into public improvement plans. • Evaluation of the overall development plan. • Size and phasing of the proposed development. • Other City-related issues. RECOMMENDATION Discuss and provide staff direction 5 Plan Design-Developer w/option to Petition Plan Design-Developer Only w/City Review Plan Design-City only the City. Plan Design-Other options Arden Hills-If City constructs,then City designs. If Dev Anoka Apple Valley Coon Rapids constructs,they prepare plans with City review. Bloomington-If Dev prepares,City modifies to conform to standards and keeps track of staff time.Some Dev have asked City to prepare plans and add costs into the special Blaine Cottage Grove Eagan assessments. Eden Prairie(plus 5%fee if Dev preparees to pay Dayton-If Dev is constructing and financing,then they can Brooklyn Park Forest Lake for City inspection) also prepare plans. Minnetrista-Dev prepares plans for their dev with City review.City completes plans on adjacent infrastructure,such Burnsville Golden Valley Lino Lakes as existing road reconstruction or utility extensions. Champlin Lakeville Minnetonka St.Louis Park-either depending on complexity of project. Chanhassen Maple Grove Savage Columbus Maplewood Shakopee Elko-New Market Woodbury White Bear Lake Ham Lake Hastings Hugo IGH Mounds View Norwood-YA Oakgrove Plymouth Prior Lake Roseville Scandia Shoreview Stillwater Victoria Waconia Wayzata (Construction-Developer w/option to Construction-Developer Only Construction-City only Petition the City. Construction-Other options Anoka Bloomington Coon Rapids Arden Hills-Usually Developer unless bigger project. Brooklyn Park-Developer unless MSA street is involved,the City Apple Valley Maple Grove Cottage Grove may then bid the project. Blaine Maplewood Eagan Dayton-1.Dev all. 2.City all.3.City constructs,Dev finances. Farmington:1.City all w/waiver of 429 assessment.2.City constructs,Dev Finances.3.Dev All plus design. 4.Dev all,but no Burnsville Golden Valley Eden Prairie design. IGH:Dev unless large trunk mains or collector streets are involved, Champlin Hastings then the City. Chanhassen Lino Lakes Stillwater:Dev except City installed trunk sewer and water lines. Columbus Minnetonka Woodbury:80%is constructed by Dev. Elko-New Market Norwood-YA St.Louis Park-either depending on the complexity of project. Forest Lake Plymouth Ham Lake Savage Hugo White Bear Lake Lakeville Minnetrista Mounds View Oakgrove Orono Prior Lake Roseville Scandia Shakopee Shoreview Victoria Waconia Wayzata CITY/TOWNSHIP WHO CONSTRUCTS? WHO PREPS PLANS? Residential is usually the Developer with City Anoka inspection. Preferred option would be for City to do all Developer with City review. and have the Developer reimburse the costs. Apple Valley Developer City Typically if it is a project that will be let and contracted for Both. Most ordinary improvements are constructed construction by the City the City or a consultant working for the by the developer and inspected by the city but some of City will prepare plans. If the work is to be contracted for by the Arden Hills the more involved improvements may be designed and developer the developers engineer may prepare plans and then (wants a copy of results) built by a city either city staff or a consultant hired by the city will review and ( py ) y y project especially if it involves approve. I have worked for cities that allow for the developer to assessment of other properties that are not part of the development. contract with the city's consultant to prepare plans for the development and thus saving on the review costs to the developer. Blaine Developer can construct with City review. Developer can prepare with City review. We've done both ways. If the developer's engineer prepares the plans,we get the AutoCAD files and then put them into our format. Any tweaks needed are done by City Engineering staff. City hires contractor and collects through special Staff keeps track of their time on specific projects and then staff Bloomington assessment from the Developer. time and costs get added into the project costs to be specially assessed. Some developers have asked the City to do the design and prepare plans so that they can add all of their design costs into the special assessment,which gets spread over 10 years at a relatively low interest rate. Developer constructs the local street,utilities, sidewalks,etc.with inspection by the City.We review Brooklyn Park and approve the construction plans before work The plans for all infrastructure are prepared by the developer with begins.If the subdivision includes an MSA street,the review and approval by the City Engineer. City might bid that project spearately(we've done it both ways). Burnsville Developer Developer Champlin Developer designs and builds public infrastructure. Developer designs and builds public infrastructure. City reviews City reviews plans and inspects work. plans and inspects work. Chanhassen Developer with City inspection. Developer with City review. Columbus Only the Developer with City inspection. Only the Developer with City review. Coon Rapids Developer's option Developer's Option.If Developer preps plan,the City will review. No answer-would like the results of our survey as Corcoran they are in the process of making the same policy No answer would like the results of our survey as they are in th changes. eprocess of making the same policy changes. Cottage Grove Developer,or the Developer can petition the City to City Engineer construct. There are 4 options available with review and Dayton inspection by the City on all options: 1.Developer Option 4 is the same as Option 1 but with the Developer constructs and finances.2.City constructs and preparing the plans. In Options 1-3,the City prepares the plans. finances.3.City constructs with Developer financing. The developer may request public installation or propose to do private installation with inspection by Eagan the City. In either case,they have to provide financial Either,under the same terms as the construction. guarantees to insure it is installed to City standards and paid for. CITY/TOWNSHIP WHO CONSTRUCTS? WHO PREPS PLANS? We allow the Developer to design,construct and inspect the public infrastructure. We approve the We allow the Developer to design,construct and inspect the design and will charge them a 5%fee for the City to public infrastructure. We approve the design and will charge Eden Prairie them a 5%fee for the City to oversee the Developer's engineer oversee the Developer's engineer who will perform the who will perform the inspection.If they choose,they may If they choose,they may petition the City p p y Y Y petition to design and construct the infrastructure. the City to design and construct the infrastructure. In Lonsdale and Elko New Market,Land Developers In Lonsdale and Elko New Market,Land Developers are Elko-New Market construct the public infrastructure under the responsible for preparing the plans,and the City Engineer reviews supervision of a City Inspector. the plans for compliance with City standards. Four options: 1.City designs,constructs and finances the improvements. This is done through a waiver of the 429 assessment process. 2.City designs and constructs the improvements,Developer finances the improvements(developer money set aside in a Farmington construction account to finance the construction rather than assessments).3.City designs and inspect the improvements,Developer constructs and finances the improvements(City does plans,developer hires contractor and pays contractor,city inspects work). 4. Developer designs,constructs and finances the improvements,City inspects improvements. Forest lake Developer with inspection by City. Only the City. Golden Valley is fully developed so we do not get a lot of new subdivisions. Most that we do get are replats In the few areas that we have built new subdivision for housing, Golden Valley which already have city services and streets. The few the City has prepared the plans and assessed them as part of the that we have done have been the city constructing the overall cost of the project. street and utilities and assessing the cost back to the property. Ham Lake Developer to City specifications. Developer to City specifications. Usually developer constructs with City inspection. If Developer constructing the improvements,they do the plans. Hastings Developer can petition City to construct with City Otherwise the City but it has been 10 years since they had an in- assessing back the costs to the developer. house designed development infrastructure design. Hugo Developer is responsible for all public infrastructure Plans and construction are reviewed,approved,and inspected by and designs it to City standard. the City. Developers are generally allowed to build street and Inver Grove Heights lateral utilities. When large trunk mains or collector For private developments,Developer may utilize engineer with streets are involved,the city leads those projects even City review. if funded by the Developer. Lakeville Developer Engineering If Developer requests 429 Assessments,the City will on 429 assessment projects,the City will prepare the plans and Lino Lakes bid the project for construction.If Developer is specs. If Developer is preparing plans and specs,the City will installing,the City will inspect. review and approve. Maple Grove Requires all public improvements be installed by a city Ci p contract. ty prepares plans. When a developer proposes a project in Maplewood that includes public roads we have the developer The City conducts the feasibility study,prepares the contract Maplewood petition the City to build the public improvements. documents and plans,bids the project out,and is the project The cost of the improvements are assessed back to the manager for the public improvements. new properties. CITY/TOWNSHIP WHO CONSTRUCTS? WHO PREPS PLANS? Both. The developer may complete the improvements on their own with inspection by the City OR they may Either. The developer's engineer may prepare plans with City Minnetonka petition the City to complete the public improvements review if they choose to complete the construction of the public which are paid with 100%project costs assessed back infrastructure. If they choose to petition the City to complete the to the developer. This petition must be approved by improvements,the plans must be prepared by the City. council. Developer prepares the plans for their development with City Minnetrista Allows the Developer to get their own bids privately review. The city completes all plans on infrastructure adjacent to and the City provides the inspection. a development,such as existing road reconstruction or utility extensions. Mounds View Developer with City review/inspection. Developer with City review. Either.Developer can request to be assessed by the Norwood Young America City and City would construct all of the project. If the developer prepares the plans,City would review and Developer can construct the project with inspection by approve. the City. Oakgrove Only the Developer with City inspection. Developer with City review. Orono Only the Developer with City inspection. Only the Developer with City review. The Developer almost always constructs the public infrastructure within new subdivisions.The City inspects the public infrastructure during installation The Developer submits the plans for public infrastructure and the Plymouth and prior to city acceptance before the warranty city reviews the plans. A development contract is required to period expires. The Developer can petition for the City ensure that the developer installs the infrastructure in accordance to construct the public infrastructure but it is rarely with the approved plans and specs. used because the cost is generally higher and the timing is on our schedule. Prior Lake Developer constructs with inspection by City. The Developer prepares the plans with City review/approval during the preliminary and final plat stages. Roseville Usually developer constructs with City inspection. Developer with City review. The Developer may contract for the improvements or Developer's engineer may prepare plans;the City may hire a Savage they may petition the City to install the improvements consultant to prepare the plans;or the City may prepare the with 429 assessments. The improvements are plans.All plans prepared by Developer are subject to City review inspected by the City. and use of City standard specs and detail plates. Construction is completed by Developer with Plans&Specs have been prepared by Developer with inspection Scandia inspection by the City. Construction staking has been by the City,but the Engineer has suggested the City take control performed either way. of plans and specs to ensure consistency throughout the City. The developer can hire his contractor under a The developer can have his engineer design the work or he can Shakopee developer's agreement with the city staff doing the inspection. petition the city to design. It has historically been the developer installing all the infrastructure. The City inspects along with the The developer is responsible to hire engineers to prepare the Shoreview developers engineer. The developer is required to plans according to City Specifications and are reviewed and provide an escrow for 125%of the value of work in the approved by the City. public right of way. Stillwater Developer generally constructs with City inspection Developer prepares the plans with review by the City. and the City has installed trunk sewer and water lines. Both. If the project is minor,Developer will design and Both. If the project is minor,Developer will design and construct. construct. If the project is major,City will hire a If the project is major,City will hire a consulting engineer and consulting engineer and work with the Developer on work with the Developer on the design of the public St.Louis Park the design of the public infrastructure. infrastructure. CITY/TOWNSHIP WHO CONSTRUCTS? WHO PREPS PLANS? Victoria Developer with City inspection. Developer with City inspection. Waconia Developer with City inspection. Developer with City review. Wayzata Developer with City inspection. Developer with City review. White Bear Lake Either the Developer(to the City's specs and with Either the Developer(to the City's specs and with inspection)or inspection)or the City. the City. Woodbury 80%is all constructed by Developer.City inspects. City Engineer NO RESPONSE GIVEN Brooklyn Center Carver Chaska East Bethel Edina Greenfield Independence Jordan Lake Elmo Mound New Brighton Ramsey Rogers ROSEMOUNT CITY PROCEEDINGS REGULAR MEETING JULY 2, 1996 MOTION by Anderson to direct staff to get a sixty day extension for the preliminary plat and rezoning request for Biscayne Pointe. Second by Carroll. Ayes: Wippermann, Busho, Carroll, Edwards, Anderson. Nays: None. Motion carried. Community Development Director Rogness reviewed Shannon Pond East Final Plat and Rezoning. The 1st Phase of the 38 acre site will have 40 single family residential detached lots. The developer is Jim Alien of Hampton Development. The Planning Commission recommended that Outlot A, a ponding area, be absorbed by the adjacent lots resulting in larger building pads and eliminating several variances. Staff and City Council agreed. MOTION by Wippermann to adopt A RESOLUTION APPROVING THE FINAL PLAT FOR SHANNON POND EAST ADDITION. Second by Busho. Ayes: Busho, Carroll, Edwards, Anderson, Wippermann. Nays: None. Motion carried. MOTION by Wippermann to adopt AN ORDINANCE AMENDING ORDINANCE B CITY OF ROSEMOUNT ZONING ORDINANCE rezoning Shannon Pond East Addition from AG- Agriculture to R-1, Single Family Detached Residential. Second by Edwards. Ayes: Carroll, Edwards, Anderson, Wippermann, Busho. Nays: None. Motion carried. Public Work Director/City Engineer Osmundson introduced a Public Improvement Policy in which the City would require all developers to utilize the City Staff and its designated consultants to provide the engineering design and construction engineering of all newly installed public streets and utilities. This will provide a higher quality control and prevent "fix up" problems later on. It will also insure consistency with the existing utility systems and its comprehensive plans for storm sewer, sanitary sewer, water distribution and transportation systems. Council discussed options. Jim Allen, Hampton Development, noted that assuredly the developer does not like to give up any control, but the cost and liquidated damages will be the same for any contractor. City Administrator Burt said that better quality now will reduce repairs in the future which will be a long term savings. Edwards noted, "why not build it right the first time?" MOTION by Wippermann to adopt A RESOLUTION ADOPTING AN IMPROVEMENT POLICY FOR PUBLIC INFRASTRUCTURE INSTALLATION. Second by Edwards. Ayes: Edwards, Anderson, Wippermann, Busho, Carroll. Nays: None. Motion carried. Mayor Busho reminded Council and audience of the AMM Legislative Policy meeting on July 18; the Rosemount Fire Department will be at the Apple Valley 4th of July Parade; and remember to plan for events for our annual Leprechaun Days celebration July 21 -28, 1996, 3 CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION CITY COUNCIL MEETING DATE: July 2, 1996 AGENDA ITEM: Public Improvement Policy AGENDA SECTION: New Business PREPARED BY: Bud Osmundson AGENDA NIOL City Engineer/Public Works Director ITEM - C ATTACHMENTS: Policy, Resolution, Eagan Article APPROVED BY:� For many years the City has allowed developers to chose two ways of installing public improvements in new developments. They have the option of petitioning to have the City provide the financing, engineering, legal and construction costs through the Chapter 429 process where all costs are then assessed to the property within the development. Another option is where the developer finances the construction of the public improvements and pay for a engineer of their choosing to design these public improvements. What we are proposing to do is to require all developers to utilize the City Staff and its designated consultants to provide the engineering design and construction engineeering of all newly installed public streets and utilities. Why are we doing these things? One is to ensure the consistency and compatibility with the City's existing utility systems and its comprehensive plans for storm sewer, sanitary sewer, water distribution and transportation systems. The second major reason is to ensure that the public facilities are built to the highest quality so that the City does not have to spend City funds prematurely to reconstruct or rehabilitate in some manner these facilities. We have had numerous cases of premature costs which were borne by the City taxpayers because there is not an economical mechanism in place to make developers come back and pay for the costs of the rehabilitations. At this time we have a mix of developers choosing either option. There are financial reasons to choose either method which I will go over in more detail at the Council meeting. At this point, Staff is recommending that the attached policy be adopted through the resolution. The Public Infrastructure is a major investment by the Community and should not be compromised to save money initially instead of looking at the ultimate operating/ownership costs of these facilities. The policy will also assist Staff in determining when a public improvement is required. It will also allow the developer to chose one of two methods, either the City financing or financing by the developer, the details of which are described in the policy. RECOMMENDED ACTION: MOTION TO ADOPT A RESOLUTION ADOPTING AN IMPROVEMENT POLICY FOR PUBLIC INFRASTRUCTURE INSTALLATION. COUNCIL ACTION: 4 CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 1996 - A RESOLUTION ADOPTING AN IMPROVEMENT POLICY FOR PUBLIC INFRASTRUCTURE INSTALLATION WHEREAS, it is the City's responsibility to provide and ensure the public health, safety and welfare through the City's infrastructure including the sanitary sewer system, potable water system, storm water drainage system, transportation systems and related appurtenances. These facilities are owned, operated, maintained and ultimately reconstructed by the City which has enormous amounts of money invested in these systems. Because of these financial obligations it is important for the City to clarify the City's policy towards constructing new public improvements in developments, and WHEREAS, It is the policy of the City Council of the City of Rosemount that it is in the best interest of the City that all new streets and utilities added to the public system shall be designed and inspected by engineers employed by the City, hereinafter referred to as the "City Engineer", for the following reasons: 1. To ensure consistency and compatibility with the City's existing utility system. 2. To ensure consistency and compatibility with the City's Comprehensive Plan, including the Storm Water Management Plan, the Sanitary Sewer Plan, the Potable Water System Plan, the Transportation Plan and its Wetland Management Plan. 3. To ensure maximum control by the City of system components that will ultimately be operated, maintained and reconstructed by the City. 4. To ensure quality construction acceptable to City Standards. 5. To ensure that the City's tax dollars are not spent in educating numerous design personnel about City ordinances, standards and procedures. WHEREAS, all plans and specifications for improvements will be prepared by the City Engineer or the Consultant designated by the City Engineer and there will be two options for which the developer and City Council may choose for actual construction of the improvements, which are listed within the policy. NOW THEREFORE BE IT RESOLVED, the City Council of the City of Rosemount adopts the "IMPROVEMENT POLICY FOR PUBLIC INFRASTRUCTURE INSTALLATION". ADOPTED this 2nd day of July, 1996. Cathy Busho, Mayor ATTEST: Susan M. Walsh, City Clerk i I Motion by: Second by: Voted in favor: Voted against: II Public Works if Policy No. IMPROVEMENT POLICY Adopted by Council FOR on: PUBLIC INFRASTRUCTURE INSTALLATION 1� PURPOSE: It is the City's responsibility to provide and ensure the public health, safety and welfare through the City's infrastructure including the sanitary sewer system, potable water system, storm water drainage system, transportation systems and related appurtenances. These facilities are owned, operated, maintained and ultimately reconstructed by the City which has enormous amounts of money invested in these systems. Because of these financial obligations it is important for the City to clarify the City's policy towards constructing new public improvements in developments. II. STATEMENT OF POLICY It is the policy of the City Council of the City of Rosemount that it is in the best interest of the City that all new streets and utilities added to the public system shall be designed and inspected by engineers employed by the City, hereinafter referred to as the "City Engineer", for the following reasons: 1. To ensure consistency and compatibility with the City's existing utility system. 2. To ensure consistency and compatibility with the City's Comprehensive Plan, including the Storm Water Management Plan, the Sanitary Sewer Plan, the Potable Water System Plan, the Transportation Plan and its Wetland Management Plan. 3. To ensure maximum control by the City of system components that will ultimately be operated, maintained and reconstructed by the City. 4. To ensure quality construction acceptable to City Standards. 5. To ensure that the City's tax dollars are not spent in educating numerous design personnel about City ordinances, standards and procedures. All plans and specifications for improvements will be prepared by the City Engineer or the Consultant designated by the City Engineer and there will be two options for which the developer and City Council may choose for actual construction of the improvements. Last Revision: IMPROVEMENT POLICY The only exception to this rule is where trunk facilities are to be constructed through a developing area. In this case, Option 1, the State Chapter 429 process will be followed which will allow for the most appropriate cost spreading of the project benefits. In all cases, construction observation will be completed by the City or its designated consultant and a two year warranty will be provided by the contractor after final acceptance of all utilities and streets by the City. A, OPTION 1: This option is the basic City financing and construction of all improvements which is completed through the State Statute, Chapter 429, Public Improvement Process. In this process the Developer/Land Owner will be required to sign a petition (Exhibit A) requesting public improvements, waiving their rights to the preliminary hearing and requesting that the entire cost of all engineering, planning, legal or other required work be assessed against their property, including Feasibility/Preliminary Reports, even if the project does not proceed past this point. If the Developer/Land Owner desires, they can submit a petition and include funding to pay directly for the Feasibility/Preliminary Report and then for the preparation of Plans and Specifications in lieu of assessing the costs, per the attached Schedule A. In the Development Contract the Developer will be required to submit security for 25% of the public improvements and appurtenances. B. OPTION 2: This option is where the Developer/Land Owner will finance the construction. The Developer will submit in writing its request and will be required to submit funding which will establish a "Construction Account" for the project. Initially the Developer must submit funding for the Feasibility/Preliminary Report stage, then the preparation of the Plans and Specifications per the attached Schedule A. If the project proceeds to construction the Developer will have to submit the bid amount plus a 10% contingency to pay the Contractor for construction, plus any other costs including: • Construction Engineering 4% • Construction Surveying 4% • Testing Services 2% • Attorney Fees As Determined • Administration Fees 5% The percentages at the right are estimates of construction costs as based on past experiences and could increase or decrease depending on the individual projects. 2 • IMPROVEMENT POLICY The City will have the sole authority and responsibility to pay the construction costs plus those described above from the "Construction Account", in the same manner as is done with Option 1. The Development Contract may describe other requirements, financial or otherwise, which the Developer is responsible for, above and beyond the "Construction Account". 3 EXHIBIT "A" Proj # CITY OF ROSEMOUNT PETITION FOR LOCAL IMPROVEMENTS (100% Petition) To the City Council of Rosemount, Minnesota: We, the undersigned, being the owners of all the real property legally described as follows: hereby petition the City Council to undertake without a public hearing under Minnesota Statutes, Section 429.031, the following improvements to such property and agree to pay for all costs for the preparation of the Feasibility Report for these improvements in the event the improvements are not ordered in: Sanitary Sewer Walkways Watermain Streets Storm Sewer Curb & Gutter Street Lights Other and to pay the entire assessable costs thereof against our property encompassing or abutting said improvements based on benefits received without regard to cash valuation. Signature of Owner(s)* Address Date 1. 2. 3. 4. We also agree to guaranty payment for the preparation of plans and specifications for the above petitioned improvements in order that the plans and specifications may be prepared simultaneously with the Feasibility Report. For City Use Only Date Rec'd: By: To Council: *Property owned in joint tenancy should be signed by each owner. • 10/88 SCHEDULE "A" REQUIRED ENGINEERING SECURITIES Preliminary Report $155/lot single-family $100/unit twin homes $ 75/unit quad homes or multi-plex Estimated actual engineering cost for all other developments. Plans and Specifications $400/lot single-family $300/unit twin homes $200/unit quad homes or multi-plex Estimated actual engineering cost for all other developments. JUL 02 '96 14 26 HERITAGE DEVELOPMENT P.2 HRE C DEVELOPMENT • June 23, 1996 Mayor and City Council City of Rosemount 2875 145th Street West Rosemount, MN 55068-0510 Mayor and Planning Commission Members: • Heritage Development opposes the City of Rosemount's proposal to require developers to do all projects within Rosemount as a City Improvement. Heritage Development has been placed in an unfair market situation by having to comply with this policy change,when James Allen's neighboring plat did not comply to this policy change. An additional 25%of construction cost becomes difficult to meet when the purchase of the property and plans have been submitted based on our engineers ability to perform this work. Occasionally we as private citizens,municipalities and land developers need to review our rights under the US Constitution in regard to the use of property. The Eight amendment of the Constitution states,"No State shall... abridge the privileges or immunity of citizens of the United States: nor shall any State deprive any person of life liberty,or property,without due process of law," It is the Eight Amendment which granted Municipalities and States the right of police power.Police power became the basis for the City's right to zone and regulate land. In 1926 this power was challenged and upheld in the case of the Pillage of Euclid v.Amber Realty Company and again two years later in Nectaw v City of Cambridge. Two important principles were established by these challenges, first zoning is legal and enforceable as a police-power responsibility,even when private property value is lost and secondly the purpose of zoning is to promote the health, safety,morals and general welfare of a community. When the court's ruled to uphold zoning as a legitimate use of police power, municipalities were also granted the right to pass and enforce subdivision ordinances. These ordinance in contemporary Metropolitan Minneapolis-St. Paul regulate everything from street widths and construction, lot size and setback widths,wetland encroachments and ponding requirements,housing size and appearance, landscape requirements and tree preservation. Nearly every decision a private property owner might have over the use of their property has been determined by municipality's regulation. When a city then proceeds to enact law which requires the private developer of land to use and pay for the services of one engineering firm to design and implement construction of property without regard to the needs and wishes of its owner,I would submit that the City has removed all the owners rights,but the right to pay for the city's decisions. Where as an argument could be made that the City's consulting engineer is within the City's Constitutional right to design and plan subdivisions as a/Unction of its police-power to promote the health,safety and general welfare of a community it could also be argued that such action is a violation of the Eight Amendment's intent. 450 East County Road Q•Little Canada,MN 55117•Phone:(612)481-0017•Fax:(612)481-1518•Toll Free:(800)644-0017 20720 Watertown Road,Suite 102•Brookfield,WI 53186•Phone:(414)796-8129•Fax:(414)796-8149 JUL 02 '96 14.27 HERITAGE DEVELOPMENT P.3 Larger lots sizes,increased setbacks,oversized ponding areas,increased street widths are in fact not simply imposed as a method to promote health and safety to a community but are in reality a method to promote a larger tax basis to a community. When the only remaining rights the private developer has left is the right to purchase property and pay for all improvements, perhaps the City should consider buying and developing property. Heritage Development opposes the City ofRosemount's proposal hire developers to use only the consulting engineer named by the City. Sincerely, Thomas D.Bisch Director of Heritage Development Inc.of Minnesota • CALL TO ORDER Pursuant to due call and notice thereof a regular work session of the Rosemount City Council was held on Wednesday,May 12,2010 at 6:33 p.m.in the Conference Room at City Hall,2875 145th Street West,Rosemount. Mayor Droste called the meeting to order with Council Members Bills,DeBettignies,Shoe-Corrigan and Weisensel in attendance. Staff present included City Administrator Johnson,City Clerk Domeier,Director of Parks and Recreation Schultz,Community Development Director Lindquist, Project Engineer Olson,City Engineer Weiss and Chief of Police Kalstabakken. ADDITIONS OR CORRECTIONS TO THE AGENDA 6.F.Shenanigans Updates—reduction of hours from Community Development DISCUSSION 2.A. Discussion with Progressive Rail representative Dave Fellon of Progressive Rail provided more detail on the issues previously raised about train noise. He also talked about the number of requests received for potential growth and development. Discussion was held regarding the industrial development campaign. Mayor Droste suggested that a separate meeting should be held regarding the development. Bruno DiNella expressed his concerns regarding train noise. Further discussion was held regarding the quiet zones. Project Engineer Olson provided an update on the quiet zone locations. Mr. Felon explained the federal requirements for sounding the train horns. Mr.Felon stated he would be willing to meet in the future regarding industrial development. 2.B. Rosewood City Council Appeal Community Development Director Lindquist provided information about the park dedication fees. The subdivision agreement would include language related to the park dedication fee study and that the fee may be adjusted. Director of Park and Recreation Schultz stated the goal of the study was to be fair to the developers and to the City. The current park dedication fee is$85,000 per acre or approximately$3,400 per unit. Warren Isrealson stated that developers have not been buying land for the past four years. The six lot project was his biggest project in four years. He added that land values have dropped tremendously and lot prices have dropped to almost half of what they used to be listed. Mayor Droste questioned what park dedication fees he was seeking for the project. Mr.Isrealson stated it would not be feasible to develop the property at the current rate. Mr.Isrealson stated that he wanted to install his own sewer and water on the project. He stated that City Engineer Brotzler had informed him it required the public bidding process. He was requesting that the City Council would allow him to do the project and avoid the public bidding process.He wanted to design the project by himself since it was on a private street and to have an exception from the normal City policies. Bret Weiss of WSB stated he was present when the policy was put into place.The policy was developed for City control as well as having quality control. He provided history on the quality of projects in the past. By having the City take over the project the City will be able to say the policies have been followed and there is no need for negotiating back and forth on the process. Further discussion was held regarding the design work estimates. Mr.Weiss stated that the City adopted standards were not out of the ordinary and the intent is for the sewer,water and streets to last many years. He would not advocate for doing things that could impact the quality of the systems just to get more lots in the door. He did note that Mr. Isrealson could bid on the project through the public bidding process. Mr.Weiss did not anticipate problems but noted situations may arise with disagreements about soil conditions and the construction. The policy allows the City to enforce standards and is a more efficient practice. Bill Ryan stated that Mr.Isrealson was a great guy and they never had trouble working on any other development projects. Mr.Weiss explained past issues with Mr.Isrealson performing unauthorized work. He added that at one point the FBI was involved. Mr.Weiss stated there are parameters around capabilities along with the contractor being bonded,insured and experienced. He stated that that the private roads should be built to the standards of public roads. xp P p The City should not limit its design standards for a shorter life span. Mr.Isrealson stated he has been busy doing similar projects. Mr.Weiss responded that Mr.Isrealson stated earlier that it had been over four years since he was bidding on projects. Mr. Isrealson stated that most developers have to hire an engineer to get the project done but he and his son are already an engineers. He added that he was strongly motivated. Council Member Shoe- Corrigan questioned Mr.Isrealson on the communities he had done his own engineering work. He replied Lakeville,Farmington,Savage and Prior Lake. Community Development Director Lindquist stated she did recognize the financing shift due to the current economic conditions and talked about assessing the costs. She added that it was not all or nothing and different options could be discussed depending upon the situation at hand. Mr.Isrealson stated the fees and costs are more than he would make on selling six lots.He could not move forward without significant changes. Council Member Weisensel stated that the estimated costs is based upon an average cost and with such a small project Mr. Isrealson would only be charged for what is actually done and the rest would be returned to the developer. Mr.Weiss explained the process when doing developer agreements.' He provided more information on the cost for design work,staking,inspections, asbuilt and erosion control. He stated that 20%is used to set the dollar amount. Council Me!nber Shoe-Corrigan expressed her concerns and supported ensuring that the systems are built well and to standard. Mr.Wiess stated it is important for the City to have the control in order to get more"consistent quality. Council Member Shoe-Corrigan agreed it was reasonable to review the park dedication fees and suggested reviewing the engineering fees as well. Further discussion was held regarding the letters of credit the City currently has for Mr. Isrealson's past project. Mr. Weiss explained how the estimates are created for the letters of credit. Ms.Lindquist added there was a history on the last project and that is why the letters of credit had not been released. There were warrants issued on the project and the City was not a party to the lawsuit and because of that the City hasrequested additional information. i Mr.Weiss explained that he would do all he could to keep the fees down. He stated that the policy was put in place in 1996 based upon standards and expectations. Mayor Droste noted it was important for cities to work with developers. Council Member Shoe-Corrigan stood behind the policy that was adopted in 1996. Council Member DeBettignies stated that Mr. Isrealson would have the opportunity to submit a bid for the project. Further discussion was held on the bidding process. Mr.Isrealson stated the project was a unique situation and would be a small and simple undertaking for him to complete. Council Member Bills suggested reviewing the letter of credit process as makes it difficult for a smaller guy to come in and do the project. Council Member Weisensel stated it doesn't make a difference and that the only difference is having a cash flow to get a letter of credit. He added that the City's fees were not on the top of municipal fees. He understood that the City would look at our typical fees and actual costs. He did not see the City Council changing the policy.Mr. Israelson asked the City Council to allow him to meet with Mr.Weiss and to do the improvements on his own. Ms.Lindquist asked Mr.Isrealson to send her the preliminary numbers he had developed for the project infrastructue. It was determined that Mr.Isrealson would meet with Mr.Weiss and Ms. Lindquist to discuss fees and letters of credit associated with the project roject and the subdivision agreement. 2.C.Shannon Parkway Pedestrian Underpass—2010 Street Improvements Project—City Project#428 Director of Parks and Recreation Schultz summarized the information provided within the staff report.We think we will get the easement from the home owners association.Cannot guarantee we will be able to drain all the water through the underpass.The HOA wondered if the City might dose the underpass.. Council Member Weisensel stated that he has heard complaints about the underpass. Different options regarding maintaining or completely eliminating the underpass were discussed. The City Council had interest in fixing the underpass with minimal repairs and investment. Mr. Schultz stated that staff would research the options and find a cost effective way to move forward. 2.D. Emergency Siren Replacements Chief of Police Kalstabakken provided a summary of the information within the staff report Discussion was held regarding the addition of a fifth siren at Connemara Park. The City Council supported the replacement of all five sirens. 2.E. Extension of Connemara Trail to Akron Avenue City Ad '4trator Johnson provided a summary of the staff report.City Engineer Weiss explained that the Citq may be able to advance the numbers.Mr.Johnson planned to stay one step behind the developer all the way.Discussion was held regarding the safety components with the extension of Connemara;Trail.Further discussion was held regarding signals at the intersections. Community Development Director Lindquist stated that Dakota County would not install signal lights until the warrants are met.The City Council supported the planning of the extension. Staff assumed engineer review and work would be conducted in the summer or fall. S.F.Liquor;License Establishments Chief of Police Kalstabakken provided information on the general activity occurring at Shenanigan's. Officers have done walkthroughs as needed and will continue to once a night Wednesdays through Sundays. He stated that a letter was sent to the owner in March about the police calls occurring on 4ROSEMOUNTEXECUTIVE SUMMARY CITY COUNCIL City Council Work Session: May 12, 2010 AGENDA ITEM: Rosewood City Council Appeal AGENDA SECTION: W PREPARED BY: Kim Lindquist, Community Development nn Director, AGENDA NO. 4)-427 Dan Schultz, Park and Recreation Director ATTACHMENTS: Memorandum from City Engineer, Andy Brotzler dated 5-3-2010, email from Luke APPROVED BY: Israelson dated 4-15-2010 0� RECOMMENDED ACTION: Staff does not support the applicants request regarding the engineering for the subdivision. Staff will be reviewing the Park Dedication fees and will be making a recommendation to the Parks Commission and City Council in the near future. ISSUE Public Infrastructure Warren and Luke Israelson have requested that the Council vary from their policy requiring all public projects to be engineered and constructed by the City or their designee.The reason for the request is that the applicant has indicated that they could accomplish the engineering and construction faster and cheaper than the estimated costs found within the draft subdivision agreement.Staff met with the Israelsons on April 30,2010 to discuss this issue,and the park dedication fee issue.We could come to no resolution and therefore the applicant would like to present their request to the Council during the work session. This request is common as many developers are interested in using their own engineers or contractors for installation of public infrastructure. Should the Council wish to vary from our policy in this instance it would be expected that other developers would want similar treatment.Attached is a memorandum from Andy Brotzler,City Engineer explaining some of the background associated with the policy and enumerating the benefits with City designed and installed infrastructure. Park Dedication Fees Staff also has discussed the current park dedication fees with the Israelsons. Staff has indicated that we will be reviewing the land value assumptions which are the basis for the park dedication fees,however,the study will not be done by the time their subdivision is approved. Staff is recommending that the subdivision agreement allow for a reduction in park dedications fees should the land value study indicate that a reduction is warranted. It is expected that the study will be complete by early summer. CONCLUSION Staff is bringing this item before you due to the applicant's request.We have received similar requests in the past and have not varied from our policy of city designed and installed infrastructure. Staff does not support changing the policy now,even though the economic climate is different than several years ago,as we do not want to compromise the public infrastructure system. Regarding park dedication fees,Staff has indicated they would be reviewing the fees and will make a recommendation to the Parks Commission and City Council.The recommendation will be based upon what is going on in the market and not related specifically to the applicant's property.There will be other properties within the City that will be requesting subdivision approval and any fee adjustment must address all properties equally. 2 f ' 4 ROSEMOUNT PUBLIC WORKS DEPARTMENT M E M O R A N D U M To: Honorable Mayor and City Council Cc: Dwight Johnson, City Administrator Kim Lindquist, Community Development Director From: Andy Brother, Director of Public Works/City Engineer Date: May 3, 2010 Re: Policy for Public Street and Utility Improvements within Developments This memorandum is to provide background information for the completion of street and utility improvements within private developments as public improvements designed and constructed by the City. In 1996 the City adopted the attached policy to address the design and construction of street and utility improvements within private developments. As these facilities become part of the City's public infrastructure system for ownership and maintenance, for the reasons enumerated in the policy the improvements are designed and constructed by the City. In addition,since 1996 new technologies and requirements have emerged which add to the importance of these improvements being designed and constructed under the control of the City. These include the development and use of a Geographic Information System(GIS) for the maintenance of record drawings and increased requirements for City locating of utilities with higher levels of accuracy as required by the Minnesota Office of Pipeline Safety (MnOPS). With the City performing the design and construction of street and utility improvements within development projects,the collection and development of this information is able to be completed efficiently and accurately. There are several advantages associated with the completion of street and utility improvements within private developments as City administered projects. Examples include the following: • For the design and administration of a construction contract,the City is the single point of accountability for the completion of improvements to City standards and system plans. • As the single point of accountability for the project,the City is ensured of receiving the expected completed product with the initial construction effort. This not only includes the physical improvements but the project documentation and delivery of consistent record drawings and electronic information for utilization with the City's GIS system and maintenance operations. • All improvement projects are designed and constructed consistently. This provides for improved and efficient City operation of the facilities in the long-term from a maintenance standpoint. • On past projects,actual engineering costs associated for the design and construction administration have typically varied from 12%to 22%of the construction cost. The actual cost varies based on the size of the project and the phase of the development. Typically larger projects and later phases of the development result in lower percentages and vice versa for smaller projects and earlier phases of the development. The first phase of a development includes a feasibility report for the entire development that is referenced with each additional phase of the development project. • Former developers in Rosemount have provided positive comments on the efficiency and effectiveness of the public improvement process utilized by the city for development projects. With regard to development projects,the subdivision agreement typically identifies estimated engineering costs associated with 1) the review of the preliminary plat,grading plan,and final plat;and 2) the design,construction administration,construction observation and staking for the public street and utility improvements. As these costs can vary significantly from project to project,estimates for plan review are typically derived based on average expenditures from similar past projects. For project design and construction an estimate of 20%of the estimated construction cost is used. A cash deposit for the amount of these estimated fees is required with the subdivision agreement deposited in a city project account. All engineering costs are charged on an actual basis such that any unspent monies at the close out of a project are returned to the developer. Please do not hesitate to contact me with questions or comments regarding the process for the installation of public infrastructure within development projects. Public Works Policy No. E-2 IMPROVEMENT POLICY Adopted by Council FOR on: 7-2-96 PUBLIC INFRASTRUCTURE INSTALLATION I, PURPOSE: It is the City's responsibility to provide and ensure the public health, safety and welfare through the City's infrastructure including the sanitary sewer system, potable water system, storm water drainage system, transportation systems and related appurtenances. These facilities are owned, operated, maintained and ultimately reconstructed by the City which has enormous amounts of money invested in these systems. Because of these financial obligations it is important for the City to clarify the City's policy towards constructing new public improvements in developments. II. STATEMENT OF POLICY It is the policy of the City Council of the City of Rosemount that it is in the best interest of the City that all new streets and utilities added to the public system shall be designed and inspected by engineers employed by the City, hereinafter referred to as the "City Engineer", for the following reasons: 1. To ensure consistency and compatibility with the City's existing utility system. 2. To ensure consistency and compatibility with the City's Comprehensive Plan, including the Storm Water Management Plan, the Sanitary Sewer Plan, the Potable Water System Plan, the Transportation Plan and its Wetland Management Plan. 3. To ensure maximum control by the City of system components that will ultimately be operated, maintained and reconstructed by the City. 4. To ensure quality construction acceptable to City Standards. 5. To ensure that the City's tax dollars are not spent in educating numerous design personnel about City ordinances, standards and procedures. All plans and specifications for improvements will be prepared by the City Engineer or the Consultant designated by the City Engineer and there will be two options for which the developer and City Council may choose for actual construction of the improvements. Last Revision: IMPROVEMENT POLICY The only exception to this rule is where trunk facilities are to be constructed through a developing area. In this case, Option 1, the State Chapter 429 process will be followed which will allow for the most appropriate cost spreading of the project benefits. In all cases, construction observation will be completed by the City or its designated consultant and a two year warranty will be provided by the contractor after final acceptance of all utilities and streets by the City. A, OPTION 1: This option is the basic City financing and construction of all improvements which is completed through the State Statute, Chapter 429, Public Improvement Process. In this process the Developer/Land Owner will be required to sign a petition (Exhibit A) requesting public improvements, waiving their rights to the preliminary hearing and requesting that the entire cost of all engineering, planning, legal or other required work be assessed against their property, including Feasibility/Preliminary Reports, even if the project does not proceed past this point. If the Developer/Land Owner desires, they can submit a petition and include funding to pay directly for the Feasibility/Preliminary Report and then for the preparation of Plans and Specifications in lieu of assessing the costs, per the attached Schedule A. In the Development Contract the Developer will be required to submit security for 25% of the public improvements and appurtenances. B. OPTION 2: This option is where the Developer/Land Owner will finance the construction. The Developer will submit in writing its request and will be required to submit funding which will establish a "Construction Account" for the project. Initially the Developer must submit funding for the Feasibility/Preliminary Report stage, then the preparation of the Plans and Specifications per the attached Schedule A. If the project proceeds to construction the Developer will have to submit the bid amount plus a 10% contingency to pay the Contractor for construction, plus any other costs including: • Construction Engineering 4% • Construction Surveying 4% • Testing Services 2% • Attorney Fees As Determined • Administration Fees 5% The percentages at the right are estimates of construction costs as based on past experiences and could increase or decrease depending on the individual projects. 2 IMPROVEMENT POLICY The City will have the sole authority and responsibility to pay the construction costs plus those described above from the "Construction Account", in the same manner as is done with Option 1. The Development Contract may describe other requirements, financial or otherwise, which the Developer is responsible for, above and beyond the "Construction Account". 3 From: Luke Israelson [mailto:Iuke©kjwalk.com] Sent:Thursday, April 15, 2010 11:54 AM To: Lindahl,Jason Subject: Rosewood Village 3rd Addition Hello Jason, After reviewing the Development Agreement and Engineers Estimate we have a serious concern with regard to the cost of the project. When we look at a project we think about what it is going to cost us,we have all our own equipment and have the expertise within the company to both complete final design and install the utilities ourselves. We figured this would be a very simple and cheap project to complete,it is just 6 small lots with less than 500'of pipe(sewer,water and storm combined)and a cul-de-sac. However,you have$24,000 for final design and an additional$5,000 for engineering review,that's almost$30,000 for a final design that I could finish in 8 hours. Costs are a huge factor for us as developers right now,with current market conditions we are selling lots at roughly half of what we were selling them a few years ago,and if the construction estimate,which is extremely high from our perspective,is indeed accurate after paying all the city fees and paying for construction we will lose money on the lots that we're selling,and that's not including land cost! As a result we are requesting an opportunity to speak to the city council to express our concerns and request a variance from the requirements of having the city do final design and the public bid process for utility install. With respect to the park fees,we have an appraisal on the property across the tracks,Outlot B of Rosewood Estates,which came in at$40,700 per acre of developable land. If you use 10%of land value for the 2.03 acres as park dedication it comes to about$8,350. As a result we don't think it is unreasonable to request that the city follow the current market conditions when assessing park dedication fees,and all other fees for that fact.The cities that adjust their costs to reflect the drop in raw land and completed lot values are the ones that will draw interest from developers,the ones that remain stubborn with high charges will continue to languish with no new development. I've attached the summary from the appraisal. I look forward to hearing back from you. Thanks, Luke Israelson President KJ Walk Inc 6001 Egan Drive Suite 100 Savage MN 55378 Phone: 952-826-9068 Electronic Privacy Notice. This wreak and any attacirnmus.commits information that is.or may be.covered by the Electronic Convinunications Primacy Act.Iv USL and it also conliattgiti and pometary in nature. W you are not the intended recipient.please be advised that you are levity prohibited from retaining,using c dlstAaatng.or otherwise disclosing this information in any manner. Instead.please reply to the sender that you have received this communication in ehror.and than delete R Thank you in advance for your cooperation. Prestwick Place 7 th Construction Schedule The City has received a comment from the Sales Manager from Lennar's Falmoor Glen (Prestwick Place) development that the City took many months to complete the infrastructure in Prestwick Place 7th Addition. He indicated the delay negatively affected the sales performance of Lennar.The circumstances causing the delay were unusual, and would have occurred whether the developer installed, or the city installed infrastructure in this neighborhood. The Prestwick Place Preliminary Plat was approved by the City on October 2,2007. Prestwick Place had three owners:Arcon Development, US Home Corporation (Lennar) and Pemtom Land Development. During the plat approval,Arcon created a public improvement cost sharing agreement to share the common roads and infrastructure bordering the separate ownerships that the City endorsed and uses when public infrastructure in the Prestwick neighborhood is constructed. Prestwick Place 7th was predominately owned by Lennar, but the northwest road is shared by Arcon and Lennar and is identified to be constructed through the cost sharing agreement. See Figure 8 attached. Below is the anticipated or preliminary schedule initially proposed to the developer and the column adjacent the timeline experienced. Prestwick Place 7th Addition Preliminary Schedule Actual Schedule Planning Commission Recommendation February 26, 2013 January 22,2013 City Council Approval w/Petition and Waiver March 19, 2013 April 25,2013 BEGIN SITE GRADING Bid Opening May 10, 2013 June 28, 2013 AWARD CONTRACT a 11' -' Grading As-built Received from Lennar May 25, 2013 July 25, 2013 Begin Infrastructure Construction June 3, 2013 August 8, 2013 Agreement for Early Bldg Permit Issuance * N/A September 11, 2013 SUBSTANTIAL COMPLETION July2, 3 4. � e n1 *Added by staff for purposes of organization and not part of original schedule The three key activities that resulted in the delay of the construction of Prestwick Place 7th Addition were the beginning of site grading, awarding the construction contract, and the substantial completion of the construction project. The five week delay in starting site grading was because project grading would need to occur on both the property owned by Lennar and the property owned by Arcon. Scott Johnson of Arcon would not allow Lennar's grading contractor onto the Arcon property until an agreement with Lennar about supplying and grading excess material onto Arcon's property was created. This issue was ultimately resolved by Lennar entering into a purchase agreement with Arcon to purchase the Arcon property. With the purchase agreement,Arcon allowed Lennar's grading contractor to enter their property and Arcon signed the petition and waiver for the Prestwick Place 7th Addition subdivision agreement. The grading of the property began on May 1, over five weeks later than anticipated in the preliminary schedule. This delay is not related to the City's delivery process but was due to the two private parties which would have occurred has Lennar been responsible for all the infrastructure installation versus the City. Additionally,Lennar's purchase agreement was conditioned on City approval of the Prestwick Place 9th Addition prior to closing on the land with Arcon. Prestwick Place 7th and 9th Additions share a common street,Albany Way that has sewer and water services to both the 7th and 9th Additions.The result of the condition was that final construction plans for Prestwick Place 7th could not begin until the plans for Prestwick Place 9th were developed. The Prestwick Place Preliminary Plat approved in 2007 could not be used because the conversion of the Lennar property from townhouses to single family homes in 2011 resulted in changes to the street and utility intersections onto Albany Avenue. The Prestwick Place 9th Addition plans that provided these modifications were delivered to the City on May 20,2013. WSB advertised the Prestwick Place 7th public improvement project on June 13, distributed the plans to the contractor on June 21, opened bids on June 28, and awarded the contract to LaTour Contracting at the July 16 City Council meeting. Construction of the public infrastructure began on August 8. Three issues remained unresolved during the time that LaTour was readying for the project: Lennar's grading contractor did not perform their grading work consistent with the approved plans,Lennar and Arcon needed to resolve a payment for crop damage and the noncompliant grading,and the City needed to negotiate a construction easement with the exception property because Lennar could not obtain the needed easement on its own. Following construction commencement, further coordination occurred between Lennar and Arcon to agree on the additional grading that needed to occur and Lennar's grading contractor completed their grading while LaTour was constructing the trunk stormwater line. With site grading completed,the City and Lennar discussed the possibility of early building permits for lots that could be accessed through Prestwick Place 3`d. On September 11,Lennar and City staff agreed to construction terms that would allow building permits on three lots at the corner of Ailesbury Avenue and Albany Avenue with the construction staging occurring on a fourth lot adjacent to Prestwick Place 3rd. These three building permits were available more than three weeks before the substantial completion of the public improvement on October 5. All the lots within Prestwick Place 7th were available for construction as of October 5. Summary of Conversations and Key Activities October 11,2012: Joe Jablonski calls and states that Westwood needs to survey the site because Prestwick Place 3rd was long on material when using the County elevations. Grading would likely not occur in 2012. December 27, 2012: Phil Olson emails the preliminary construction schedule. The main elements on that schedule are listed on the table above. December 28,2012: Westwood submits the Prestwick Place 7th Final Plat and grading plan. January 17,2013: Phil Olson and Eric Zweber meet with Scott Johnson of Arcon to discuss Prestwick Place 7th Addition including grading and utility stub placement on the northwest side of Albany Avenue that is shared with Lennar. Because Lennar only controlled one-half of the right of way for Albany Avenue,Mr. Johnson also needed to agree to the road and infrastructure project. Mr. Johnson stated that he was talking with Lennar but that there was an issue with the grading. He indicated that within the cost sharing agreement, Lennar was to place the material from Prestwick Place 3`d on his property but Lennar hadn't done so. Also,Mr.Johnson indicated that initially,when the Lennar property was designated for townhouse development,more material would have been moved to his property than what will be coming now that the development would be single family.This would result in his property being short material. Mr.Johnson stated that he would not sign any petition and waiver agreement for the construction of Albany Avenue until Lennar provided the original amount of material anticipated and placed it on his property. Mr.Johnson stated that one way Lennar can resolve this issue is to buy his property and that he has given Lennar a price for the land. January 25,2013: City requests signatures from Lennar for the Subdivision Agreement and from Arcon for the Petition and Waver Agreement. February and March: Conversations with Lennar about either the need for Scott Johnson to sign the Petition and Waiver or modify the plans to remove Mr.Johnson's property. Lennar submits a revised grading plan to address some of the grading concerns. March 19, 2013: Eric Zweber emails Joe Jablonski of Lennar to state that the 120 day review period is almost over and either Mr.Johnson will need to sign the Petition and Waiver or Lennar should modify the plans to remove Mr.Johnson's property. March 19, 2013: Mr.Jablonski replies that Lennar is evaluating Mr.Johnson's purchase offer and Westwood is preparing some designs. Those designs will eventually become Prestwick Place 9th Addition. Lennar's purchase of Mr.Johnson's property will be contingent on the City approving modifications within Prestwick Place 9th Addition Preliminary Plat. April 9, 2013: Lennar submits another revised grading plan that lowers the site elevation. This submittal is closer to the submittal included with the preliminary plat submittal for the Prestwick Place 3`d Addition. April 15,2013: City receives the signed subdivision agreement for Prestwick Place 7th Addition. April 16, 2013: City Council approves the Prestwick Place 7th Addition Final Plat and Subdivision Agreement with a signed Petition and Waiver. City Council authorizes the preparation of plans and specifications. April 25, 2013: Phil Olson and Eric Zweber meet with Lennar and John Wiederhold to discuss acquisition of easements on Mr.Wiederhold's exception property for grading and to install the needed deep stormwater overflow pipe. April 29,2013: Lennar submits their grading permit application. May 1,2013: Grading permit issued by the City. May 15,2013: Lennar determines that they will shift lots in Prestwick Place 9th Addition to accommodate deep trunk storm sewer. City has confirmed that Mr. Wiederhold will give the city a temporary construction easement so that excavation can extend onto his property. May 20,2013: Westwood/Lennar submits final CAD files with the utility layout of Prestwick Place 7th Addition and 9th Addition. City begins final design. May 23, 2013: Westwood submits the Prestwick Place 9th Addition Preliminary Plat on behalf of Lennar. June 13, 2013: The advertisement for bids on the Prestwick Place 7th Addition public infrastructure is published. June 21, 2013: The final construction plans for public improvement of Prestwick Place 7th Addition are complete and distributed to the contractors bidding on the project. June 25, 2013: The Planning Commission recommends approval of Prestwick Place 9`h. City Council receives plans and specifications,ratifies advertisement for bids for Prestwick Place 7th Addition. June 28, 2013: City opens bid for the public improvements of Prestwick Place 7th Addition. July 16,2013: The City Council approves Prestwick Place 9th and Lennar is ready to close on the Arcon Development property. City receives bids for contract and awards contract to LaTour Construction. July 24,2013: The City held the preconstruction meeting with LaTour Construction. July 25, 2013: Lennar submitted grading plan as-built to the City. Lennar was notified that there were several areas that appeared to not meet acceptable tolerances. August 2,2013: Lennar and Arcon agree on the amount of crop damages due to construction within Prestwick Place 9th Addition August 5, 2013: City Council approves temporary easement for the construction of the trunk storm sewer within Mr. Wiederhold's property. August 8, 2013: Construction of Prestwick Place 7th infrastructure begins. August 21, 2013: Lennar and Arcon agree on grading revisions in Prestwick Place 9th Addition. This area had originally not been included with the mass grading and Albany Avenue services could not be installed as proposed. Arcon approves grading work and utility construction to move forward with Prestwick Place 7th Addition public improvements as proposed by Lennar. September 11, 2013: City issues memo notifying Lennar that three lots within Prestwick Place 7th may receive building permits prior to substantial completion of infrastructure,which is a departure from the normal practice. The three lots could be accessed through Prestwick Place 3rd therefore emergency vehicle access was satisfied. September 18, 2013: Lennar notifies City that they do not have a crossing permit from Northern Natural Gas for the sidewalk. Lennar begins 4-6 week permit process. October 3, 2013: Substantial completion of Prestwick Place 7th Addition and all lots are available for building permits. October 15,2013: The City Council approves the assessment roll for Prestwick Place 7th. October 29,2013 Lennar has yet to obtain the crossing permit from Northern Natural Gas. Without the NNG permit, the sidewalk will be installed next year with the final road wear course. . Prehtxuna Develo meat Schedule 140, 11 11 weeks from design to construction for a basic project. Mass grading is concurrent with city schedule. Grading Plan Approval and Grading Permit Site Grading Begins Begin Design Begin Final Design(5 weeks) -Developer Payment of City Fees City Council Action: Order Project/Authorize the Prep of Plans and Specs/Subdivision Agreement/Petition&Waver Site Grading Completed and Certified with City 5 Weeks Receive Plans and Spec/Ratify AFB Advertisement for Bids-Rosemount Town Pages&Finance&Commerce (10 day advertisement) 2 Weeks Bid Opening 1 Week City Council Action:Receive Bids /Award Contract* 2 Week Preconstruction Meeting 1/2 Week Begin Construction of City Contract 1/2 Week *Construction could begin approximately 2 weeks earlier by allowing bids to be presented at the Council meeting Adopted: 1-26-11 Number: CD-ENGPW-4.3 12,64 Revised: arroF IS ury or City Administrato : • • V4Vrr "Ice? • For: • unity Development,Engineeri I COUNCIL DIRECTIVE Finance Subject: Public Infrastructure Improvements for New Residential Development PURPOSE The provisions of this policy apply to all public improvements constructed either publicly or privately in the City of Woodbury to serve new residential developments or religious institutions or elementary or secondary schools in residential zoning districts. The purpose of this policy is to ensure consistency and compatibility with the City's Comprehensive Plan and existing utility system and to minimize potential liability, operation and maintenance issues. In addition, it is the policy of the City Council that new residential development pays its own way and that all associated costs for the installation of public infrastructure to serve new residential development be the sole responsibility of the developing property owner. This policy includes the following sections: I. Design,Construction and Construction Administration Page 2 A. Design Page 2 B. Construction Page 2 C. Construction Administration Page 2 II. New Street and Sidewalk Construction Page 3 A. Street Construction Methods Page 3 B. Sidewalk Construction,Repair and Replacement Page 3 C. Final Street Improvements Page 3 III. Allocation of Public Improvement Costs Page 4 A. Water and Sewer Area Charges Page 4 B. Lateral Water and Sewer Improvement Costs Page 5 C. Roadway Improvement Costs Page 6 D. Connection Charges Page 7 IV.Assessment of Publicly Constructed Infrastructure Costs and Other Charges Page 7 V. Surety for Public Infrastructure Improvements Page 8 A. Surety Required Page 8 B. Acceptable Sureties Page 8 C. Surety for Publicly Constructed Infrastructure with Assessment Financing Page 9 D. Surety for Publicly Constructed Infrastructure without Assessment Financing Page 10 E. Surety for Privately Constructed Public Infrastructure Improvements Page 11 F. Surety for Area and Other Charges Page 13 VI.Definitions Page 14 CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 2 of 14 I. Design, Construction and Construction Administration The design, construction and construction administration of public infrastructure necessary to serve new residential developments shall be completed as follows: A. Design. All public infrastructure improvements shall be designed by the City, either by City staff or its consultant(s), under the direct supervision of the City Engineer. Private design of public infrastructure improvements results in costly and duplicated review effort by the City with no corresponding benefit and lack of continuity if the design engineer changes during the project. B. Construction. Public infrastructure shall usually be constructed by the City through public bid and construction practices. However, at the City Administrator's sole discretion, developer(s) may be allowed to contract privately for the construction of public infrastructure improvements necessary to serve their development. Upon request, the City Administrator will evaluate a project's eligibility for private construction based on criteria that include but are not limited to: • Financial wherewithal of the developer to adequately secure the project and of the institution providing the security on the developer's behalf. • Type of security provided(i.e.,letter of credit, cash escrow,third party agreement, etc.). • Developer's and/or contractor's prior experience and proven ability to successfully complete a similar project in Woodbury and/or other community including reference checks if necessary. • Ability to provide 2-year warranty bond. • Necessity of incorporating other benefitted properties into public improvement plans. • Evaluation of the overall development plan. • Size and phasing of the proposed development. • Other City-related issues All terms and conditions under which the City would allow private construction will be memorialized in a Developers Agreement. Approval for developer-constructed infrastructure improvements for one development addition will not automatically grant the developer the right to complete future additions on that basis. Each addition will be evaluated independently based on satisfactory completion of the work, compliance with the Developers Agreement and criteria set forth within this policy. The City reserves the right to require all public improvements to be constructed publicly. If public trunk utilities are constructed privately,the area charge credit will not exceed the area charges for the Preliminary Plat or Planned Unit Development. C. Construction Administration. Construction administration for all public infrastructure improvements, including those constructed under private contract, shall be performed by City staff and/or its consultant(s) under the direct supervision of the City Engineer. Construction CD-ENGPW-4,3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 3 of 14 administration includes but is not limited to inspection, documentation, pay requests, as-builts, surveying,field staking,testing and monitoring. II. New Street and Sidewalk Construction All associated costs for new streets and sidewalks to serve new residential developments shall be the sole responsibility of the developing property owner. The purpose of this section is to establish City policies for new street, sidewalk and path construction in developing residential areas in the City of Woodbury. This policy applies to both public and private streets and sidewalk improvements. For construction practices and standards, refer to the Engineering Directive - New Street and Sidewalk Construction. A. Street Construction Methods. The City of Woodbury requires one of two street construction methods in new residential developments. All street construction shall be in accordance with City standard plans, specifications and detail plates. 1. Method No. 1 -- Concrete Curb. This method allows initial construction of the ultimate concrete curb section and bituminous base course. Curb is to be protected by a bituminous wedge along the street edge and reinforced silt fence along the back edge. The bituminous wedge is removed, and any damaged curb replaced prior to wear course paving. If over 40% of curb is damaged per review criteria along any given street section, the entire curb along that section of roadway shall be replaced. New concrete curb shall be protected from housing construction activities until its design strength is achieved. No building permits will be issued within new curb construction areas until the Planning Division has approved alternative access or verified with the Engineering Division that the curb has reached its design strength. 2. Method No. 2 -- Interim Bituminous Curb. This method allows initial construction of an interim bituminous curb and road section to be used as a road surface until housing construction is substantially complete, at which time the ultimate concrete curb and bituminous street section will be constructed. The City reserves the right to require Method No. 2 in high- and medium-density housing developments including narrow lot single family. B. Sidewalk Construction. Repair and Replacement. All sidewalk construction shall be in accordance with City standard plans, specifications and detail plates. Sidewalk panels with damage that may cause hazard to life or limb shall be repaired immediately by a contractor approved by the City. Other damaged sidewalk panels shall be replaced when the street wear course paving occurs by a contractor approved by the City. C. Final Street Improvements. Final street improvements and necessary sidewalk repairs shall occur after approximately 85 percent of the homes have been constructed along a given street section. If this threshold is not met within three years after the bituminous base is placed, the City reserves the right to require final street improvements at that time at the City's discretion. CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 4 of 14 III.Allocation of Public Improvement Costs This section provides for the allocation of public improvement costs to all residential properties that benefit from the installation of public improvements. Minnesota State Statutes allow the cost of public improvements to be assigned to benefiting properties up to the benefit received. A. Water and Sewer Area Charges. Area and connection charges are utilized to regain capital spent by the City to pay for the installation of public utilities such as water, sanitary sewer and storm sewer facilities. These facilities consist of, but are not limited to, trunk mains, wells, lift stations,water towers,ponds,and rights-of-way. The City reserves the right to review and adjust area charge rates annually. 1. Assignment of Area Charges. Water, sanitary sewer and storm sewer area charges will be assigned to properties regardless of zoning, size or homestead status. a. Water and sanitary sewer area charges will not be assigned until the property is within the Municipal Urban Service Area (MUSA) boundary and can be developed in accordance with the City's Land Use and Phasing Plan. b. Area charges will be calculated on the net area of the property as defined in Section VI of this policy. c. Based upon the trunk improvement cost recovery needs of the City as determined at its sole discretion, trunk water and sanitary sewer area charges and trunk utility lateral benefit charges may be assigned when trunk infrastructure serving the property is installed even though water and sanitary sewer may not be immediately available to the property. However, the aforementioned charges will normally be assigned when a property subdivides or an existing home connects to public utilities. d. Storm sewer area charges will be assigned when a property is subdivided or when an existing home connects to public utilities. e. Parcels with an existing home will be assigned area charges as an Equivalent Residential Unit (ERU) for the first two acres of a parcel. The balance of the parcel will be assigned area charges in effect at the time. f. In the event any portion of the two acres upon which the ERU area charge has been levied is subdivided in the future, the area which is subdivided will be assigned area charges at the rate in effect at the time the subdivision occurs. The parcel will be credited with the ERU area charge previously levied, adjusted to the current year based upon the construction cost index. g. Parcels without an existing home at the time the trunk infrastructure is provided will be assigned area charges on the entire area of the parcel. 2. Delay Payment Option on Water and Sewer Area Charges. Property owners of a lot of record at the time the assessment roll is adopted may apply for an option to delay CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 5 of 14 certification and payment of the area charges on a portion of the property within 30 days of the adoption of the assessment roll. a. If the parcel has an existing home at the time area charge assessments are levied,the City will certify area charges on the first two acres as a single ERU plus any area greater than five acres. The City will delay certifying area charge assessments on the remaining area, up to three acres, until the property subdivides or no later than ten years after the area p p p Y Y charge assessment roll is adopted,whichever comes first. b. If the parcel does not have an existing home at the time area charge assessments are levied,the City will certify area charge assessments to one acre and any area greater than five acres. The City will delay certifying area charge assessments on the area of one acre to five acres,up to four acres,until the property subdivides or no later than ten years after the area charge assessment roll is adopted,which ever comes first. c. Payment on the delayed assessment will be equal to the original assessment amount plus an inflation adjustment factor based on the construction cost index. A lump sum payment or installment payments can be used to pay the remaining amount. Installments will be spread over the same payment period set for the original assessment roll and will be at an p p interest rate established at the time the delayed assessments are certified or paid in full. Said interest rate shall be based upon two percent above the market interest rate for bonding. d. If any part of the property for which a delay in the certification of the assessments was approved subdivides within ten years from the time the assessments were adopted, area charges will be certified against only that portion of the property that is subdivided. Any delayed assessments which have not been certified within ten years after the adoption of the assessment roll shall be certified at the end of the ten-year period. Said assessments shall be payable in annual installments extending over the same time period as the original assessment period. e. Upon approval of a request for the delay of the certification of special assessments, the City shall file a certificate with the County Recorder containing the legal description of the affected property and the amount of the assessment delayed. B. Lateral Water and Sewer Improvement Costs. Lateral public improvements provide direct service or lateral benefit to a particular property. 1. Assignment of Lateral Water and Sewer Costs. Lateral costs will be applied to all properties regardless of zoning, size or homestead status. a. Lateral costs will be applied to the property based on benefit. b. Lateral costs will be applied when laterals are installed that benefit the property. 2. Delay Payment Option on Lateral Water and Sewer Assessments. Property owners of a lot of record at the time assessments are levied may apply for a delay of the certification of CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGP W-4.3 Public Infrastructure Improvements for New Residential Development Page 6 of 14 the lateral charges within 30 days of the adoption of the assessment roll,provided the subject property is not connected to water or sewer service. a. Certification of lateral water and sewer improvement assessments can be delayed until the property connects to water or sewer, subdivides or no later than ten years after the lateral charge assessments were originally adopted, whichever comes first. b. Payment on the delayed assessment will be equal to the original assessment amount plus an inflation adjustment factor based on the construction cost index. A lump sum payment or installment payments can be used to pay the remaining amount. Installments will be spread over the same payment period set for the original assessment roll and will be at an interest rate established at the time the delayed assessments are certified or paid in full. Said interest rate shall be based upon two percent above the market interest rate for bonding. c. If any part of the property for which a delay in the certification of the assessment was approved is subdivided, payment of the delayed costs for the subdivided area will be required. d. If any part of the property for which a delay in the certification of the assessment was approved is connected to water and sewer,payment for a portion of the delayed costs will be required on an ERU basis. e. Upon approval of a request for the delay of the certification of special assessments, the City shall file a certificate with the County Recorder containing the legal description of the affected property and the amount of the assessment delayed. C. Roadway Improvement Costs 1. Residential Roadways. Residential roadway costs within developing areas may be assigned to properties regardless of zoning,size or homestead status. a. Residential roadway costs will not be assigned until the property is within the MUSA boundary and can be developed in accordance with the City's adopted Land Use and Phasing Plan. b. Residential roadway costs will be assigned based on roadway frontage, property acreage or a combination thereof. c. Residential roadway costs may be assigned when residential roads are constructed that have frontage along or provide direct benefit to the property. 2. Delay Payment Option on Residential Roadway Assessments. Property owners of a lot of record at the time assessments are levied may apply for a delay of the certification of the residential roadway assessments on a portion of the property within 30 days of the adoption of the assessment roll. CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 7 of 14 a. If certification of residential roadway assessments are delayed, the assessment amount identified in the assessment roll will be converted to a per acre assessment regardless of the original assessment calculation method. b. If the property owner applies for a delay in the certification of the assessments within 30 days of the adoption of the assessment, and if a delay is granted, the City will certify residential roadway assessments to one acre plus any area greater than five acres. The City will delay certifying the assessments on the remaining area, up to four acres, until the property subdivides or no later than ten years after the assessment roll is adopted, whichever comes first. c. Payment on the delayed assessment will be equal to the original assessment amount plus an inflation adjustment factor based on the construction cost index. A lump sum payment or installment payments can be used to pay the remaining amount. Installments will be spread over the same payment period set for the original assessment roll and will be at an interest rate established at the time the delayed assessments are certified or paid in full. Said interest rate shall be based upon two percent above the market interest rate for bonding. d. If any part of the property for which a delay in the certification of the assessments was approved subdivides, the delayed residential roadway assessments will be certified against only that portion of the property that is subdivided. e. Any delayed assessments not certified within ten years after assessment roll adoption shall be certified at the end of the ten-year period. Said assessments shall be payable in annual installments extending over the same time period as the original assessment period. f. Upon approval of a request for the delay of the certification of special assessments, the City shall file a certificate with the County Recorder containing the legal description of the affected property and the amount of the assessment delayed. 3. Major Roadways. Major roadway costs will be applied to properties regardless of zoning, size or homestead status. Major roadway improvement cost will normally be collected at the time a property develops per a negotiated major roadway contribution. D. Connection Charges. Connection charges will be collected at the time of building permit issuance and are utilized to regain capital spent by the City to pay for the installation of public improvements. The City reserves the right to review and adjust connection charges annually. IV.Assessment of Publicly Constructed Infrastructure Costs and Other Charges The City of Woodbury may offer assessment terms for payment of publicly constructed public infrastructure costs, area charges and other charges at its sole discretion. Upon request,the City will evaluate the developer, the proposed project and the financial impacts to the City to determine the offering of assessments. The evaluation criteria,includes but is not limited to,the following: CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 8 of 14 • Financial wherewithal of the developer to adequately secure the project and of the institution providing the security on the developer's behalf. • Type of security provided(i.e., letter of credit,cash escrow,third party agreement, etc.). • Developer's and/or contractor's prior experience and proven ability to successfully complete a similar project in Woodbury and/or other community including reference checks if necessary. • Ability to provide 2-year warranty bond. • Necessity of incorporating other benefitted properties into public improvement plans. ■ Evaluation of the overall development plan. • Size and phasing of the proposed development. ■ Other City-related issues V. Surety for Public Infrastructure Improvements A. Surety Required. The amount of the surety shall be that amount required by this policy based on the City Engineer's estimated public infrastructure improvement costs as defined in Section VI of this policy. The City reserves the right to modify the surety requirements at its discretion or in recognition of other benefits, such as economic development benefits,received by the City. B. Acceptable Sureties. Acceptable sureties, at the sole discretion of the City, shall include a cash escrow with the City of Woodbury, trust instrument/improvement agreement (three-party agreement)or an irrevocable letter of credit in accordance with the City's Surety Policy. C. Surety for Publicly Constructed Infrastructure with Assessment Financing. If the City offers assessment of public infrastructure improvement costs in accordance with Section IV of this policy, the developer shall provide a surety as follows: 1. Single-Family Detached Residential Developments Surety Requirements. The developer shall deposit a surety in the amount of 33 percent of the City Engineer's estimated public infrastructure improvement costs for final plats with 50 single-family detached lots or less and in the amount of 125 percent of the City Engineer's estimated public infrastructure improvement costs for final plats exceeding 50 single-family detached lots. In addition, surety in the amount of 125 percent of the three-year inflated cost of the final street improvement costs shall also be provided regardless of final plat size. Surety Release. The developer may make application to the City to reduce or release all or a portion of the surety in accordance with the terms of the Developers Agreement and as follows: CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 9 of 14 • When another surety acceptable to the City is furnished by the developer to replace a prior surety;or • The surety may be reduced to the outstanding assessment balance if at least 67 percent or more of the original assessment balance for the parcel within the development has been paid and received by the City. City costs for processing surety reductions shall be billed to the developer in an amount per the fee schedule and shall be paid by the developer to the City within 10 days or as outlined in the Developers Agreement. 2. Multi-Family and Cooperative Residential Developments Surety Requirements. The developer shall deposit a surety in the amount of 125 percent of the City Engineer's estimated public infrastructure improvement costs for multi-family and cooperative residential developments. In addition, a surety in the amount of 125 percent of the three-year inflated cost of the final street improvement costs shall also be provided. Surety Release—Structures with 12 units or less. The developer may make application to the City to reduce or release all or a portion of the surety in accordance with the terms of the Developers Agreement and as follows: • When another surety acceptable to the city is furnished by the developer to replace a prior surety; or • The surety may be reduced to the outstanding assessment balance if at least 75 percent or more of the original assessment balance for the parcel within the development has been paid and received by the City. City costs for processing surety reductions shall be billed to the developer in an amount per the fee schedule and shall be paid by the developer to the City within 10 days or as outlined in the Developers Agreement. Surety Release — Structures with greater than 12 units. The developer may make application to the City to reduce or release all or a portion of the surety in accordance with the terms of the Developers Agreement and as follows: • When another surety acceptable to the City is furnished to the City by the developer to replace a prior surety;or • The surety may be reduced to the outstanding assessment balance for the parcel within the development if the application clearly establishes that the reduction amount requested has been paid and received by the City; or CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 10 of 14 • If a certificate of occupancy is issued and all other provisions of the Developers Agreement are complete,then the surety for only that specific parcel will be released. City costs for processing surety reductions shall be billed to the developer in an amount per the fee schedule and shall be paid by the developer to the City within 10 days or as outlined in the Developers Agreement. D. Surety for Publicly Constructed Infrastructure without Assessment Financing If the City does not offer assessment of public infrastructure improvement costs in accordance with Section IV, the developer shall supply a cash escrow equal to 125 percent of the City Engineer's estimated public infrastructure improvement costs. The City reserves the right to modify the 125 percent escrow amount at its discretion or in recognition of other benefits, such as economic development benefits,received by the City. E. Surety for Privately Constructed Public Infrastructure Improvements Surety Requirements. The provisions of this section apply to all projects where public infrastructure improvements are constructed under private contract and will be inspected and accepted by the City of Woodbury upon completion. The developer shall deposit a surety acceptable to the City in the amount of 125% of the City Engineer's estimated public infrastructure improvement costs. The surety shall guarantee completion of the public improvements being constructed under private contract by the developer. The City reserves the right to modify the surety policy requirements at its discretion or in recognition of other benefits, such as economic development benefits,received by the City. Surety Release — Utility Improvements. The developer may make application to the City to reduce or release all or a portion of the surety provided in conjunction with the public utility improvements as follows: • When another surety acceptable to the City is furnished to the City by the developer to replace a prior surety. • No reduction shall be made which would result in the surety held being less than 10 percent of the original surety amount for the public utility improvement petition items until the final acceptance of said improvements. • When public utility improvements have been completed, up to 90 percent of the surety for those completed items may be released contingent upon meeting the requirements of the Engineering Directive - Surety Release for Privately Constructed Public Infrastructure Improvements. CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 11 of 14 City costs for processing surety reductions shall be billed to the developer in amount per the fee schedule and shall be paid by the developer to the City within 10 days or as outlined in the Developers Agreement. Surety Release — Public Street Improvements. The developer may make application to the City to reduce or release all or a portion of the surety provided in conjunction with the public street improvements as follows: • When another surety acceptable to the City is furnished by the developer to replace a prior surety. • When the interim public street improvements have been completed in accordance with the City's New Street and Sidewalk Construction requirements in Section II of this policy, up to 90 percent of the surety for the interim public street improvements may be released contingent upon meeting the requirements of the Engineering Directive - Surety Release for Privately Constructed Public Infrastructure Improvements. • When final public street improvements have been completed in accordance with the City's New Street and Sidewalk Construction requirements in Section II of this policy, up to 90 percent of the surety for those final public street improvements may be released contingent upon meeting the requirements of the Engineering Directive - Surety Release for Privately Constructed Public Infrastructure Improvements. City costs for processing surety reductions shall be billed to the developer in amount per the fee schedule and shall be paid by the developer to the City within 10 days or as outlined in the Developers Agreement. Surety Release — Final. The developer may make application to the City to release the remaining surety provided in conjunction with the public utility and street improvements as follows: • All public street and utility improvement petition items have been completed to the satisfaction of the City,including final punchlist items. • All required copies of approved record plans have been provided in compliance with City standards,policies or other applicable agreements. • All final lien waivers have been provided from all contractors, sub-contractors and suppliers. • Signed IC-134 forms have been provided from all contractors, sub-contractors and suppliers as required by law. • Final copies of bids, change orders, contracts,payment verification and lists of suppliers and subcontractors have been provided. CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 12 of 14 • A final cost summary of the public infrastructure improvements has been provided. • Homeowner's association papers,if applicable,must be filed. • Any additional activities as detailed in the Developers Agreement or other agreements between the developer and the City have been completed. City costs for processing surety reductions shall be billed to the developer in amount per the fee schedule and shall be paid by the developer to the City within 10 days or as outlined in the Developers Agreement. F. Surety for Area and Other Charges No surety is collected to secure assessment of area charges. Any assessed area charges shall be secured with a pending assessment prior to being levied. If the City, at its sole discretion, does not offer assessment of area charges and other charges, the applicant shall submit to the City of Woodbury all applicable charges as part of the execution of the Developers Agreement. VI.DEFINITIONS Area Charge and Connection Charges Area and connection charges are utilized to regain capital spent by the City to pay for the installation of public utilities such as water, sanitary sewer and storm sewer facilities. These facilities consist of, but are not limited to,trunk mains,wells,lift stations,water towers,ponding areas,and rights-of-way. Assessment As used in this policy, financing method whereby assigned public improvement costs or charges are paid in installments over time by a benefitted property in conjunction with property tax payments. Assignment Public improvement costs or charges allocated to a benefitted property. Development Process of platting or subdividing property into lots for sale and/or housing construction. ERU CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 13 of 14 Parcels with an existing home will be assigned area charges as an Equivalent Residential Unit(ERU) for the first two acres of a parcel. The ERU rate is equal to the charges on a 10,000 square foot single- family lot at the time charges are assigned. Lateral Benefit Public improvement cost applied to a benefitted property for the public improvements that provide service or lateral benefit to a particular property. These improvements include, but are not limited to, water main, sewer main, services, residential and collector streets, storm sewer pipes, sidewalks, pathways,ponding and/or related infrastructure. Lateral Cost Lateral utility cost is capital spent by the City to pay for the installation of utilities that provide service or lateral benefit to a particular property. These improvements include, but are not limited to, water main, sewer main, services, residential and collector streets, storm sewer pipes, sidewalks, pathways, ponding and/or related infrastructure. Lateral Improvement Public improvements that provide service or lateral benefit to a particular property. These improvements include, but are not limited to,water main, sewer main, services,residential and collector streets, storm sewer pipes, sidewalks,pathways,ponding and/or related infrastructure. Low-, Medium-and High Density Residential Land use categories as defined in the City's Comprehensive Plan. Major Roadways As used in this policy, major roadways are the arterial, minor arterial and collector roadways identified in the Comprehensive Plan. Net Area Gross acreage minus the following acreage deductions for the purpose of calculating area charges or other fees and charges: • Publicly dedicated National Wetlands Inventory wetlands and the Minnesota Department of Natural Resources public waters; ■ Publicly dedicated major road rights-of-way; • Publicly dedicated greenway corridors; • Publicly dedicated wetland buffers; ■ Publicly dedicated parks or open spaces; CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Council Directive CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development Page 14 of 14 ■ Publicly dedicated regional storm water management facilities. The area definition for any particular property will be based on the conditions existing at the time area charges are assigned to the benefited property. Public Infrastructure Improvement Costs Costs shall include, but are not limited to: engineering; design; inspection; testing; surveying; project- related legal and administrative costs; advertising; appraisals; acquisition of rights-of-way, permanent easements and temporary construction easements; construction;restoration; and financing costs. Publicly Dedicated Publicly dedicated as used in this policy is defined to include those areas for which unrestricted fee title is dedicated to the City without payment or compensation by the City. Religious Institutions and Schools Religious institution properties and elementary and secondary school properties (public and private) located in residential land use districts. Residential Roadways Low volume residential streets. Roadway Charge Roadway charges are utilized to regain capital spent by the City to pay for roadway and associated improvements that have frontage along or provide direct benefit to a property. These improvements include, but are not limited to, arterial, minor arterial and collector roadway improvements, as well as associated sidewalk,pathway, signage and storm sewer pipes,ponding and/or related infrastructure. Trunk Improvements Public improvements consisting of, but not limited to, trunk mains, wells, lift stations, water towers, ponds and rights-of-way. Adopted by the Woodbury City Council on January 26,2011—Resolution No. 11-20 CD-ENGPW-4.3 Public Infrastructure Improvements for New Residential Development • RESOLUTION NO. 11-20 RESOLUTION OF THE CITY OF WOODBURY, WASHINGTON COUNTY,MINNESOTA ADOPTING NEW COUNCIL DIRECTIVE CD-ENGPW-4.3— PUBLIC INFRASTRUCTURE IMPROVEMENTS FOR NEW RESIDENTIAL DEVELOPMENT AND RESCINDING IMPROVEMENT POLICY FOR RESIDENTIAL SUBDIVISIONS (DATED MAY 23,2001); STREET AND SIDEWALK CONSTRUCTION (CD-ENGPW-4.5); SPECIAL ASSESSMENTS FOR PUBLIC INFRASTRUCTURE IMPROVEMENTS BENEFITING RESIDENTIAL PROPERTIES (CD-ENGPW-4.3); SURETY TO GUARANTEE PAYMENT OF SPECIAL ASSESSMENTS (DATED FEBRUARY 24,2004); SURETY TO GUARANTEE PRIVATE CONSTRUCTION OF PUBLIC IMPROVEMENTS (CD-ENGPW-4.6) • WHEREAS, from time to time the City Council reviews and revises its existing policy related to public infrastructure and development;and WHEREAS,the City Council previously adopted the following policies: • Improvement Policy for Residential Subdivisions(dated May 23, 2001) • Street and Sidewalk Construction(Policy#CD-ENGPW-4.5) • Special Assessments for Public Infrastructure Improvements Benefiting Residential Properties(Policy#CD-ENGPW-4.3) • Surety to Guarantee Payment of Special Assessments(dated February 25, 2004) • Surety to Guarantee Private Construction of Public Improvements (Policy #CD- ENGPW-4.6); and WHEREAS, these policies require modification to reflect current needs and conditions and for consistency with the 2030 Comprehensive Plan. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Woodbury, Washington County, Minnesota that the following existing policies and Council Directives be rescinded: • Improvement Policy for Residential Subdivisions(dated May 23, 2001) • Street and Sidewalk Construction(Policy#CD-ENGPW-4.5) • Special Assessments for Public Infrastructure Improvements Benefiting Residential Properties(Policy#CD-ENGPW-4.3) • Surety to Guarantee Payment of Special Assessments(dated February 25, 2004) • •Resolution No. 11-20 January 26,2011 • Page 2 of 2 ■ Surety to Guarantee Private Construction of Public Improvements (Policy #CD- ENGPW-4.6) NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Woodbury,Washington County,Minnesota that Council Directive CD-ENGPW-4.3 be adopted as the City's official Public Infrastructure Improvements Policy for New Residential Development. This Resolution was declared duly passed and adopted and was signed by the Mayor and attested to by the City Administrator this 26th day of January, 2011. L. _So V ATTEST: Mary Gi '.� ' ` "�,' a or ,0001( 4OP Clinton P. Gridley,City A, inistrator (SEAL)