HomeMy WebLinkAbout2.b. Rosewood City Council AppealROSEMOUNTEXECUTIVE SUMMARY
CITY COUNCIL
City Council Work Session: May 12, 2010
AGENDA ITEM: Rosewood City Council Appeal
AGENDA SECTION:
PREPARED BY: Kim Lindquist, Community Development
Director,
Dan Schultz, Park and Recreation
AGENDA NO.
Director
ATTACHMENTS: Memorandum from City Engineer, Andy
Brotzler dated 5 -3 -2010, email from Luke
APPROVED BY:
Israelson dated 4 -15 -2010
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.
N
4ROSEMOUNT
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 Brotzler, 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
Jj 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.
�i 1 • ' •
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.
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.
11-20�•�
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:luke @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
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