HomeMy WebLinkAbout5.c. Assessment PolicyCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: FEBRUARY 4, 1992
AGENDA ITEM: ASSESSMENT POLICY
AGENDA SECTION:
OLD BUSINESS
PREPARED BY: STEPHAN JILK, CITY ADMINISTRATOR
AGENDIM # 5 r
ATTACHMENTS: MEMO, DRAFT #5 OF POLICY
APP BY:
This item is on the agenda for two purposes:
1. to complete a brief overview of the proposed policy.
2. to gain consensus on the policy so it can be finalized on
March 3, 1992.
This item has been discussed several times before Council in 1991. The
last time it was discussed two specific items were yet to be finalized and
they were:
A. Whether or not the property owner would be assessed at 100% of the
equivalent cost based on the property use as outlined in the policy or
a lessor amount. The examples shown in the draft are based on 100%.
B. The deferment section which has now been expanded to explain the
deferment options available.
My intent is to cause discussion and review such that the final
consideration of the policy can be had on March 2, 1992.
RECOMMENDED ACTION:
Consensus on the policy and direction to complete it to formally
adopt on March 2, 1992.
COUNCIL ACTION:
TO: Mayor McMenomy
Council Members Klassen, Staats, W'llcox, Wippermann
FROM: Stephan Jilk, City Administrator
DATE: January 31, 1992
RE: Proposed Assessment Policy
The proposed Assessment/Improvement Policy is being presented in
its 5th draft form. This policy had undergone major discussion
and thorough consideration by the previous City Council and was
left with few decisions to be made and consensus on the concept
was reached.
Background
The purpose of establishing this policy was two fold:
1. To establish a consistent policy in written form which would
be the basis for all assessments for construction and
reconstruction projects; and
2. To establish a guideline for funding these projects so that
we can calculate and plan for financing in them in the
future.
The drafted policy outlines methods for determining the
specifications or standards by which the City will allow these
improvements to be constructed and that assessments to property
will be based on the type of use the property assessed is
designated for.
That is, if a property is zoned R-1 an assessment will be
different than if it is zoned commercial. This concept was
developed to keep residential properties from paying commercial
street or industrial street costs. Sort of a "pay as you need"
concept. This relates directly to benefit which is of course the
basis for assessment.
The policy covers all types of improvements and all types of
property.
2
Recommendations
Street and utility construction projects are fairly easily
defined as to the cost and benefit to property owners when they
are new construction. But as the city's streets and utilities
age and are in need of replacement it becomes exceedingly
difficult to determine true benefit to a property and also
difficult to defend, sometimes in the courts, the value of that
benefit unless you can relate use to benefit.
The City has, in the past, used an area wide assessment for
streets. Especially when building collector streets this area
wide or service area concept can work well. County Road 42 was
assessed on a half mile area wide, either side of CR 42. Shannon
Parkway was assessed on a quarter mile wide area basis. This
concept can be applied to collector streets but when we proceed
to reconstruct residential streets in that same area property
owners have difficulty accepting the additional amount. In an
attempt to plan for and finance a long term street reconstruction
program, the proposed policy was drafted. Since it provides for
a "pay as you need" or pay for design/construction based on
property use, all property owners will be paying for a street
that they would need to serve their property even when, in some
cases, the abutting street may be wider or built heavier than
their allowed use would require. An example would be a
residential lot on 145th Street west of Chippendale.
We feel that this policy provides a strong, legally defensible
and acceptable method of recouping reconstruction and
construction costs and will be a major element in defining the
financing of this Capital Improvement item.
1) Since this policy also is the basis for determining costs
and financial planning for securing costs for these projects
in the future it is necessary to determine at what level
properties will be assessed. That is, once we determine the
assessment based on property use and project cost should the
city subsidize or reduce this assessment? Should the
property owner pay 100% of that calculated cost or a lessor
amount. If the lessor amount, say 90%, 80%, 70% is allowed
then the general taxpayer must pick up that difference
between 100% and some lessor amount assessed. This question
must be answered. As drafted the policy reflects a 100%
assessment. Examples shown also reflect this 100% rate.
Because we have established the "pay as you need" or
residential equivalent concept I would recommend that we
leave the rate at 100%. Establishing a lessor rate will
bring a greater burden on the other tax payers and
competition for other programs in utilizing general revenue
funds. Assessing a property for street improvements based
upon cost is usually a defensible position to take.
2
2) Deferments. The policy outlines several options for
deferment of assessments. There is one based on
agricultural use of a property and it is set by state law.
The two others listed as discretionary are open to the City
Council to decide if they are to be established here. These
are senior citizen/low income and undeveloped property
deferments. If these are to be adopted we will need to
decide a couple of issues, one of which is a major factor in
affordablity.
a) Low Income. Which financial guidelines will be used to
determine if a property owner should be given this. We
can research other cities to determine what is commonly
used. I believe this is the best approach.
b) On both the senior citizen/Low Income and unimproved
property deferments we can forgive part or all of the
interest which would accumulate or the assessment
principal. This is a major issue since the amount of
principal and the length of time the principal is
deferred can create a great deal of loss of funds to
the project and the debt owned on it.
This will be a major factor on some projects such as
160th where large parcels are considered undeveloped.
My recommendation is to consider deferring interest for up
to five years then allow it to cumulate. We will provide
examples of deferments on projects at the meeting for your
consideration.
I will be pleased to discuss any item in the policy as well as
the concept is developed around with any of you and I hope we can
reach consensus on the 4th so we can move ahead.
lj
3
CITY OF ROSEMOUNT
ASSESSMENT/IMPROVEMENT POLICY
STH DRAFT
January 29, 1992
TABLE OF CONTENTS
Page 1
Page 2
Page 3
Page 3
Page 4
Page 6
Page 7
Page 8
Page 11
Page 13
Page 14
Exhibit
A
Exhibit
B
Exhibit
C
Exhibit
D
Exhibit
E
Preface
Introduction
Definitions
Policies and Procedures
Project Initiation &
Hearing Process
Construction Standards
Useful Service Life
New Development
Improvements
Existing Development
Improvements
Method of Payment
Assessment Deferment
Policy
Street Reconstruction
Structural Maintenance
Five Year Street
Reconstruction Program
Residential Street
Equivalent Estimate
Street Assessment
Examples
PREFACE
This policy is the basis for, and plays an integral part in, the
long range construction and reconstruction of streets, sanitary
sewer, water, stormwater and trail improvements in the City of
Rosemount.
In construction of such improvements it is necessary to consider
two basic issues: one is the improvement needed, and two, how
will it be paid for.
The City is entering a new era in regards to these types of
improvements. Sections of the City are still developing with new
residential, commercial and industrial developments which require
utilities and streets.
At the same time a section of the City is ageing and the
infrastructure has aged and deteriorated such that it needs major
upgrading and replacement.
In new developments the cost of making such improvements can
generally be born by the developer and development agreements
where the costs are assessed over a rather short period of time
and no additional burden is placed on the rest of the taxpayers.
In older areas which are already developed, this may }�otfi be the
case. When existing infrastructure is replaced after those
improvements have "lived their normal life" the replacement costs
may become such a burden to the property owners that those costs
may be unacceptable and to assess all of these costs may prove
difficult.
Therefore, the City is attempting to develop a "Reconstruction"
program utilizing revenue sources from several areas including:
1. Assessments
2. Minnesota State Aids for Highway Improvements
3. Sanitary Sewer Connection Charges
4. Water Utility Connection Charges
5. Stormwater utility user fees & connection charges
6. General Taxes.
This concept wherein revenues from various sources will be
"pooled" to develop a reconstruction fund allows assessments to
be generated on a more equitable and consistent basis and still
not create an extreme burden on the property owners. It also
allows the City as a whole to share in the responsibility to
maintain and protect the entire infrastructure for city services.
The policy which follows outlines most specifically as to how
improvements are initiated, how they are designed and finally how
they are funded with the emphasis on assessments.
- 1 -
ASSESSMENT/IMPROVEMENT POLICY
PAGE 2
This approach is taken so that those involved in improvement
projects will be able to comprehend the approach taken and how
they are to be charged for the benefit they receive through the
improvement process.
INTRODUCTION
This document sets forth the methods and policies relating to
local improvements and special assessments practiced in the City
of Rosemount. It is emphasized that the following summarization
is general in nature and that certain circumstances may justify
deviations from stated policy as determined by the Rosemount City
Council.
A local improvement involves one or more of the following types
of improvements:
Roadway grading and base
Bituminous surfacing
Curb and gutter
Sidewalks, trails and driveways
Water trunklines and laterals
Sanitary sewer trunklines and laterals
Service connections
Storm sewer trunks, laterals and ponds
Street Lighting
All appropriate appurtenances associated with the
above improvements
Improvements are classified as follows:
1. New Developments - The construction of improvements related
to newly developed areas, normally made in conjunction with
the plat approval process.
2. Reconstruction - see definitions (Section I.1)
3. Rehabilitation - Complete or partial reconstruction of the
above mentioned improvements including bituminous overlays.
Rehabilitation does not include routine maintenance which
does not improve the structural integrity of a roadway, such
as seal coating and crack fillings.
4. Preventive Maintenance - see definitions (Section I.3)
5. Extensions - Construction of improvements generally made to
extend services to a certain area. Extensions normally
pertain to water, sanitary sewer and storm sewer trunks.
ASSESSMENT/IMPROVEMENT POLICY
PAGE 3
The special assessment is a financing tool employed by the City
of Rosemount as a means to allocate the cost of specific
improvements to benefitted properties and to spread those costs
over a number of years.
Minnesota Statues Chapter 429 regulates the procedure for the
construction and financing of local improvement projects when at
least part of the cost is defrayed by special assessments.
Special assessments are collected from the property owner along
with real estate taxes. When an improvement is of benefit to
certain areas, it is the intent of the Council that special
assessments be levied against benefitted properties. A major
goal of this document is that special assessments be allocated
and levied in an equitable and consistent manner.
SECTION I
DEFINITIONS
Additional definitions will be added as policy needed.
1. RECONSTRUCTION - will be defined as a project whereby all
meaningful elements of a street are being removed and
replaced. This would include curb and gutter, sidewalks,
trail, bituminous or concrete pavement, granular base, and
items appurtenant to these elements.
2. REHABILITATION- will be defined as a project in which one
or more of the aforementioned elements is modified or
supplemented in-place, to restore the serviceability of the
entire street, such as bituminous overlays.
3. PREVENTATIVE MAINTENANCE - will be defined as work that
involves a level of effort less than that involved in
reconstruction or rehabilitation, the intent of which is to
extend the life of the existing improvement. Preventative
maintenance will include but not be limited to crack
filling, patching, milling and cold planing, and seal
coating.
SECTION II
GENERAL POLICIES AND PROCEDURES
The following are general principles, policiesandprocedures
applicable to all types of improvement:
1. Project costs shall include the cost of all necessary
construction work required to accomplish the improvement,
ASSE88MENT/IMPROVEMENT POLICY
PAGE 4
plus engineering, legal, financing, easement acquisition and
contingency costs.
2. Assessable costs are project costs minus the City and County
share and other credits. MSA funds will not be credited as
they will be utilized to offset total reconstruction program
costs.
3. Special assessments will be levied as soon as practical.
Normally this will be within one year after completion of
the project.
4. Publicly owned properties, including but not limited to
municipal building sites, schools, parks, County, State and
Federal building sites, but not including public streets and
alleys, are regarded as being assessable on the same basis
as if such property were privately owned.
5. Revenue sources for these types of improvements will be many
including, but not limited to assessments, MSA Funds, core
facility funds and general tax levies. This policy
determines an equitable assessment aRRroach such that the
property will pay an "equivalent" amount on each project no
matter what other sources are available.
SECTION III
SPECIFIC POLICIES
Project Initiation and Hearing Process
This section intends to describe the initiation of improvement
projects and the administration required to receive final Council
action, pursuant to the requirements of MSA 429.
A. Project Initiation
1. By Petition: Petitions for initiating improvements will be
prepared by City staff upon request. Such petitions,
circulated by the affected property owners should bear the
signatures of the property owners of 51% or more, of the
benefitted property(ies). Petitions may be requested and
submitted at any time during the year but projects for which
petitions received after February 1st will not be scheduled
until the construction season of the following year. The
normal time required for receiving, processing, scheduling
hearings and preparing construction documents is six months.
When projects are initiated through this process the costs
of doing engineering feasibility studies and associated
ASSESSMENT/IMPROVEMENT POLICY
PAGg 5
project consideration costs will be born by the property
owner so petitioning.
If the project proceeds through construction and assessment
those costs will be considered project costs under Section
II.1 above.
If the project does not proceed through construction these
costs will be billed back to the property owners petitioning
or will be recorded for future project costs consideration
at which time the project is concluded. Determination of
the method of cost recovery will be made by the City
Council.
2. By Council Action: If the Council determines that an
improvement is in the best interest of the City, it can,
without petition, initiate the improvement with a
four/fifths vote of the Council.
3. By 100% Signed Petition: When a petition is signed by 100%
of the property owners benefitted by the improvement, and
there is no City cost participation, the Council may order
the improvement without holding an improvement hearing.
4. By Development Contract: Improvement projects for new
development will only be considered upon execution of a
developers agreement signed by loot of the benefitted
property owners. The Council may order the project without
a public hearing.
B. Hearing Process
1. Improvement Hearing: After a petition is filed and its
adequacy determined, or the Council initiates the project,
the City Engineer is directed to study and report as to the
feasibility of the improvement. If after reviewing the
feasibility report, the Council feels the project has merit,
a public hearing is scheduled, notice published twice, and
all persons benefitted by the project notified in writing.
When an improvement project is to be financed by the sale of
improvement bonds, there is a statutory requirement that at
least 20% of the total costs of the project be assessed
against the benefitted property.
If after the improvement hearing, at which all persons are
heard, the Council feels that the project still has merit,
then the Council will authorize the preparation of necessary
plans and specifications, and upon receipt and acceptance of
those plans, will authorize the advertisement for bids, by
resolution, for the construction of the project.
ASSESSMENT/IMPROVEMENT POLICY
PAGE 6
C. Final Hearing (Assessment)
After the improvement is ordered and bids received and the
improvement is completed, a roll will be prepared and the
affected property owners will be mailed a Notice of the
Assessment Hearing stating the time and date that an
assessment hearing will be held. An assessment roll will be
prepared and will be posted at the City Hall for review
prior to the assessment hearing. All interested parties
shall have an opportunity to be heard regarding the
assessment.
Necessary and proper adjustment to the assessment roll can
be made by Council at the time the hearing is being held.
If an appeal is made regarding the amount of the special
assessment, written notice must be filed with the Council
prior to or at the assessment hearing.
After the hearing, the assessment roll is adopted by the
Council. The property owners have a 30 day period in which
to pay their assessment in part or in full at the City Hail,
interest free. After this period, the assessment begins to
accumulate interest. On or about October loth of each year,
the assessment roll is certified to the County Auditor's
office where it is added to the tax roll for the following
year.
The assessment shall be levied over a period to be
established by the City Council, in equal annual
installments on the principal with interest due and payable
on the declining balance. The annual interest rate shall
also be established by the City Council upon the sale of the
improvement bonds.
SECTION IV
CONSTRUCTION STANDARDS AND EXPECTED LIFE
Construction Standards and Expected Life Minimum Design Standards
The following are minimum design standards applied to the
design and construction of improvements in the City of
Rosemount and are for reference to this policy.
The design of construction of improvements will be completed
referencing City Construction and Engineering Guidelines and
Minnesota Department of Transportation Reference Book dated
1988
ASSESSMENT/IMPROVEMMNT POLICY
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Design and construction of such improvements may be enhanced
as is determined by the City Engineer to serve areas being
serviced.
A. Sanitary Sewer Laterals
Minimum 8" PVC (SDR35) or DIP (CL52). Manholes a maximum
400' apart.
B. Sanitary Sewer Services
Minimum 4" PVC (SDR35)
C. Water Main Lateral
Minimum 6" loop or 8" dead end DIP (CL52) or CL50 as
determined by the City Engineer
D. Water Main Services
1. Single Family Residences - Minimum 1" Type K copper.
2• Multiple Family Residences - To be determined by City
Engineer based on Minnesota State Plumbing Code.
3. Commercial/Industrial - To be determined by City Engineer
based on Minnesota State Plumbing Code.
E. Storm Sewer System
Pipe size shall be designed to handle a 10 year event and
pond shall be designed to handle a 100 year event as
determined by the City Engineer.
F. Sidewalks, Trails and Bikeways
Concrete - 5 ' wide with 6" sand base - 4" thick (6" thick
at driveways)
Bituminous - 8' wide (2341) Bit. with 6" CL5 Limerock Base
and 2" Bit.
All trails and sidewalks will be located 1' off property
line, pedestrian ramps and curb drops will be installed
according to MNDOT Standards.
G. Streets
AG, AG -P and RR Zones - minimum 24' edge to edge, 4' gravel
shoulders, rural ditch cross section and 7 ton pavement - or
- minimum 28' back of curb to back of curb, urban cross
section with bituminous curb and 7 ton pavement (no street
parking). In certain cases bituminous curb will be allowed
and considered temporary.
ASSESSXZNT/IXPROVEMENT POLICY
PAGE 8
RL, R1 & R2 Zones - minimum 32' back of curb to back of
curb, urban cross section, with concrete curb & gutter and 7
ton pavement.
R-3 & R-4 Zones - minimum 37' back of curb to back of curb,
urban cross section, with concrete curb & gutter and 7 - 9
ton pavement.
Commercial Zones - 37' - 49' back of curb to back of curb,
urban cross section, with concrete curb and gutter and 7 - 9
ton pavement.
WM and Industrial Zone - 37' - 49' back of curb to back of
curb, urban cross section, with concrete curb and gutter and
9 ton pavement.
Public Zone - Churches, government offices and primary
schools - 37' back of curb to back of curb, urban cross
section, with concrete curb and gutter and 7 ton pavement
secondary and post -secondary schools: 49' back of curb to
back of curb, urban cross section, with concrete curb and
gutter and 9 ton pavement.
Useful Service Life
Public improvements are judged to have a normal useful life
expectancy. For the purpose of this policy, this life expectancy
shall be as follows:
A. Surface Improvements
Concrete Curb and Gutter 30 years
Bituminous Roadways 20 years
Pedestrian Walkways - Concrete 30 years
Pedestrian Walkways - Bituminous 20 years
B. Subsurface Improvements
Water Main 50 years
Sanitary Sewer 50 years
Storm Sewer 50 years
When any existing improvement is ordered to be reconstructed
or replaced as defined under Section I, the assessments to
be levied will be prorated from 0% at one-half life
expectancy to 100% at full life expectancy as noted above or
beyond.
ASB889MENT/IMPROVEMENT POLICY
PAGE 9
SECTION V
PUBLIC IMPROVEMENTS IN NEW DEVELOPMENTS
neral Proce
City Code requires execution of a development contract at the
time of land platting. The developer's agreement normally
references means and methods of providing for public improvement
construction.
As a standard, the City of Rosemount has pursued policies by
which all costs of improvement are directly attributable and
fully paid by cost allocation or assessments against the
development, developer or properties requiring and benefiting by
the improvement. The policies are established with the intent
that no developmental costs are incurred by existing lots or
parcels, by the existing residents, or by the City in general.
The exception is for improvements which are determined to have an
area wide benefit which exceeds the scope of the development.
At the time of platting, the cost responsibilities for any
development for trunk improvements shall be defined. This
responsibility includes trunk sanitary sewer facilities, trunk
water facilities (including source, supply, storage and
distribution components), storm water drainage and control
facilities, arterial street, park dedication, pedestrian walkway
systems and other public improvements, existing or proposed, of
an area wide benefit. Normally the City will require a cash
payment by the developer for the development's share of
improvements for an area wide benefit. The amount to be
determined by the City Council.
At the time of platting, the development contract may provide
details on construction and timing of local or lateral
improvements of various nature for the benefit and improvement of
the individual properties as required by the Rosemount
Subdivision Ordinance.
City Improvement Financing and Construction
As a general policy, the City of Rosemount will assist developers
in the financing and construction of public improvementsthrough
authority granted to the City by Chapter 429 of Minnesota
Statutes. Such assistance is granted by specific Council action
for each development proposal based on perception by the Council
of the project, viability, and development benefit to the City.
The City may elect to sell bonds for such improvement and assess
the costs of bond retirement against individual benefitted land
parcels for a period of repayment 3-5 years or as otherwise
determined by Council.
Typically, the total project costs
the development will be assessed on
buildable lots in the development.
ASSESSMENT/IMPROVEMENT POLICY
PAGE 10
for improvements benefiting
an equal basis against all
For such City assessed developments and improvements, the City,
through the development contract, requires a 60% down payment,
cash escrow or letter of credit to protect the City from
potential project default, and requires assessment payment
concurrent with building permit issuance or per the assessment
payment schedule whichever comes first. For such City assisted
projects, the City provides design, construction supervision and
assessment certificate, legal, fiscal and administrative services
and _charge costs for those services back to the project.
Public Improvement Work by Private Developers
No public improvements may take place before a development
contract has been executed.
A private developer may have his plans prepared by other than
City forces under the following conditions:
1. All plans, drawings, specifications and related documents
required shall be prepared by a professional engineer,
registered in the State of Minnesota and approved by the
City.
2. The developer must keep the City informed as to the time
table of development and design, the letting date of a
construction contract, and the starting date of construction
work.
3. In order to warrant the construction for the life expectancy
as previously set forth, the City will provide inspection of
all phases of construction as set forth in the contract
documents at the developer's cost.
4. The City of Rosemount may perform construction surveys,
staking and other engineering services when requested by the
contractor or developer. The City will also assist the
contractor in interpretation of the contract documents,
ordinances, codes and other items necessary to meet the
criteria as established by the City of Rosemount.
5. No public improvement work shall be performed by any
developer or other private party in City right of way or
easement unless a development contract has been executed and
the final construction plans have been approved by the City.
ASSESSMENT/IMPROVEMENT POLICY
PAGE 11
6. The City will require a surety deposit of 100% of the
estimated project costs in the form of cash, escrow deposit,
or irrevocable letter of credit.
The City and its representatives shall at all times have access
to the work in order to complete the services as herein provided,
and the developer shall give the City timely notice of his
readiness for inspections or other work to be rendered. Permits,
licenses and easements or permanent changes in existing
facilities shall be secured and paid for by the developer.
The developer shall be charged for these services, and the value
of the services shall be determined on a percentage basis as
agreed upon by the developer and the City before, the project is
started. The fee for plan review and City administration is set
annually by resolution of the City Council. All inspection costs
will be billed on an hourly basis.
Upon proper completion of sanitary sewers, storm sewers, water
mains, curb and gutter, roadway base, surfacing and pedestrian
walkway by the developer, the City will accept said improvements
by resolution under a two (2) year guarantee to the City.
SECTION VI
IMPROVEMENTS IN EXISTING DEVELOPMENTS
(RECONSTRUCTION/REHABILITATION)
A. Initiation
Improvements may be initiated by petition or by Council as
set out in Section III -1-A.
B. Reconstruction and rehabilitation work proceeding under the
terms of this policy shall provide for the standards set out
in Section IV. A -G.
C. Computation of Assessable Costs
Property Cost AssessableAllocation - Assessable costs will
be allocated to properties based upon their zoning
designation at the time of the improvement. The "current"
cost for constructing the improvement in Section IV. A -F.
will be determined using actual bid prices for those units
averaged over the previous two years as constructed by the
City plus the last 12 months change in the ECI (Engineering
Construction Index)
ASSESSMENT/IMPROVEMENT POLICY
PAGE 12
D. Method of Assessment
1. Basic Assessment Data
a. Front Footage Assessment
Most improvements are assessed according to the cost of
the actual design standards implemented in the
improvement project, based upon the lesser of the cost
per front footage of the improvements abutting a parcel
or the corresponding cost based upon the design
criteria of the use identified in Section IV.
b. Unit Assessments
Some improvements may be assessed on a unit basis,
rather than front footage basis. The unit basis is
typically used in improvement projects affecting only
single family residential properties. It may also be
used in single use developments, i.e. commercial parks,
industrial parks, where land uses and development
densities are similar. Equivalent design costs of the
improvements by the minimum frontage requirements of a
parcel, as established in the Zoning Ordinance.
C. Adjusted Assessments
Assessments may be adjusted due to public easements
recorded on a parcel.
d. Multiple Frontage Assessment
Parcels with multiple frontage may be assessed for more
than one improvement project. Determination of the
assessments will be based upon the actual access or
connection to improvements that abut the parcel.
2. Method for Determining Assessment
a. Front Footage Assessment
To determine the front footage assessment whichever of the
following is less will be used:
1) The actual front foot costs of improvements being made
which abut the parcel; or
2.) The cost per front foot for constructing the
improvement according to the design criteria as
described in Section IV.
ASSESS1+ ZNT/IXPROVEMENT POLICY
GAGE 13
b. Unit Assessment
1) Multiple Land Use Improvement Project assessments
will be determined by multiplying the design
criteria costs per front foot by the minimum
frontage of the parcel, as established in the
Zoning Ordinance for improvement projects
affecting mixed land uses. (RR/AG lot width is
300')
2) Single Land Use Improvement Projects
Assessments will be determined by dividing the
actual costs of the improvement project by the
maximum number of benefitted parcels abutting the
improvements, as determined by the Zoning
Ordinance. Parcels that may be divided according
to the provisions of the Zoning Ordinance and Sub
Division Ordinance, may receive multiple
assessments units.
3. Method of Payment (Interest on the assessment will begin
accruing from the date of the adoption of the assessment
roll.)
A schedule for the payments of special assessments will be
determined by the City for each project. The payment
schedule for projects in new developments will be set
through a development contract but in no circumstances will
those schedules be less than the following schedule(s) used
for existing developments.
The owner may pay the entire or partial amount of assessment
within 30 days of adoption of the assessment roll without
interest. The remaining amount shall be paid in equal
principal installments (per the schedule in 6.a.) plus
interest as determined by the Council (typically 2% above
the net interest rate of the bond issue). Annual payments
will be remitted with the property taxes. An owner may pay
off the assessments in full at any time, but will :be charged
the entire year's interest.
SECTION VII
ASSESSMENT DEFERMENT POLICY
Deferment of Special Assessments
A. Purpose - To indicate in which instances the City may
legally allow deferment of special assessments levied under
this policy.
B. Situations of Mandatory Deferment:
1. Certain agricultural/nurser/greenhouse deferments.
Generally, real estate consisting of 10 acres or more
or a nursery or greenhouse shall be entitled to a
deferment from special local assessments provided that:
a. The property is actively and exclusively devoted
to agricultural use evidenced by: -
(1) At least 33h% of the total family income of
the owner is derived from the property or the
total production income including rental from the
property is $300.00 plus $10.00 per tillable acre;
and
(2) The property is devoted to the production for
sale of agricultural products.
b. The property:
(1) Is the homestead of the owner, the owner's
surviving spouse, child or sibling of the owner or
is real estate which is farmed with the real
estate containing the homestead property; or
(2) Has been in possession of the applicant, the
applicant's spouse, parent, or sibling or a
combination of the foregoing for a period of at
least seven (7) years prior to application for the
deferment of special assessments or is real estate
which is physically near and farmed with the real
estate which qualifies under this provision; or
(3) Is the homestead of a shareholder in a family
farm corporation; or
(4) Is in the possession of a nursery or
greenhouse.
when the above described property no longer qualifies
for deferment, all deferred special assessments plus
interest shall be payable in equal installments spread
over the time remaining until the last maturity date of
the bonds issued to finance the improvements for which
the assessments were levied. if such bonds have
matured, the deferred special assessments plus interest
shall be payable within 90 days.
Application for deferment of special assessments under
these provisions must be filed by May 1st of the year
prior to the year in which the assessments would be
payable. Applications granted shall continue in effect
for subsequent years until the property no longer
qualifies. Applications shall be filed with the
assessor of the taxing district in which the real
property is located.
The agricultural/nursery/greenhouse special assessments
deferment is subject to the provisions of Minn. Stat.
5273.111.
C. Situations of Discretionary Deferment.
1. Senior citizen/low income deferment. At its discretion
the City may defer assessments against any homestead
property owned by a person 65 years of age or older and
for whom it would be a hardship to make the assessment
payments. The standards and cruidelines governing what
constitutes hardship are established by City ordinance
or resolution.
Additionally, the City may grant a deferment in
situations where its hardships standards and guidelines
have not been met if exceptional and unusual
circumstances exist and no preference or discriminatory
treatment will occur.
This deferment is subject to the provisions of Minn.
Stat. 5435.193.
2. Unimproved property deferment. The City may also
defer the assessment of improvements with respect to
property which is not directly and immediately affected
by the improvement for which the assessment is levied.
If applicable, at such times as extensions or
connections regarding the improvement directly'hpnefit
such unimproved property, the City may require payment
of the deferred assessments as well as those relating
to the connection or extension.
This deferment is subject to the provisions of Minn.
Stat. 5429.051.
Five Year street Reconstruction Program
Estimated Cost of Reconstruction $5,700,000 over 5 years
Estimated Cost of Maintenance/Overlays $ 300,000 over 5 years
Sources of Revenue
1. Assessments
2. MSA Funds
3. CIP
4. General Tax Levy
Concent
Develop five year, ongoing, street reconstruction program to
reconstruct and maintain city streets. initially this program
would cover years 1991 - 1995. Each year this program would be
reviewed and upgraded to add next year.
In order to fund this general reconstruction/maintenance program
it is necessary to look at sources of funding in a broader sense
than on a project by project basis. Itis necessary to consider
"Pooling" of all available sources so that a "financing program"
can be generated. These sources would be:
1. Assessments - under the proposed assessment policy a
portion of all construction costs, will be assessed.
The percentage of individual project costs to be
assessed will typically be Go %, but could range from
a low of 50% to a high of 100% depending on what type
of street it is and how many abutting properties have
access to the street, the type of development
occurring, etc.. Generally if the street is larger
than a residential street MSA Funds offset city costs.
(Those not collected through assessments.)
2. MSA Funds are available to the city through the State
of Minnesota from the MVET Fund. There is no
indication now that those funds:*re in any great
extent, in jeopardy.
On some projects the amount of dollars that the 'city
can receive for reconstruction of an MSA designated
street is almost 100% of the cost. The city receives a
maximum amount per year from MSA Funds even if our
costs are greater. We don't lose those funds which are
not covered in a single year but we must wait for our
allocation to be great enough to cover those costs.
In 1991 our construction allocation for MSA is about
$300,000 per year. This amount would expand as the
number of street miles that are eligible increases.
What many cities do is to develop a 5 year
reconstruction plan and borrow against their MSA
allocation. That is, say borrow money to fund large
projects which have to be done before MSA Funds are
available and use their allocation as it comes in to
pay off the debt. This is actually quite a common and
a good approach if you have a "Street Reconstruction
Program" in place.
3. CIP. As part of a reconstruction and maintenance
program it is appropriate to set aside, as part of a 5
year CIP Program, monies for general overlay and
maintenance. This is simply part of the General Fund
but funds specifically designated for the Street
Reconstruction Program.
In fact, the Street Reconstruction Program should be
just one part of an overall 5 year CIP Program for the
city and the "General Tax" contribution would be part
of it.
The specific dollar amount to be designated in ,the CIP
would vary depending on the overall needs.
4. General Tax Levy. Funds made available through general
taxes could be provided in a couple of ways.
a. In a five year street reconstruction program as we
borrow money to pay for projects a certain portion
of that debt could be calculated as "General Fund"
debt, and, if the levy needed to pay for that debt
is greater than the assessments available, the
general tax base would support that debt.
b. Through a CIP Program, as noted in No. 3 above,
the general taxes used to help finance a program
would compete with other uses of our tax levy.
Example:
YAR R11CONITIMUC77QN MAIN MNANCT TOTAL.
1991 S 500.000 S 60.000 S 960.000
1942 800,000 60,000 560.000
1993 2.000.000 60,000 1.060.000
2994 1,600,000 60.000 2,660,000
1995 1300,000 60.000 1360AM
Total Cast SS,?00,000 S 300,000 S6,000,000
Revenues
1. Assessments - Assume average of 50% of
Reconstruction cost would be assessable.
50% a $5,700,000 = $2,850,000
Typically assessments would be spread for seven
years in these issues.
2. MSA - Based on the projects now projected for
complete reconstruction over the next 5 years
it is calculated that $3,000,000 would be MSA
Fundable. Since our MSA allocation is only
$300,000 per year we could either use that
$300,000 per year to offset that amount of debt
to incur or borrow against this allocation up
front and utilize our allocation to payoff
that debt.
3. General Tax/CSP - The shortfall created between
the total needed and those dollars available in
No. 1 and 2 above would have to be picked up
through general taxes either through a debt
levy or general tax levy and funding the CIP.
Assume:
A.1991, 1992, 1993 $2,780,000 in cost
MSA Allocation (900,000)
$1,880,000
CIP Funding 300,000
(100,000 per yr.)
$1,580,000 DEBT NEEDED
Issue $1,600,000 in Bond At 8%
for 7 Yrs. in 1991
Annual debt payment $ 299,255
Assume 50% Assessments 260,000
Increase in Debt Levy 40,000 (rounded)
..- 4L
B. 1994, 1995 $3,220,000 in cost
MSA Allocation ( 60Q,,000 1
$2,620,000
CIP Funding 300,000
(150,000 per yr.)
$2,320,000 DEBT NEEDED
Issue $2,325,000 in Bonds at 8% for
seven years in 1994
Annual debt payment $ 434,855
Assume 50% Assessable 301,125
Increase in Debt Levy 134,000 (rounded)
This example shows what two debt issues over
a five year period would cause as an increase
in debt services levy. The amount of
$174,000 is equal to about a 2%increase in
the city's portion of our tax levy.
Typical Assessment
Assume a 80 foot frontage residential street lot.
Assume residential equivalent front footage cost
equals $40.
Percentage Assessed Assessment Amount
100% $3200
90% 2580
80% 2560
500 1600
40% 1280
30% 960
200 640
10% 320
STREEP
RECONSTRUCTION
------------------
LINEAL
PROP.
TOTAL
MSA
Route
NRClM
TO
PRIORMILES
FFTX
WID'I7l
COSTS ASSESSIBLE CI'T'Y SHARE
ELLIGIBLE
YEAR STREL"r
91 145771 ST. W.
SHAN PKWY
DIA. PNIIi
2
0.36
1901
40
$575,100
$503,100
91 DIAMOND IWIII
144111 ST
138171 ST
5
0.7
3696
64
$214,000
$789,100
$555,000
92 CIIILI AVE
N. END
145TH ST.
2
0.2
1056
32
$48,892
92 145'111 SI'. W.
CAMEO AVE
CIIIPP. AVE
2
0.52
2746
40
$585,900
92 CAMEO AVE
145111 ST.W.
L. 147111 Sr. W.
3
0.17
898
32
$83,117
92 L.147111 ST.W.
IIWY 3
CANADA AVE
3
0.24
1267
32
$117,341
$874,400
92 143RD ST.W.
IRlY 3
W. END
6
0.1
528
32
$48,892
$884,142
93 CAMEO AVE
143RD Sr.
14517i S'I'.
2
0.17
898
32
$83,117
93 1.45'111 91'. W.
SHAN PKWY
(311 PP. AVE
4
0.48
2534
40
$941,308
$1,024,424
94 160771 ST
APPLE VALLEY
111 3
2
1.0
5280
52
$945,000
$373,000
$287,000
94 160111 ST
771 3
US IIWY 52
4
5.0
26400
44
$331,000
94 C11IPP. AVE
151ST ST.W.
16011 ST.W.
6
0.9
4750
48
$373,000
$1,649,000
95 145171 sr. 4l.
BISCAYNE AVE
BRAZIL AVE
2
0.33
1742
40
$318,000
$426,000
95 DODD BLVD
CIIIPP. AVE.
SHAN. PKWY.
4
0.54
2851
40
$585,900
95 AKRON AVE
CSAR 42
INVm GROVE I1Ci'S
8
2.5
13200
44
$647,712
$1,551,61.2
96 145171 Sl'. 1.1.
W. RD. 42
BISC"AYNE AVE.
2
0.38
2006
40
$461,000
97 DODD BLVD
SHAN. PKWY
DELFT AVE
4
0.53
2798
40
$585,900
--------------
STREL,r
CAMBRIAN AVE
CAMARO LANE
CI ARLS'1'ON AVE
C'IIAIANTI AVE
C111LI AVIS
146'1'11 ST W.
146`191 ST.W.
L. 147111
147'1'11 ST.W.
U.147'1'11 S'1'.W.
148'191 ST.W.
U.149'i'll 61'.W.
L.150111 S'1'.W.
143RD 'ST.W.
144'191 ST.W.
CHORLEY AVE
147'111 &I'.W.
14 8T1 1 ST.W.
149'111 s'1'.w.
U.149'111
DALLARA AVE
DALLARA AVE
DAHVILLE AVE
DELF"E' AVE
U.145'111 ST .I'I
U .14 59'11 &r .W .
U.148'111 S`I'-W-
121ST E1'. W.
BURNLEY AVE
1, .147'I'l l
149'191 ST.W.
C I MARRON AVE
146'191 ST.W.
U.148'111 ST.W.
149'I'll S'1'.14.
DAMASK Cl'.
L.146'I'll S9'.W.
150'111 s'1' . W .
---- Route
['ROM
L.147111 ST -
14 -CAMBRIAN AVE
148'1'11 ST.W
145'191 S'I'.W.
L .14'7'1'11 S'1' . W .
BURNLEY AVE
CAMEO AVE
CANADA AVE.
CANADA AVIS
CANADA AVE
CANADA AVE
CIIARLS'1'ON AVE.
CAMF'IELD CIR.
L11ILE: AVE
C.11111 AVE
U..148111 ST.W.
UJIPP. AVE.
C11IPP AVE
C91IPP.AVE.
CHORLE'Y AVE.
145'1'11 S"I'.W.
DODD BLVD
U.145'111 ST.W.
U.145'111 S'1'.W .
DALLARA AVE
DANVILLE AVE
DELF I' AVE
AKRON AVE
145'111 ST. V1
BURMA AVE
CANADA AVE
148'1'11 -'n'.
C11111P. AVE.
CHORLEY AVE
CIEORIXY AVE
N. END
DANBURY AVE
DALLARA AVE
------------------
TO
IHY 3
S. END
I,. 1.50111 ST.w.
1...147'111 ST.W.
148'191 S'1'.W.
IlWY 3
C111PP.AVE
011LI AVE
C11I13P. AVE
CIIII,I AVE
CIII L I AVE
C91 I PP AVE
CIIARLSTON AVE
CIMMARON
CIMMARON AVE
U.149111 ST.W.
CIMARRON AVE
CIMARRON AVE
C9IORLL'Y AVE
CIMARRON AVIS
DODD BLVD
150'14( ST.W.
DODD BLVD
DODD BLVD
DAMASK AVE
DC:LF'r AVE
DIAMOND 13NIII
WEST LVD
146TH S'1'.W.
IlWY3
C1IARLSTON AVE
U..1,48111 Sl' .W.
CmMARRON - AVE
CIMARRON AVE
CHRYSLER AVE
DODD BLVD
DANVILLE AVE
WEND
Piz IORM ILES
4 0.25
4 0.19
4 0.13
4 0.14
4 0.18
4 0.1
4 0.38
4 0.21.
4 0.24
4 0.21
4 0.21
4 0.1.5
4 0.16-
4 0 21
4 0.24
4 0.1
4 0.21
4 0.21
4 0.04
4 0.16
4 0.31
4 0.16
4 0.38
4 0.42
4 0.06
4 0.11
8 0.09
10 0.64
10 0.09
10 0.06
1.0 0.09
10 0-.16
10 - 0.2
10 0.17
10 0.1
10 0.13
10 0.06
10 0.1.8
S'PRUC"191AI, MAIIITENANCE.
F LL"I'
1.320
1.00:3
686
739
950
528
2006
.1109
1.267
1109
11.09
792
845
.1109
1267
528
1109
11.09
211
645
1637
845
2006
2218
317
581
475
33'79
475
31'7
475
845
.1056
898
528
686
31.7
950
'DOTAL 7.13 37646
TOTAL
$13,000.00
$11,000.00
$6,000.00
$6,000.00
$8,000.00
$6,000.00
$18,000.00
$9,000.00
$1.1.,000.00
$9,000.00
$9,000.00
$7,000.00
$7,000.00
$9,000.00
$1_1,000.00
$4,000.00
$9,000.00
$9,000.00
$2,000.00
$7,000.00
$14,000.00
$7,000.00
$15,000.00
$1-7,000.00
$2,000.00
$4,000.00
$4,000.00
$24,000.00
$4,000.00
$4,000..00
$4,000.00
$'I , 000.00
$9,000.00
:$7,000.00
$4,000.00
$5,000.00
$2,000.00
$7,000.00
$311,000.00
RESIDENTIAL STREET EQUIVALENT ESTIMATE
The quantities listed below are for a 500' length
of residential street, 32' wide bituminous,
including lateral storm drain
and street lights
Item Quantity Units Unit Price Total
a..: 1. Soil Correction, 2000 C. Y. $ 4 $8,000
2. 6" Class 5 Aggregate 600 Ton $ 5 $3,000
3. 1;" 2331 Bitum. Base 135 Ton $ 17 $2,295
4. 12" 2341 Bituminous 135 Ton $ 19 $2,565
Wear Course
5. Concrete Curb & Gutter 1000 L.F. $ 5 $5,000
6. Restoration 1 L.S. $3500 $3,500
7. Street Light 1 Each $1800 $1,800
8. Catch Basins 2 Each $ 800 $1,600
9. Manhole 1 Each $1000 $1,000
10. RC Pipe 250 L.F. $ 23 $5,750
TOTAL CONSTRUCTION $34,510
10% CONTINGENCY 3,450
SUBTOTAL $37,960
PLUS 10% ADMINISTRATION 11,390
TOTAL.................................... $49,350
$49,350 divided by 500 L.F. _ $98.70 per foot of street.
$ 98.70 divided by 2 sides = $49.35 per assessable foot.
Equivalent residential street assessment = $49.35 per foot for all
items.
Street only = $34.85 per assessable foot (items 1-6)
Storm drain only = $11.95 per assessable foot (items 8-10)
Street light only = $ 2.57 per assessable foot (item 7)