HomeMy WebLinkAbout5.d. Assessment PolicyCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: APRIL 16, 1991
AGENDA ITEM: ASSESSMENT POLICY
AGENDA SECTION:
OLD BUSINESS
PREPARED BY: STEPHAN JILK, CITY ADMINISTRATOR
AGENDA NITEM # 5
ATTACHMENTS: 4th DRAFT ASSESSMENT POLICY
APPR- ED Y:
SUPPORTING DATA
JW v
This item will consist of continuing discussion of the policy and review of
examples used to clarify the effects of the policy.
Please see shaded areas of the policy to consider several minor changes in
the text we have made on pages 8 to 12.
RECOMMENDED ACTION:
None.
COUNCIL ACTION:
CITY OF ROSEMOUNT
ASSESSMENWIMPROVEMENT POLICY
4TH DRAFT
April 16, 1991
TABLE OF CONTENTS
Page
1
Preface
Page
2
Introduction
Page
3
Definitions
Page
3
Policies and Procedures
Page
4
Project Initiation &
Hearing Process
Page
6
Construction Standards
Page
7
Useful Service Life
Page 8 New Development
Improvements
Page 11 Existing Development
Improvements
Page 13 Method of Payment
Page 14 Assessment Deferment
Policy
Exhibit
A
Street Reconstruction
Exhibit
B
Structural Maintenance
Exhibit
C
Five Year Street
Reconstruction Program,
Exhibit
D
Residential Street
Equivalent Estimate
Exhibit
E
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, 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 cost 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 not 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 and laterals
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.
The special assessment is
of Rosemount as a means to
improvements to benefitted
over a number of years.
ASSESSMENT/IMPROVEMENT POLICY
PAGE 3
a financing tool employed by the City
allocate the cost of specific
properties and to spread those costs
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, policies and procedures
applicable to all types of improvement:
1. Project costs shall include the cost of all necessary
construction work required to accomplish the improvement,
ASSESSMENT/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 approach such that the
property will pay on "equivalent" amount on each project no
matter what other sources are available.
SECTION III
SPECIFIC POLICIES
Prosect Initiation and Hearing Process
This section intends to describe the initiation of improvement
projects and the administration required to 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
PAGE 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 100% 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
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 Hall,
interest free. After this period, the assessment begins to
accumulate interest. On or about October 10th 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 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 for municipalities.
Design and construction of such improvements may be enhanced
as is determined by the City Engineer to serve areas being
serviced.
ASSESSMENT/IMPROVEMENT POLICY
PAGE 7
A. Sanitary Sewer Laterals
Minimum 8" PVC (SDR35) or DIP (CL52). Manholes a maximum
400' apart.
B. Sanitary Sewer Services
Minimum 4' PVC (SDR35) or (LISP).
C. Water Main Lateral
Minimum 6" loop or 8" dead end DIP (CL52).
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
(to be added)
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 to back, urban cross section with
bituminous curb and 7 ton pavement (no street parking).
RL, R1 & R2 Zones - minimum 32' back to back, urban cross
section, with concrete curb & gutter and 7 ton pavement.
R-3 & R-4 Zones - minimum 37' back to back, urban cross
section, with concrete curb & gutter and 7 - 9 ton pavement.
Commercial Zones - 37' - 49' back to back, urban cross
section, with concrete curb and gutter and 7 - 9 ton
pavement.
WM and Industrial Zone - 37' - 49' back to back, urban cross
section, with concrete curb and gutter and 9 ton pavement.
ASSESSMENT/IMPROVEMENT POLICY
PAGE 8
Public Zone - Churches, government offices and primary
schools - 37' back to back, urban cross section, with
concrete curb and gutter and 7 ton pavement; secondary and
post -secondary schools: 49' back to back, 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
Sidewalks - Concrete 30 years
Sidewalks - 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 renewed or
replaced, 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.
SECTION V
PUBLIC IMPROVEMENTS IN NEW DEVELOPMENTS
General Procedures and Policies
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
ASSESSMENT/IMPROVEMENT POLICY
PAGE 9
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 improvements through
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 for improvements benefiting
the development will be assessed on an equal basis against all
buildable lots in the development.
For such City assessed developments and improvements, the City,
through the development contract, requires a 60% down payment,
ca?<'sor letter of credit to protect the City from
.pr
potential oject 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.
ASSESSMENT/IMPROVEMENT POLICY
PAGE 10
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.
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.
6. The City will require a surety deposit of 100% of the
estimated project costs in the form of cash, escrow deposit,
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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
ASSESSMENT/IMPROVEMENT POLICY
PAGE 11
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 sidewalk 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. F.
C. Computation of Assessable Costs
Property Cost Assessable Allocation - 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. 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.
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 single
ASSESSMENT/IMPROVEMENT POLICY
PAGE 12
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.
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assessments are generally determined by muYtiplying
this 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 ob'<sfor constructing the
improvementcorng_:.to the design criteria as
described in`S'ecton"-IV and Section VI.
b. Unit Assessment
1) Multiple Land Use Improvement Projects 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
ASSESSMENT/IMPROVEMENT POLICY
PAGE 13
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 20 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 determine in which instances the City may
legally allow deferment of special assessments levied under
this policy so as to not create undue hardship for property
owners because of the project being assessed.
ASSESSMENT/IMPROVEMENT POLICY
PAGE 14
B. Under Minnesota State Statutes 429.051, 529.061, 273.111 and
435.193 Cities may legally defer special assessments for the
following reasons:
1. For Property covered under the Green Acres Law
2. Unimproved property until it is improved
3. Senior Citizen and low income deferments due to age and
low income
C. Based on these Statutes and the desire of the City to
provide adequate street, sewer, water and stormwater systems
to the City residents while not causing property owners
undue hardships due to the construction of and assessment
for these systems the following deferments will be available
upon written request of the affected property owners:
1. Green Acres
2. Unimproved property
3. Senior Citizen/Low Income