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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, c.r f e hey: <��mav:'>>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 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. ark::::: ee:..r<:::dae<::a> ;.Amin Via:st.:::..?Ja:e nit i•%+4i:{iS:v.{; 4:{v11'i:45�1L.J:•v/.W.•.::i{iv+Cir':-'-1.•:J�:x.•:.•.i/.iLLC:ii:::l.:n;::.:{JAO�:•:�:.::.v.{•iC•:•.•.w.:v: is ��•'•'i.L:�i:: �1:: i.:'k'.:viii '�4 is iiCiii 'rtYiYv��i'.•i�: 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