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HomeMy WebLinkAboutItem 06.etll4 Date: 30 October 2013 Item No. APPROVAL OF SPECIAL ASSESSMENT POLICY RELATING TO THE REHABILITATION OF ROADWAYS Proposed Action Staff recommends adoption of the following motion: Move to approve the Special Assessment Policy Relating to the Rehabilitation of Roadways. Overview As the City continues to rehabilitate roadways throughout the City in conjunction with its Pavement Management Plan, staff has determined it is necessary to update the policy and procedures for calculating the special assessments to benefitting properties using the 429 Special Assessment Process. This Special Assessment Policy Relating to the Rehabilitation of Roadways is intended to replace the existing Street Reconstruction Assessment Policy drafted in 2006 in an effort to clarify portions of the City's Special Assessment Policy. The Special Assessment Policy Relating to the Rehabilitation of Roadways addresses assessments for residential, commercial, industrial, institutional, public and agricultural properties. It also outlines the terms of the special assessments. Primary Issues to Consider Is this policy necessary? Yes, in order for the City to continue with its street reconstruction program and finance the improvements, a formal policy with the recent updates is necessary for the 429 Special Assessment Process. Supporting Information • Memo dated October 24, 2013 outlining updates to the policy. • Special Assessment Policy Relating to the Rehabilitation of Roadways (New). • Street Reconstruction Assessment Policy (2006). a Christopher J. ree Public Works Director Financial Impact: Related Documents (CIP, ERP, etc.): Notes: Budgeted: Source: �Lltl.� t �fc To: Mayor and City Council Steve Mielke, City Administrator From: Chris Petree, Public Works Director 4�� Monica Heil, WSB & Associates, Inc. Copy. Dennis Feller, Finance Director Zach Johnson, City Engineer Date: October 24, 2o%3 City of Lakeville Public Works Subject: Special Assessment Policy Relating to the Rehabilitation of Roadways As the City continues to rehabilitate roadways throughout the City in conjunction with its Pavement Management Plan, staff has determined it necessary to update the polity and procedures for calculating the special assessments to benefitting properties using the 4 Special Assessment Process. This Special Assessment Policy Relating to the Rehabilitation of Roadways is intended to replace the existing Street Reconstruction Assessment Policy drafted in the mid-2000'S in an effort to clarify portions of the City's Special Assessment Policy, specifically: Residential Properties: i. Benefited properties shall be assessed 40% of the project costs, as calculated using the contract bid prices for the project. a. This reflects the City's current practice of determining assessment amounts for benefitting property prior to starting construction on the project, so that benefitting property owners are not responsible for any costs associated with unforeseen issues that may arise during construction. z. Along major collector and arterial roadways, the Single Family Unit Rate shall be prorated to reflect the City's typical 40-f00t minor collector street section. a. This verbiage is new to the City's Assessment polity, and is intended to assess residential properties that may be located along major collector or arterial roadways an amount more similar to what single family residential property located along a local residential street or a minor collector roadway would be assessed for similar improvements. b. For example, if single family residential properties are located along a collector roadway measuring 52 -feet in width, the assessments for these properties would be prorated to reflect that only 4o -feet of the 52 400t wide roadway reconstruction costs would be used to calculate the assessments for single family residential properties. Commercial, Industrial, Institutional, Public and Agricultural Properties: 1. For commercial and industrial properties, the policy states that the primary method for calculating special assessments shall be on a front foot basis. 2. For institutional and public properties, the policy states that the primary method for calculating special assessments shall be the same methodology as. the predominant surrounding land use and/or zoning of the area. a. For example, if the predominant land use or zoning within a given project area is single family residential, assessments will be calculated by determining single family residential unit equivalents for the institutional or public properties within the project area. 3. For agricultural properties, regardless of the number of individual tax parcels, will be assessed residential units commensurate with the number of users for the agricultural land. 4. In mixed -use areas, the policy states that the primary method for calculating special assessments shall be the same methodology as the predominant surrounding land use and /or zoning of the area. Lastly, the Special Assessment terms have been revised to reflect a repayment period of zo- years for mill and overlay projects, and zo- to 20 -years for reconstruction projects. This is consistent with the 20 -year assessment periods that have been established for the 2o11 -2o23 Street Reconstruction Projects. Staff seeks direction and feedback on this policy from the City Council. SPECIAL ASSESSMENT POLICY RELATING TO THE REHABILITATION OF ROADWAYS Policy 1) PURPOSE a) The City of Lakeville, Minnesota finds that it is in the best interest of the City to outline the policy and procedures for calculating the special assessments to benefitting properties using the 429 Special Assessment Process. b) The policy shall apply to the rehabilitation of roadways with existing paved surfaces. 2) OBJECTIVE a) The City currently utilizes the 429 Special Assessment Process to fund a portion of the costs associated with the rehabilitation of roadways within the City. This policy is intended to: i) Define the share of improvement costs to be specially assessed to benefitting properties ii) Identify the method(s) for calculating the assessments iii) Identify the improvement types for which special assessments will be levied iv) Identify the assessment period for the specified improvement type 3) GENERAL a) Minnesota Statutes Chapter 429 gives cities the authority to levy special assessments for public improvement projects to the benefitting property owners. 4) IMPROVEMENT COSTS TO BE SPECIALLY ASSESSED TO BENEFITTED PROPERTIES. a) It is the policy of the City to special assesses benefiting property for street reconstruction including mill and overlay costs in neighborhoods where the majority of the streets have deteriorated to the extent whereby it is no longer cost effective to provide routine maintenance. b) The special assessments will not be in excess of the benefit to the property. This policy applies to all streets that are public streets. c) Benefited properties shall be assessed 40% of the project costs, as calculated using the contract bid prices for the project d) For the purposes of street reconstruction or mill and overlay, the project costs will include the cost of replacing or repairing concrete curb and gutter. In those cases where bituminous curbing is replaced with concrete curb and gutter, or where curb and gutter did not previously exist, the additional benefit will be assessed. The cost to be assessed shall be 100% of the cost of installing the concrete curb and gutter. This cost will be assessed on either a front foot or per lot basis. In areas where no storm sewer currently exists, the addition of a storm sewer system will also be considered an additional benefit and shall be assessed at 100% of the cost. e) Project cost includes both direct construction costs and all indirect costs such as engineering, financing and administration. f) Assessments for properties guided or zoned for single - family use shall be made on a per parcel (unit) basis. A property may be assessed for more than one unit in cases where the property could be reasonably further subdivided in accordance with current zoning and subdivision requirement. g) The City recognizes that various housing types typically do not carry the same number of persons (due to their respective densities) or generate the same amount of wear on the streets. Therefore, the following table outlines the cost allocation to be assessed per project: Land use Facctor Single family and detached townhomes 1.00 Duplexes 0.50 Town homes 0.50 Apartments 0.25 h) Along major collector and arterial roadways, the Single Family Unit Rate shall be prorated to reflect the City's typical 40 -foot minor collector street section. i) If a street is reconstructed to a design standard greater than the current design standard due to the actual or zoned uses, the additional cost to reconstruct the street shall be fully assessed to those properties. If the street is reconstructed to a design different than the current standard, the total cost shall be fully assessed to those properties if conditions warrant. j) Properties abutting county roadways reconstructed to complete urban design and having reasonable access thereto shall be assessed in accordance with this policy. The assessments shall be used to defray the City's cost participation in the county improvement projects. k) Properties or areas of property that have been determined to be unbuildable shall be excluded from assessments. No building permits will be issued for such property so deleted from assessments. 1) Senior Citizens and Disabled People Special Assessments Deferrals are available in accordance with City policy. Other deferrals may be available as authorized by State Statute, Section 429. m) City will = special assess the • cost of routine maintenance such as sealcoating, crack sealing or minor patching. n) Commercial and Industrial (1) The method for calculating the special assessments for commercial and industrial properties shall be on a front foot basis, unless it is otherwise determined by the City Council. (2) The front foot unit assessment rate will be based on the average cost per foot of assessable roadway improvements (3) At the City Council's discretion, assessments may also be calculated using the same methodology as the predominant surrounding land use and /or zoning of the area. a. For properties used or zoned for other than residential use, the Assessable Units will be calculated by multiplying the number of front feet by 1.5 (because streets and roadways adjacent to non - residential uses are typically constructed to higher standards) and divided by the minimum required lot width based on the lot requirements for the predominant single - family zoning in the area. o) Institutional and Public Properties (1) The method for calculating the special assessments for these properties shall be the same methodology as the predominant surrounding land use and /or zoning of the area, unless it is otherwise determined by the City Council. (2) At the City Council's discretion, assessments may also be calculated on a front foot basis. p) Mixed Use Areas (1) The method for calculating the special assessments in these areas shall be the same methodology as the predominant surrounding land use and /or zoning of the area, unless it is otherwise determined by the City Council. a. For properties used or zoned for commercial or industrial use, the Assessable Units will be calculated by multiplying the number of front feet by 1.5 (because streets and roadways adjacent to non - residential uses are typically constructed to higher standards) and divided by the minimum required lot width based on the lot requirements for the predominant single - family zoning in the area. (2) At the City Council's discretion, assessments may also be calculated on a front foot basis. q) Agricultural land. Agricultural properties, regardless of the number of individual tax parcels, shall be assessed residential units commensurate with the number of users for the agricultural land (i.e. If there is one residential building structure for multiple adjacent agricultural tax parcels under the same ownership, only one residential unit assessment shall be levied, and it shall be levied against the parcel containing the building structure 5) Sp _UAL ASSESSMENT TERMS a) As established by the City Council, but typically: (1) Reconstruction =10 to 20 -years (2) Mill and Overlay =10 -years STREET RECONSTRUCTION ASSESSMENT POLICY 1.0 P E The City Council has adopted a long -range Capital Improvement Plan providing for the periodic maintenance of City streets. Reconstruction or mill and overlay will be proposed in neighborhoods where the majority of the streets have deteriorated to the extent whereby it is no longer cost effective to provide routine maintenance. With the improvement of streets, as a result of reconstruction or mill and overlay, adjoining properties receive special benefit that results in the increase of the property's value. It is the policy of the City that this special benefit should be paid for by the property owner receiving the special benefit rather than the City as a whole. This is accomplished by specially assessing the benefited property as authorized by State Statute, Section 429. The following is the City of Lakeville policy regarding special assessments to properties benefiting from street improvements. 2.0 POLICY a. It is the policy of the City to special assesses abutting benefiting property for street reconstruction including mill and overlay costs in neighborhoods where the majority of the streets have deteriorated to the extent whereby it is no longer cost effective to provide routine maintenance. The special assessments will not be in excess of the special benefit to the property. This policy applies to all streets that are public streets. b. The assessment amount is based on the following: (1) Benefited properties shall be assessed 40% of the engineer's estimated project cost as set forth in the project feasibility report or 40% of the actual project cost, whichever amount is less. (2) For the purposes of street reconstruction or mill and overlay, the project costs will include the cost of replacing or repairing concrete curb and gutter. In those cases where bituminous curbing is replaced with concrete curb and gutter, or where curb and gutter did not previously exist, the additional special benefit will be assessed. The cost to be assessed shall be 100% of the cost of installing the concrete curb and gutter. This cost will be assessed on either a front foot or per lot basis. The addition of a storm sewer system will also be considered an additional benefit and shall be assessed at 100% of the cost. (3) Project cost includes both direct construction costs and all indirect costs such as engineering and administration. (4) Assessments for properties guided or zoned for single -family use shall be made on a per parcel (unit) basis for a local residential or residential low volume street design standard. A property may be assessed for more than one unit in cases where the property could be reasonably further subdivided in accordance with current zoning and subdivision requirement. (5) The City recognizes that various housing types typically do not carry the same number of persons (due to their respective densities) or generate the same amount of wear on the streets. Therefore, the following table outlines the cost allocation to be assessed per project: Land use Factor Single family and detached townhomes 1.00 Duplexes 0.50 Town homes 0.50 Apartments 0.25 (6) For properties used or zoned for other than residential use, the Assessable Units will be calculated by multiplying the number of front feet by 1.5 (because streets and roadways adjacent to non - residential uses are typically constructed to higher standards) and divided by 85. (7) If a street is reconstructed to a design standard greater than the current design standard due to the actual or zoned uses, the additional cost to reconstruct the street shall be fully assessed to those properties. If the stmt is reconstructed to a design different than the current standard, the total cost shall be fully assessed to those properties if conditions warrant. (8) Properties abutting county roadways reconstructed to complete urban design and having reasonable access thereto shall be assessed in accordance with this policy. The assessments shall be used to defray the City's cost participation in the county improvement projects. (9) Properties or areas of property that have been determined to be unbuildable shall be excluded from assessments. No building permits will be issued for such property so deleted from assessments. (10) Senior Citizens and Disabled People Special Assessments Deferrals are available in accordance with City policy. Other deferrals may be available as authorized by State Statute, Section 429. 3.0 SPECIAL ASSESSMENT TERMS All assessments shall be levied for a 10 -year period to all benefited properties. 1211M os 2