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3.b)1) Overview of Draft CIP & Committee Recommendations -1 1 "\ _� � ; � a �: � , � . � �`g � ,� ,�.. �� .� �, ��, ;�� . «` -��..` . " �: '" . '''_ . SC�E��,NDIA. Memo � - To: Mayor and City Council From: Anne Hurlburt,City Administrator Date: July 8, 2009 Re: Draft Capital Improvement Plan (CIP),2010-2014 The City's Capital Improvement Committee meet twice, in May and June of 2009,to review the Capital Improvements Plan(CIP) and make recommendations to the Counci] for the 2010 budget. Attached to this cover memo are the following: 1. Summary list of capital improvement projects, sorted by department, for 2010 through 2019 2. Summary list of capital improvement projects,sorted by funding source for 20l 0 through 2019 3. Projections for equipment replacement fund at various funding levels, swrunary of replacements by department, and list of all scheduled replacements 4. Report on a draft assessment policy considered by the committee,including attachments 5. Notes from May 18, 2009 and June 11,2009 Capital Improvement Committee meetings The items in the recommended CII' that would have budget impacts in 2010 are: o $10,000 for floor replacements in the Community Center(General Fund,project CC-001) o $24,000 for improvements to Lilleskogen(PR-001)and Wind in the Pines(PR-002)Parks that are dependent on receiving grant funds or revenue to the Parks Capital Fund o $17,000 for replacement of a ditch mower(Equipment Replacement Fund, PW-007) o $220,000 for replacement of Fire Rescue 5179(F-Ol 0) o $240,000 for the Street Maintenance program(General Fund,project PW-002), approximately a 10%increase over the 2009 budget for crack-sealing and other pavement preservation work o $385,000 to begin design, easement acquisition and culvert replacements for paving of approximately 5.5 miles of gavel roadways(PW-001) The availability of General Fund money for projects will depend upon the tvc levy and how much of it is available for capital projects versus operations. Funding for the fire truck replacement would be expected to be from a debt issue that would occur after bids are received for the truck. The payments could be structured so a debt service levy would not be required until the following year(2011.)The most significant issue for the Council's consideration is whether or not the city should go forward with a paving project in 2410,and what that project should be. The Capital Improvement Coinmittee spent some time reviewing the Pavement Management Plan that was completed in 2008. The city has not yet identified a way to finance the plan. The level of ' funding proposed for 2010 would allow for a crack-sealing project similar to this year's, but would provide no funding for reconstruction or significant patching of any of the streets with low ratings. Current levy limits prevent increasing the General Fund operating budget to cover costs on a pay-as- you-go basis. Debt financing is not available unless a minimum 20%of the project costs are assessed to benefitting property owners. The current assessment policy does not provide far assessing any maintenance or reconstruction costs. The Committee reviewed data provided by the City Engineer on assessment practices of other communities. Staffprepared a draft assessment policy based on the current policy and that of Forest Lake. The Committee decided to not make a specific recommendation about the policy. The Committee also did not make a specific recommendation regarding a 2010-201 l paving project. Staffwill provide the Council with a separate backgound memo concerning the potential road project. The Council will need to give some direction on these issues for the 2010 budget. The CIP is a required part of the City's Comprehensive Plan,and the update must be adopted in the same process as any plan amendment. Once the Council has given its direction and adopted a preliminary budget, the next step would be far the Planning Commission to hold a public hearing on the CII' update(most ]ikely in November.) The CIP update would then be adopted by the City Council when the final budget and t� levy are approved in December. 2 City of Scandia, Minnesota Capital Improvement Program 2010 thr� 2019 PROJECTS BY DEPARTMENT Department # Priority 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total IAdministration � City Meeting/Office Space Study a-oo� 3 18,000 18.000 Building O�cial Vehicle Replacement A-ooz nia 15,000 15,000 Administration Total 18,000 �5,000 33,000 �Community Center � Community Center Interior cc-oo� 3 10,000 1 D,000 I mprovements--Flooring Community Center Roof Replacement cc-oo3 z 22,000 22,000 Irrigation System CC-ooa n 1Q000 10,000 Community Center Total 10,000 to,o00 z2,000 42,000 Fire Fire Station HVAC Rep�acement F-oo� 2 15,000 15,000 Fire Department Radio Replacement F-�3 � 60,000 60,000 Fire Chiefs Car F-� 3 15,000 15,000 SCBA Cylinder Replacements F-005 � 20,000 20,000 Civil Defense Siren,Big Manne Lake F-�� z 15,000 15,000 Park Reserve Rescue 5179 Replacement F-o�o nla 220,000 220,000 Tanker 5177 Replacement F-o>> ^ia 180,000 180,000 Engine 5180 Replacement F-o�z �ia 245,000 245.000 Grass Rig 5175 Replacement F-013 �ra 46,200 46,200 Fire Total 220,000 15,000 180,000 245,000 20,000 61,200 15,000 60,000 816,200 �Ice Rink � Zamboni Replacement iR-oo2 oia 40,000 40,000 Ice Rink Total 40,000 40,000 !_\ � \ For Capilal lmprnvements Comrni�lee J�me 2009 fG'ednesdar.Jiili�08. 2(I09 `� •� Department # Priority 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total Parks and Recreation Lilleskogen Park Improvements PR-0Of z 12,300 143,075 47,500 36,000 238,875 Wind in the Pines Park PR-002 3 12,000 12,000 Lighted Ball Field Improvements--Infield PR-007 s 0 0 Parks and Recreation Total 24,300 143,075 47,500 36,000 250,875 ;Public Works � Street Paving Pw-oo� 2 385,000 1,390,000 1,775,000 Street Maintenance Program Pw-ooz � 240,000 600,000 600,000 600,000 600,000 2,640,000 Ozark Ave.Extension PW-003 s 333,333 333,333 Pickup w/Plow Replacement Pw-ooa n/a 25,000 25,000 John Deere Tractor Mower wBroom 8 pw.00s �ra 25,000 25,000 Blower Replace 1997 FOrd 8000 Dump TruCk wlPlOw �'-�6 n/a 140,000 140,000 Replacement Tiger Ditch Rear Mower Replacement Pw-oo� n/a 17,ppp 17,000 34,000 Tiger Boom Mower Attachment Pw-oos nia 22,000 22,000 44,000 Replacement 1999 JD-6410 Tractor Replacement �'-�9 ^�a 60,000 60,000 2002 Sterling Dump Truck w/Plow Pw-o�o n/a 140,000 140,000 Replacement SalUSand Shelter PW-0+� Z 60,000 60,000 Public Works Total 642,000 2,072,000 740,000 933,333 800,000 25,000 22,000 42,000 5,276,333 GRAND TOTAL 896,300 2,248,075 967,500 1,224,333 860,000 61,200 40,000 22,000 117,000 22,000 6,458,408 For Capilnl Improvemenls Commit�ee June 2009 Wed�esdai�.Jrily 08.2009 City of Scandia, Minnesota Capital Improvement Program 2010 thru 2019 PROJECTS BY SOURCE Source # Priority 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total �Capital Improvement Fund � City Meeting/O�ce Space Study A-�o� 3 18,000 18,000 Civil Defense Siren,Big Marine Lake F'�9 2 15,000 15,000 Park Reserve OzarkAve.Extension PWA03 3 333,333 333,333 SalUSand Shetter �'-0�� 2 60,000 60,000 Capital Improvement Fund Total 93,000 333,333 426,333 Debt Service Fund � Street Paving PW-oo+ 2 385,000 1,390,000 1,775,000 Street Maintenance Program PW-�z 1 350,000 350,000 350,000 350,000 1,400,000 Debt Service Fund Total 385,000 1,740,000 350,000 350,000 350,000 3,175,000 ',Equipment Replacement Fund Building Official Vehicie Replacement a-ooz nla 15,000 15.000 Fire Department Radio Replacement F-�3 � 60,000 60,000 Fire ChiePs Car F-�a 3 15,000 15,000 SCBA Cylinder Replacements F-�5 t 20,000 20,000 Rescue 5179 Replacement F-o�o nia 220,000 220,000 Tanker5177Replacement F-o�� nla 180,000 180,000 Engine 5180 Replacement F-o�Z nla 245,000 245.000 Grass Rig 5175 Repiacement F-oi3 nla 46,200 46,200 Zamboni Replacement �R-�2 nia 40,000 40,000 Pickup wlPlow Replacement �'-�4 nia 25,000 25.000 John Deere Trador MowerwlBroom �'-�5 n�a 25,000 25,000 &Blower Replace 1997 Ford 8000 Dump Truck w/�low �'-� nia 140,000 140,000 Replacement (r�'�� For Ca i�al Im rovemenls Commillee June 2009 '. r'L; P P Wednesday.JuA�08, 2009 Source # Priority 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total Tger Ditch Rear Mower PW-oo� Na 17,OOp 17,000 34,000 Replacement TgerBoomMowerAttachment �'-0os n/a 22,000 22,000 44,000 Replacement 1999 JD-6410 Tractor Replacement PW-�9 nia 60,000 60,000 2002 Sterling Dump Truck w/Plow Pw-0+o nla 140,000 140.000 Replacement �ipment Replacement Fund Total 237,000 22,000 320,000 245,000 260,000 46,200 40,000 22,000 117,000 1,309.200 General Fund � Community Center Interior ��-�� 3 10,000 10,000 Improvements--Flooring Community Center Roof cc-oo3 2 Replacement 22,000 22.000 Irrigation System cc-ooa q 10,000 10,000 Fire Station HVAC Replacement F-�� 2 15,000 15,000 Street Maintenance Program PW-�2 � 240,000 250,000 250,000 250,000 250,000 1,240,000 General Fund Total 250,000 250,000 250,000 260,000 250,000 15,000 22,000 1,297,000 Grants/Donations Lilleskogen Park Improvements PR-0Of 2 12,300 12,300 Grants/Donations Total 12,300 12,300 Other/TBD Lighted Ball Field Improvements-- PR-0o� 3 p 0 Infield Other/TBD Total 0 0 Park Improvement Fund � Lilleskogen Park Improvements PR-0Of 2 143,075 47,500 36,000 226,575 Wind in the Pines Park PR-002 3 12,OOp 12,000 Park Improvement Fund Total 12,000 143,075 47,500 36,000 138,575 GRAND TOTAL 896,300 2,248,075 967,500 1,224,333 860,000 61,200 40,000 22,000 117,000 22,000 6,458,408 For Capila!lmprovements Commi�lee June 2009 Wedn2sday,Jul��08. 2009 �� :z ) � Equipment Replacement Fund 2010 - 2029 Annual Funding Level 2010 8�After Scheduled Year Replacements $40K/Yr $100K/Yr $150K/Yr 2010 $237,000 -$126,084 -$66,484 -$16,084 2011 $22,000 -$180,084 $11,916 $111,916 2012 $320,000 -$388,084 -$208,084 -$58,084 2013 $245,000 -$593,084 -$353,084 -$153,084 2014 $260,000 -$813,084 -$513,084 -$263,084 2015 $46,200 -$819,284 -$459,284 -$159,284 2016 $40,000 -$819,284 -$399,284 -$49,284 2017 $22,000 -$801,284 -$321,284 $78,716 2018 $117,000 -$878,284 -$338,284 $111,716 2019 $0 -$838,284 -$238,284 $261,716 2020 $0 -$798,284 -$138,284 -$111,716 2021 $50,000 -$808,284 -$88,284 -$11,716 2022 $60,000 -$82$,284 -$48,284 $78,284 2023 $194,000 -$982,284 -$142,284 $34,2$4 2024 $140,000 -$1,082,284 -$182,284 $44,284 2025 $290,000 -$1,332,284 -$372,284 -$95,716 2026 $157,000 -$1,449,284 -$429,284 -$102,716 2027 $0 -$1,409,284 -$329,284 $47,284 2028 $90,000 -$1,459,284 -$319,284 $107,284 2029 $82,000 -$1,501,284 -$301,284 $175,284 ------ --------- ------- - - - - ----------- Equipment Replacement Fund Year End Fund Balances 2010 - 2029 $500,000 ♦ � �� _♦/�� ♦ • $0 -� + � � • • � , � • • � � � ♦ , -$500,000 � � N � � � � O O O O N N N N -$1,000,000 -$1,500,000 -$2,000,000 �$40K/Yr �$100K/Yr �$150K/Yr -•-Scheduled Replacements . . :, Equipment Replacement Fund 2010 - 2019 Replacements by Department Administration/ Year Building Fire Parks/ Ice Rink Public Works Grand Total 2010 220,000 17,000 $237,000 2011 22,000 $22,000 2012 180,000 140,000 $320,000 2013 245,000 $245,000 2014 20,000 40,000 200,000 $260,000 2015 46,200 $46,200 2016 15,000 25,000 $40,000 2017 22,000 $22,000 2018 15,000 60,000 42,000 $117,000 2019 $0 $15,000 $786,200 $40,000 $468,000 $1,309,200 1.15% 60.05% 3.06% 35.75% 100.00% Replacements by Department 2010 - 2019 Administration/ Building 1% Public Works 36% ."' Fire Parks/ Ice Rink 60% 3% r � Equipment Replacement Fund 2010 - 2029 All Equipment Replacements Project Year Useful Cost Department # Description Purchased Life Year Estimate Administration A-002 Building Official Vehicle 2008 10 2018 $15,000 Administration A-002 Building Official Vehicle 2018 10 2028 $15,000 Fire F-002 Air Compressor 2001 20 2021 $30,000 Fire F-003 Fire Department Radios 2007 10 2018 $60,000 Fire F-003 Fire Department Radios 2018 10 2028 $60,000 Fire F-004 Fire Chiefs Car 2009 7 2016 $15,000 Fire F-004 Fire Chiefs Car 2016 7 2023 $15,000 Fire F-005 SCBA Cylinders 2007 7 2014 $20,000 Fire F-005 SCBA Cylinders 2014 7 2021 $20,000 Fire F-005 SCBA Cylinders 2021 7 2028 $20,000 Fire F-006 SCBA Air Pacs 2007 15 2022 $60,000 Fire F-008 Well Replacement 2008 20 2028 $30,000 Fire F-010 Rescue 5179 1990 20 2010 $220,000 Fire F-011 Tanker 5177 1992 20 2012 $180,000 Fire F-012 Engine 5180 1988 25 2013 $245,000 Fire F-013 Grass Rig 5175 1995 20 2015 $46,200 Fire F-014 Tanker 5178 2003 20 2023 $132,000 Fire F-015 Engine 5176 2000 25 2025 $290,000 Ice Rink IR-2 Zamboni Replacement 25 2014 $40,000 Public Works PW-004 F350 Pickup w/Plow 2008 10 2018 $25,000 Public Works PW-004 F350 Pickup w/Plow 2018 10 2028 $25,000 Public Works PW-005 John Deere Tractor Mower w/Broom & Blower 2002 7 2009 $25,000 Public Works PW-005 John Deere Tractor Mower w/Broom & Blower 2009 7 2016 $25,000 Public Works PW-005 John Deere Tractor Mower w/Broom & Blower 2016 7 2023 $25,000 Public Works PW-005 John Deere Tractor Mower w/Broom & Blower 2023 7 2030 $25,000 Public Works PW-006 1997 Ford 8000 Dump Truck w/Plow 1997 12 2012 $140,000 Public Works PW-006 1997 Ford 8000 Dump Truck w/Plow 2012 12 2024 $140,000 Public Works PW-007 Tiger Ditch Rear Mower 2002 8 2010 $17,000 Public Works PW-007 Tiger Ditch Rear Mower 2010 8 2018 $17,000 Public Works PW-007 Tiger Ditch Rear Mower 2018 8 2026 $17,000 Public Works PW-008 Tiger Boom Mower Attachment 2005 6 2011 $22,000 Public Works PW-008 Tiger Boom Mower Attachment 2011 6 2017 $22,000 Public Works PW-008 Tiger Boom Mower Attachment 2017 6 2023 $22,000 Public Works PW-008 Tiger Boom Mower Attachment 2023 6 2029 $22,000 Public Works PW-009 1999 JD-6410 Tractor 1999 15 2014 $60,000 Public Works PW-009 1999 JD-6410 Tractor 2014 15 2029 $60,000 Public Works PW-010 2002 Sterling Dump Truck w/Plow 2002 12 2014 $140,000 Public Works PW-010 2002 Sterling Dump Truck w/Plow 2014 12 2026 $140,000 Public Works 1998 John Deere Grader 1998 20 Do Not Replace Public Works 1995 GMC Pickup w/ Plow 1998 10 Do Not Replace $2,482,200 _ l , - �►, � :- �`�`� .i. � �.� ' ,� �, /' - . �. - � �;,'`,•., r" j , 5��y►...�TDIA Memo - � � To: Capital Improvements Committee From: Anne Hurlburt, City Administrator Date: 6/8/2009 Re: Draft Assessment Policy At the May 18 meeting, the Committee discussed the possible financing of improvements to existing paved roads through assessments to benefited properties. Several items are attached for use as you continue this discussion at the June 11 meeting: 1. Draft Assessment Policy for Public Streets (June, 2009}—this is a rough draft based on Forest Lakes' and Scandia's current policies. Some key items (the percent of costs to be assessed vs. paid by the city) have been left blank. 2. Survey of Assessment Policies (2007)--this is the data promise by City Engineer Paul Hornby. The table has very small print so we have provided an enlargement of part of the page so it's easier to read. 3. New Scandia Township Bituminous Surfacing PoGcy (February 19,2002}--is the current policy,provided as background information. 4. Special Assessment Guide, Minnesota League of Cities—an exceipt of this LMC publication provides some general background on special assessments. • Page 1 City of Scandia, Minnesota , Assessment Policy for Public Streets Draft, June 2009 Purpose The purpose of this Street Assessment Policy is to establish a fair and equitable manner of recovering and distributing the cost of public improvements. The procedures used by the City of Scandia for levying special street assessments are those specified by Minnesota Statutes §Chapter 429, which provides that "all or a part of the cost of improvements may be assessed against benefiting properties." Initiation of Public Street lmnrovements A public street improvement can be initiated in the following manner: 1. Petition by property owners that own at least 35% of the frontage on the street to be improved; or 2. Resolution by the City Council ordering the public improvement when, in the Council's judgrnent, the improvement i� n�eded, and action is required. The criteria which the City Council may use as a basis to'de�ermine the public need for the improvement include traffic volume, maintenance co�ts; arid the general public safety. Definitions � Unit Method —The�Triit Method of assessmerit i� defined as fhe quotients of the identified assessable costs divided by the number of lots, pa�cels, or properties benefiting from the improvement. When parcels that can b��urther si�bdivided are found to benefit from the proposed improvement, the nutnber of lois atriibuted#o that parcel will be determined from the number of potential lots that could be obtained from subdivision, using current subdivision regulations. Corner lots subject to an assessable street improvement will be assessed 100% of the unit assessment when the property address fronts the assessable improvement. Corner lots assessed under the "unit" method assessment shall be responsible for 150% of the costs when the improvements abut the property on more than one street. Front Foot Method —The front foot method of assessment is defined as the quotients of the identified assessable costs divided by the total assessable frontage benefiting from the improvement adjustments shall be made for odd shaped lots to an average front footage that would be the equivalent to the frontage of a rectangular shaped lot of the same area and depth. The purpose of this adjusted front footage is to equalize assessment calculations for lots of similar size. Corner lots assessed under the "front foot" method shall be responsible for the costs identified for the improvement for the full frontage of the property that fronts the improvement. Assessable Street Improvement Costs —The assessable costs of a street improvement project includes the cost of all necessary construction work required to accomplish the improvement, acquisition of right-of-way and easements, engineering, legal, administrative, financing, appraisals, and other identifiable costs. The street improvement project includes bituminous 1 surfacing, aggregate base, sub-�rade correction, drainage improvements such as curb and gutter, ditches, swales, stonn se�r, and stonn water management retention or treatment as required for _ the improve�nent. Collector Road - A road designated as a major ar minor collector by the Camprehensive Plan (as depicted on Map 25, Roadway Functional Classification, 2008 Co�nprehensive Plan.) Assessment Method The assessment rate shall nonnally be by the "unit"method in residentia] or agricuitural areas. The "front foot" method of assessment may be used for streets serving commercial or indusMal development, as detennined by the City Council. Corner lot properties shall be included in the assessment roll when the property mailing address fronts the improvement. Design Standards Construction and reconstruction of public improvements shall be consistent with the Engineering Standards approved by the City Council. The life expectancy,or service life, for street improvements, including concrete curb and gutter, sidewalk, trails, and storm sewer, is 20 years, unless otherwise stated in the resolution ordering the public improvement. If a public improvement project needs premature replacement or reconstruction, the amount to be assessed to the benefiting properties will be limited to an amount determined by dividing the actual service period of the original improvement by the expectec� service life of the original improvement. lnitial Bituminous Pavement Improvements for Gravel Streets Initial bituminous construction for existing gravel streets in rural zoning districts consists of the shaping of the existing aggregate surface, supplementing the existing aggregate base to specified thickness, constructing the bituminous base course to the specified thickness and width, construction of the bituminous wear course to the specified thickness and width. Sub-grade and drainage improvements will be constructed as determined necessary by the City Engineer. The constructed width and material thickness is to be in accordance with the Typical Rural Street Section detailed in the Engineering Standards adopted by the City Council, unless otherwise determined by the City Council. Initial bituminous pavement improvements for existing gravel streets shall be assessed based on the following formula: 1. Total bituminous cost (both base course and wear course) divided by the number of assessable units = cost/unit 2. Cost/unit x 0.25 = collector road assessment per unit 3. Cost/unit x 0.75 = non-collector road assessment per unit 2 The City Council may make an exceptio» to this policy in the case where the city is detennined to benefit from the improvement or where special conditions exist. In no case will less than 20 percent of t�tal project costs be assessed to benefiting properties. Reconstruction or Overlav of Existin� Residential Bituminous Surfaced Streets Reconstruction of existing bituminous surfaced streets shall be assessed at a rate of % of the costs of the improvements to the benefitting properties, with frontage on the street proposed for the improvement, and adjustments for corner properties. The C'ity of Scandia will participate in the remaining % of the improvement costs. Reconstruction of existing bituminous surfaced streets that are designated as Collectar streets shall be assessed at a rate of 100% of the costs of a typical Rural Street Section and defined in the Engineering Standards as adopted by City Council. The City of Scandia will participate in the improvement costs that exceed the Standard Residential Street Section including additional design street section thickness, additional storm drainage capacity, and additional width required to meet the needs of the projected 20-year traffic volume projections. These City costs are generally referred to as "street over-sizing" costs. The City of Scandia may vary from this policy in the case of a street that has been transferred to its jurisdiction from the County or Sfate, typically referred to as "turn-back," depending upon the condition of the street at the time of turn-back arid considering any payrnents received by the city from the other jurisdiction. Construction of New Streets Construction of all new �treets will be assessed �t a rate of 100% of the cost of the improvemenis, to the benefiting properties. The new streets will be designed in accordance with the city's Engineering Standards and applicable provisions of the city's Subdivision Regulations, as adopted by the City Council. The assessed cost of the improvements to the benefiting properties with frontage on the proposed street improvement will be limited to the construction costs of a typical City residential rural street section. The City of Scaridia will participate in the any street over-sizing costs for improvements to d�signated Collector streets. Non-Assessable Public Street Improvement and Maintenance Costs The City of Scandia will not assess the following: � Maintenance of bituminous surfaced streets including bituminous patching, crack filling, seal coating, shoulder maintenance, mowing and snow plowing � Maintenance of existing public gravel streets including periodic grading, periodic gravel placement, mowing, dust control and snow plowing. Maintenance frequency is determined by the City Council and staff, and described in city policies (such as for snow plowing, dust control and others) as may be adopted by the Council. 3 . � � 4 p S a - � a � g - g > r E �b ° u ° ' � ° � � ' g ° 3 E r�6 � � � � ` y yd ` u 's b 8 s m - 0 8 $ - s � 8 S Q � v 7 _ 7 a $ � S ' � = � � a � �? v ° " � ° $ ° z a _ _ a � � � � r � - o > � ,� o - _ � " g 3 8 a 8 � m » � � � � � . > �� B _ � � � - R S s - - - - � � - - �I R � - _ A R _ � _ � _ _ y R = � � ' 8 E �Y - R � 3 R F '"1 _ - - _ �F 8 � �` _ � R �� 8 � � � � $ � � # 8 � � � � � � R � g � B � � $ § � g � � � # P � � B � � � � � � $ & � � � � � � - - - - - - - - � � � �� ee � K a �e �e �e �e �e �e ce �e �e w �e �e �e ee �e � d �` a � °` K !� '� La' L� R� K �e �e �e �e �e w ce w � w K � " � � I� C - - � - - � � � s i � � � � � - - v - a � s t R s i �� g � ? „ R ry � : „ � � g � m r s „ _ _ _ > sc > x : � � � s � a Q � = a fi a � � : "s � " � g� c � c � � a - - - - - - - - � 8 : = � R � � Q � ^ - ^ � � - - - _ i�� N � 8 � e z e 6 � z 8 8 S 8 8 $ 8 � R o r 8 m g � v a 8 b _ _ _ ' _ _ R ' _ _ _ R R R - - ' _ R _ _ ' ' F i +� „ � �� b � � � � � u " � � � � � _ ' � � � _ ` � � � ^ � =5 - - - e Ng �F � � °` � s °` � � � " 5 � » � � � � � � $ �� _ = � � � � gz� ° 6: � ��s g o� F�.� ' aa � no � � _ °` � � � a � � � d = � � � � � �aa S„ Y � uao �o � � � �S � � � $ � �` � � � � �` �` �` � � �` � �` �e o � o � � � K � ,� � � � � � � � � � � � K � � � � � � � � � � � � � � � � � � � � � � " � 7 �` � � � " � �o :� ; � � � � � � g � � � � � � € � � � � � � � �a � � � aas � � � s � � � � � � � � � � s � � � � � � s� �s j _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 6 � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � $ � � � � � � � � � � � � � � � � � � - - € � � - � = i o o � o o � ; o 0 0 4 a �F - - � - - - - _ $ � - a s � m � � � - � - � � - � � � � � � � s � � $ ooa � o � � 6 � � ° ° � Y � ° b � � = � � � � � bvm � � � � � � o $ � � ` � � � � g 8 � € � E s� € E � � � � � � a u � .� � v � f u � E E � 8 � 8 � � � g � € b � E � s`� a ; a a � °` � � � } ' � � a 3 ; � ; 3 = a 8 y-o°� a � .� � u > � S a � �� m g � � 3 ° fi � ' � � -°o u � � n y �' o o tS � � o n � � � fi � � $ a � � Y a° a u u � G u 8 �' � € a - � � $ � s a i $ � 3 � � � ; o � s € 3 � � � - £ 5 � t � � � 8 ��. . � � ' �� Assessment Mefhod NEW DEVEIOPMENT RECONSTRUCTION Assess. Median Muni. Size(Sq.Mi) Sanitory Wafer Mill d Payment Pop.2006 Avg.Cify Home Muni. Sheefs(lane Written � ' City Counfy Age ••• Per loi Fronfage New Sheets New Utilifies Sheets"" Sform Sewer Sewer Sysfem Overlay Length esfimote' Tax Rate" Value"• Sheets mi mf Polic � � � � Y• Commenfs AlberiLeo _ _ _ Freebom 1878 10.8 R ^ 100% 100% �ppy p% 0% 0% NA 5-ISyeors 17,758 41.SIr $69,700 84.5 168.9 Y � Andover ------- _ Anoka 1974- ---34 1 -- --- ----- 100% I OOi�-- 25% 25%-- NA -- NA - - GF -- S-8 yeors 30.222 31.68% $158.a00 136.4 272.9 y ------- ------------------ Anoka Anoka 1878 - -- 6.7 -- -- - - - ._-- - --- ----------- -- - -_--- - R - 100% 100% 36% 17.501 38J4% $I 19.000 53.8 107J $3560/80 lot Appie volley Dakota 1969 17.3 �R/NR R/NR 100%, I00% 25% PUF PUF PUF NA 3 IS years 50,109 35.69% g154,300 134.2 268.4 N Follow LMC recommendotions Bioomington ,_ Hennepin 1858 35.5 _ _ _ R Ippy_ 50% 25�o PUF PUF PUF TAXES 10 years 80,869 33.82% $147,000 2879 580.3 Y � --- - - -- Brooklyn Park _ _ __ Hennepin 1954 26.1 ___ 100% 100% 70°� PUF PUF PUF Gf � 69,942 37.74% $I 31,000 I 66.5 333.3 $6000/80'lof Carver - - ----- Corver 1852 3.9 BOTH IOOI 100% 50% - --- - I O years 2,512 41 J5% $152,500 8.5 17 Chomplin Hennepin 1971 8.2 BpTH 100% 100% $0% 50% 50% 50% 50% 5-ISyrs 23,294 32.64% $137,600 60.4 120.8 Y Cottoge Grove _ Washington 1843 34 R _ NR 100! 100% 45� a5% 45% 45% NA 1 S years 32,969 37.84% $137,300 120.7 241.6 Y $51/Lf or$2700-3200/lot Crookston _ Polk 1879 4.9 100% 100% 30l O/M 100% 7,809 71.14% $62,400 40.3 80.5 $35/LF Crystal __ Hennepin 1852 5.8 R NR I00% 100% 603; PUF PUF PUF NA IS years 21,494 36J5% $I 12,900 70.1 140.2 N $5608/80'lot Dayton _ _ Hennepin 1855 23.5 BOTH 100% 100% Sp% 50% 50% 50% NA 30 years 5,059 42.52% $144,000 33.9 67.9 Y Eagan Dakoto 1860 32.3 BOTH I00% 100% Ipp% NA NA NA 75% NA 63,736 26.71% $164,500 175.4 354.4 Y Edina Hennepin 1888 15.7 R 100% 10p% _ �ppq� PUF PUF PUf GF l0 years 45,305 22.61% $248.500 159.6 318.9 Y Farmington _ Dakota 1872 12.5 100% 100% 35� 35% 35% 35% 35% 18,207 42.77% g146,200 39 78 Forest Lake Washington 1893 4.2 gpTH I00% NA 70� NA NA NA NA NA V,458 29.18� $122,800 88 176 Y Fridley Anoka 1957 10.2 R $14.41/LF 100% 100% ipg6 $1000/loT PUF PUF NA l0years 26.289 32.00% $120,300 83.5 167.3 N Streeis$20.00/LF Golden Volley_ Hennepin 1886 10.2 100% 100% 33% PUF PUf PUF 0% IOyears 19.921 43.31% $160,300 95.9 191.9 Y $3200/80'lot Hastings Oakota 1857 10.1 New Recon I00% 100% 90% 90% PUF PUF NA 10 ears 21,360 50.01% Y $13 I J00 66.7 I 33.4 Y Hawley Cloy 1872 2.5 NR R 100%, Ipp% 100� PUF PUF PUF NA 20years 1,924 43.59% $75.400 14.2 28.4 Y Hopkins Hennepin 1893 4.1 7py, �pp/ 7p;g PUF PUF PUF 100% 17,145 4826% $132,400 37.4 75.1 Hutchinson McLeod 1855 7.4 R �pp% �ppy, �pp% py 0% 0% 50% 13.963 57.52% $108,200 a6.3 92.7 Jordan _ Scott 1872 2.6 �ppyo �ppy, 30� 30y, 3p� 30% GF 5,312 SOJ9% $I 26,800 I 5.6 31.2 Mahtomedi Washington 1900 3.6 Sp/ �pp% � 65% NA NA 30% 8,016 28.10% $180,300 29.9 59.4 Mankato Nicollet/Blue Earth 1868 15.2 R �ppy, �ppy, 50� PUF F'UF PUF $15/LF 34,970 36.27% $97,400 104.1 2I0.9 $59.50/Lf Mople Grove Hennepin 1954 32.9 R �pp� �pp� Sp% 50% PUF PUF NA 20 years 60,584 30.27% $155.300 170.3 343.7 N Increase annually by CCI Minnefonka Hennepin 1956 27.1 �ppy, �pp� � 20 years 49,928 28.62% $190,100 193.6 386.3 Y Do Not Assess�but have a policy) Monticello Carver 1856 62 R NR 100% 1p0%, 7596 NA NA NA NA 10 ears 11,136 51.03% Y $130.200 32.5 65 Y Moorhead Clay 187I 13.4 BOTH 100% 100% $p% p% py, 0% NA 10-20 years 34,749 31.94� $g6.100 103.6 207.6 Y Movnds View Ramsey 1958 4.1 R �ppry, 100%, 25% 25% 25% 25% NA 10 yeors 12,023 39.94% $126.600 26.5 53 Y Currenily revising New Brighton Ramsey 1891 6.6 R 100% 100% 25% 0% U% 0% NA 20,875 34.I 7% $I 44,200 47.9 95.8 N Oakdale Washington 1974 Il.l 100% 100%, 33� PUF FUF PUF $12/LF 27,206 32.01% $137.200 109J 219.5 $40/LF Owotonna Steele 1854 12.6 $47.60/FF $20/FF Sp� NA NA NA NA 24,533 40.32% $104,0p0 92.1 I 84.9 Plymouth Hennepin 1858 32.9 �pp% �pp/ � PUF PUF PUF 40% 5-10 ears Y 70,102 23.20% $I97,600 226.6 456.9 Y Prior Lake ScoTT 1891 13.5 BOTH 100% 100% 40% 40% NA Na, a0% 10 eors 22,674 31.24% Y $175.100 65.2 I 30.3 Y Red wing _ Goodhve 1857 35.4 100% 100% 25�o NA P�A NA NA 15,754 54.32% $I 12,800 93.5 187 Robbinsdale _ Hennepin 1893 2.8 �ppy, �ppy �pp�+, PUF PUF PUF 100% 13,340 36.02% $I I 2,000 42.4 88.I Roseviile Ramsey 1948 13.2 �ppy, �pp% 2pp� 25%/#units FF FF NA 3 I,909 23.2 I% $143,400 90.8 I 81.7 St.Louis Park Hennepin 1886 10.7 �pp% �ppy p� NA 43,I45 36.34% $135,800 I i9.2 238.3 N Do Not Assess St.Paui Romsey 1854 52.8 �pp% �pp% 254b NA NA NA NA 20 yeors 273,535 28.94% $105,400 588.2 I 172.3 Y RSVP- Residentiol Sireei Vitolity Progrom South St.Paul Dakota 1887 5.7 �pp�, �ppy 3q% NA NA NA $I I/LF I 9,321 35.00% $I 10.300 53.5 107 Spring Lake Park Anoko 1953 2 R 100% 100% 45� 0% 0% 0% NA 10 years 6,633 50.93% $120,000 22.2 44.4 Y Stewartviile Olmsted 1857 2.1 BOTH 100% 100% 25% 25% 25% 25% 25% I5 years 5,759 44.24% $99,700 I5.2 30.4 Y Stillwoter Washington 1854 6.5 R Ipp% Ipp% Spry, 50% 50% 50% NA 10-12 years 17,781 49.18% $156,200 58 I 16.2 Y O�idated policy,currently under revision waseca Waseca 1867 3.8 _ ippy 100% 30� NA NA NA 30% 9,491 57.21% $84,200 32.5 65.1 �/aYZata _ Hennepin 1883 3.2 _� �ppy �pp% p�, PUf PUF PUF 0% NA 3,922 22.22% $281,700 24.5 53 N DoNot,4ssess Willmar _'___ Kandiyohi 1901 I I.8 _ _ R 100% 100%, 75% 75% PUF PUF 75% 10 years 18.067 23.97% $83,700 75.5 150.9 Y woodbury Washington 1858 35 R NR 100% 100� SO% 33%/PUF 33%/PUF 33%/PUF NA I S years 5a,365 29.02% $17a,300 160.6 321.3 Y $4700/80'lot i Worihingion Nobles 1875 7.1 _ _ �pp J �ppy 33l NA NA NA NA 1 1,056 50.24% $69,900 45.1 90.3 i �� o� Everything aside from center 24' . NEW SCANDIA TOWNSHIP BITUMINOUS SURFACING POLICY FOR EXISTING GRAVEL ROADS FEBRUARY l9, 2002 l. GOALS A. All Collector Roads and nearly all Non Collector Roads shall be Bituminous Surfaced. (I) Cheaper to maintain (2) Better road surface (3) Safer B. No more than two(2) Bituminous Bonds at any one time. C. Minimum of two(2)miles/year or ten (10) miles/5 years. II. BITUMINOUS STANDARDS A. All bituminous surfaced roads within the Township shall be constructed to a minimum of six inches(6) inches of Class 5 gravel and tllree(3) inches bituminous surfacing. The bituminous surfacing shall be installed in two lifts of one and one half inches each according to a sclledule approved by the Township Engineer. A more stringent road design may be required for Collector roads upon recommendation of the Township Engineer. B. In all cases, Collector Roads should be 24 feet wide. C. Non Collector Roads shall be minimum of 20 feet wide. The Town Board may allow a variance under special conditions. D. Township Standards Road Section is 24 feet with 2 feet gravel shoulders on each side, but in some cases it may be necessary to reduce these. E. In some cases it may be necessary for the Town Board to review further on an individual basis where special conditions exist. IIL Assessments A. Formulas (1) Total Bituminous Surfacing Cost divided by total assessable units=cosUunit (2) Cost/Unit x 0.25 = Collector Road Assessment (3) Cost/LJnit x 0.75 =Non Collector Assessment B. Definitions (1) Assessable unit is an existing home site or buildable site. (2) Collector Road and Non Collector Road shall be defined by New Scandia Road Classification Map (3) Special Situations-township could pay 100°/o if the township benefits from tlie project L�� , • (4) Corner Lot Assessment is %z assessment on side without main driveway Plus one (1) assessmei�t on side with main driveway. � (5) No assessment on resurfacing or maintenance IV. FACTORS TO CONSIDER WHEN A ROAD MAY BE StJRFACED A. Road has been properly petitioned prior to township consideration for bituminous Surfacing. Petition must have 35% of the abutting property owners. B. Road has been built to township specifications. C. Road committee recommends improvements. D. Where a Collector Road is surfaced all Non Collector Roads entering on to that Collector Road should be surfaced. E. Ease of road maintenance. Bituminous surfaced road should not be left between gravel surfaced roads. F. The Town Board must attempt to keep good ratio of Collector Roads and Non Collector Roads in each Bituminous Surfacing Project. (1) Keep assessments as even and fair as possible on all Bituminous Surfacing. (2) This complies with the Comprehensive Plan. Special Assessment Guide r.�"," �1°' `��' �'"' Minnesota Statutes Chapter 429 (Chapter 429) gives cities authority to levy special assessments. Court decisions and attorney general opinions have added to the complexity of the issue. This Guide addresses the following: 1. What are special assessments II. Synopsis of procedure III. Challenges by property owners IV. Levying and collecting assessments V. Tax-exempt and railroad property Vl. Corrections VII. Borrowing for special assessment purposes VIII Charter cities IX. Forms I. What are special assessments? Special assessments are a charge imposed on properties for a particular improvement that benefits the owners of those selected properties. The authority to use special assessments originates in the state constitution which allows the state legislature to give cities and other governmental units the authority"to levy and collect assessments for local improvements upon property benefited thereby."The legislature confers that authority to cities in Minnesota Statutes Chapter 429. see se�t;on v►n:charrer�utes. A charter city may choose to use either Chapter 429 or provisions of the charter to assess for local improvements but even so state law requires that charter cities follow state law in certain steps of the proceedings,as discussed subsequently. To ensure full protection for property owners,state law and courts applying that law insist on strict compliance with complex procedural requirements. Because these requirements have legal implications,city councils should have the city attorney guide assessment proceedings. Special assessments have three distinct characteristics: • They are a levy a city uses to finance,or partially finance,a particular public improvement program. • The city levies the charge only against those particular parcels of property that receive some special benefit from the program. SPECIAL ASSESSMEM GUIDE 5 • The amount of the charge bears a direct relationship to the value of the benefits the property receives. A. What do special assessments pay for? Special assessments have a number of important uses: • The most typical use is to pay for infrastructure in undeveloped areas of a city, particularly when the city is converting new tracts of land to urban or residential use. Special assessments frequently pay for opening and surfacing streets; installing utility lines and constn�cting curbs, gutters,and sidewalks. • Special assessments may partially underwrite the cost of major maintenance programs. Cities often finance large scale repairs and maintenance operations on streets,sidewalks, sewers, and similar facilities in part with special assessments. • Another use of special assessments is the redevelopment of existing neighborhoods. Cities use special assessments when areas age and the infrastructure needs updating. B. The special benefit test Specia] assessments reflect the influence of a specific local improvement on the value of selected property. No matter what method the city uses to establish the amount of the assessment,the real measure of benefit is the increase in the market value of the land because of the improvement. Under the special benefit test,special assessments are presumptively valid Buzick v.Cin�oJ Blaine,505 N.W.2d j f 51(Minn. 1993). EHW Properties v. Cit} o/Eagan, • The land receives a special benefit from the improvement. (Minn.Ct.App. 1993). • The assessment does not exceed the special benefit measured by Schumocher v.City of Exce/sior,az� the increase in market value due to the im rovement. N.W.2d 235(Minn. 1988). p Trr-State Land Co.��.Cih�o� • The assessment is uniform as applied to the same class of property, Shoreview,290 N.W.2d 775(Minn in the assessed area. 1980). Because special assessments are appealable to district court, it is important that the city considers the benefit to the property as a result of the specific improvement. Councils often do this by retaining a qualified,licensed appraiser. At the hearings on the assessments the appraiser presents a written or oral report on the increase in market value as a result of the improvement. 6 LEAGUE OF MINNESOTA CITIES a�,�r,ner,�.ctn�ojsr.c�oud,z�� A special assessment that exceeds the special benefit is a taking of property N_w zd i99�M;n�. i9�9�. ��,�thout fair compensation and violates both the Fourteenth Amendment of Sourhrie�r Countr Club.r.Citr o/ lmer Groi�e Heigh�s,263 N W 2d the United States Constitution and the Minnesota Constitution. Property 3as�M�oo. �9�s� assessed must enjoy a corresponding benefit from the local improvement. r:i��,��,_� „�,.� �� .; � This is a different concept than property tax valuation. The Minnesota Constitution states: "The Legislature may authorize municipal corporations to levy and collect assessments for local improvements upon property benefited thereby without regard to cash valuation."As the courts have made clear, the special benefit is the increase in market value of the land as a result of the improvement. Ewer1 r.Cih o/Winlhrop,278 � If a city s assessment is challenged in district court, the assessment roll N.W.2d 545(Minn. 1979). constitutes prima facie(or initial)proof that an assessment does not exceed the special benefit. The party contesting the assessment must introduce evidence sufficient to overcome that presumption. If the evidence as to the special benefit is conflicting it is the responsibility of the district court to determine whether the assessment exceeds the market value increase and, if so,by what amount. K"�"�` '� `"' "��""""""� '`" For this reason,the city's assessment method should approximate market r��,d�iain��,�, c� ��,�, i��U��i analysis. A formula that does not consider an analysis of the increase in Qualitv Homes,Inc.v. Village o� NewBrighton,289 Minn.274,i93 market value of each parcel may be invalid. For instance, a method using tv.w.2a sss��9�>>. only front-footage in calculating assessments for street improvement Anderson v.Ciry ofBemidjr,z9s projects based on costs of street improvement projects from previous years N.w.2d sss�t�t�r,�. i9so>. has been found arbitrary and invalid on its face. I�il/age o%Edrna v.Joseph,264 Minn.84,1 19 N.W.2d 809(Minn. 1962). iz��r,,-,�„,�_rr��i c��,��,i�.�,a��-.,ou: Courts often uphold special assessments based on evidence from the city's �'t_»a�i33�.�,o�-i7�in�;�,�, c�. ualified and licensed a raiser that the s ecial benefit did not exceed the A�i,.No��.a.�ou3�. 9 PP P I//�-n� C�i�ro/Nrnii�,�y,olic �003 IIICI'e8S8 lIl 11]8I'ICet V8�U0 2S a teSll�t Of t118 1171pI'OV8171e17t. �1'L 196'OI�.CI-02-15061Minn. Ci. ��i April�3,?U0;I. llurrrhrrg c��h�u/Ah�dison.2003 WL U8797,C�-0?-I Id6lMinn.Ct. App I<in.2R.'003�. SPECIAL.ASSESSMEN"I GUIDE � `�`�`'''��' ` "'� ''"""�""'^�' ' ` '� However, in recent unpublished opinions, the appellate courts have r,�.4G�d,ry,�r.r�14 !';.AV'._'d_-1r, ,�;,�;,,,, ,�, ��i, _;,,,,;,, ,�,,,,,,,,, routinely upheld decisions that went against the city because the district �;,�,,;h �;-�,<<r�� i,,;,;.� r�,��,,.i„i, court found a lack of adequate evidence of a market value increase equal to ,110��`� ��`'�' `��`'-�� '�`�� or exceeding the amount of the special assessment. IP.�linn_l't �Ap�� A�uil II�,,?(10='i; B�lunt'r� i� (in ol Ln��l�iG�_'nu� ��FL jh_�'.9b,C�I.q�; 13-I i{qliiit� t . \�� F,1.� �),�I1qI11;R�ilint-�� t lh � Linu L�rk<s�IIUO\1�1. �h�)_;F-J.l�7- y'� ��y-JlGiinn ! t ��i�, \��i. II �Uf1Ui; I��dri_,oii r ( in�nl l;��ll�dr,. ?UUII�4'L:17'-)I.(7-�)�)_h-I I I I�ilnn l t ��,�i. I,�n I£ ?l){IU1;XnAlin�;i <7n�u/�(l��irri��li�i. I'>9�l\��I.71-1Aa C�;-�)ti-1=(i�?(^iinii (l. ,�� F��h. Ih. 199�Jy iun��nhli�l'ic�l il�rci�ml; (��ullnr�l r (�i�r uI L�i1��/'�iiG. 1997 \NL�F57d>;,('ti-�17-�'(17 I��linn l'I ��p.:iug. I�. I�)9 i 1;h�n .!/��rul hr Eusl.e(�7� l)c r��lu��m��n�.C'-I-01- iA=;Ch-01-��_:U01 \NL I(1;��VU 1�1inn.Cl.:\��p.�(IUl llun�,ul�li.h��i dec isi�in 1. �"'"��'�'��"��" �-�""�"�� Especially with regard to street improvements it may be very difficult to D�'relopmen�.�001 N�I 11135'SU, ' ca-oi-ss�in��,�, �,�� ni�i�_s��„ i� demonstrate that there is any significant increase in market value as a result '-��i i. of the resurfacing or reconstruction. Bloniyuisi r Crm o/Lii��in.�001 WL 4361F7,C?-O0-1591 1�1inn_(1 A��p.Ma1' 1.201)I I. Jolrn>nn��.('in ��/L�i��n.SS-4 �en a COU11 C�1S8��OWS 2 pO1�lOII Of 8ri BSSeSSIDerit b0C8US2 11 W2S lIl BXCCSS N�'_'d�701�1inn 19�151. of the benefit to the specific property,the city may not try to recoup the /n re Village o/Burnsvi!/e,3 i o disallowed amount throu h another method--such as b im osin a char e Minn.32,245 N.W.2d 445(1976). g Y P g g for a utility line on only that property and not on the other properties involved in the assessment. When the cost of an improvement exceeds the benefit,the difference must not be borne by a particular property,but instead by the city as a whole. Nordgren��.Cih�o/Map/ewood 326 The Minnesota Supreme Court has held that connection charges,based on N.w.2a bao�M;n�. i 9sz>. a different state law,are not assessments and may be imposed on top of n��,�, s�.�, ;aaa u�=, prior assessments. One unpublished Court of Appeals decision,however, s�»�ri�,� s��;»�;t��T��„�,n;��. held that the cost of the connection char es should be included with the �ooi v,�� iaaaa=.�,cu-ni-�iu g in��„�, c�_,�.i�i� r.,,�� u._uo i�. amount of special assessments in determining the special benefit to the property. C. Practical points to consider The following three strategies helps avoid the problem of proceeding on estimates that do not equal actual revenue: g L.EAGUE OF MINNESOTA C1T1ES - 1. Coordinating procedures Chapter 429 allows coordinating the special assessment process with the competitive bidding process —and may protect the city from successful appeals and ensuing budget shortfalls. The city may determine the assessment amount and prepare the assessment roll before work on the '��`' r,i��, � ��'.,i, ="�,a local improvement even begins. Effective Aug. l, 2008, the competitive °"'e"d'"s ni"''' �'',' ;a'i 'a-' bidding threshold for all cities, regardless of size, is $100,000e Howeve�-, ��",° ";" ' �-�� "'�"� � this new/�igher bid trigge��does not apply lo local improvemeni pr•ojecls unde�• Cha�ter 929 because the law gove�-�iing local im�rovement conn-acls was not changed. Thus, such projects must still be bid if the estimated cost exceeds $50,000. If needed, the city may advertise for bids and allow sufficient time after the bid closing date to permit the city to prepare the assessment roll based on the lowest responsible bid the city receives and to hold the assessment hearing(the second hearing)based on that low bid. The city then proceeds with the actual work of the project after certification of the assessment roll and the 30-day appeal period is over. Using this coordinated procedure means the city knows both important numbers up front--how much money will be available through special assessments and the cost of the local improvement. Because the time for appeals is over before the contract is issued, the city will not need to cover potential budget shortfalls that may occur if a property owner successfully challenges a special assessment or the lowest bid comes in higher than expected. This Guide and the forms attached track this coordinated procedural format. For larger projects in particular,city councils should seriously consider having provisions in the specifications that give the city more time to accept or reject bids. Either the city can make the improvement contract conditional on the absence of objections filed within 30 days after the assessment hearing,or the city may specify(in the bid documents, or specifications)that the improvement work will not begin until 90 days after the city receives bids. Under both strategies,the council would not enter into a binding contract, nor wonld any improvement work start until after the improvement and assessment hearings and the time for appeals elapses. 2. Specially assessing less of the cost see sect�on nA2:s��oUn��. The city can also avoid appeals by paying a substantial portion of the cost of all improvements out of general funds. The larger the portion of cost the city assumes,the less the chances that any individual assessment would exceed the benefit from the improvement as measured by the increase in market value. Indeed,the council can proceed with the proposed assessment based on estimates--and plan to use monies from a reserve fund from general taxes and other uncommitted sources of revenue making up any difference between the assessments and the project cost. SPECIAL ASSESSMEM�GUIDE 9 3. Waivers ku�t��.ctn�o/Eden P.ar.re, a�9 The council might obtain, under certain circumstances, waivers of rights to N w.2a ai��M;�� ci n�,� i99i i appeal before entering into the contract and ordering the improvement. Any �•��" �`�� ; ��"'�� waiver of rights is effective only for the amount of assessment agreed on �`��"" �`" ; �`,- �� '� by the city and property owners or developers. An effective waiver of see Form z rights of appeal is essentially a contract and may contain additional conditions providing for the increases in assessments that will not be subject to appeal;consult the city attorney for specific advice on effective waivers. D. Pros and cons of special assessments Following is a summary of the advantages and disadvantages of special assessment financing. The council can avoid many of the disadvantages with adequate plans and a long-range capital improvement program. Advantages of special assessment financing include: • Special assessments are generally a dependable source of revenue. • Special assessments are a means of raising money outside city debt and general property taxes. (Special assessment bonds do not count toward statutory debt limitations.) • Special assessments provide a means of levying charges for public services against property otherwise exempt from taxation. • Special assessments lower the cost to the community of bringing undeveloped land into urban use. • Charging the property owner for the benefit received prevents or minimizes the possibility that a property owner will reap a financial profit from the improvement at the expense of the general taxpayer. Disadvantages of special assessment financing include: • The difficulty and expense in establishing the specia] benefit to the property. • The difficulties in special assessment administration. The administrative procedures require careful execution in order to avoid litigation. • Cities have at times used special assessments to pay for premature public improvements. Because the city generally bears some of the cost of every public improvement, land speculators sometimes urge councils to do unjustifiable special assessment programs. • The availability of special assessment financing often tempts city officials to underwrite the cost of governmental programs that should be an obligation of the entire city. I O LEAGUE OF MINNESOTA C1T1ES • Unless special assessments conform to a city's long-term financial and ' capital improvement plans, they can subject a city to two serious financial dangers. First, if a city frequently undertakes special assessment bond issues backed by the full faith and credit of a city in an unplanned manner, city credit might be overextended. This leads to higher interest charges on all city and school district borrowing and increases the possibility of default. Second, placing too heavy a burden on individual property owners(with special assessments and regular property taxes)runs the risk of increasing tax delinquencies and potentially jeopardizes a city's credit and borrowing position. • From the council's point of view, the public's reaction to a proposed special assessment might be the most important determinative factor. While taxpayer resistance is usually minimal, this is not true in every instance. Special assessment programs receive much greater public support if the council adequately informs people of its intentions to make the improvement, the benefit the improvements will provide, and the necessary financial demands. E. Special assessment policies See Seclion IB:The special bene/i� Some cities have attempted to minimize the controversy over special test. assessment financing by adopting a special assessment policy(not an ordinance). Whatever the policy provides it must adhere to the rule that the amount of a specia] assessment cannot exceed the specia] benefit to the property as measured by increase in market value due to the improvement. With frequent turnover on the council a policy may increase consistency in the use of financing improvements with special assessments. Justifying council decisions in a particular case may also be easier with a policy in place. An updated and current special assessment policy may also facilitate the development of a ]ong-range capital program far public improvements. A policy should reflect basic procedural decisions on financing local improvements -- decisions that the council must think through carefully, taking into account past practice,equity, revenue productivity,political acceptability, and the rest of the city's revenue system. Practically speaking,many city special assessment policies provide procedures for city-specific issues, such assessing oddly shaped lots,corner lots, lots with septic systems and what method of assessment the city uses. (E.g. including but not limited to the area method of assessment, unit method or a per lot assessment). Cities may wish to work with citizens, appraisers, an attorney and city engineers to develop a special assessment policy that fits the unique needs of their city. SPECIAL ASSESSMEM GUIDE �� (� � _ Meeting Notes Scandia Capital Improvement Committee May 18, 2009 The meeting of the Scandia Capital Improvements Committee was called to order at 6:30 p.m. by Chair Dennis Seefeldt. Committee members present were: Mike Goeken, Bill Havener, Jim VanHoven, Mike Harnetty, Jim Finnegan, Anne Hurlburt, Colleen Firkus and John Morrison. Members absent: Dolores Peterson, Chris Ness, Christine Maefsky and Arden Johnson. Guests present: City Engineer Paul Hornby. Members of the Committee were introduced. City Engineer Hornby reviewed the Pavement Management Plan completed in 2008. Issues concerning financing of road maintenance were discussed. Forest Lake's assessment policy was reviewed as an example. Prior to the next meeting, Hornby will share a survey of assessment practices in other communities. Administrator Hurlburt gave an overview of the Capital Improvement Program (CIP) adopted by the City Council in December, and the status of projects included in the 2009 budget. Balances in the city's capital funds, and the projected needs for equipment replacements were discussed. The committee will be asked to identify any new projects to be added to the CIP, to update the projects (costs, priority, timeline, etc.) and to make recommendations to the Council far the update. Recommendations that would affect the 2010 budget will need to be made before the Council budget sessions that will begin in late July. Prior to the next meeting, each department or group responsible for CIP projects will be asked to review their projects and update descriptions and cost estimates. New projects may be proposed at that same time. Staff will draft an assessment policy and obtain the survey of assessment practices for discussion at the next meeting. Two meeting dates/times were set: - Thursday, June 11, 6:30 p.m. - Thursday, July 9, 6:30 p.m. The meeting adjourned at 8:40 p.m. Respectfully Submitted, Anne Hurlburt Administrator 1 Meeting Notes . Scandia Capital Improvement Committee June 11, 2009 The meeting of the Scandia Capital [mprovement Committee was called to order at 6:30 p.m. by Chair Dennis Seefeldt. Committee members present were: Bill Havener, Jim VanHoven, Jim Finnegan, Arden Johnson, Dolores Peterson, Alex Bildeaux for Mike Goeken, Anne Hurlburt, Colleen Firkus and John Morrison. Members Absent: Chris Ness, Christine Maefsky, Mike Goeken, Mike Harnetty. Guests present: City Engineer Paul Hornby. The minutes from the May 18 meeting were approved with no changes. Administrator Hurlburt outlined the updates to the CIP made since the last meeting, including new Park projects. The 2009 projects are all in the works or have been completed. The Committee reviewed the projects and funding sources slated for the next five years and made the following changes: Move the Civil Defense Siren on Big Marine Lake from 2010 to 2011 and increase to $15,000. Move the Community Center flooring to 2010. Take Pilar Road out of the Street Paving project for 2010 and 2011, add in Quinnell Ave. City Engineer Hornby will provide updated cost estimates reflecting those changes to the Street Paving project. Move the Fire Station HVAC Replacement from 2012 to 2015. Move the replacement of the Building Official Vehicle from 2014 to 2018. The Committee agreed that the CIP is ready to send to the City Council While an error was noted in the Equipment Replacement Fund Annual Funding graph, the graph reflected that there are some major equipment purchases to be made in the next six years and funding at $150,000 annually would not cover the purchases. Borrowing will be necessary for those purchases. However, after 2015, there is a reprieve that would allow some time to build up a balance in this fund. A draft Assessment Policy combining Scandia's current policy and Forest Lake's policy was presented along with a survey of assessment practices by other cities. It was the consensus of the Committee that there is no standard practice when it comes to assessing street improvements and it is the realm of the City Council to make this kind of policy decision. The meeting adjourned at 8:10 p.m. Respectfully submitted, Colleen Firkus Treasurer