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4.b) Staff Report-Draft Assessment Policy " t` l � �'* ''�\ � � �.s '� +'�.... _r .. SCANDIA Staff Report Date of Meeting: July 9, 2013 To: City Council From: Kristina Handt, Administrator Re: DRAFT Assessment Policy Agenda Item #: 4.b) Background: The City has no written assessment policy but past practice has been to assess for new roads at either 25% or 75% depending on whether or not it was collector road. In 2009, the Capital Improvement Committee reviewed a draft proposal (copy included in your packet)but declined to make any recommendation on it to the Council feeling that Council should be the body to make the decision on this policy matter. No action was taken by the Council to adopt an assessment policy, instead road projects such as Quinell and Pilar were delayed until residents requested them and that good roads would be maintained by crack filling and seal coating. Last year during the discussion of the improvements to Melanie Trail, the need for an assessment policy was noted and may also need to apply to reconstructions as well as new roads or turning gravel roads to paved roads. In order to help with the financial planning for various road projects discussed earlier on the agenda and others that may come up in the future, staff is seeking direction from the Council on whether or not road costs will be assessed and other components of a possible policy. The City Attorney has recommended that if the City is going to be assessing for roads, it should have an adopted, written policy. Issue: Should the City adopt an assessment policy? If so, what should be included? Proposal Details: Included in your packet are the draft from 2009 reviewed by the Capital Improvement Committee at the time and a draft assessment policy Ehlers and Associates prepared for the League of Minnesota Cities. Before discussing the specifics of any assessment policy, the Council should discuss if assessing for improvements is something they'd like to pursue or if levying a general tax levy is more appropriate. Items for discussion: ➢ Is the past practice of 25% assessment for collector roads and 75% assessment for non- collector roads still appropriate? ➢ Should the policy include provisions for assessing on reconstruction projects? If so, at what percentage? ➢ What method of assessment should be used?-Adjusted Front Footage, Area Method, Per Lot/Unit Method? ➢ How are corner lots counted? Fiscal Impact: The direct fiscal impact would be measured and known for each specific project at the time the Council is considering it. Options: Any direction provided to staff would be helpful in preparing the next draft of the policy likely to be brought back to another work session for further review by the Council. 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 Improvements 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 judgment,the improvement is needed, and action is required. The criteria which the City Council may use as a basis to determine the public need for the improvement include traffic volume, maintenance costs, and the general public safety. Definitions Unit Method—The Unit Method of assessment is defined as the quotients of the identified assessable costs divided by the number of lots, parcels, or properties benefiting from the improvement. When parcels that can be further subdivided are found to benefit from the proposed improvement, the number of lots attributed to 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-grade correction, drainage improvements such as curb and gutter, ditches, swales, storm sewer; and storm water management retention or treatment as required for the improvement. Collector Road—A road designated as a major or minor collector by the Comprehensive Plan (as depicted on Map 25, Roadway Functional Classification, 2008 Comprehensive Plan.) Assessment Method The assessment rate shall normally be by the "unit"method in residential or agricultural areas. The "front foot" method of assessment may be used for streets serving commercial or industrial development, as determined by the City Council. Corner lot properties shall be included in the assessment roll when the property mailing address fronts the improvement. Desi�n 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 expected service life of the original improvement. Initial Bituminous Pavement Imnrovements for Gravel Streets Initial bituminous construction for existing gra�el 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 exception to this policy in the case where the city is determined to benefit from the improvement or where special conditions exist. In no case will less than 20 percent of total project costs be assessed to benefiting properties. Reconstruction or Overlav of Existing 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 City of Scandia will participate in the remaining % of the improvement costs. Reconstruction of existing bituminous surfaced streets that are designated as Collector 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 State, typically referred to as "turn-back," depending upon the condition of the street at the time of turn-back and considering any payments received by the city from the other jurisdiction. � Construction of New Streets Construction of all new streets will be assessed at a rate of 100% of the cost of the improvements,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 Scandia will participate in the any street over-sizing costs for improvements to designated 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