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    4. 7.    
CC Regular Session
Meeting Date: 09/12/2017  
By: Bruce Westby, Engineering/Public Works

Information
Title:
Adopt Resolution #17-09-213 Ordering Assessment Roll and Calling Assessment Hearing for Improvement Project #17-00, Sunwood Drive Reconstruction
Purpose/Background:
Purpose:
The purpose of this case is to adopt Resolution #17-09-213 ordering preparation of a final Assessment Roll and calling for an Assessment Hearing on October 10, 2017, for City Improvement Project #17-00, Sunwood Drive Reconstruction.

Background:
City Improvement Project 17-00 involved reconstructing Sunwood Drive between Ramsey Boulevard/County State Aid Highway (CSAH) 56 and Bunker Lake Boulevard /County Road 116, which totals approximately 3,050 linear feet (0.58 miles).  A map showing the scope of the proposed improvements is included as Figure 1 in Appendix A of the attached Feasibility Report.

Pre-Existing Conditions
Record plans indicate this segment of Sunwood Drive was constructed in 1996 using B618 concrete curb and gutter at a consistent width of 40 feet from face-of-curb to face-of-curb, centered within an 80 foot wide right-of-way.  Record plans also show that 3½ inches of bituminous pavement was constructed over 5 inches of class 5 aggregate base.  However, soil borings and pavement corings revealed an average of about 4¾ inches of bituminous pavement along the corridor. Eight (8) foot wide parking lanes were delineated along both sides of the street using solid white pavement striping.

The existing storm sewer system consists of concrete catch basins and pipes, which drain runoff from the street to adjacent low-lying areas. Sanitary sewer and watermain also exist under the pavement.

An off-street bituminous trail exists along the north side of Sunwood Drive.  The trail is in relatively good condition so the trail was not improved with this project.

Four pavement corings were completed by WSB and Associates (WSB) to assist with the preparation of this report. In addition, eleven soil borings were completed by Northern Technologies, Inc. (NTI).  Copies of WSB’s and NTI’s reports are included in Appendix D of the attached Feasibility Report.

Completed Improvements
Damaged sections of existing concrete curb and gutter were removed and replaced, along with all concrete cross gutters at driveways and intersections which are used to better facilitate drainage in areas where grades in the gutter line are less than 2% which helps to prevent standing water causing unsafe conditions for drivers and pedestrians.

The existing bituminous pavement was reconstructed using the Stabilized Full Depth Reclamation (SFDR) process.  This process included reclaiming the existing bituminous pavement, along with a portion of the existing class 5 aggregate base.  The reclaimed material was then spread on top of the remaining class 5 aggregate base, after which about 4 inches of reclaim material was removed from site.  An asphalt emulsion was then mixed into the remaining reclaim material as a stabilizing agent to increase the strength of the reclaim material. The stabilized reclaim material was then shaped and compacted, after which 4 inches of new bituminous pavement was placed on top. The new pavement section is a 10-ton pavement design meeting current State Aid pavement design standards.

The existing storm sewer system met all current State Aid design standards so no storm sewer improvements were necessary, other than casting adjustments.  The existing sanitary sewer and watermain were tested and found to be in good condition so no utility improvements were necessary.

Public Input
Staff met with all property owners prior to construction to discuss the improvements and their preliminary assessments.  All generally understood the need for the improvements, and though many of the property owners questioned the use of special assessments to help pay for the improvements, they did not generally oppose their proposed assessments.  Only Connexus Energy continues to voice concerns with their proposed assessment.
Notification:
Following Council approval, an Assessment Hearing Notice will be published in the City’s official newspaper on Friday, September 15th, and Assessment Hearing Notices will be mailed to all benefiting property owners as required per Minnesota State Statute Chapter 429 (attached).
 
Anoka County requires special assessments to be certified to the County Auditor by November 30th for collection on next year’s taxes.  This deadline will be met by conducting the Assessment Hearing at the October 10th City Council meeting.  This will also allow adequate time for the required publication and mailing of notices for the hearing.
Observations/Alternatives:
Observations:
At the time this report was prepared, construction was substantially complete with only pavement striping and minor punch list items remaining.  Final completion is scheduled to occur well before the Assessment Hearing is conducted on October 10, 2017.
 
Alternatives:
Alternative #1 – Motion to adopt Resolution #17-09-213 ordering preparation of a final Assessment Roll, and calling for an Assessment Hearing on October 10, 2017, for City Improvement Project #17-00, Sunwood Drive Reconstruction.
 
Alternative #2 – Motion to deny adoption of Resolution #17-09-213 at this time.
Funding Source:
The contract amount for this project is $409,385.03.  This is $51,742.21, or 11.2%, less than the engineer’s estimate of $461,127.24.  Final project costs, which include actual construction costs plus 23% indirect costs for administrative (6%), engineering (15%), finance (1%), and legal (1%) costs, are estimated to be $503,543.59.  Staff believes the estimated project costs will be relatively close to final project costs since no significant quantity revisions or change orders occurred during construction.  A detailed breakout of final project costs will be presented at the Assessment Hearing.
 
These improvements were included in the City’s Capital Improvement Plan for 2017 construction.  Funding is proposed to include a combination of Street Reconstruction and Overlay Program (SROP) bond funds, special assessments to benefiting properties, and stormwater utility funds.
 
Special Assessments
The City’s adopted Special Assessments Policy (attached) specifies that special assessments shall pay for 25% of eligible street reconstruction improvement costs.  Special assessments are calculated using methods resulting in reasonable and equitable distribution of assessments that are uniform upon the same class of properties within the assessable area. The test for determining the validity of a special assessment is whether the improvement for which the assessment was levied has increased the market value of the property against which the assessment was levied in at least the amount of the assessment.

Ramsey’s Special Assessments Policy identifies three optional methods for calculating assessments.  A total of 9 benefiting properties were identified along this segment of Sunwood Drive.  All 9 properties are zoned E1 or E2 (industrial) so only two assessment methods are recommended; the “adjusted front footage” method and the “area” method.
 
Staff originally considered impacts of both methods as they would be applied in the current context of the policy.  The adjusted front footage method resulted in less variability between assessments ($9K - $40K), while the area method resulted in greater variability ($3K - $42K).  Staff initially recommended using the area method since it appeared to better assign benefit based on lot geometry, which seemed to make sense for this project considering the significant differences in lot depths along the corridor.  However, based on feedback received from the City’s consultant that has prepared the benefit appraisal consultation reports for recent street reconstruction projects in Ramsey (Patchin, Messner, Dodd and Brumm), and based on feedback received from other cities that have assessed industrial parcels for street reconstruction improvements, the adjusted front footage method was used to calculate preliminary assessments.
 
Additionally, Patchin, Messner, Dodd and Brumm calculated estimated special benefits for each assessable property, which was added to the preliminary assessment roll.  Staff then applied the lesser of the calculated front footage assessment and the estimated special benefit to determine the preliminary assessment for each assessable property per the attached Feasibility Report.

All project costs are eligible for special assessments since the street was reconstructed to its pre-existing width, and since the old and new pavement sections are both 10-ton designs.
 
As stated earlier, Connexus Energy is still voicing concerns with their proposed assessment.  Connexus Energy’s concerns primarily focus on the fact that the parcel proposed to be assessed in undeveloped.  Staff met with Connexus Energy representatives on several occasions to discuss their assessment.  However, based on feedback from our consulting appraiser, Patchin, Messner, Dodd and Brumm, as well as from other cities that utilize assessments who do not appear to assess properties differently due to development status.  Staff therefore believes Connexus Energy’s proposed assessment is reasonable. In summary, assessments were calculated based on the highest and best use of the property.
 
Connexus Energy plans to address the Public Works Committee on September 19, 2017, to discuss their proposed special assessment.  However, at the time this report was prepared no formal objections had been received City Staff.  Should any formal objections be received from property owners prior to the Assessment Hearing, or if the Public Works Committee recommends any adjustments be made to the final Assessment Roll, Staff will update the City Council on such matters before the Assessment Hearing is conducted.
 
The estimated assessable project cost based on the contract amount is $503,543.59.  This results in a total assessment amount of $125,885.90 based on 25% of eligible project costs.  Special assessments for each benefiting property varies based on front frontage.
 
A special benefit consultation report is being completed for this project to help provide proof of benefit.  The results of this report, which is being finalized at this time, along with final special assessment amounts, will be presented during the Assessment Hearing on October 10, 2017.
Recommendation:
Staff recommends Alternative #1.  Staff does not support Alternative #2.
Action:
Motion to adopt Resolution #17-09-213 ordering preparation of a final Assessment Roll, and calling for an Assessment Hearing on October 10, 2017, for City Improvement Project #17-00, Sunwood Drive Reconstruction.

Attachments
Resolution 1709213
IP1700 Feas Report
City Assessment Policy
MSS Chapter 429

Form Review
Inbox Reviewed By Date
Diana Lund Diana Lund 09/07/2017 09:21 AM
Kurt Ulrich Kurt Ulrich 09/07/2017 11:02 AM
Form Started By: Bruce Westby Started On: 09/03/2017 10:39 AM
Final Approval Date: 09/07/2017

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