HomeMy WebLinkAbout13.B.1. Assessment Policy Revision-Res. No. 702513. B•!.
CITY OF SHAKOPEE
Memorandum
TO: Mayor & City Council
Mark McNeill, City Administrator
FROM: Jeff Weyandt, Assistant City Engineer
SUBJECT Assessment Policy Revisions
DATE: August 17, 2010
INTRODUCTION:
Attached is Resolution No. 7025, a resolution amending the Special Assessment Policy
for Street Bituminous Overlay Projects.
BACKGROUND:
At the June 15, 2010 City Council meeting, staff presented the attached memo and
recommended to revise the Assessment Policy to eliminate assessments for overlay
projects. Council agreed to discuss this issue at a later meeting.
BITUMINOUS STREET OVERLAYS
Attached is Page 12 of the City's Special Assessment Policy. Section X, Paragraph A.5
states that overlays are assessed at 30%. Resolution No. 7028 includes language to the
paragraph to revise the policy to no longer assess bituminous. street overlay projects. and
to add reclamation projects to the reconstruction category.
ALTERNATIVES:
1. Adopt Resolution No. 7025, A Resolution Amending the Special Assessment
Policy.
2. Deny Resolution No. 7025, A Resolution Amending the Special Assessment
Policy.
3. Modify and adopt Resolution No. 7025, A Resolution Amending the Special
Assessment Policy.
4. Table for addition information from staff.
RECOMMENDATION:
Staff recommends Alternative No. 1.
If approved, staff recommends Council pass a motion directing staff not to assess the
2010 Overlay Project and fund the assessable portion of the project from the State
Aid/Street Fund. The estimated assessable portion of the 2010 Overlay Project is
approximately $86,000.00.
ACTION REQUESTED:
1. Offer Resolution No. 7025, A Resolution Amending the Special Assessment
Policy with regards to Street Overlay Projects and move its adoption.
2. Pass a motion directing staff not to assess the 2010 Bituminous Overlay Project
No. 2010-2.
Jeff Weyandt, P.E.
Assistant City Engineer
JW/pmp
ENGR/2010-PROJECTS/2010-COiJNCII,/MEM7025 -AMENDING-SPECIAL-ASSESSMENT-POLICY
any other method or combination of methods authorized by the City
Council.
2. Collector Streets
Collector streets will be assessed to the equivalent local street costs. All
street oversizing costs associated with collector streets will not be
assessed.
3. Reconstructions/Reclamations
All street reconstructions and reclamations shall be 30% assessed.
4. Gravel Streets
a. Urban Areas
Upgrading an existing gravel street located in the Urban Service
Area by adding pavement, curb and gutter shall be considered new
construction and all costs assessed 100%.
b. Rural Areas
Only those items added to rural gravel roads by upgrading (i.e.
pavement, curb and gutter, etc.) will be assessed 100%, but not the
costs to replace the existing gravel roadbed. The City Council may
elect to revise the assessable areas to establish additional
assessment credits due to the large landowners abutting rural
gravel roads or for rural collector roads that have little or no direct
driveway accesses to it.
5. Overlay, Seal Coats
Bituminous overlay projects ~''°"'~° 2f0'- °~~°~~°a and bituminous
sealcoats will not be assessed. '~~•+ r +'~°„ ~•„''°a ~ °~ +,,° n°-°°"'°r+
6. Alleys
Upgrading existing gravel alleys by adding pavement will be assessed
100% to the block in question. Reconstructing existing paved alleys will
be 100% assessed also, except in the Central Business District (CBD). For
CBD alleys, the City Council will determine the amount assessed at the
public hearing considering the Improvements.
CITY OF SHAKOPEE
Memo~•andum
TO: Mayor & City Council
Mark McNeill, City Administrator
FROM: Jeff Weyandt, Assistant City Engineer
SUBJECT: Assessment Policy for Future Overlays
DATE: June 15, 2010
BACKGROUND:
Given the economy and the recent discussion with regards to the impacts the City's assessment
projects have on residents, staff looked at the impacts of eliminating assessments for fixture
overlay projects. Currently, the City assesses 30% of the project costs to benefitting properties.
Following is a summary of assessments paid for overlay projects since 2004.
Year Assessment Amount
2004 $ 46,893.00
2005 $ 42,893.00
2006 $143,561.00
2007 $176,896.00
2008 $268,054.00
2009 $103,310.00
2010 (Projected) $136,000.00
Tax Impaci
Average Cost Per
Household Per Month
$0.20
$0.18
$0.60
$0.73
$1.11
$0.43
$0.57
Total $917,695.00
X0.55
The average cost per household per month is just a rough estimate assuming 62% of the City's
properly tax revenue conies froii3 residential properties, therefore, 62% of the cost will be funded
by residential property taxes. The number of households was based on the following: 34,000
population with an average household size of 2.73 people equals roughly 12,454 households.
Over the years, many residents have stated that overlays are a maintenance activity and should be
included in the taxes and would prefer a small yearly increase versus a $500.00 assessment bill.
As the numbers above show, if the City did not assess overlays over the last seven years, the
average cost per household would have been approximately $0.55/month.
An advantage to not assessing overlays is project costs will go down. The extra time required to
prepare the feasibility study and assessment roll, along with the extra mailings, costs the City an
additional $10,000 to $15,000 per project. Also, bonding for the project adds an additional cost
of l% to the project, which is an additional $10,000.00 for every $1,000,000.00 of project cost.
Another advantage to not assessing overlays is that the City could add streets to the project if the
bids received are favorable. Currently, we cannot add streets to the project and assess for the
improvements if the improvements were not included in the feasibility study.
The one advantage to assessing the project is the City is allowed to combine it with the
reconstruction project and bond for the whole works and the tax levy portion is not currently
subject to levy limits. However, due to there being an annual overlay project, Finance is trying
to transition away from bonding overlay projects because of debt levels, interest rates alid to
increase the levy limit under which the City is subject. Therefore, due to the fact that not
assessing overlays would lower project costs, give the City flexibility to add streets to the project
and lessen the financial burden on benefitted properties by eliminating assessment bills, staff
believes it is time to reconsider the policy of assessing bituminous overlay projects.
The current 5-year CIP apportions costs based on the current Assessment Policy. If Council
chooses to eliminate assessments on overlay projects, the City could ftu-~d the assessable portion
of the projects with the State Aid/Street Fund. Attached is the projected fluid balance of the
State Aid/Street Fund, if projected overlay assessments in the current CIP are funded by the State
Aid/Street Fw.id.
AID T ERNA T I`JES:
1. Direct staff to revise the Special Assessment Policy to eliminate the assessment of future
bituminous overlay projects beginnhig in 2011.
2. Direct staff to continue assessing overlay projects consistent with the current Special
Assessment Policy.
3. Table for additional information.
RECOMMENDATION:
Direct staff to revise the Special Assessment Policy to eliminate the assessment of future
bituminous overlay projects begimung in 2011.
ACTION REOUESTED:
Duect staff to revise the Special Assessment Policy to eliminate the assessment of future
bituminous overlay projects beginnuig in 2011.
,~ ~ ~
Jeff Weyandt, P.E.
Assistant City Engineer
ENGR/2010-PR07ECTS/2010-COUNCIL/AS SESSMENT-POLICY-OVERLAYS
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RESOLUTION NO. 7025
A Resolution Amending The Special Assessment Policy
WHEREAS, on January 19, 1992, the City Council of Shakopee adopted the Special
Assessment Policy by Resolution No. 3735; and
WHEREAS, the Special Assessment Policy was recently amended by Resolution No. 6572
on February 6, 2007; and
WHEREAS, the City Council desires to amend the Special Assessment Policy.
NOW, THEREFORE BE IT RESOLVED BY THH; CITY COUNCIIL OF
SHAKOPEE, MINNESOTA, The Special assessment Policy is hereby amended as follows:
1. In Section X, Paragraph A.3 — Reconstructions, the text "Reclamation and reclamations"
will be added.
2. In Section X, Paragraph A.5 — "Overlay, Seal Coats ", append this paragraph with the
following: Bituminous overlay projects and bituminous sealcoats will not be assessed.
These policy changes shall become effective on August 17, 2010.
Adopted in session of the City Council of the City of
Shakopee, Minnesota, held this day of , 2010.
Mayor of the City of Shakopee
ATTEST:
City Clerk
ENGR2010- PROJECTS( 2010- COUNCEURES7025- ADOPT - REVISED ASSESSMENT- POLICY