06-03-2024 Council Work Session Packet

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Feasibility Report 2024 / 2025 Street Reconstruction and Municipal Sewer and Water Extension Project Pine Haven City of Lino Lakes, MN WSB Project No. 023620-000 Page 6 In the table above, the total sewer and water infrastructure cost is $1,568,855 of which $510,365 is attributable to trunk oversizing. Generally, oversizing is calculated by the difference in cost between a regular main and an oversized main. There are other factors considered such as additional depth and difference in materials. The remaining amount to be funded through special assessments is $1,058,490. This equates to $35,283 per unit/lot. The City consulted with an independent appraiser to conduct a special benefit analysis of the proposed sewer and water extensions. The analysis supported an assessment amount of $16,000 per unit/lot. This would total $480,000 from special assessments to benefiting properties. A Preliminary Assessment Role and corresponding map is include in Appendix C. This would result in a funding gap of $19,283 per unit/lot which totals $578,490. The City could consider funding the gap through the Area & Unit Trunk Fund. The Area & Unit Trunk Fund would be reimbursed through a special project specific trunk connection fee. All properties when connecting to municipal sewer and water services pay a standard trunk connection fee in the amount of $7,429 per unit/lot (adjusted annually). The funding gap of $19,283 per unit/lot minus the standard trunk connection fee in the amount of $7,429 per unit/lot equals $11,854 per unit/lot. A special project fee would be established to include the base fee plus 50% of the funding gap on a per lot basis. Based on this scenario property owners would pay an additional connection fee of $5,927 upon hook up for a total connection fee of $13,356. The City’s Area & Unit Trunk Fund would fund the balance of the funding gap as outlined below: 2024 / 2025 Street and Utility Improvement Project Proposed Detailed Funding Area & Unit Trunk Fund Total City Funds Property Owner Connection Fees Oversizing Additional Match Costs Additional Match Connection Standard Connection Fee Sanitary Sewer $278,982 $79,410 $79,410 $100,890 $538,692 Watermain $231,383 $98,400 $98,400 $121,980 $550,163 Total $510,365 $177,810 $177,810 $222,870 $1,088,855 Preliminary assessments are calculated on a per unit basis for benefitting parcels along the streets within the project area. Benefitting parcels would be assessed over a period of 15 years, collected with property taxes, at an interest rate set at 2% above the City’s borrowing rate. Last year’s interest rate was 5%. At a 5% rate over 15 years, the assessments would be $1,542/year or $129 per month. The City also provides for the trunk connections fees to be specially assessed at the time of connection. A compilation of connection cost and assessments per property is outlined in Appendix D. DRAFT278