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HomeMy WebLinkAbout10-05-2010 Assessment Subcommittee packetCity Council Assessment Subcommittee Meeting Agenda 5:30 PM - 6:30 PM Tuesday, October 5th, 2010 Assessment Subcommittee Agenda Review/Approval of Minutes Proposed Draft Assessment Policy Proposed Timeline/Next Steps Other Items/Next Meeting Adjourn City Council Assessment Subcommittee Meeting Agenda 5:30 PM - 6:30 PM Tuesday, October 5th, 2010 Assessment Subcommittee Agenda • Review/Approval of Minutes • Proposed Draft Assessment Policy • Proposed Timeline/Next Steps • Other Items/Next Meeting • Adjourn THE CITY OF City Council Assessment Subcommittee Meeting Agenda 5:30 PM - 6:30 PM Tuesday, October 5th, 2010 Assessment Subcommittee Agenda Review/Approval of Minutes Proposed Draft Assessment Policy Proposed Timeline/Next Steps Other Items/Next Meeting Adjourn City Council Assessment Subcommittee Meeting Agenda 5:30 PM - 6:30 PM Tuesday, October 5th, 2010 Assessment Subcommittee Agenda Review/Approval of Minutes Proposed Draft Assessment Policy Proposed Timeline/Next Steps Other Items/Next Meeting Adjourn City Council Assessment Subcommittee Meeting Agenda 5:30 PM - 6:30 PM Tuesday, October 5th, 2010 Assessment Subcommittee Agenda Review/Approval of Minutes Proposed Draft Assessment Policy Proposed Timeline/Next Steps Other Items/Next Meeting Adjourn TKDA ENGINEERS • ARCHITEC I b PLANNERS CITY OF LAKE ELMO ASSESSMENT POLICY October 2010 444 Cedar Street, Suite 1500 Saint Paul, MN 55101-2140 (651) 202-4400 (651) 292-0083 Fax www.tkda.com We want to develop a clear, fair and equitable, and defensible Assessment Policy. Assessment Policies are highly regulated and are becoming more and more litigated. A. Statutory Rules to keep in mind: I. The assessments must be uniform in relation to the other properties (fair and equitable). 2. On the high end — The amount of the assessment is limited — it cannot exceed the increase in fair market value of the property (special benefit). And the assessment amount cannot exceed the cost of providing the improvement. 3 On the low end — The total amount of the project to be assessed must exceed 20% of the total project costs, in order to purchase bonds to fund the improvements. B. Goals for an assessment policy 1. To remain fair and equitable for the benefit received. 2. To be defensible, able to hold up against appeal. 3. To balance the assessable costs to the benefitting properties with the city costs for the better good of the community, 4. To promote public support for the city to install improvements deemed desirable for the betterment of the community. 5. To be comprehensive and flexible, able to be fairly applied to differing circumstances. 6. To deter the undesirable subdivision of land for the purpose of paying assessments. 11. DRAFT Special Assessment Policy A. Section II — simply a general information piece. Types of Improvements (covered by Statute). B. Section III — simply a general information piece. Initiation — petition notice. C. Section IV — Public Improvement Process — informative. D. Section V — Policies 1. (A) Sets the expectations for Developer's to pay full infrastructure costs. 2. (B) Purpose of Assessments is typically for rehabilitation and replacement. 3. (C) (H) standard policies 4. (I) applies outside grants, MSA funds, etc. to City cost share. 5. (7) — (M) standard policies 6. (N) Green Acres deferment 7. (0) Hardship (Senior Citizen or disability) deferment E. Section VI — Methods of Assessments 1. Fixe Cost "Unit" Method 2. Adjusted Front Footage 3. Area F. Section VII — Reassessment, sets infrastructure life expectancies and prorates assessment. G. Section VIII — Determination of Assessable Costs 1. Street Improvements a. New Streets = 100% (paid by developer). Upgrading gravel roadway addressed. An Employee Owned Company Promoting Affirmative Action and Equal Opportunity CITY OF LAKE ELMO Page 2 ASSESSMENT POLICY b. Local Street = 30% for residential city design standard. Council/staff needs to decide the "Improvement" after listening to property owners. = 100% to Commercial, Industrial and Institutional properties. c. Oversize costs for Collector/Arterial streets paid by city, MSA, etc. Oversize costs requested by property owners AND approved by Council = 100% assessed. d. Section VIII, A, 3. -- Residential properties with access to collector streets — steps include defining number of units, taking out oversize costs, and finding eq. unit. Specific staff recommendations for street improvements. I. Maintain the policy to assess at least 30% of the total project costs for street reconstruction and rehabilitation (reclaim) improvements. ifyou adjust this percentage, staff recommends only slight adjustments upward, say 35% or 40%. Adjust the assessable portion for the 2011 project and maintain that level going forward. 2. Establish an assessment policy for the improvement of gravel roadways. Create an assessment methodology for the paving of gravel residential roadways (percentage assessable cost), typically requiring new storm sewer s,vstents (handled separately?). And remove residential gravel roadways from the street capital improvement schedule; instead nottfiiing residents that improvements will be considered only by petition. 3 Oversizing costs, in excess of residential requirements, shall be city costs. City Council determines the "Improvement" to be made. 4. Properties along rural collector roadways will be assessed on the basis of an equivalent residential asses.sment. Cam by case? Use traffic counts? 3-yr avg.? Set annual fee? 5. Extend the assessment payback period to 20 years for street improvements, making higher cost street reconstruction projects more affordable to property owners. 6. Develop a funding/assessment practice for Water Quality improvements(Ram Gardens). 2. Sidewalks, Trails, Bikeways a. Need to remain very flexible for council discretion. b. New infrastructure = 100% assessed, Replacement = 30% residential, 100% other. 3 Street Boulevard Trees a. Assessed together with street project. 4, Street Light Improvements a. Requires 60% property owner petition (from existing policy), b. Assessed = ??%, or assessed together with street project. 5 Transportation Improvements a. Assessed 100% to commercial, industrial and institutional zoned areas. 6. Storm Sewer and Drainage Facility Improvements , a. NEW infrastructure = 100% assessed. Policy to capture additional contributing properties. b. Replacement infrastructure = 30% assessed to residential only? 7. Sanitary Sewer Improvements a. NEW infrastructure = 100% assessed. Unit method using SAC unit definitions. b. Sewer Enterprise Fund pays oversize costs and trunk infrastructure. c. Policy to capture direct connections to trunk mains — lateral benefit charge. 8 Waterinain Improvements a. NEW infrastructure = 100% assessed. Unit method using SAC unit definitions. b. Sewer Enterprise Fund pays oversize costs and trunk infrastructure, c. Policy to capture direct connections to trunk mains — lateral benefit charge. TKDA ENGINEEFIS • ARCHITECTS • PLANNJERS CITY OF LAKE ELMO ASSESSMENT POLICY October 2010 444 Cedar Street Suite 1500 Saint Paul, MN 55101-2140 (651) 292-4400 (651) 292-0083 Fax www.tkda.com I. We want to develop a clear, fair and equitable, and defensible Assessment Policy. Assessment Policies are highly regulated and are becoming more and more litigated. A. Statutory Rules to keep in mind: 1, The assessments must be uniform in relation to the other properties (fair and equitable). 2. On the high end — The amount of the assessment is limited — it cannot exceed the increase in fair market value of the property (special benefit). And the assessment amount cannot exceed the cost of providing the improvement. 3 On the low end — The total amount of the project to be assessed must exceed 20% of the total project costs, in order to purchase bonds to fund the improvements. B. Goals for an assessment policy 1. To remain fair and equitable for the benefit received. 2. To be defensible, able to hold up against appeal, 3. To balance the assessable costs to the benefitting properties with the city costs for the better good of the community. 4. To promote public support for the city to install improvements deemed desirable for the betterment of the community. 5, To be comprehensive and flexible, able to be fairly applied to differing circumstances, 6. To deter the undesirable subdivision of land for the purpose of paying assessments. 11. DRAFT Special Assessment Policy A. Section LI — simply a general information piece. Types of Improvements (covered by Statute). B. Section III — simply a general information piece. Initiation — petition notice. C. Section IV — Public Improvement Process — informative. D. Section V — Policies 1. (A) Sets the expectations for Developer's to pay full infrastructure costs. 2. (B) Purpose of Assessments is typically for rehabilitation and replacement, 3. (C) (H) standard policies 4. (I) applies outside grants, MSA funds, etc. to City cost share. 5, (J) (M) standard policies 6, (N) Green Acres deferment 7. (0) Hardship (Senior Citizen or disability) deferment E. Section VI — Methods of Assessments 1. Fixe Cost "Unit" Method 2, Adjusted Front Footage 3, Area F. Section VII — Reassessment, sets infrastructure life expectancies and prorates assessment. G. Section VIII — Determination of Assessable Costs 1. Street Improvements a. New Streets 100% (paid by developer), Upgrading gravel roadway addressed. An Employee Owned Company Promoting Alllanative Action and Equal Opportunity CITY OF LAKE ELMO Page 2 ASSESSMENT POLICY b. Local Street = 30% for residential city design standard. Council/staff needs to decide the "Improvement" after listening to property owners. = 100% to Commercial, Industrial and Institutional properties. c, Oversize costs for Collector/Arterial streets paid by city, MSA, etc. Oversize costs requested by property owners AND approved by Council = 100% assessed. d. Section VIII, A. 3. -- Residential properties with access to collector streets — steps include defining number of units, taking out oversize costs, and finding eq, unit. Specific staff recommendations for street improvements. 1. Maintain the policy to assess at least 30% of the total project costs for street reconstruction and rehabilitation (reclaim) improvements. Ifyou adjust this percentage, staff recommends only slight adjustments upward, say 35% or 40%. Adjust the assessable portion for the 2011 project and maintain that level going forward. 2. Establish an assessment policy for the improvement of gravel roadways. Create an assessment methodology for the paving of gravel residential roadways (percentage assessable cost), typically requiring new storm sewer systems (handled separately?). And remove residential gravel roadways from the street capital improvement schedule,' instead notifying residents that improvements will be considered only by petition. 3 Ovcrsizing costs, in excess of residential requirements, shall be city costs. City Council determines the "Improvement" to be made. 4 Properties along rural collector roadways will be assessed on the basis of an equivalent residential assessment. Case by case? Use traffic c:ounts? 3-yr avg.? Set annual fee? 5, Extend the assessment payback period to 20 years for street improvements, making higher cost street reconstruction projects more affordable to property owners. 6 Develop a funding/assessment practice for Water Quality improvetnents Gardens). 2. Sidewalks, Trails, Bikeways a. Need to remain very flexible for council discretion. b. New infrastructure = 100% assessed, Replacement = 30% residential, 100% other, 3 Street Boulevard Trees a. Assessed together with street project. 4. Street Light Improvements a. Requires 60% property owner petition (from existing LE panty). b. Assessed = ??%, or assessed together with street project. 5. Transportation Improvements a. Assessed 100% to commercial, industrial and institutional zoned areas. 6. Storm Sewer and Drainage Facility Improvements a. NEW infrastructure = 100% assessed. Policy to capture additional contributing properties. b. Replacement infrastructure = 30% assessed to residentia; oniy? 7. Sanitary Sewer Improvements a. NEW infrastructure 100% assessed. Unit method using SAC unit definitions. b. Sewer Enterprise Fund pays oversize costs and trunk infrastructure. c. Policy to capture direct connections to trunk mains — lateral benefit charge. 8 Watermain Improvements a. NEW infrastructure = 100% assessed. Unit method using SAC unit definitions. b. Sewer Enterprise Fund pays oversize costs and trunk infrastructure. c. Policy to capture direct connections to trunk mains — lateral benefit charge. TKDA 11 11 I 11 11 I III 1.1. ENGINEERS • ARCHITECTS PLANNERS CITY OF LAKE ELMO ASSESSMENT POLICY October 2010 444 Cedar Street, Suite 1500 Saint Paul, MN 55101-2140 (651) 292-4400 (651) 292-0083 Fax www,tkda.com We want to develop a clear, fair and equitable, and defensible Assessment Policy. Assessment Policies are highly regulated and are becoming more and more litigated. A. Statutory Rules to keep in mind: 1, The assessments must be uniform in relation to the other properties (fair and equitable). 2. On the high end — The amount of the assessment is limited — it cannot exceed the increase in fair market value of the property (special benefit). And the assessment amount cannot exceed the cost of providing the improvement. 3 On the low end — The total amount of the project to be assessed must exceed 20% of the total project costs, in order to purchase bonds to fund the improvements. B. Goals for an assessment policy 1. To remain fair and equitable for the benefit received. 2. To be defensible, able to hold up against appeal, 3. To balance the assessable costs to the benefitting properties with the city costs for the better good of the community, 4. To promote public support for the city to install improvements deemed desirable for the betterment of the community. 5. To be comprehensive and flexible, able to be fairly applied to differing circumstances. 6. To deter the undesirable subdivision of land for the purpose of paying assessments. 11. DRAFT Special Assessment Policy A. Section II — simply a general information piece. Types of Improvements (covered by Statute). B, Section III — simply a general information piece. Initiation — petition notice. C. Section TV — Public Improvement Process — informative. D. Section V — Policies 1. (A) Sets the expectations for Developer's to pay full infrastructure costs. 2. (B) Purpose of Assessments is typically for rehabilitation and replacement. 3. (C) — (H) standard policies 4. (I) applies outside grants, MSA funds, etc, to City cost share, 5. (.1) — (M) standard policies 6. (N) Green Acres deferment 7. (0) Hardship (Senior Citizen or disability) deferment E. Section VI —Methods of Assessments 1. Fixe Cost "Unit" Method 2. Adjusted Front Footage 3. Area F. Section VII — Reassessment, sets infrastructure life expectancies and prorates assessment. G. Section VIII — Determination of Assessable Costs 1, Street Improvements a. New Streets ----- 100% (paid by developer). Upgrading gravel roadway addressed. An Employee Owned Company Promoting Affirmative Action and Equal Opportunity CITY OF LAKE ELMO Page 2 ASSESSMENT POLICY b. Local Street = 30% for residential city design standard, Council/staff needs to decide the "Improvement" after listening to property owners. = 100% to Commercial, Industrial and Institutional properties. c. Oversize costs for Collector/Arterial streets paid by city, MSA, etc, Oversize costs requested by property owners AND approved by Council = 100% assessed, d, Section VIII, A. 3. -- Residential properties with access to collector streets — steps include defining number of units, taking out oversize costs, and finding eq. unit. Specific staff recommendations for street improvements. 1. Maintain the policy to assess at least 30% of the total project costs for street reconstruction and rehabilitation (reclaim) improvements. (iyou adjust this percentage, staff recommends only slight adjustments upward, say 35% or 40%. Adjust the assessable portion for the 2011 project and maintain that level going forward. 2. Establish an assessment policy for the improvement of gravel roadways. Create an assessment methodology for the paving of gravel residential roadways (percentage assessable cost), typically requiring new storm sewer systems (handled separately?), And remove residential gravel roadways from the street capital improvement schedule; instead notifying residents that improvements will be considered only by petition. 3 Oversizing costs, in excess of residential requirements, shall be city costs. City Council determines the "Improvement" to be made. 4. Properties along rural collector roadways will be assessed on the basis of an equivalent residential assessment. Case by case? Use truffle counts? 3-yr avg.? Set annual fee? 5, Extend the assessment payback period to 20 years for street improvements, making higher cost street reconstruction projects more affordable to property owners. 6. Develop a funding/assessment practice for Water Ottani), Improvements(Ram Gardens). 2. Sidewalks, Trails, Bikeways a. Need to remain very flexible for council discretion. b. New infrastructure = 100% assessed, Replacement = 30% residential, 100% other. 3 Street Boulevard Trees a. Assessed together with street project. 4. Street Light Improvements a. Requires 60% property owner petition (from eistiug LE policy). b. Assessed = ??%, or assessed together with street project. 5. Transportation Improvements a. Assessed 100% to commercial, industrial and institutional zoned areas. 6. Storm Sewer and Drainage Facility Improvements . a. NEW infrastructure = 100% assessed, Policy to capture additional contributing properties. b. Replacement infrastructure = 30% assessed to residential only? 7. Sanitary Sewer Improvements a. NEW infrastructure = 100% assessed. Unit method using SAC unit definitions. b. Sewer Enterprise Fund pays oversize costs and trunk infrastructure. c. Policy to capture direct connections to trunk mains — lateral benefit charge. 8 Waterman' Improvements a. NEW infrastructure = 100% assessed. Unit method using SAC unit definitions. b. Sewer Enterprise Fund pays oversize costs and trunk infrastructure. c. Policy to capture direct connections to trunk mains — lateral benefit charge. CITY OF LAKE ELMO SPECIAL ASSESSMENT POLICIES AND PROCEDURES FOR PUBLIC IMPROVEMENTS Adopted by Resolution No. on: November XX, 2010 TABLE OF CONTENTS SECTION I: GENERAL POLICY STATEMENT .............. .......... ....................... 3 SECTION II: DEFINITION OF IMPROVEMENTS ELIGIBLE FOR SPECIAL ASSESSMENT .. 5 SECTION III: INITIATION OF PUBLIC IMPROVEMENT PROJECTS ............. .................... ..... 7 SECTION IV: PUBLIC IMPROVEMENT ............. 8 SECTION V: GENERAL ASSESSMENT POLICIES ............ SECTION VI: METHODS OF ASSESSMENT 14 SECTION VII: POLICIES OF REASSESSMENT...... ..„.. ..... .....17 SECTION VIII: DETERMINATION OF ASSESSABLE COSTS................... 18 18 • - „ 2 SECTION I. GENERAL POLICY STATEMENT A special assessment is a levy on a property to defray the cost of public improvements. Chapter 429 of the Minnesota Statutes grants cities the authority to use special assessments as a mechanism to finance a broad range of public improvements. The primary purpose of special assessments is to have the properties that benefit from the public improvements pay as much of the cost of the improvements as reasonable, thereby „redUCing a city's reliance on general property taxes. However, Chapter 429 of the Minnesotatattiteelimits the amount that may be assessed to the increase in the market value of the property being ,assessed as a result of the public improvement. The purpose of this Special 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 Lake Elmo ("City") for levying specialesSessments are those specified by Minnesota Statutes § Chapter 429, which provides that "all or a part cost of drnprovements may be assessed against benefiting properties:'!, This assessment policy is intended to serve as a guide for a • „ systematic assessmentprocess in the City of take Elmo. Special Assessments must:meet the following criteria: A. The land must have received special benefit from the improvement. B. Theamount of the asSessmeritritust not exceed the special benefit. C. The assessment must be uniform in relation to the same class of property within the assessment area. It is important to recognize that the actual cost of extending an improvement past a particular parcel is not the determining factor in determining the amount to be assessed. However, in most cases the method for determining the value of the benefit received by the improvement, and therefore the amount to be assessed, shall be the cost of providing the improvement, as long as the cost does not exceed the increase in the market value of the property being assessed. The entire project shall be considered as a whole for the purpose of calculating and computing an assessment rate. In the event City staff has doubt as to whether or not the costs of the project may exceed the special benefits to the property, the City Council may obtain such appraisals as may be necessary to support the proposed assessment, The City must recover the expense of installing public improvements undertaken, while ensuring that each parcel pays its fair share of the project cost in accordance with these assessment guidelines. While there is no perfect assessment policy, it is important that assessments be implemented in a reasonable, consistent and fair manner. There may be exceptions to the policy or unique circumstances or situations that mayreqUire special consideration and discretion by City staff and the City Council. = 4 SECTION II. DEFINITION OF IMPROVEMENTS ELIGIBLE FOR SPECIAL ASSESSMENT This policy shall be applicable to those types of public improvements that are allowable under Minnesota Statutes §429.021. Generally the improvements include: A. Street and sidewalk improvements: Acquisition, construction, reconstruction, extension and major maintenance of any street and Sidewalk arid improvement of streets and sidewalks including base and subbase', paverrierirt, gutters, curbs, and vehicle parking strips, paver cross walks, pedestrian crossings, medians, beautification amenities, and street and sidewalk drainage systems. B. Street lighting systems. Installation, replacement extension, and maintenance of street lights, street lighting systems, and special lighting systems. C. Parks, trails, open space areas4laygrpunds, and facilities. Acquisition and improvementrit: land, arid- purchase of equipment and facilities, and the construction4eConstructipn, and extensionbtltralls.' . D. Street trees. Planting, trimrning, care, and removal. E. .Potable F. erworks systems Construction, reconstruction, extension, and Maintenance of water supply welts and pump houses, water treatment facilities, storage tanks; and all components of -the watermain distribution system network and related appurtenances. Sanitary sewer systems. Acquisition, development, construction, reconstruction, extension, and maintenance of sanitary sewer conveyance and treatment systems. This may include sanitary sewers, interceptor mains, lift stations, treatment facilities and treatment systems, service connections, and other appurtenances of a sanitary sewer system. G. Storm sewer and drainage systems. Acquisition, development, construction, reconstruction, extension, and maintenance of storm water management facilities and storm sewer systems. This may include outlets, culverts, pipe systems, catch basins, 5 holding areas and ponds, infiltration basins, rain gardens, treatment plants, pumps, lift stations, service connections, and other appurtenances of a storm sewer system. H. Nuisance abatement. Includes, but is not limited to, draining and filling swamps, marshes, and ponds on public or private property. 1. Dikes and other flood control works. Construction, reconstruction, extension, and maintenance. Retaining and area walls, including :„Noini*,2noise barriers, Acquisition, construction, reconstruction, improvement alteration, extension, and maintenance. . .. K. Malls, plazas, or courtyards. Acquisition, construction, improvement, alteration, extension, operation, maintenance, aiiii:::promotionf,,of public'IMalls, plazas, and courtyards. ...,,-„, .... . ..... , . . _ Parking lots. Acquisition or construPtiorpotparking facilities. • 6 SECTION III. INITIATION OF PUBLIC IMPROVEMENT PROJECTS Public improvement projects may be initiated in the following ways: A. A public improvement project may be initiated by petition of at least 35% of the affected property owners. B. Public improvements may be initiated by the City.0ouncil when, in its judgment, such action is required. A resolution ordering any Council initiated improvements requires a 4/5th vote, rather than a simple majority. • 7 SECTION IV, PUBLIC IMPROVEMENT PROCEDURES The following is the general procedure that will be followed by the City Council for all public improvement projects from initiation of such a project through certification of the assessment role to the County Auditor. The City Council reserves the right to alter the procedure on a case - by -case basis and within the context of Minnesota Statues § Chapter 429. Improvements of different kinds anywhere in the City:A-pay te included in a proceeding and conducted as one or more improvements. Thus a sin4le proceeding may encompass sidewalk, curb and gutter, and water and sewer mains installed anywhere in the City A. Staff reviews petition for local improvements from property owners and submits the petition to the City Council, or the City Couhdtlpasses a resolution ordering a Feasibility Report on the improvement.- . ".. B. Council accepts or rejects the petition. If accepted, the Council orders the preparation of a Feasibility Report ORAne improverbent. C. Staff prepares a..-FeasibilityReport on theproposed improvements, or reviews the report submitted by anotheragerroYirepresentatives. D. -Council acceptsurr,rejects:lhe Feasibility',Report, If accepted, the Council orders a public hearing on the impr6VementS.„ E. Staff publishes a hearingbotice and mails notices to the affected property owners. F. Council conduOts improVement hearing and adopts or rejects a resolution ordering the improvement and'the preparation of plans and specifications. Bonds to finance project costs may be issued at any time after the improvements are ordered. G. Staff prepares final plans for Council approval. Council approves the plans and authorizes the advertisement of the improvements and the opening of Bids. H. Staff receives bids, prepares a bid tabulation, and makes a recommendation to the City Council for Award. Council rejects the bids or awards a contract based on the bids received. Performance of the work under contract is completed. Staff supervises construction, prepares payments, and completes the improvement project. J. Staff prepares an assessment roll and presents it to the Council. K. Council reviews the assessment schedule and OrderS"atkassessment hearing. , . L. Staff publishes a hearing notice, maifslhe notice of hearing. date and the proposed assessments to the affected property owners. Council conducts assessment hearing, adopts; revises, or rejects the resolution adopting the assessment roll. If adopted, -Council authonzeszertification of the assessment to the County Auditor. N. Staff certifies the assessments to the-CountyAuditor. * Note: At Council's discretion, Item G may be carried out in advance of the improvement hearing. • - * 'Note: AtCouncil's discretion, Iterii.eJ-N may be carried out in advance to Council award and cOnStructinglhe improvements. 9 SECTION V. GENERAL ASSESSMENT POLICIES The cost of any improvement shall be assessed upon property benefited by the improvements, based upon the benefits received. The following general principles shall be used as a basis of the City's assessment policy: A. It is the general policy of the City of Lake Elmo_ id require future development in accordance with the City Comprehensive Plan and for new areas of development in an orderly manner, typically contiguous to existing development areas. It is also the general policy of the City of Lake Elmo to require all new development areas to provide for adequate public infrastructure at the Developer's sole expense, and in accordance with the City Comprehensive Plans and Design Standards B. The use of special assessments will typically be,ernployed by the City to finance needed public improvements (e.g. parks and trails, sidewalks, water, sewer, and street improvements) in certain areas that have previously been developed .without all needed infrastructure,.orAo repair and/or replace agind';infraStructure. C. The "project cost" :of an improvement includes the costs of all necessary construction work required to accomplish the'improvernent, plus engineering, legal, administrative, ":.. financing, and other contingent costs, including acquisition of right-of-way, easements and :other propertY. The financing charges include all costs of financing the project. These costs include, but are not limited to, financial consultant's fees, bond attorney's fees, anthcapitalized interest. When the project is started and funds are expended prior to receivinrthe„proceedSlrom a bond sale, the project may be charged interest on the funds expended Irom iihe date of expenditure to the date the bond proceeds are received. The interestrate charged will be the average interest rate earned by the City's investments during the six months preceding the receipt of the bond proceeds. The interest charged to the project shall be included as financing charges. D. The "assessable cost" of an improvement is equal to the "project cost" minus the "City cost". E. The City of Lake Elmo will charge interest on Special Assessments at a rate specified in the resolution. If bonds were sold to finance the improvement project, the interest rate 10 shall be two percent (2%) more than the average interest rate of the bonds, rounded to the nearest quarter of a percent. lf no bonds were sold, the interest rate shall be set at the rate allowed by State law, F. Property owners may pay their assessments in full, interest free for a period of 30 days after the assessment hearing. After such period interest shall be computed from the date specified in the assessment resolution. The City will certify each year's collection (principal and interest) to the County Auditor by Aovember 30th. Prior to the first certification of principal and interest to the County:Auditor, a property owner may make a partial pre -payment of the principal to the .City of Lake Elmo. Such partial prepayment must be at least $100.00. If the partial prepayment is made ;after the 30-day "interest - free" period allowed by State law, interest will be charged on the ;amount of the partial pre -payment from the date specified in the ;resolution ,and paid along with the partial pre -payment. After the City has made the firstcertification of principal and interest to the County Auditor, pre -payment :Will ,be accepted only for the total amount still owing including interest. If a parcel ' has two or more separate Special Assessments, pre -payment of the ;remaining principal balance ,may be made on one or more. Tax- exempt parcels -such as churches and school properties may make a partial prepayment at any time, with ,a'minimum.partial pre payment of one half of the principal balance. The tax-exemptparcel will'iloe-,ellOWed to make only one partial pre -payment prior to the first certification tothe County Auditor. The -remaining principal after the partial prepayment will be paid in equal installrnents over the remaining term of the special assessments. G. Where*i improvemeritjs designed for service of an area beyond that of direct benefit, increased project costs due to such provisions for future service extensions may be paid for by the City.: The, city will levy assessments to cover this cost when a new improvement is installed as an extension of the existing improvement. As an alternative, the City may assess these costs to the area of future benefit immediately. H. Where the project cost of an improvement is not entirely attributable to the need for service to the area served by said improvement, or where unusual conditions beyond the control of the owners of the property in the area served by the improvement would result in an inequitable distribution of special assessments, the City, through the use of other funds, may pay such "City cost" which, in the opinion of the City Council, represents the excess cost not directly attributable to the area served. 1 1 If financial assistance is received by the City from the Federal Government, from the State of Minnesota, the County, or from any other source to defray a portion of the costs of a given improvement, such aid will be used first to reduce the "City cost" of the improvement. If the financial assistance received is greater than the normal ''City cost", the remainder of the aid will be applied according to the terms of the assistance program or at the Council's discretion. J. City -owned properties, including municipal building sites, parks and playgrounds, but not including public streets and alleys, shall be regarded,as being assessable on the same basis as if such property was privately -owned. K. Improvements specifically designed for shown to be of d reatibenefit to one or more properties may be constructed by the City. The costs for these -improvements will be assessed directly to such properties, and not included in the assessments for the remainder of the project. An ,.example of this would be utility service lines running from the main lines to the property. Benefit Appraisals I.n ithe event that City .Starff Itas doubt as to whether or not the proposed assessments exceed the. 'speaal benefits to the property in question (increased property value as defined by State law), the City Council may order benefit appraisals .as deemectInebessary4o support the proposed assessments. .property owner ,:.may Cleft to offset 'Special Assessments against condemnation awards by executing -.a'Net Assessment Agreement with the City Council. Assessment Deferral Procedure for Green Acres Parcels: In cases where improvement projects are determined to.benefit properties that have been certified to qualify for Green Acres exemption;lhe -"City will determine that portion of the project cost that benefits those properties, and finance that portion of the project cost as a system cost. During the period of deferral, interest shall be applied annually to the unpaid principle balance at the rate established on the original special assessment, or as adopted by resolution of the City Council at the time the original assessment is adopted. Once the benefiting properties no longer qualify for Green Acres status, the City may recover the system cost either through assessments or connection charges. 12 0, Assessment Deferral for Hardships: The City Council will consider deferment for the payment of special assessments on any homestead property, owned by a person 65 years of age or older, or retired by virtue of permanent and total disability. A hardship shall be deemed to exist when the annual principle installment of all assessments levied against the property exceeds two percent (2%) of the adjusted gross income of the applicant as evidenced by the applicant's most recent federal income tax return, and total assets (excluding the homestead property) do not exceed six times the adjusted gross income. The City Council may also determine, on a case by case basis, the existence of a hardship on the basis of exceptional anCi..unusual circumstances not covered by these standards and guidelines, if done in a non-discriminatory manner and without giving the applicant an unreasonable preference or advantage aver other property owners. During the period of deferral, jriterest shall be applied annually to the unpaid principle balance at the rate establishethon the -Driginal special: assessment, or as adopted by resolution of the City,Council at the time the original assessment is adopted. The deferment Shall terminate and arprinbipie and interest becomes due and payable upon the occurrence of anrof the following events: 1. The death of the owner when there is no spouse whorn,is,:eligible for deferment, 2. The sale, transfer or subdivision of :the ,property or any part thereof, 3. The loroperty should lose its homestead status, 4. The City Council should determine that the hardship no longer exists. A review of the hardship will be conducted everrthree to five years. 13 SECTION VI. METHODS OF ASSESSMENT A. GENERAL POLICY STATEMENT The City of Lake Elmo has adopted the following three methods for assessment of public improvements: fixed cost unit, adjusted front footage,a.nd by area method. For any particular project one of these methods will more adequately reflect the true benefits received in the assessment area than the other :Methods. The City Engineer, in his Feasibility Study to the Council, will recommend one or atombination of these methods for each project, based upon past practices and the method that would best reflect the benefit received for the area to be aSseSsed. The City Council select the preferred method of calculating the assessments at the time the -project is ordered. The general rule is to assess platted residential lots using the "unit" assessment basis, however, where platted residential letS•zdo, not reflect a general similar size and shape, consideration will be given to an adjusted front footage basis. Commercial and industrial lots will be assessed on an adjustedJront-leotage'Pasis; however, consideration will be given to a "unit assessment if the special benefit to the property in the district is essentially the same...: B. ASSESSMENTAVIETHODS The'ioilowing methods of assessment, as described and defined below, are hereby established as the official methods of assessment in the City of Lake Elmo: Fixed,Gost "UneMethod of Assessment When it has -been determined to assess by the "unit" method, all lots within the benefited area shall be assessed equally for the improvements. The "fixed cost per unit" shall be defined as a quotient of the "assessable cost" divided by the total assessable lots or parcels benefiting from the improvement. For the purpose of determining the "units" or "parcels", all parcels, including governmental agencies, shall be included in such calculations. 14 When large lots can be subdivided into more than one lot, the number of assessable lots attributed to that parcel will be determined from the number of potential future lots that could be obtained using current subdivision regulations. For multi -family, commercial, industrial and institutional properties, the number of fixed units assigned to the property may be determined by an equivalent "residential" factor representing the properties ;use compared to a single family residential home (e.g. SAC units,WAC unitsorstandard traffic generation units). 2. "Adjusted Front Footage" Method of Assessment When it has been determined to assess by the "Adjusted Front Footage" method, the "cost per adjusted front forcit", or assessment rate, -Shall be defined as the quotient of the "assessable cost"divided by the total assessable frontage benefiting from thef.drnprovement. The assessment for each parcel is then obtained by multiplyiriRithe assessment ratetmes the adjusted front footage for each property. For the 'p.urpoSe cf determining .the "assessable frontage", all properties,"-.irieluding governmental agencies, shall'ilave their frontages included in such:calculatiOn. The actual „physical dimensions of a,parcel abutting an improvement (Le., street, ;sewer, 'water, etc4-ShalINOT be construed as the frontage utilized to calculate the assessment for a particular parcel. Rather, an "adjusted front footage" will be determined. -An the Adjustment Front Footage method, odd shaped lots are adjusted to an average footage that would be the equivalent to the frontage of a rectangular shaped lot of the same area and depth. The purpose of this method is to equalize assessment calculations for lots of similar size. "Area" Method of Assessment When it has been determined to assess by the "area" method, the area shall be defined as the number of square feet or acres within the boundaries of the appropriate property lines of the areas benefiting from the project. The assessment rate (i.e. cost per square foot) shall be calculated by dividing the total assessable cost by the total assessable area. The assessment for each parcel is then obtained by multiplying the assessment rate times the benefitting area of the parcel. On large lots, the City Engineer may determine that only a 15 portion of the lot receives the benefit and may select a lot depth for the calculations equal to the benefit received, For the purposes of defining assessable areas, all properties included in the benefited area, including other governmental areas, churches, etc. shall be included in the assessable areas. The following items may not be included in area calculations: public right-of-ways, natural waterways, swamps and lakes or other wetlands designated by the Mn/DNR.: The City Engineer will make the recommendation on the benefited area inihe Fe?sibility Report. SECTION VII. POLICIES OF REASSESSMENT The City of Lake Elmo, in constructing or reconstructing any public improvement, shall design such improvement to last for a defined period. The life expectancy or service life shall be as stated in the policy statement of this section, or if different, shall be as stated in the Resolution ordering the improvement and preparation of plans. When Such project needs renewing or replacement prematurely, the amount to be assessed against the property owner shall be limited to an amount determined by dividing the actual life of the original improvement by the expected service life of the original improvement. A. POLICY STATEMENT The following are hereby established as the "life expectancies" or ."service lives" of public improvements unless ,otherwise stated in the Resolution ordering improvement and preparation of plans, in whiCh:case,the life set forth in the Resolution shall govern. • 1. Sidewalks,andTrails - 15 years . . •: 2. StreetqmprovementS, including:surfacing and curb and gutter - 20 years 3. Street Lighting - 20-3'feers, Water Mains and Appurtenances 40 years 5. Sanitary Sewers and ppurtenances - 40 years 6. Storm Sewers andAppurtenances - 40 years 7. Mechanical and Electrical Systems, Pumps and Controls - 15 years 17 SECTION VIII. DETERMINATION OF ASSESSABLE COSTS A. STREET IMPROVEMENTS Street Improvement assessments, including paving, curb & gutter, and related street drainage systems are levied over a 10-year period. Low Density residential properties will be assessed if the property has direct accessJo the improvement, High Density Residential, Commercial, and Industrial Properties,,wilik.be assessed if the property abuts the improvement. New Street Improvement Construction and Paving All new street improvements will -be:assessect100`)/0 to the benefited properties when the improvement,includes a "Nee:street. For new storm drainage systems, adding curb and gutter,and;',paving gravel 'roadways, the "NeWimprovement will be assessed 100%, while the base, subbase and other in place elements will be assessethastlefined under Street Reconstructions. Local.'Street Improvements Local streetimproyernents and paying shall be assessed based on the minimum City desIgn standard detail'aridpavement section and will normally be assessed by the urilUrnethodhowever other methods may be considered. Oversizing costs which are incurred in excess of the above may be paid by: (1) State Aid Funds, (2) larger assessment rates to properties, (3) general obligation funds, or (4) any othermethod or combination of methods authorized by the City Council _ . Collectorand,Arterial Street Improvements Collector and arterial street Improvements shall be assessed to a broader property benefitting area with the area to be determined by the City and approved by the City Council. Residential properties located along collector and arterial streets will be assessed to the equivalent local City standard street cost. All street-oversizing costs associated with collector streets will not be assessed to residential properties. 18 4. Street Reconstruction Improvements All residential street reconstructions shall be 30% assessed to be benefitting properties and will normally be assessed by the unit method. Street reconstruction improvements in Commercial, Business District, Institutional and Industrial areas shall be assessed 100% of the total project costs or determined on a project -by -project basis. 5. Street Maintenance Overlays and Seal Coating Bituminous overlay projects, bituminous seal coats, patching, crack sealing, fog sealing, and filling potholes will note assessed when completed as part of the street system's "life cycle" maintenance activities. B. SIDEWALKS, TRAILS, AND BIKEWAYS Assessments for sidewalk, trails ,and bikeway improvements are levied over a 10-year period. The City may install sidewaks,traiis or bikeway improvements in accordance with the City Comprehensive Plan for the community, or for -,council directed purposes, in which case the City maynot assesSahe..improverrients. At council discretion, sidewalk, trail and bikeway.:iimprovernents maybe fully or partially funded as part of a street construction/reconstruction- assessment, through park dedication fees, using Municipal State Aid funding, Capital Infrastructhre funding, or general tax levy funds. -• • ; •:•'' New Construotion • New sidewalks, 'trails, and 'bikeway improvements will be 100% assessed to the benefitting properties based upon the adjusted front footage. --• . 2. Reconstruction:. Replacement sidewalks, trails and bikeway improvements will be assessed 30% to the abutting residential properties and assessed 100% to the abutting commercial, industrial, and institutional properties. 1 9 C. STREET BOULEVARD TREES All street boulevard trees installed as part of new street construction or in reconstructing existing streets shall be included as part of the overall project costs and included in the assessment calculations. D. STREET LIGHT IMPROVEMENTS All costs for new street lights installed as part of constructing new streets or street lights relocated as part of reconstructing streets will be included in the overall project costs and included in the assessment calculations. Street lights May.' be included as part of the improvement project if sixty percent (60*cf the benefitting prOPerties petition for them. E. TRANSPORTATION IMPROVEMENTS All costs associated with traffic _and transportation related improvements, such as widening of a roadway for turn 'Ianes,..additional driving lanes, on -street parking, traffic calming, and traffic -signalization may be assessed 100°/d,ito the benefiting properties in commercial, industrial 'and- institutional zoned areas F. STORM SEWER AND DRAINAGE FACILITY IMPROVEMENTS Storm se er..and drainage facility timprovernents shall be considered and incorporated -,as part of street Improvement projects and assessed as part of the project and levied over a 10-year period. Storm _sewer and drainage facility improvements completed as independent projects will mormallyloe assessed by the area method taking into account each parcelsiand use and rate of runoff as determined by the City Engineer, New Storrn Sewer and Drainage Facility improvements New storm sewer and drainage facility improvements installed in conjunction with new street construction where no storm sewer previously existed will be assessed 100% and be included in the street assessment to benefiting properties. If the facilities are oversized to accommodate drainage from areas outside the street improvement assessment area, the additional costs may be assessed to the properties in the contributing area. Their assessment will be determined by the area method based on the contributing area of the parcel(s) taking into account the land use and rate of runoff. 20 2. Replacement and Major Maintenance of Storm Sewer Improvements Any replacement costs or reconstruction of existing storm sewers and drainage facilities in conjunction with street reconstruction projects will be assessed 30% and be included in the street assessment to benefiting properties. If the facilities are oversized to accommodate drainage from areas outside the street improvement assessment area, the additional costs may be assessed to the properties in the contributing area. Their assessment will be determined by the area method based on the contributing area of the parcel(s) taking into account the land use and rate of runoff. G. SANITARY SEWER IMPROVEMENTS - Assessments for sanitary sewer improvements shall be based upon the cost of construction of 8-inch sewer :mains. Oversizihg ,costs due to larger mains and larger appurtenances and/or extra depths:required to service future development, and major trunk sewers or interceptors will -'not be assessed and -will be "City costs" funded out of the Utility Reserve IFund. Normally, sanitary -sewers vvill-be.assessed using the per lot method. Sanitary,sewer system assessments are levied.pver a 20-year period. Street improvements and -,major street maintenance that are completed as part of utility replacement projects ;and has effectively -accelerated the replacement of the street before it's expected useidl life, shall 'be funded through the Utility Reserve Fund in proportion to the remaining design life of the street. Interceptor Sewer:System The MetropolitamCouncil Environmental Services (MCES) is responsible for the construction Pf :the interceptor sewer system and for the wastewater treatment facility to treat the sewage generated in the City of Lake Elmo, A Sewer Availability Charge (SAC) is determined by the MCES for each unit connected to the sanitary sewer system. The current charge per residential equivalent unit (REC) is collected, in full, by the City at the time of connection or the issuance of the building permit. The City collects this charge and passes this fee on to MCES. 21 2. Trunk Sanitary Sewer System The Trunk Sanitary Sewer System is constructed to serve the entire community or a larger service area and therefore is deemed to be of community -wide benefit. Trunk sanitary sewers, lift stations, and other trunk sewer system facilities shall be financed by a core facility charge to be paid at the time of connection to the City system. Core facility charges on units existing at thelime of construction may be paid in not more than 15 annual installmentsof,:,iprindipal plus interest on the unpaid principal balance at the rate of eignt'percentper annum or at a rate otherwise set by the City Council. Core .faOility charges on units •.built after the sewer construction should be paid in fUl(iat.the time the building permit is issued. Lateral Sanitary Sewer System The costs for lateral sanitary sewers shall be fully assessed (100%) to the benefiting properties. CommerOia industrial and multiple land uses and undevelopedlands are converted into equivalent residential units for assessment purpoSeS. Any building unit Whiolii:js served directly by an interceptor or trunk sewer and .therefore requires no lateral sewer, is levied a lateral benefit -iassessment which is equal to the Sewer Lateral Benefit Charge as set in the latest 'adopted City:Fee SchedUld. The replacement of existing sanitary sewer mains and service lines within the right-of-way will,.not be assessed, but rather financed from the Utility Reserve Fund Dr other funding sources identified by the City Council. Each property shall pay forthe replacement of the service line on their private property, from the right-of-wayAo The building/home. 22 H. WATERMAIN IMPROVEMENTS Assessments for new water main improvements shall be based upon the cost of construction of 8-inch water mains. Oversizing costs due to larger mains and larger appurtenances will not be assessed and will be "City costs" funded out of the Utility Reserve Fund. Normally, water mains will be assessed using the per lot method. Water system assessments are levied over a 20-year period. Street improvements and major street maintenarreelhat is completed as part of utility replacement projects and has effectively accelerated the replacement of the street before it's expected useful life, shall be :.funded through the Utility Reserve Fund in proportion to the remaining design life:Oflhe street. 1. Trunk Water Mains, Supply, Storage, and Treatment Facflities The Trunk Water 'SrStem Facilities are constructed to serve the entire community or a larger Service -Areaand therefore deemed to be of community - wide benefit,_ Trunk water mains, ':bump stations, wells, storage tanks, and treatment be financedby a.,core facility charge to be paid at the time of;connectionlolhe City system. 'Core:facility -chargeS ‘orrunits existing.at the time of construction may be paid in not rrforeAhan 15:annual installments of principal plus interest on the unpaid principal balance at the rate of eight percent per annum or at a rate otherwise set ;by the City Council. Core 4acility charges on units built after the water main construction should be paid in full at the time the building permit is issued. „.. 2. Lateral:Water Mains The costs for lateral water mains shall be fully assessed (100%) to the benefiting properties. Commercial, industrial and multiple land uses, and undeveloped lands are converted into residential units for assessment purposes. Any building unit which is served directly by a trunk water main and therefore requires no lateral water main, is levied a lateral benefit assessment which is equal to the Watermain Lateral Benefit Charge as set in the latest adopted City Fee Schedule. 23 The replacement of existing water mains and service lines within the right-of-way will not be assessed, but rather financed from the Utility Reserve Fund or other funding sources identified by the City Council. Each property shall pay for the replacement of the service line on their private property, from the right-of-way to the building/home. '•• • •,, • , • _ • CITY OF LAKE ELMO SPECIAL ASSESSMENT POLICIES AND PROCEDURES FOR PUBLIC IMPROVEMENTS Adopted by Resolution No. on: November XX, 2010 TABLE OF CONTENTS SECTION I: GENERAL POLICY STATEMENT_ .............. ....„...... ..... ...... ......... 3 SECTION DEFINITION OF IMPROVEMENTS ELIGIBLE FOR SPECIAL ASSESSMENT .. 5 SECTION III: INITIATION OF PUBLIC IMPROVEMENT ............. .......... 7 11 • 2 SECTION I. GENERAL POLICY STATEMENT A special assessment is a levy on a property to defray the cost of public improvements. Chapter 429 of the Minnesota Statutes grants cities the authority to use special assessments as a mechanism to finance a broad range of public improvements. The primary purpose of special assessments is to have the properties that benefit from the public improvements pay as much of the cost of the improvements as reasonable, thereby reducing a city's reliance on general property taxes. However, Chapter 429 of the MinnesotaStatutes limits the amount that may be assessed to the increase in the market value of the -property being assessed as a result of the public improvement. The purpose of this Special Assessment Policy'iS:to establish a fair and,eOuitable manner of , . recovering and distributing the costot)fpublic improvements, The procedures used by the City of Lake Elmo ("City") for levying special assessments are those specified by Minnesota Statutes § Chapter 429, which provides that "all ot'a part cost Of Amprovements may be assessed against benefiting properties" This assessment pohcyAs intended to serve as a guide for a systematic assessmentOrocess'in the City of tpice::Eimo. Special Assessments must.meet thv.following criteria: A, The:land must have received special benefit from he improvement. B. The amount of the assessment:must not exceed the special benefit. C. The assessment must be ,uniform in relation to the same class of property within the assessment area. It is important to recognize that the actual cost of extending an improvement past a particular parcel is not the determining factor in determining the amount to be assessed. However, in most cases the method for determining the value of the benefit received by the improvement, and therefore the amount to be assessed, shall be the cost of providing the improvement, as long as the cost does not exceed the increase in the market value of the property being assessed. The entire project shall be considered as a whole for the purpose of calculating and computing an assessment rate. In the event City staff has doubt as to whether or not the costs of the project may exceed the special benefits to the property, the City Council may obtain such appraisals as may be necessary to support the proposed assessment. The City must recover the expense of installing public improvements undertaken, while ensuring that each parcel pays its fair share of the project cost in accordance with these assessment guidelines. While there is no perfect assessment policy, it is important that assessments be implemented in a reasonable, consistent and fair manner. There may be exceptions to the policy or unique circumstances or situations that may require special consideration and discretion by City staff and the City Council. • 4 SECTION II. DEFINITION OF IMPROVEMENTS ELIGIBLE FOR SPECIAL ASSESSMENT This policy shall be applicable to those types of public improvements that are allowable under Minnesota Statutes §429.021. Generally the improvements include: A. Street and sidewalk improvements: Acquisition; construction, reconstruction, extension and major maintenance of any street and'Sidewalk and improvement of streets and sidewalks including base and subbase', 4bavernerit, gutters, curbs, and vehicle parking strips, paver cross walks, pedestrian crossings, medians, beautification amenities, and street and sidewalk drainage systems. B. Street lighting systems. Installation, replacement? extension, and maintenance of street lights, street lighting systems, and special 'lighting systems. C. Parks, trails, open space areas playgrounds, and recreational facilities. Acquisition and improvemenV:Of land, and ',:lpurchase of equipment and facilities, and the construction, econstruction and extension,Ofirails. D. Street trees. Planting, trimniing, care, and:removal. E. .Potable waterworks 4.systems. ;Construction, reconstruction, extension, and _ . maintenance of water supply ',wells and pump houses, water treatment facilities, storage tanks, .and all components of the watermain distribution system network and related appurtenances. F. Sanitary sewer, systems, Acquisition, development, construction, reconstruction, extension, and maintenance of sanitary sewer conveyance and treatment systems. This may include sanitary sewers, interceptor mains, lift stations, treatment facilities and treatment systems, service connections, and other appurtenances of a sanitary sewer system. G. Storm sewer and drainage systems. Acquisition, development, construction, reconstruction, extension, and maintenance of storm water management facilities and storm sewer systems. This may include outlets, culverts, pipe systems, catch basins, holding areas and ponds, infiltration basins, rain gardens, treatment plants, pumps, lift stations, service connections, and other appurtenances of a storm sewer system. R. Nuisance abatement. Includes, but is not limited to, draining and filling swamps, marshes, and ponds on public or private property. Dikes and other flood control works. Construction, reconstruction, extension, and maintenance. Retaining and area walls, including .4liglitAia.T„noise barriers. Acquisition, construction, reconstruction, improvementalteration, extenSion, and maintenance. extension, operation, maintenance, and. ,;promotiori. of public 'malls, plazas, and ' courtyards. Parking lots. Acquisition or conStrudtion-of,parking fabilities. 6 SECTION III. INITIATION OF PUBLIC IMPROVEMENT PROJECTS Public improvement projects may be initiated in the following ways: A. A public improvement project may be initiated by petition of at least 35% of the affected property owners. B. Public improvements may be initiated by the City 'Cquncil when, in its judgment, such action is required. A resolution ordering any Council -initiated improvements requires a 4/5th vote, rather than a simple majority. 7 SECTION IV. PUBLIC IMPROVEMENT PROCEDURES The following is the general procedure that will be followed by the City Council for all public improvement projects from initiation of such a project through certification of the assessment role to the County Auditor. The City Council reserves the right to alter the procedure on a case - by -case basis and within the context of Minnesota Statues § Chapter 429. Improvements of different kinds anywhere in the City :may .be included in a proceeding and conducted as one or more improvements. Thus a single procee0ing may encompass sidewalk, curb and gutter, and water and sewer mains installed anywhere in the City A. Staff reviews petition for local improvements from property owners and submits the petition to the City Council, or the City CoundillipassaS-a resolution ordering a Feasibility Report on the improvement. B. Council accepts or rejects the petition. If accepted, the Council orders the preparation of a Feasibility Report on improvethent. C. Staff prepares a'Feasibility'iReport on the proposed improvements, or reviews the report submitted by anotheragency/representatiVes. , - D. Council accepts or FeasibilWFieport, If accepted, the Council orders a public hearing on the improvement6.. E. Staff publishes a hearingnotice and mails notices to the affected property owners. F. Council condUcts. improvement hearing and adopts or rejects a resolution ordering the improvement and-the:preparation of plans and specifications. Bonds to finance project costs may be issued at any time after the improvements are ordered. G. Staff prepares final plans for Council approval. Council approves the plans and authorizes the advertisement of the improvements and the opening of Bids. H. Staff receives bids, prepares a bid tabulation, and makes a recommendation to the City Council for Award. Council rejects the bids or awards a contract based on the bids received. 1. Performance of the work under contract is completed. Staff supervises construction, prepares payments, and completes the improvement project. J. Staff prepares an assessment roil and presents it to the,Council. K. Council reviews the assessment schedule andiorderS'anzssessment hearing. L. Staff publishes a hearing notice, mails the notice of hearing. date and the proposed assessments to the affected property owners. . Council conducts assessmenthearing, adoptsiJeviSes, or rejects the resolution adopting the assessment roll. If adopted„'Council authorizescertification of the assessment to the County Auditor. N. Staff certifies the asSessments to theCourityAuditor. * Note: At•CoUncil's discretion, Item GZrrray be carried out in advance of the improvement hearing. *= Note: AtCouncil's discretion, Itenis.J-N May be carried out in advance to Council ,award and constructing improvements. 9 SECTION V. GENERAL ASSESSMENT POLICIES The cost of any improvement shall be assessed upon property benefited by the improvements, based upon the benefits received. The following general principles shall be used as a basis of the City's assessment policy: A. It is the general policy of the City of Lake Elmo_16 require future development in accordance with the City Comprehensive Plan andlOrnew areas of development in an orderly manner, typically contiguous to existing,develoPinent areas. It is also the general policy of the City of Lake Elmo to reqUire'all new development areas to provide for adequate public infrastructure at the Developer's sole expense, and in accordance with the City Comprehensive Plans and Design'Standards.:, , . . B. The use of special assessments will typically be employed by the City to finance needed public improvements (e.g. parks and trarls, sidewalks, water, sewer, and street improvements) in certain areas that .have previously been developed without all needed infrastructure, orltd'repair.and/or replace aging -infrastructure, C. The "project cog` ;of an improvement includes the costs of all necessary construction work ,required to accomplish the improvement, plus engineering, legal, administrative, inencing, and:other contingent coSts,,,mcluding acquisition of right-of-way, easements and _other property, The financing charges include all costs of financing the project. These costs include, 'but are not Aimited to, financial consultant's fees, bond attorney's fees, andcapitalized interest, When the project is started and funds are expended prior to receiving be proceedsArom a bond sale, the project may be charged interest on the funds expended :frorri the date of expenditure to the date the bond proceeds are received. The interest rate charged will be the average interest rate earned by the City's investments during the six months preceding the receipt of the bond proceeds. The interest charged to the project shall be included as financing charges. D. The "assessable cost" of an improvement is equal to the "project cost" minus the "City cost". E. The City of Lake Elmo will charge interest on Special Assessments at a rate specified in the resolution. If bonds were sold to finance the improvement project, the interest rate 10 shall be two percent (2%) more than the average interest rate of the bonds, rounded to the nearest quarter of a percent. If no bonds were sold, the interest rate shall be set at the rate allowed by State law. F. Property owners may pay their assessments in full, interest free for a period of 30 days after the assessment hearing. After such period interest shall be computed from the date specified in the assessment resolution. The City will certify each year's collection (principal and interest) to the County Auditor by AlOvember 30th. Prior to the first . . certification of principal and interest to the County:Auditor, a property owner may make a partial pre -payment of the principal to the:.C.ity of Lake -Elmo. Such partial prepayment must be at least $100.00. If the partial-l?repayment is made after the 30-day "interest - free" period allowed by State law, interest will be charged on theamount of the partial pre -payment from the date specified in the,.xesolutia:k.and paid along with the partial . . pre -payment. After the City tta-S-made the first certification of principal and interest to the County Auditor, pre-payment-,*ilkbe .accepted only for the total amount still owing including interest. If a parcel has more H:separate Special Assessments, • pre -payment of the remaining principal balance may be made on one or more. Tax- exempt parcels such as churches and:•schp.or properties may make a partial prepayment at any time, with:al--minimurn•partial pre payment of one half of the principal balance. The tax-exempt.parcel will be allowed to make only one partial pre -payment prior to the first -.• ceitificatidn'16:-The County :Auditor. The remaining principal after the partial prepayment Will)oe paid in eqbakinstallments over the remaining term of the special assessments. G. Wherean improvementis designed for service of an area beyond that of direct benefit, increased 'project costs due to such provisions for future service extensions may be paid for by the City, The r'0ity will levy assessments to cover this cost when a new improvement is installed as an extension of the existing improvement. As an alternative, the City may assess these costs to the area of future benefit immediately. H. Where the project cost of an improvement is not entirely attributable to the need for service to the area served by said improvement, or where unusual conditions beyond the control of the owners of the property in the area served by the improvement would result in an inequitable distribution of special assessments, the City, through the use of other funds, may pay such "City cost" which, in the opinion of the City Council, represents the excess cost not directly attributable to the area served. 1 1 If financial assistance is received by the City from the Federal Government, from the State of Minnesota, the County, or from any other source to defray a portion of the costs of a given improvement, such aid will be used first to reduce the "City cost" of the improvement. If the financial assistance received is greater than the normal "City cost", the remainder of the aid will be applied according to the terms of the assistance program or at the Council's discretion. City -owned properties, including municipal building titeS, parks and playgrounds, but not including public streets and alleys, shall be regarded -as being assessable on the same basis as if such property was privately -owned. K. Improvements specifically designed for or shown to be of direettenefit to one or more properties may be constructed by the City. The costs for these -improvements will be assessed directly to such properties, and not included in the assessments for the remainder of the project. Arrexarriple of this woUld be utility service lines running from the main lines to the property. L. Benefit Appraisals: In the event that City :staff has doUbt as to whether or not the proposed assessments exceed the ;special benefits to the property in question (increased property value as defined by State law), the City Council may order benefit appraiSalSas deemed4lebeSsarylpsupportAhe proposed assessments. 'A -property owner Trtay elebt to offset 'Special Assessments against condemnation awards by executing a'Net Assessment Agreement with the City Council. N. Assessmentneferral Procedure for Green Acres Parcels: In cases where improvement projects are determined Ito,benefit properties that have been certified to qualify for Green Acres exemption, lhe City will determine that portion of the project cost that benefits those properties, and finance that portion of the project cost as a system cost. During the period of deferral, interest shall be applied annually to the unpaid principle balance at the rate established on the original special assessment, or as adopted by resolution of the City Council at the time the original assessment is adopted. Once the benefiting properties no longer qualify for Green Acres status, the City may recover the system cost either through assessments or connection charges. 12 O. Assessment Deferral for Hardships: The City Council will consider deferment for the payment of special assessments on any homestead property, owned by a person 65 years of age or older, or retired by virtue of permanent and total disability. A hardship shall be deemed to exist when the annual principle installment of all assessments levied against the property exceeds two percent (2%) of the adjusted gross income of the applicant as evidenced by the applicant's most recent federal income tax return, and total assets (excluding the homestead property) do not exceed six times the adjusted gross income. The City Council may also determine, on ,a case by case basis, the existence of a hardship on the basis of exceptional and unusual circumstances not covered by these standards and guidelines, if done in anon -discriminatory manner -and without giving the applicant an unreasonable preference or advantage over other property owners. During the period of deferral,:ihterest shall be applied annually to the unpaid principle balance at the rate established .f.on the ,briginal special assessment, or as adopted by resolution of the City Council at the time the -original assessment is adopted. The deferment,thall terminate and all7prinCiple and interest becomes due and payable upon the occurrence of anyiof the following events: 1. The death of the owner when there is no spouse whom.is,,eligible for deferment, 2. The sale, transfer or subdivision of the property or any part:thereof, 3, Theproperty should lose its homestead status, 4. The:City Council should determine that the hardship no longer exists. A review of the hardship will be conducted everytthree to five years. 13 SECTION VI. METHODS OF ASSESSMENT A. GENERAL POLICY STATEMENT The City of Lake Elmo has adopted the following three methods for assessment of public improvements: fixed cost unit, adjusted front footage, and by area method. For any particular project one of these methods will more .:adequately reflect the true benefits received in the assessment area than the otner n)ethods. The City Engineer, in his Feasibility Study to the Council, will recommend -one or combination of these methods for each project, based upon past practioeS and the methockhat would best reflect the •• benefit received for the area to be asseSsed. The City Councillwill select the preferred method of calculating the assessments atctha time theproject is ordared, The general rule is to assess platted residential:4cl% using the "unit" assessment basis, however, where platted residential lOts',t1o, not reflect a general similar size and shape, consideration will be given to an adjusted frontfootage basip. Commercial and industrial lots will be assessed on an adjustedAront,f&Otage 'basis; however, consideration will be • given to a "Unit" assessment if the epecial benefit to the property in the district is essentially the same. B. ASSESSMENTJMETHODS • Thelollowing methods of assessment, as described and defined below, are hereby established as the official method's -Of assessment in the City of Lake Elmo: Fixed -Cost "Unit'i'Vethod of Assessment When it has been determined to assess by the "unit" method, all lots within the benefited area shall be assessed equally for the improvements. The "fixed cost per unit" shall be defined as a quotient of the "assessable cost" divided by the total assessable lots or parcels benefiting from the improvement. For the purpose of determining the "units" or "parcels", all parcels, including governmental agencies, shall be included in such calculations. 14 When large lots can be subdivided into more than one lot, the number of assessable lots attributed to that parcel will be determined from the number of potential future lots that could be obtained using current subdivision regulations. For mufti -family, commercial, industrial and institutional properties, the number of fixed units assigned to the property may be determined by an equivalent "residential" factor representing the properties -use compared to a single family residential home (e.g. SAC units,WAC units,orstandard traffic generation units). 2. "Adjusted Front Footage" Method of Assessment When it has been determined to rasSess by the 'Adjusted Front Footage" method, the ''cost per adjusted front foot, or assessment rate,shall be defined as the quotient of the "assessable cost"clivided .:by the total assessable frontage benefiting from the improvement The, assessment for each --parcel is then obtained by multiplyinglheassessment ratelimes the adjusted front footage for each property. For the ipurpoSeiff,..determining _the "assessable frontage", all properties, including governmental agendies, shall have their frontages included in suollCalculation:,,„ The actual physicalAmensions of ,a,parcel abutting an improvement (i.e., street, water, 'shall NOT be construed as the frontage utilized to calculate the assessment foreiparticular parcel. Rather, an "adjusted front footage" will be determined. in the Adjustment Front Footage method, odd shaped lots are :adjusted to an"average footage that would be the equivalent to the frontage of a rectangular shaped lot of the same area and depth. The purpose of this method is to equalize assessment calculations for lots of similar size. "Area" Method of Assessment When it has been determined to assess by the "area" method, the area shall be defined as the number of square feet or acres within the boundaries of the appropriate property lines of the areas benefiting from the project. The assessment rate (Le. cost per square foot) shall be calculated by dividing the total assessable cost by the total assessable area. The assessment for each parcel is then obtained by multiplying the assessment rate times the benefitting area of the parcel. On large lots, the City Engineer may determine that only a 15 portion of the lot receives the benefit and may select a lot depth for the calculations equal to the benefit received. For the purposes of defining assessable areas, all properties included in the benefited area, including other governmental areas, churches, etc, shall be included in the assessable areas. The following items may not be included in area calculations: public right-of-ways, natural waterways, swamps and lakes or other wetlands designated by the Mn/DNR :The City Engineer will make the recommendation on the benefited area irilhe:Feasibility Report. SECTION VII. POLICIES OF REASSESSMENT The City of Lake Elmo, in constructing or reconstructing any public improvement, shall design such improvement to last for a defined period. The life expectancy or service life shall be as stated in the policy statement of this section, or if different, shall be as stated in the Resolution ordering the improvement and preparation of plans. When .Such project needs renewing or replacement prematurely, the amount to be assessed 'against the property owner shall be limited to an amount determined by dividing the actual life -of)the original improvement by the expected service life of the original improvement. A. POLICY STATEMENT The following are hereby established as the "life expectancies" or 'service lives" of public improvements unless -.otherwise stated in the Resolution ordering improvement . - and preparation of plans, in which case, the life set forth in the Resolution shall govern. 1. Sidewalks .ancaralls - 15 years 2. StreeHrnprovements, includingsurfacing and curb and gutter - 20 years 3. Street Lighting - 20years aterklains and:Appurtenances- 40 years 5. Sanitary Sewers and;APpurtenances - 40 years 6. Storm Sewers and Appurtenances - 40 years 7. Mechanical and Electrical Systems, Pumps and Controls - 15 years 17 SECTION VIII. DETERMINATION OF ASSESSABLE COSTS A. STREET IMPROVEMENTS Street Improvement assessments, including paving, curb & gutter, and related street drainage systems are levied over a 10-year period. Low Density residential properties will be assessed if the property has direct accessiIo 'the improvement. High Density Residential, Commercial, and industrial Properties:Will-be assessed if the property abuts the improvement. New Street improvement Construction and Paving All new street improvements will be assessed 100`)/0 to the benefited properties when the improvemeptjncludes a New' Street For new storm drainage systems, adding curb and gutter,-and;paving graveritoadways, the "NeWimprovement will be assessed 100%, while ,the base, subbase and other in place elements will be assessed as defined under 'Street Re6onstructions. - , 2. LocalStreet Improvements Local streetirriproVeMentsand paV , ing shall be assessed based on the minimum _., ...„...,-,. ..... .... ..., ......„ City.:_clesign standard detail'andlpaveMent section and will normally be assessed ..... _ ....- ..... by the unitnethod;'however other -methods may be considered. Oversizing costs which are incurred in excess of the above may be paid by: (1) State Aid Funds, 12) larger assessment rates"to properties, (3) general obligation funds, or (4) any other:method or Combination of methods authorized by the City Council Collectorand,Arterial Street improvements Collector and arterial street improvements shall be assessed to a broader property benefitting area with the area to be determined by the City and approved by the City Council. Residential properties located along collector and arterial streets will be assessed to the equivalent local City standard street cost. All street-oversizing costs associated with collector streets will not be assessed to residential properties. 18 4. Street Reconstruction Improvements All residential street reconstructions shall be 30% assessed to be benefitting properties and will normally be assessed by the unit method. Street reconstruction improvements in Commercial, Business District, Institutional and Industrial areas shall be assessed 100% of the total project costs or determined on a project -by -project basis. 5. Street Maintenance Overlays and Seal Coating Bituminous overlay projects, bituminobs .iseal coats, patching, crack sealing, fog sealing, and filling potholes will ncitibe assessed When completed as part of the street system's "life cycle" maintenance activities. SIDEWALKS, TRAILS, AND BIKEWAYS Assessments for sidewalk, trails'anchbikeway improvements are levied over a 10-year period. The City may install sidewalkt;,4rails or bikeway improvements in accordance with the City Comprehensive Plant* the community, or kir:council directed purposes, in which case the City may not assesSibe improverrients. At council discretion, sidewalk, trail and bikeway improvements may be fully or partially funded as part of a street construction/reconstruction sa:Seessment, through park dedication fees, using Municipal State Aid funding, Capitallnfrastrubturerfunding, or general tax levy funds. New ConstruCtion New sidewalks, trails, and bikeway improvements will be 100% assessed to the benefitting properties based upon the adjusted front footage. 2. Reconstruction Replacement sidewalks, trails and bikeway improvements will be assessed 30% to the abutting residential properties and assessed 100% to the abutting commercial, industrial, and institutional properties. 19 C. STREET BOULEVARD TREES All street boulevard trees installed as part of new street construction or in reconstructing existing streets shall be included as part of the overall project costs and included in the assessment calculations. D. STREET LIGHT IMPROVEMENTS All costs for new street lights installed as part of constructing new streets or street lights relocated as part of reconstructing streets will.baJnOlUded in the overall project costs and included in the assessment calculations Street lights may be included as part of the improvement project if sixty percent (600a the benefitting properties petition for them. E. TRANSPORTATION IMPROVEMENTS *: All costs associated with traffic :and transportation related improvements, such as widening of a roadway for turrilaneAdditional driving lanes, on -street parking, traffic calming, and traffic:signalization may be assessed 100°/0'..to the benefiting properties in commercial, indu institutional zoned areaS, F. STORM SEWER AND DRAINAGE FACILITY IMPROVEMENTS • Storm sewer and drairiage facility improvements shall be considered and incorporated „. as part of street improvement projects and assessed as part of the project and levied over a 10-year period. Storm ..sewer and drainage facility improvements completed as independent projects Will:normally-be assessed by the area method taking into account each parcels land use anthate of runoff as determined by the City Engineer. New Storm Sewer and Drainage Facility improvements New storm sewer and drainage facility improvements installed in conjunction with new street construction where no storm sewer previously existed will be assessed 100% and be included in the street assessment to benefiting properties. If the facilities are oversized to accommodate drainage from areas outside the street improvement assessment area, the additional costs may be assessed to the properties in the contributing area. Their assessment will be determined by the area method based on the contributing area of the parcel(s) taking into account the land use and rate of runoff. 20 2. Replacement and Major Maintenance of Storm Sewer Improvements Any replacement costs or reconstruction of existing storm sewers and drainage facilities in conjunction with street reconstruction projects will be assessed 30% and be included in the street assessment to benefiting properties, If the facilities are oversized to accommodate drainage from areas outside the street improvement assessment area, the additional costs may be assessed to the properties in the contributing area. Their assessment will be determined by the area method based on the contributing area of the parcel(s) taking into account the land use and rate of runoff. G. SANITARY SEWER IMPROVEMENTS Assessments for sanitary sewer improvements shall be based .upon the cost of construction of 8-inch sewer mains. Oversiling,costs due to larger rnains and larger appurtenances and/or extra depths -,required to service future development, and major trunk sewers or interceptors will mot be assessed and ,will be "City costs" funded out of the Utility Reseryefund. Normally, sanitary sewers will•be assessed using the per lot method. Sanitary -sewer system assessments are levied over a 20-year period. Street improvements and:major street maintenance that are completed as part of utility replac.erneht 3,projectsand has effectively accelerated the replacement of the street ;before it's expected usefril life, shall belunded through the Utility Reserve Fund in proportion to the remaining design life of the street. Interceptor SewerSystem The Metropolitan' Council Environmental Services (MCES) is responsible for the construction of the interceptor sewer system and for the wastewater treatment facility to treat the sewage generated in the City of Lake Elmo. A Sewer Availability Charge (SAC) is determined by the MCES for each unit connected to the sanitary sewer system. The current charge per residential equivalent unit (REC) is collected, in full, by the City at the time of connection or the issuance of the building permit. The City collects this charge and passes this fee on to MCES. 21 2. Trunk Sanitary Sewer System The Trunk Sanitary Sewer System is constructed to serve the entire community or a larger service area and therefore is deemed to be of community -wide benefit. Trunk, sanitary sewers, lift stations, and other trunk sewer system facilities shall be financed by a core facility charge to be paid at the time of connection to the City system. Core facility charges on units existing at thelime of construction may be paid in not more than 15 annual installmentsbf ;principal plus interest on the unpaid principal balance at the rate of eight percent per annum or at a rate otherwise set by the City Council. Core facility charges on units built after the sewer construction should be paid in fulkatthe time the building permit is issued. Lateral Sanitary SevvSystem The costs for lateral Sanitarypewers shallioe fully assessed (1 00°/0) to the benefiting properties. Commercial -industrial .and multiple land uses and undeveloPecklarids are converted into equivalent residential units for assessment purpoees. Any building unit which s served directly by an interceptor or trunk sewer and -therefore requires -no lateral sewer, is levied a lateral benefit assessment Which ls equal :to the Sewer Lateral Benefit Charge as set in the latest 'adopted City Fee SchedUle:. ; - The replacement of existing sanitary sewer mains and service lines within the ht-of-way will not be assessed, but rather financed from the Utility Reserve Funckor other funding sources identified by the City Council. Each property shall pay for The replacement of the service line on their private property, from the - . rig ht-of-waY'tO the building/home. 22 H. WATERMAIN IMPROVEMENTS Assessments for new water main improvements shall be based upon the cost of construction of 8-inch water mains. Oversizing costs due to larger mains and larger appurtenances will not be assessed and will be "City costs" funded out of the Utility Reserve Fund. Normally, water mains will be assessed using the per lot method. Water system assessments are levied over a 20-year period. Street improvements and major street maintenancethat is completed as part of utility replacement projects and has effectively adcelerated the replacement of the street before it's expected useful life, shall be funded through the Utility Reserve Fund in proportion to the remaining design lifeOtthe street. Trunk Water Mains, Supply, Storage„and Treatment Facilities • The Trunk Water SyStem Facilities are constructed to serve the entire community or a larger service area and therefore deemed to be of community - wide benefit. Trunk water. :mains,' :Pimp stations, wells, storage tanks, and treatment be financed by aoore facility charge to be paid at the time btoonnection to the City syStern. Core facility charges on Oft existing at the time of construction may be paid in not more !than 15 annual installments of principal plus interest on the unpaid principal balance at 'therate of eight percent per annum or at a rate otherwise set .by the City Council. Core Jacility charges on units built after the water main construction should be paid in full at the time the building permit is issued. 2. Lateral Water Mains The costs for lateral water mains shall be fully assessed (100%) to the benefiting properties. Commercial, industrial and multiple land uses, and undeveloped lands are converted into residential units for assessment purposes. Any building unit which is served directly by a trunk water main and therefore requires no lateral water main, is levied a lateral benefit assessment which is equal to the Watermain Lateral Benefit Charge as set in the latest adopted City Fee Schedule. 23 The replacement of existing water mains and service lines within the right-of-way will not be assessed, but rather financed from the Utility Reserve Fund or other funding sources identified by the City Council. Each property shall pay for the replacement of the service line on their private property, from the right-of-way to the building/home.