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Home My WebLink About08-14-01 CCMCITY OF LAKE ELMO City of Lake Elmo Phone: 651-777-5510 Fax: 651-777-9615 3800 Laverne Avenue North / Lake Elmo, Minnesota 55042 LAKE ELMO CITY COUNCIL WORKSHOP TUESDAY, AUGUST 14, 2001 5:00 P.M. CITY HALL 3800 LAVERNE AVENUE NORTH LAKE ELMO, MINNESOTA AGENDA 1. Review Assessment Policy A. Current Assessment Policy B. Changes proposed by Council Member DeLapp C. Assessments for gravel roads 2. Preliminary Budget A. Assistant to Building Official B. Erosion control officer C. Fire Dept. Inspections 3. Variance Public Hearings: Change from PZ to CC ;= printed on recycled paper Mayor Lee Hunt Councilmembers Rosemary Armstrong Steve DeLapp Susan Dunn Chuck Siedow Citv Administrator Mary Kueffner Asst. City Admin. /City Planner Chuck Dillerud No. 13A Agenda Section: City Administrator's Report Agenda Item: Assessment Policy Date: January 16, 2001 Attached is a copy of the proposed Assessment Policy submitted by Councilman DeLapp a few months ago. I have also attached a copy of the City's current assessment policy, and a letter from the City Attorney clarifying assessment guidelines. In defense of the City's current policy, I would like to remind you that it is the culmination of many years of trying different methods of assessing for 429 Projects within the City, and thus far has worked out quite well (there has never been an appeal to an assessment). In defense of Councilmember DeLapp's proposed policy, I believe it is well intended, but to me appears to be complex and subjective. However, I look forward to hearing his explanation of the proposal so I get a better understanding of what he is attempting to do. If this proposal is the result of the three OP developments that occurred onto unimproved roads, I can and do appreciate the City's frustration with not assessing the developing property adjacent to these roads at a greater percentage. I would support a change to the current policy that would allow us that type of flexibility, and wish more than any one that we could make any change retroactive. I will work with the Council to amend the current policy, if that is your direction. City of Lake Elmo Public Improvement and Assessment Policy I. INTRODUCTION It has been and will continue to be the policy of the City Council that when public improvements are made which are of special benefit to certain areas, special assessments will be levied for the benefits received. The procedures used by the City are those specified by Minnesota Statutes, Chapter 429, which provide that all, or a part of the cost of the improvements, may be assessed against benefiting properties in accordance with the benefits received. The statute, however, does not provide a guide as to how these benefits are measured or how the costs are to be apportioned. The purpose of this general policy is to establish a consistent standard for the apportionment of special assessments. II. TYPES OF IMPROVEMENTS This policy shall relate to those public improvements allowable under Minnesota Statute 429. Generally, the improvements include: street and street lighting improvements; sanitary and water utility improvements; sanitary and water utility improvements; storm sewer and drainage improvements; and bikeway/ped/way improvements. This policy outlines how new construction reconstruction, and major maintenance shall be financed under each type of project. Project costs shall include: the construction costs; engineering; testing; permitting; legal; administrative; land or easement acquisition; fiscal; capitalized interest; data processing and publications fees. III. SPECIAL ASSESSMENT METHODS Benefiting properties generally are assessed by one or a combination of four (4) methods; front footage; area; unit and benefit appraisal. Generally, the nature of an improvement lends itself to a particular method. The four (4) methods are described as follows: A. Frontage Method: Frontage is measured at the building setback line. Assessments are determined by multiplying the frontage by.the Council -established rate. B. Area Method: Assessments are determined by multiplying the net developable area (gross area less wetland area) by the Council -established assessment rate. C. Unit Method: Assessments are determined by multiplying the particular land unit by the Council established assessment rate, for each particular zoning category. City of Lake Elmo Public Improvement and Assessment Policy Page 2 D. Benefit Appraisal Method: Assessments are determined by assigning the increase in value to a property as determined by the appraisal. Corner Lots: Comer lots are included in the benefiting area with the exception of single/two family dwellings. If the improvements are along the front lot line of a single\two family dwelling, the parcel shall be included in the benefiting area with each unit assessed separately. If the improvements are along the side lot line of a single/two family dwelling, the parcel shall not be included in the benefiting area, unless the lot can be subdivided. For the purpose of this Assessment Policy, the front lot line is defined as the side of the lot which abuts the street upon which the property is addressed. Recreational Lots: Recreational lots without a primary living structure, but used for recreational purposes, and not combined with the owner's lot with a primary structure shall be included in the benefiting area and assessed at one-half (1/2) of the rate for a non -recreational lot within the same project. Agricultural and Rural Residential Property: Property zoned Agricultural or Rural Residential that has not been subdivided will be assessed as one unit for each dwelling on the property. If the property is subdivided after the completion of said improvement, but before the expiration of the assessment period or eight years, whichever is the greater, then the property will pay a total contribution equivalent to the total number of subdivided lots based on the original assessment without interest. (or with interest.) IV. IMPRO VEVIEVTS A. Roadway and Street Lighting Improvements 1. Petitions for roadway and street lighting projects shall be filed and accepted by the Council prior to January I of the year of construction. The Council may authorize accepting a petition after January by special consent. 2. Projects may be initiated by petition of at least thirty-five percent (35%) of the property owners measured in area and/or frontage, and requires a majority vote of the City Council. 3. Projects may be initiated by the City Council in absence of an adequate petition and requires a four -fifths (415) majority vote of the City Council. 4. Street light petitioned projects shall be uniformly spread to the benefiting properties. City of Lake Elmo Public Improvement and Assessment Policy Page 3 B. Reconstruction 1. Petitions for roadway projects shall be filed and accepted by the Council prior to January 1 of the year of construction. The Council may authorize accepting a petition after January 1 by special consent. 2. The scope of project shall be determined by traffic volumes, and reason for pavement deterioration. 3. Abutting property owners shall be assessed based on zoning category. The Council will set the appropriate rate for each zoning category. 4. The assessment rate with a zoning category shall be equal throughout the community, independent of project scope. 5. The City will assess it share of County Road projects to properties along County roadways in the same manner as City streets. 6. The City participation in projects will be the difference between the project cost and the amount to be assessed. The City's share may include: Municipal State Aids (MSA) on MSA routes, Grants, Capital Improvement Funds, or a City-wide Road Improvement Utility. 7. Street lights may be installed as part of a roadway reconstruction project is sixty percent (60%) of the neighborhood signs a petition requesting the installation. The installation costs will be financed as part of the reconstruction project. C. Maior Maintenance 1. Overlays to postpone the reconstruction of a roadway shall be assessed to the abutting property owners based on zoning category. The Council will set the appropriate rates for each zoning category. 2. Sealcoating shall not require abutting property participation. 3. The City's share of project costs shall be determined by deducting the assessable costs from the project costs. The City's share may be financed with MSA , Capital Improvement funds, Maintenance Funds, or funds acquired thorough a City-wide Road Improvement Utility. City of Lake Elmo Public Improvement and Assessment Policy Page 4 D. Bikewav/Pedwav Improvements 1. The City may install bikeway/pedways according to the Comprehensive bikeway/pedway plan for the community. The bikeway/pedways should be an eight (8) foot wide asphalt surface if separated from the roadway surface a minimum of four (4) feet. 2. Bikeways/Pedways may be financed as part of a roadway reconstruction assessment; park dedication fees; MSA, Capital Improvement funds, or funds acquired through a City-wide Road Improvement Utility, 3. The City will repair and remove snow from all bikeway/pedways. E. Street Liaht Improvements 1. Street lights may be included as part of reconstruction and overlay projects if sixty percent (60%) of the property owners petition for the installation. 2. Street lights installed as part of reconstruction or overlay projects shall be financed as part of the assessed roadway project. F. Utility Improvements (New Construction) 1. Petitions for utility projects shall be filed and accepted by the Council prior to January 1 of the year of construction. The Council may authorize accepting a petition after January 1 by special consent. 2. Projects may be initiated by petition of at least thirty-five percent (35%) of the property owners measured in area and/or frontage, and requires a majority vote of the City Council. 3. Projects may be initiated by the City Council in absence of an adequate petition and requires a four -fifths (4/5) majority vote of the City Council. 4. The Citv's share may be financed with Water/Sewer Access Charge funds (WAC/SAC). G. Utility Improvements (Reconstruction and Nlaior Maintenance) 1. The replacement of water mains, sanitary sewer mains and service lines within the right-of-way shall be financed out of the Utility Reserve Fund. City of Lake Elmo Public Improvement and Assessment Policy Page 5 2, The replacement of services on private property shall be paid for by the property owner. 3. Roadway reconstruction and major maintenance projects accelerated on account of utility replacement projects shall be financed through the Utility Reserve Fund in ,'_ p�rtion to the remaining design life of the street. petitions for storm sewer projects shall be filed and accepted by the Council prior to January 1 of the year of construction. The Council may authorize accepting a petition after January 1 by special consent. 2. Projects may be initiated by petition of at least thirty-five percent (35%) of the property owners measured in area and/or frontage, and requires a majority vote of the City Council. 3. Projects may be initiated by the City Council in absence of an adequate petition and requires a four -fifths (4/3) majority vote of the City Council. 4. Projects initiated by property owners shall have their participation determined by land use, contributing area and rate of runoff. Project assessments shall be determined by multiplying the accessible area by the Council -established assessment rate taking into account land use and rate of runoff. I. Storm Sewer Proiects (Reconstruction and Maior Maintenance) 1, Storm Sewer Projects shall be incorporated and considered as part of roadway reconstruction and major maintenance projects, and assessed as part of the project. V. ASSESSMENT PERIODS DETERMINED BY TYPE OF PROJECT New construction projects may be assessed over a five (5) year period, with the exception of street lighting, which shall be limited to three (3) years. Reconstruction projects may be assessed over a ten (10) year period. Trunk water and sewer facilities may be assessed over a twenty (20) year period. Overlay projects may be assessed over a five (5) year period. City of Lake Elmo Public Improvement and Assessment Policy Page 6 VI. HARDSHIP_ DEFERRALS FOR SPECIAL ASSESSMENTS The City Council will consider a 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 for whom it would be a hardship to make the payments. 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 a non-discriminatory manner and without giving the applicant an unreasonable preference or advantage over other property owners. All assessments will continue to bear interest on the unpaid principle balance at the rate established on the original special assessment. The deferment shall terminate and all principle and interest becomes due and payable upon the occurrence of any of the following events: 1. The death of the owner when there is no spouse who is eligible for deferment. 2. The sale, transfer or subdivision of the property or any part thereof. 3. The property should lose it's homestead status. 4. The City Council should determine that the hardship no longer exists. A review of the hardship will be conducted every three to five years. Amendment # 1 - Adopted Nlay 21, 1996 City of Lake Elmo Memo To: Mayor and City Council From Mazy Kueffner, City Administrator CQ Chuck Dillerud, City Planner Date: 12/07/00 Re: Road Assessment Policy Proposed by Steve DeLapp Attached is a copy of the above referenced policy distributed by Steve DeLapp at our November 21, 2000 meeting. I apologize for not including this as an agenda item at our last meeting. I was not aware that there was concern with our current policy, other than the way it was imposed on four specific OP developments in the City. I have also attached a copy of our current policy for those of you that do not have one. Unless I hear different from the Council, this item will be on the January 16, 2001, agenda for discussion and staff direction. Please call me if you have any questions. 0 Page 1 R�4P Aaas#4wr Pau cy Ij 1//,AI-vC or- RoAn To MrLr G L i P"Pal.n owl � / t I �� oN✓Cki elect.. i� � � : ti au bl 660rdw.. pT j�tilJi� Vi.�►�cdf a ILL 04", li a-+ J 7�-'G jG r� i 1 •-�,, J c, "C4jv1 o pp&-J" 46, "jAsL» too k" i __ � � � ovltvM►.� C K.�J�� - i I tZ c -3 Va fail tit, LO(AL 40 I tz, Ono 04 of n In AS a =OM M cm Cl 0 9L ATL- f2i�9 A" A- AP FM E A 0 L.'SA k A.0 43 -rc) I c S mik lzc--x P-, D t4 Warren E. Peterson PEi TI-1 RS lergme P Fllla 1 l� , . r Daniel Witt Glenn A. Bergman rgma FT J j� �j BERGT � J� �T 1�( -11 V 1 LJ 1\ 1 V 11'-11 v John Michael Miller.jw., h •`.,a'°: �A1 Michael T. Oberle LL-t�,^�� Steven H. Bruns` Paul W. Fahning Esther E. McGinnis Jeffrey 1. Cohen December 27, 2000 Ms. Mary Kueffiier City Administrator City of Lake Elmo 3800 Laverne Avenue North Lake Elmo, MN 55042 RE: Special Assessment Policy PF&B File No. 11135.960006 Dear Mary: Suite 300 50 East Fifth Street St. Paul, MN 55101-1197 (651) 291.8955 (651) 228-1753 facsimile Direct Dial #(651) 290-6907 The City's authority to levy special assessments is derived in general from M.S. Chapter 429 and in particular from M.S. 429.051 which, in part, states: The cost of any improvement or any part thereof, may be assessed upon property benefitted by the improvement, based upon benefit received, whether or not the property abuts the improvement and whether or not any part of the cost of the improvement is paid from the County State -Aid Highway Fund, the Municipal State -Aid Street Fund, or the Trunk Highway Fund. This Statute has been construed by various Minnesota Courts. Most recently, the Minnesota Appellate Court in Bisbee v. City of Fairmont, 593 N.W.2nd 714 (1999) stated that the above Statute placed the following limitations on the city's ability to levy special assessment: 1. The land must receive a special benefit from the improvement being constructed. 2. The special assessment must be uniform upon the same class of property. 3. The special assessment may not exceed the special benefit. 'ALSO ADMITTED IN WISCONSIN December 27, 2000 Page 2 SPECIAL BENEFIT Whether the construction of an improvement project has conferred a special benefit on a parcel of land is an economic determination which requires the City to compare the fair market value of the parcel before the construction of the improvement project with the fair market value of the property after the construction of the improvement project. In contested cases, this determination is normally made with the assistance of a real estate appraiser. If the market value has increased as a result of the construction of the improvement project, a special benefit has been conferred and the City can levy special assessments to the extent of the improvement project cost. UNIFORMITY Because cities are required to allocate special assessments uniformly against similarparcels, most cities adopt special assessment policies to ensure that each successive city council treats similar property in an equitable manner. Special assessment policies are usually mathematical formulae. The project cost is divided by some unit of measure such as the number of dwelling units, the number of lots, or the number of lineal feet in a project and the product is levied as a special assessment proportionately against each parcel within a particular class ofproperty. Special assessment policies which are applied consistently over a period of time result in uniform treatment. The City would argue that the policy insures that each property owner is treated uniformly in a fair manner. Some property owners would argue that the policy treats everyone uniformly, but in an unfair manner. Therefore, a special assessment policy should include a statement which indicates that the City may adjust the proposed special assessment in those cases where it is necessary to ensure that special assessments equal or exceed market value increases. �0o oerr EXCESSIVE ASSESSMENTS There may be cases where the City Council determines that the construction of a public improvement is warranted even though the full cost of the improvement cannot be specially assessed because the amount of the special assessment would not be offset by an increase December 27, 2000 Page 3 in the market value. Some improvement projects confer a general benefit to the public as well as a special benefit to a particular property owner. This occurs where a water main is constructed to complete a looped system or where a road is constructed to a higher standard than a normal city street. Since the improvement project cost is greater than the amount of cost that can be specially assessed, the amount of the deficit needs to be financed out of general funds or by State, County, or State Aid funds. If a city levies special assessments in excess of the amount of special benefit conferred on a particular parcel, it would be considered an unconstitutional taking of property without compensation. SUMMARY As the City reviews its assessment policy, it should keep the above principles in mind. Although no assessment policy is perfect, most assessment policies can at least achieve an equitable spread of the assessment against benefitted parcels. There will always be unusual cases that need to be dealt with on an individual basis by the City Council. If you have any questions, please contact me. JPF:lk Very truly yours, Jerome villa 1