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HomeMy WebLinkAbout2008.03.17 RESO 2008-0009RESOLUTION NO. 2008-09 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUGO, WASHINGTON COUNTY, MINNESOTA, ADOPTING SPECIAL ASSESSMENT POLICIES WHEREAS, the City Council deems it advisable and in the best interest of the City of Hugo to adopt policies relating to special assessments. WHEREAS, the City Council intends that these policies not be construed as exclusive but instead to provide general guidelines for addressing assessments in the City, and in enacting these policies, the City Council acknowledges that special cases and variations may be required based on the particular facts present in any given situation. NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City of Hugo that the following assessment polices will be followed for all public improvements in the City of Hugo: 1. Assessment Amount A. The grand total of the assessments related to a project cannot exceed the City's total project cost. B. The amount of any individual assessment cannot exceed the special benefit to the property. In this case, special benefit is defined as the increase in the market value of the property because of the improvement: 2. When Assessments Will Not be Levied A. No special assessments will be levied against designated flood plans, municipal storm water ponds, or wetland areas on private property as determined by criteria in the Wetland Conservation Act of 1991 and the Minnesota Department of Natural Resources. The limits of wetlands will be determined by the City on a case-by-case basis at the time of preliminary project design and feasibility report preparation. B. No special assessments will be levied against railroad, county highway, or state highway right-of-ways. 3. Interest Rate A. The rate of interest on assessments for which bonds were issued to finance the project shall be two percent (2%) greater than the rate of interest on the bonds. In the event that no bonds were issued to finance the project, the rate of interest shall be two percent (2%) greater than the average rate of interest on all bonds issued in the prior calendar year, or if no bonds were issued in the prior calendar year, two percent (2%) greater than the current bond market rate for the City of Hugo. Page 1 4. Method of Assessment A. When residential parcels are assessed on a unit basis, a unit shall be defined as one buildable lot consistent with the prevailing zoning district in which the project is located. Other property classifications shall be assessed on a front -footage basis at the rates established on an annual basis by the City Council. B. The special assessment method described in the policy statement cannot be considered as all inclusive. Unique or unusual circumstances may, at times, justify special consideration. In such situations, the City Council may, from time to time, establish by resolution or as part of a Feasibility Study amendments to the assessment policy to cover situations that may not have been contemplated in this policy. 5. How Particular Improvements WW Be Assessed A. Evaluation of Proiect Feasibility Improvement projects, regardless of whether or not they are included in the Capital Improvement Program, initiated by the City Council, or initiated through a petition from the benefiting property owners, will be evaluated as part of a Feasibility Study and/or other report to evaluate the technical and financial aspects of the project. The City Council may or may not move forward with a project based on the results of the Feasibility Report. B. New Roadways/Projects Not Included in the Capital Improvement Program Improvements will be assessed on a front -footage or unit basis, with 100% of the project cost being assessed provided the benefit as a result of the project meets or exceeds the amount of the assessment. C. Gravel Roadway Paving Paving of existing gravel roadways shall be assessed on a front -footage or unit basis, with 100% of the project cost being assessed provided the benefit as a result of the project meets or exceeds the amount of the assessment. The City Council may, at their discretion, provide funds to offset the project cost based on the actual cost to provide additional gravel surfacing to the roadway as part of routine roadway maintenance. D. Roadway Reconstruction/Rehabilitation Roadway reconstruction and rehabilitation shall be classified as one of the following: 1. Complete Roadway Reconstruction: This shall include complete pavement removal, subgrade corrections as necessary, installation of concrete curb and gutter, new sidewalks, repair/replacement of existing sidewalks or trails adjacent to the roadway, Page 2 installation or reconstruction of storm sewer, and storm water management improvements. 2. Partial Roadway Reconstruction: This classification is intended to be used for existing urban -section roadways. The improvements shall include complete pavement removal, subgrade correction as needed, new sidewalks, partial repair/replacement of concrete curb and gutter and sidewalks/trails, storm sewer repair, and storm water management improvements. 3. Roadway Reclamation/Overlay: This classification is intended to be used for existing rural -section roadways that will remain as a rural section following the project. The project will include recycling the existing pavement as aggregate base, minor subgrade corrections as necessary, minor grading, minor storm sewer and drainage improvements, and storm water management improvements. 4. Urban Roadway Mill and Overlay: This will include milling of pavement on the outside edges, partial repair/replacement of concrete curb and gutter and sidewalks/trails, and resurfacing of the roadway. 5. Rural Roadway Overlay: This will include a resurfacing of the roadway including placement of gravel shouldering. 6. Routine Roadway Maintenance: This shall include roadway patching/spot overlays, seal coating, and crack filling. No costs associated with routine roadway maintenance shall be assessed. E. Private Street Improvements 1. Unless otherwise specified by the City, the developer or owners of lands adjoining private streets shall undertake and pay for improvements to private streets and appurtenances according to the City specifications. F. Sanitary Sewer and Water Main Laterals 1. For improvements to existing sanitary sewer and watermain laterals, no assessments shall be levied. City funding will include a combination of utility funds and/or grant monies. 2. For new developments and projects petitioned by benefiting properties currently not serviced by sanitary sewer and/or water mains, and projects not included in the Capital Improvements Plan, one hundred percent (100%) of the project costs for sanitary sewer and water utilities shall be assessed to all parcels within the development. Page 3 3. Sewer and water service replacements between the sewer main and the property line shall be assessed on a per service basis at one hundred percent (100%) of the City's expenses for such services. G. Sanitary Sewer and Water Main Trunks 1. The assessment for trunk usage is based on area. The full cost of the trunk system shall be assessed equally over the benefited area at a determined rate per unit. H. Storm Sewer 1. For new developments or improvements petitioned for by benefiting properties not included in the Capital Improvements Plan, one hundred percent (100%) of the storm sewer costs shall be assessed to all parcels within the development, or the assessment shall be the fee required to be paid by the City's Stormwater Trunk and Ponding Fee Ordinance. 2. For improvements to existing storm sewer systems, the assessment rates as outlined in the Roadway Reconstruction/Rehabilitation section, shall include the storm -sewer improvements. 6. Assessable Costs The amounts included in the costs assessable under this policy shall include the following: A. Contract Costs: Amount paid to contractors for constructing the improvements. B. Construction Interest: The costs of financing during the period between the date when the first payment is made to the contractor exceeding any amount placed in escrow pursuant to the development agreement and the date the assessment roll is approved by the City Council. C. Expenses: Costs incurred by the City in addition to the contract costs, including engineering, legal, advertising, finance charges, administration, easements/right-of-way, permit fees, and the assessment process. D. Project Cost total cost of the improvement): Total of contract costs, interest, and expenses. 7. Roadway Reconstruction/Rehabilitation Assessment Rates A. Single -Family Residential/Duplexes 1. Residential Roadways: Single -Family residential and duplex rates are typically based on an average 80 -foot wide lot in the urban area and up to 300 -foot wide lot in the rural area. The assessments shall be levied on a unit basis rather than a front -footage Page 4 basis. Lots that can be subdivided according to the prevailing zoning regulations will be reviewed on an individual basis to determine whether or not additional unit assessments should be levied. The single-family residential/duplex assessment rates to be utilized for the year 2008 are as follows: Complete Reconstruction: $5,200/unit Partial Reconstruction: $4,100/unit Roadway Reclamation/Overlay: $3,400/unit Urban Roadway Overlay: $2,100/unit Rural Roadway Overlay: $1,800/unit 2. City Municipal State -Aid Roadways: Single-family residential assessments for reconstruction/rehabilitation shall be levied in accordance with the typical residential rates outlined in the policy. B. Commercial, Industrial. Tax -Exempt, and Multi -Family Residential 1. Residential Roadways: Commercial, Industrial, Tax -Exempt, and Multi -Family Residential rates will be reviewed on an individual basis and will be assessed on a front -foot basis. The front -foot rate is determined by dividing the single-family residential/duplex rate by 80 and multiplying by 1.5 (SF Res./Dup. Rate/80 x 1.5) to arrive at the rate. 2. City Municipal State -Aid Roadways: Commercial, Industrial, Tax -Exempt, and Multi -Family Residential assessments will be assessed on a front -foot basis using the method outlined in Section 7.B.1. Each assessment will be reviewed on an individual basis to determine whether or not the property receives additional benefit from specific improvements not typical for residential roadways which may require assessments beyond the standard assessment rates. C. State and County Roadways 1. If the City incurs costs related to the reconstruction or rehabilitation of State or County roadways, the City may levy assessments based on the following: a. SinLe-Family Residential/Duplexes: Assessments for reconstruction/rehabilitation shall be levied on a unit basis at the standard residential rates outlined in Section 7.A.1 based on the category of the improvement as outlined in Section S.D. b. Commercial. Industrial. Tax -Exempt, and Multi -Family Residential: Commercial, Industrial, Tax -Exempt, and Multi -Family Residential assessments will be reviewed on an individual basis. Page 5 D. Assessment Rate Modifications 1. The assessment rate will be included within the City's adopted fee schedule, and will be reviewed on an annual basis by the City Council. The City Council may consider an adjustment to the assessment rate based on an appropriate industry guideline, such as the Construction Cost Index, provided the adjustment does not exceed the benefit. The City Council may also undertake a Special Benefit Analysis at their discretion to either adjust the assessment rate or verify that the rate as adjusted through the use of a cost index is consistent with the expected benefit. 8. Calculation of Payment A. The assessment amount shall be amortized over the term of the assessment, at the applicable interest rate, with equal installment payments through the term. 9. Corner and Other Lots A. For single-family residential properties, corner, and other multiple -frontage, lots will be assessed one-half unit for each roadway frontage. In the case of lots with more than two frontages, the units will be prorated so the property assessment will total one unit once all frontages have been improved. B. For Commercial, Industrial, Tax -Exempt, and Multi -Family Residential properties, assessments may be levied for multiple projects/frontages based on access. 10. Delay or Deferment of Assessments A. Sanitary Sewer, Storm Sewer, and Water Improvement Projects: Pursuant to Minn. Stat. S. 429.061, the City may delay making assessments for these types of improvements on property that is not completely developed, such as property which is presently served with a septic system. These costs may be deferred until the property develops, subdivides, or is connected to the system. B. Roadway. Curb and Gutter, and Sidewalk Projects: No deferment will be made for these assessments unless they front unimproved property. C. Unimproved Properly: The City may, at its discretion, defer the first installment of any assessment upon unimproved property until some designated future year until the property is platted or until improvements are constructed on the property. In these cases, if deferral is made, then the entire assessment for the property is deferred. The minimum assessment for which deferral can be considered is $500, and the minimum size of the parcel for which deferral can be considered is a buildable lot in the respective district. Interest may accrue on the deferred amount. Page 6 11. Senior Citizen Deferments As allowed by the Minnesota Statute, the City has a special assessment deferral policy for low-income senior citizens and disabled persons as follows: A. Special Assessment Deferral 1. Pursuant to Minn. Stat. 435.193 through 435.195 senior citizens may defer special assessments levied against homestead property owned by the applicant if the criteria set forth below are met by the applicant. B. Eli 'bili 1. Any person may request deferment of special assessments levied against real property once they are 65 years of age or older, whether or not they turn 65 before an assessment is levied or during the assessment repayment period. A deferment may be requested for assessments related to a public improvement if the following conditions are met: a. Ownership: The applicant must be the fee simple owner of the property or must be a contract vendee for fee simple ownership. b. Homestead: The property must be the applicant's principal place of domicile and classified on the County's real-estate tax rolls as the applicant's homestead. C. Interest on Deferred Assessment 1. All deferred special assessments shall be subject to and charged simple interest at the prevailing rate applicable at the time the assessment was originally levied. Said interest shall be payable upon termination of the deferral status. D. Termination of Deferral Status Page 7 1. Special assessment payments deferred pursuant to the eligibility requirements set forth by this resolution shall become payable effective upon the occurrence of one of the following events: a. Sale of Property: The subject property is sold, transferred, subdivided, or in any way conveyed to another by the fee owner qualified for deferral status. b. Death of Owner: The death of the fee owner qualified for deferral status unless a surviving spouse is eligible for the deferral benefit provided hereunder. c. Non -homestead Property: The subject property loses its homestead status for any reason. d. No Hardship: The City Council determines there would be no hardship to require an immediate or partial payment of the deferred special assessment. E. Filing for Deferral Status 1. An eligible applicant must file an application within 30 days of the adoption of the assessment to which the deferral applies. All deferral applications must be made on forms approved by the City and submitted to the City Clerk. WHEREUPON, said Resolution was declared duly passed and adopted by the City Council for the City of Hugo this 17th day of March, 2008. ATTEST: Michele Lindau, City Clerk Page 8 flow