Agenda - Council Work Session - 11/18/2014

Home

Page 2 Special Assessments Policy I. GENERAL Minnesota State Statute, Chapter 429 provides that a municipality shall have the power to make public improvements such as sanitary sewer, storm sewer, water trunk, source and storage facilities, street improvements including grading, curb and gutter, surfacing, sidewalks, street lighting, etc. The various procedures the municipality must follow, including reports, notices and public hearings, are well defined within the law. The Statute further provides that the cost of any improvement may be assessed upon property benefited by the improvement based upon the benefits received whether or not the property abuts on the improvement and whether or not any part of the cost of the improvement is paid from Municipal State Aid funds or other outside funds. The law is not specific on how these benefits are to be measured or how the costs are to be apportioned, but rather makes it incumbent upon the municipality to determine, with assistance of any engineer or other qualified personnel, a fair and equitable method of cost sharing among the properties involved. Competitive bids are required for all improvements in excess of $50,000. The threshold is $25,000 when work is done by day labor and a registered engineer is needed to supervise the work. The purpose of this assessment manual is to set forth a guide to be utilized by the Engineering Department when preparing assessment rolls for approval by the City Council so as to assure uniform and consistent treatment to the various properties from year to year. All references used will be the latest version thereof. Current Champlin standards require developers to install public watermain, sanitary sewer, streets, storm sewer and street lighting. The developer must provide the City with a letter of credit for one hundred and ten percent (110%) of the City Engineer's estimated project cost of the required improvements, Reference 2. If the cost of the improvements, as determined after receipt of bids for construction, exceeds the City Engineer's estimate by 10% or more, the letter of credit shall be increased proportionately. Upon completion of the improvements, the City shall levy assessments, in equal annual installments plus interest, against the benefiting property over a five (5) year period for residential development. The letter of credit shall be adjusted to one hundred percent (100%) of the actual assessment. After the balance of the principal of the assessment is less than the security agreement, the letter of credit can be reduced as assessments are paid at the rate of one dollar for each dollar paid. For developments other than residential, the subdivider shall provide the City with a letter of credit for one hundred and ten percent (110%) of the City Engineer's estimated cost of the required improvements. If the cost of the improvement, as determined after receipt of bids