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Page 3 Special Assessments Policy <br />for construction, exceeds the City Engineer's estimate by 10% or more, the letter of credit <br />shall be increased proportionately. <br />The City shall levy assessments, in equal annual installments plus interest, against the <br />benefiting property over a period of 15 years on existing commercial/residential properties at <br />the time that assessments are levied against a project. At the time the assessments are levied <br />on a project, the existing letter of credit shall be adjusted to one hundred percent (100%) of <br />the actual assessment. After the balance of the principal is less than the amount of the <br />security agreement, the letter of credit can be reduced as assessments are paid at the rate of <br />one dollar for each dollar paid. <br />The projected cost of future public improvements for utilities and streets proposed under <br />the City's 5-year Capital Improvement Program shall be paid by the developer as part of <br />the development agreement. <br />If the new development will have frontage on the street to be improved (excluding double <br />fronted lots), the developer may waive his and future owners' rights to public hearings and <br />right to appeal and agree to be assessed for thecosts when the project is constructed. This <br />document will then be filed at Hennepin County as a lien on the property. <br />On lot splits where the utilities and streets were privatley installed by the developer, no <br />additional assessment fees will be collected upon lot split. If the utilities and streets were <br />installed as a public improvement project and not fully assessed, the balance will be collected <br />as fees upon lot split and/or development. <br />If a project is initiated by the City, a four -fifths vote is required by City Council. No <br />financial guarantees are required on City -initiated projects. Pending assessments will be <br />placed on properties after the public hearing when the project is ordered. <br />No special assessments will be levied against those properties described as follows: <br />I . Permanent Drainage Ponds <br />2, Cemeteries <br />3. U.S. Government owned properties <br />The total cost of a public improvement includes the construction cost plus overhead. <br />Due to projects being assessed prior to construction of the project, the City utilizes an <br />overhead of 35 percent based on the following: <br />1. Construction Contract Estimated amount to be paid to the contractor. <br />2. Administrative, Legal <br />