Agenda - Council Work Session - 11/18/2014

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special considerations listed in Section 6 and the proposed assessment percentages/rates in Section 10. Currently, the special conditions in Section 6 require the City to cover required costs for subgrade excavation, rural to urban street conversions, and oversizing of City streets. These special considerations are intended to reduce assessments for property owners for items that are unknown to them and/or outside of their control. This is important to note in that special assessments levied at the minimum rate of 20% as required for assessment bonding can easily exceed $10,000 on larger benefiting properties more than one -quarter acre in area which comprises a majority of residential properties throughout the City. Attached is a layout showing the higher density residential urban properties throughout the City (shaded properties) that would likely allow the use of a 25% assessment to reconstruct abutting City streets. All other properties would likely be required to pay a maximum fee established annually by the City Council to ensure their assessment does not outweigh their benefit. Staff currently recommends a maximum assessment amount of $7,000. In recent years it has become more common for property owners to challenge their special assessments, especially when assessments exceed $7,000. It may therefore be difficult to defend a residential property assessment in excess of $7,000 within the City of Ramsey if challenged. Some cities now perform appraisals on one or more representative properties before projects are ordered to determine if the preliminary assessments can be defended, but this in turn increases project costs and assessment amounts. Still other cities contract with appraisers to complete benefit appraisal consultations that consider sale and re -sale figures for properties recently assessed for similar improvement projects in similar cities to help determine actual benefit costs prior to ordering a project. Jason Messner with Patchin Messner & Dodd will be in attendance to address any questions the Council may have regarding benefit appraisals and appraisal consultations. The draft Policy includes numerous revisions to reference and ensure compliance with our City Charter requirements. The City Attorney is also reviewing the draft Policy to ensure it has the proper legal form and that it conforms to our Charter assessment requirements per Chapter 8 of the Charter, which is attached for reference. During the October 14th Council work session, more information on previous assessments was requested. Property owners in the City of Ramsey were primarily previously assessed for sealcoat and overlay projects. However, a few assessments have been levied for street reconstruction projects and for upgrading gravel roads to paved roads. Typically, assessments for such projects in the City of Ramsey have ranged from; • Street Sealcoats — 0% to 50% of project costs assessed. Assessments were generally up to $500 for residential and $2,000 for commercial/industrial properties. • Street Overlays — 50% of project costs assessed. Assessments were generally up to $2,000 for residential and $7,000 for commercial/industrial properties. • Street Reconstructions — Staff was still researching this information at the time this case was published. This information will either be republished in an updated case before the work session, or the information will be presented at the work session. • Gravel Road to Paved Road Upgrades — Staff was still researching this information at the time this case was published. This information will either be republished in an updated case before the work session, or the information will be presented at the work session. • Sidewalk Reconstruction — 0% of project costs were previously assessed, though the current draft Policy calls for a 25% assessment rate. Appendix B, which was developed as an attachment to a January 19, 2010 Public Works Committee case, is also attached for reference. This lists previous Street Maintenance Program assessment practices, including effective dates. Council also asked where the four -fifths majority vote reference in Section 3.3 originated. This language comes directly from State statute 429.031. Council also requested that Staff review the language in Section 6.4 regarding interest rates. This language has been revised with input from Finance Director Lund.