Agenda - Council Work Session - 02/14/2017

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5. FINANCING 5.1 Opinion of Cost A detailed opinion of probable costs for the proposed improvements can be found in Appendix B of this report. The opinion of probable costs incorporates anticipated 2017 construction costs for the proposed improvements plus 23% indirect costs for administrative, engineering, financing and legal costs. Construction contingency costs are not included in the estimated costs. City staff prepared the Feasibility Report in-house as part of staff's normal duties. NTI prepared the Geotechnical Exploration and Engineering Review, included in Appendix D, at a cost of $4,400. WSB and Associates, Inc. prepared the Pavement Evaluations and Recommendations included in Appendix D, at a not -to -exceed cost of $2,687.50. 5.2 Funding 5.2.1 Assessments The City's adopted Special Assessments Policy allows special assessments in an amount not to exceed 25% of eligible street reconstruction project costs to be levied against benefiting properties. Eligible project costs include costs required to reconstruct the street at its current width, and to reconstruct the pavement without increasing its structural capacity. Benefiting properties are considered to be any developable parcel that has, or has the ability to create, one or more direct accesses onto the segment of Sunwood Drive being reconstructed. A total of 9 benefitting properties have been identified for this project, including two City -owned parcels. The Preliminary Assessment Map and Roll are included in Appendix C. The engineer's opinion of probable costs for eligible assessment costs totals $607,000. Assessable industrial parcels are preliminarily proposed to be assessed for 25 percent of eligible project costs, which totals $151,750. Assessment terms are proposed at ten years. Interest rates are proposed at two percent above the bond interest rate. The "area" method of assessment identified in the City of Ramsey's Special Assessments Policy is proposed to be used to calculate assessments for this project. Properties which obtain sole access off Sunwood Drive are proposed to be assessed for 100% of the properties area. Two properties have existing or potential access onto other streets so their assessable area was reduced by 40% as shown in the Assessment Roll. This is intended to offset future assessments when the other streets they access are improved. Special assessments have not been utilized widely in recent years for street reconstruction projects in Ramsey, and special assessments for industrial properties have never been applied using the new Special Assessments Policy. In addition, State Statute and the City Charter do not allow for assessments to exceed the benefit to the property. Therefore, Staff wants to ensure that all assessments applied with this project will not exceed the benefit to assessed properties and will therefore request Council authorization to order a benefit appraisal consultation report for this project in accordance with the City's Special Assessments Policy at the time a construction contract is awarded. Feasibility Report Sunwood Drive Reconstruction City of Ramsey Project No. 17-00 Page 9