Agenda - Council Work Session - 02/14/2017

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Special Assessments When special assessments are proposed to pay for all or a portion of the cost of an improvement, the objective is to choose an assessment method which will result in a reasonable, fair and equitable assessment that is uniform upon the same class of property within the assessed area. Per the City's adopted Special Assessments Policy, staff recommends using special assessments be pay for 25% of eligible improvement costs which totals $151,750. This amount must then be distributed across the 9 parcels which staff has identified as benefiting properties. In doing so, it is important to recall that the test for determining the validity of a special assessment is whether the improvement for which the assessment was levied has increased the market value of the property against which the assessment was levied in at least the amount of the assessment. The Special Assessments Policy identifies three optional methods for assigning assessments. The 9 identified benefiting properties are zoned industrial (El or E2). Only two assessment methods are recommended for assessing industrial parcels, these being the "adjusted front footage" and "area" methods. Staff completed a cursory review of both methods as they would be applied in their current context within the policy which showed that the adjusted front footage method results in less variance between assessments ($9K - $40K), whereas applying the area method results in assessments that are more variable ($3K - $42K). Based on the geometry of the assessable parcels, including significant differences in lot depth, staff recommends applying the area method so assessments are more equitable to the benefit received. Staff then reviewed all assessable parcels to determine what appreciable differences existed between parcels that would impact the benefit received from the proposed improvements. Staff determined there are two significant differences that should be accounted for when calculating assessments; whether a parcel has direct access onto an improved street, and whether the parcel abuts other City streets requiring future improvements whose costs will be assessed to the parcel. Staff therefore developed and applied the following adjustments to the area method of assessment. • Properties abutting Sunwood Drive only with access onto Sunwood Drive are proposed to be assessed for 100% of their property area. • Properties abutting Sunwood Drive and other City streets, with access onto Sunwood Drive, are proposed to be assessed for 75% of their property area. • Properties abutting Sunwood Drive with no access onto Sunwood Drive are proposed to be assessed for 50% of their property area. These adjustments are relatively similar to adjustments found in other cities assessment policies which adjust assessment calculations to allow industrial properties with multiple accesses and/or frontages to be assessed between 150% and 200% for improvements completed to all abutting streets. Based on the proposed percentages above, B&F Fastener Supply will pay assessments for 150% of their property area for mill and overlay and reconstruction improvements on Sunwood Drive and Jaspar Street, both of which they directly abut and have access onto. Vision Ease will pay assessments based on 200% of their property area for improvements made to Sunwood Drive, 143rd Avenue, and Jaspar Street since they abut all three and have access onto Sunwood Drive and 143rd Avenue (75% each), but no access onto Jaspar Street (50%). Lastly, Altron, Inc. and the small City parcel on the east end of Sunwood Drive are both proposed to be assessed for 50% of their property areas since neither has direct access onto Sunwood Drive. This analysis strictly considers existing conditions. If a property that is assessed for 50% of the property area based on not having access onto an improved street requests an access onto an improved street in the future, the assessment amount they forgiven could be collected through the permitting process. Staff will consider available methods to capture such funds, and will report our findings and recommendations to Council at an upcoming work session. The Special Assessments Policy can then be amended to include such language, as well as to address any assessment calculation adjustments approved by Council. A revised assessment map and assessment roll are attached which reflect the proposed property area percentage adjustments outlined above. In addition, the property area for (Anderson Dahlen) was corrected to include all of their property. The assessment map and roll in the draft Feasibility Report accepted by Council on January 24h inadvertently omitted a significant portion of their benefiting property area because the parcel data in the City's GIS system that was used to create the assessment map and roll for the Feasibility Report had not yet been updated with