Agenda - Council - 09/12/2017 - Laserfiche WebLink

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Special Assessments The City's adopted Special Assessments Policy (attached) specifies that special assessments shall pay for 25% of eligible street reconstruction improvement costs. Special assessments are calculated using methods resulting in reasonable and equitable distribution of assessments that are uniform upon the same class of properties within the assessable area. 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. Ramsey's Special Assessments Policy identifies three optional methods for calculating assessments. A total of 9 benefiting properties were identified along this segment of Sunwood Drive. All properties are zoned El or E2 (industrial) so only two assessment methods are recommended; the "adjusted front footage" method and the "area" method. Staff originally considered impacts of both methods as they would be applied in the current context of the policy. The adjusted front footage method resulted in less variability between assessments ($9K - $40K), while the area method resulted in greater variability ($3K - $42K). Staff initially recommended using the area method since it appeared to better assign benefit based on lot geometry, which seemed to make sense for this project considering the significant differences in lot depths along the corridor. However, based on feedback received from the City's consultant that has prepared the benefit appraisal consultation reports for recent street reconstruction projects in Ramsey (Patchin, Messner, Dodd and Brumm), and based on feedback received from other cities that have assessed industrial parcels for street reconstruction improvements, the adjusted front footage method was used to calculate preliminary assessments. Additionally, Patchin, Messner, Dodd and Brumm calculated estimated special benefits for each assessable property, which was added to the preliminary assessment roll. Staff then applied the lesser of the calculated front footage assessment and the estimated special benefit to determine the preliminary assessment for each assessable property per the attached Feasibility Report. All project costs are eligible for special assessments since the street was reconstructed to its pre-existing width, and since the old and new pavement sections are both 10-ton designs. As stated earlier, Connexus Energy is still voicing concerns with their proposed assessment. Connexus Energy's concerns primarily focus on the fact that the parcel proposed to be assessed in undeveloped. Staff met with Connexus Energy representatives on several occasions to discuss their assessment. However, based on feedback from our consulting appraiser, Patchin, Messner, Dodd and Brumm, as well as from other cities that utilize assessments who do not appear to assess properties differently due to development status. Staff therefore believes Connexus Energy's proposed assessment is reasonable. In summary, assessments were calculated based on the highest and best use of the property. Connexus Energy plans to address the Public Works Committee on September 19, 2017, to discuss their proposed special assessment. However, at the time this report was prepared no formal objections had been received City Staff. Should any formal objections be received from property owners prior to the Assessment Hearing, or if the Public Works Committee recommends any adjustments be made to the final Assessment Roll, Staff will update the City Council on such matters before the Assessment Hearing is conducted. The estimated assessable project cost based on the contract amount is $503,543.59. This results in a total assessment amount of $125,885.90 based on 25% of eligible project costs. Special assessments for each benefiting property varies based on front frontage. A special benefit consultation report is being completed for this project to help provide proof of benefit. The results of this report, which is being finalized at this time, along with final special assessment amounts, will be presented during the Assessment Hearing on October 10, 2017. Recommendation: