Agenda - Council - 10/10/2006 - Laserfiche WebLink

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-162— Case #4 Background: Discuss Mississippi Subdrainage District No. 1 Phase 2 Construction Project An ordinance adopted on February 22, 2000 established the Mississippi Drainage District to address the storm sewer needs for the area which is bounded by the Burlington Northern railroad tracks on the north; Highway 10 on the south; Sunfish Lake Boulevard on the west; and the City limits on the east. This ordinance established a special taxing district to finance necessary drainage improvements which would allow the district handle additional storm runoff caused by the development of the area within the district. In fall of 2000 storm sewer was installed through the eastern half of the district. The western half of the district had anticipated the extension of this storm sewer once appropriate drainage and utility easements were obtained. Staff last approached the City Council on June 27, 2006 advising them that three easements were still required to proceed with the phase 2 project, and that two of these easements were anticipated to be donated by the property owners to facilitate the construction. The third easement was appraised at a value of $13,500 and Council authorized an offer to be extended to the property owner in this amount. Staff has contacted the remaining two property owners several times over the intervening months to obtain these easements, but has been unsuccessful in obtaining them. During the last conversation with one of the property owners, Mr. Larry Hickman, he indicated a preference for the easement to be obtained through a purchase. Staff estimates that the value of this easement could be as much as $144,050 if the same unit price land values which were identified for the appraised property were applied to Mr. Hickman's property which is considerably larger. Staff advised currently the cost of the phase 2 project is estimated at $266,300 with $40,000 for property acquisition. The district currently has a fund balance of $142,800 with anticipated 2007 revenue of $43,348. To proceed with this project at this time in light of the significantly increased land acquisition cost would require either a significant increase in the levy to this special district or an extension of the levy period for a period for as many as six years. The purpose for this project as stated within the CU' is twofold. First it will provide drainage capacity to the western portion of the drainage district so that it can facilitate future development, and second it provides an outlet for the large regional pond which accepts the drainage from Business Park 95 and the eastern portion of the Mississippi subdrainage district No 1. Plans for the upgrade of Highway 10 will require the eventual acquisition of the property within this district and this improvement would likely increase the value of the property and consequently the cost of the acquisition. Staff is looking for direction on continuing to pursue this project. Staff advised that Mr. Hickman, who has indicated a preference for the easement to be obtained through a purchase, would be able to increase his display area without creating large ponds on his property, so there is some value involved. The following options were reviewed for consideration: 1. Pursue the project at this time and increase the annual levy to the district to recover the project costs. Alternately the project costs could be recovered over a six year period at the present levy. 2. Delay the project for a period until the fund balance more closely matches the cost of the project.