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HomeMy WebLinkAboutCity Council - 07/18/2000 (4)AGENDA EDEN PRAIRTE CITY COUNCIL WORKSHOP/FORUM TUESDAY, JULY 18,2000 5:OO - 6:55 PM, CITY CENTER HERITAGE ROOM 11 CITY COUNCIL: Mayor Jean Harris, Councilmembers Sherry Butcher, Ronald Case, Ross Thorfinnson, Jr., and Nancy Tyra-Lukens CITY COUNCIL STAFF: City Manager Chris Enger, Parks & Recreation Services Director Bob Lambert, Public Safety ' Director Jim Clark, Public Works Services Director Eugene Dietz, Asst. City Engineer Rod Rue, Community Development and Financial Services Director Don Uram, Management Services Director Natalie Swaggert, City Attorney Roger Pauly and Recorder Lorene McWaters I. 11. 111. IV. V. VI. CALL MEETING TO ORDER - MAYOR JEAN HARRI[S APPROVAL OF AGENDA SPECIAL ASSESSMENTS OTHER BUSINESS COUNCIL FORUM ADJOURNMENT - MEMORANDUM- TO: Mayor and City Councilmembers FROM Eugene A. Dietz, Director of Public Works DATE: June 15,2000 (Revised July 13,2000) RE: Special Assessment Workshop Attached is a copy of the revised Special Assessment Policy for your review in advance of the workshop. I have made a few grammatical and miscellaneous corrections to the policy, but the only substantive change is the modification of policy statements 28 and 30 that were approved by City Council on June 6, 2000, having to do with the modification of the “cap” of assessments for homesteaded properties. At the workshop, it is our intention to review the following parts of the policy and issues as listed below: 1. Page 1 of the Special Assessment Policy has a list of “bullet points” that are issues of law as opposed to policy. 2. Policy statements 1,2,9, 17,20,28,29 and 30 3. Strategic Issues: 0 35% vs. 50% petitions - gaining consensus 0 Assessment Hearing prior to award of contract 0 Uniformly of assessments 0 Standard design vs. specialty design vs. cost 4. Compare estimated cost versus the assessment cap ($19,600) for the two current projects of Cedar Forest ($25,160) and Highview ($33,000). 0 Lot pattern efficiencies 0 Environmental damage issues Reduced City Maintenance costs 0 Septic system inspection program 5. Briefing of anticipated issues regarding the HighviewLakeland Terrace Improvement Project It has been seven or eight years since we have had a significant special assessment improvement project in Eden Prairie. The goal of the staff will be to review legal issues and policies in context of current projects under consideration. CITY OF EDEN PRAIRIE SPECIAL ASSESSMENT POLICY JULY, 1989 (Revised June, 2000)' The theory of special assessments in Eden Prairie is that if each property owner pays for the road and utility system adjacent to their parcel And shares in the overall cost for the trunk utility system and collector/arteM street system, an equitable method of paying for the City infrastructure will have been attained. The underlying premise for special assessments is that each project is unique and must meet the test of Chapter 429 of the State Statutes - the amount of the assessment must not exceed the increased valuation to the property (benefit). The purpose of this policy statement is to identify those common elements that can be considered 'applicable in most situations. Special circumstances will always tale precedent over these policies, since they are proposed as a guide only. There are some principles of law that should be noted. Some of these concepts have been viewed in the past as policy, but in fact are points of law over which the Council has no flexibility: I 0 0 0 0 e As indicated above, the final test for a special assessment is that the benefit equals or exceeds the amount of the assessment. If necessary, a trial at. District Court determines these matters. In order to preserve their right of appeal, a property owner must provide a written objection in advance of or at the final assessment hearing and must initiate an appeal within 30 days thereafter. . Each petition that is submitted from benefited property owners must be reviewed to determine if it is "valid".. A valid petition is one on which 35% of the adjacent . benefiting property owners have affixed their sigpture. The law is unclear on this issue when area type assessments are proposed. As an alternative to a valid petition, the City Council may advance a project on their own motion, but each resolution required by Chapter 429 of the State Statutes must be approved by a 4/5ths majority vote of the Council. Valid petitions only require a simple majority vote. . 100% petitions from benefited property owners can be utilized to initiate a project. This is the only way in which a special assessment project can be initiated whereby the feasibility study portion of the process can be eliminated and the project can advance directly to preparation of plans and specifications. The method of distributing costs in an assessment district must be consistent by class of property. For example, if a hardship situation in an assessment district becomes evident, it is not permissible to distribute the cost from that property onto other proper& for that hardship fact alone. The method of distributing assessments must be equitable and meet the benefit test. It is permissible for the City to reimburse itself for prior expenditum through a current special assessment. This is the theory that is utilized for levying trunk utility assessments. Since streets cannot be assessed in this manner, the policy is to assess the costs and defer (with interest) .the brtion that would hefit due to future development. c DEFINITIONS The following definitions are utilized throughout the text of these policies: Assessable cost. Those costs that are attributed to the development of the project including construction contracts, engineering design and inspection, a 9% fee to administer the special assessment process (including normal legal expenses), interim financing and right-of-way or easement acquisition costs. . Front foot. A term used to describe the amount of land adjacent to an improvement along a public right-of-way. Usually this is the width dimension of a lot or parcel of property, but could be an average width for an irregularly shaped parcel. , 0 Homesteaded parcel. A piece of property having homestead stabs as defined by City and County tax records for the year in which the special assessment will be levied. 0 Lateral utilities. These utilities are designed specifically to provide a connection point for individual services to the adjacent class of property. Typically in a single family neighborhood, an 8 inch sanitary sewer and a 6 inch watermain would be the lateral system. In a commercial area, however, the minimum watermain size is usually 8 inches in diameter and the sanitary sewer is sized dependent upon the needs of the district. . 0 . Lot unit. A term usually reserved for describing a residential parcel of land that is (or will exist when) fully developed. 0 Trunk utilities. This generic term includes the large diameter (over 8") piping systems for both watkr and sanitary sewer that generally constitute our basic distribution and collection system in the City as shown on the Water and Sanitary Sewer System maps. Trunk utilities include the water treatment plant, elevated storage kilities, well houses, lift stations and other related appurtenances necessary for the distribution and collection systems. Assessments for trunk utilities therefore include reimbursement to the City for expenditures for all of these system costs. . GENERAL POLICES policy (1). . It is the specific purpose of the City council to make provisions in the special assessment proceedings so as to not force a homesteaded property into premature development or early sale because of an improvement project. Policy (2). To the extent permissible by law, new development shall pay the full cost associated with the project and not result in a burden to adjacent properties or the community at large. Policy (3). Assessment term for homesteaded properties for assessments in excess of $5,OO0.00 shall be 20 years. Policy (4). Assessment term for 100% petition projects shall be 5 years, Policy (5). Where the project cost of a storm sewer, sanitary sewer or watermain is not entirely attributable to the need for service to the area or where unusual conditions beyond the control of the owners of the property to be served would result in an inequitable distribution of special assessments, the City, through the use of other funds may pay such "city costs" which, in the opinion of the City Council, represents the excess costs not directly attributable to the area med. The City may determine that these costs benefit other areas and may.assess them at a futm date as a system cost. e TRUNK ASSESSMENTS Policy (6). It is the City's intent to recover the full cost of financing trunk system installations through a.program of fees, charges and assessmen@ against properties using or economically benefited by the utility system. Policy (7). Non-homesteaded properties shall be assessed the current acreage rate for trunk assessments as. adjusted from time to time to reflect actual utility construction costs ($4,9OO/acre in 2000). Homesteaded parcels shall be assessed $520.00 per lot. If the property is further developable, the acreage rate shall apply to the entire property with a $520.00 credit for the &st half acre.* Policy (8). Policy (9). The area to be benefited by sewer and water trunk system improvements will be . considered to be all properties which wiU be served by lateral facilities extended from the system. e. Policy (10). Trunk assessments are levied at time of determination of lateral benefit, the year in which subdivisioddevelopment approvals are granted by the City, or in accordance with special agreement with property owners. Policy (1 1). Although a number of properties in the City have been levied trunk assessments in the past, some artificial limits were applied to parcels if there was any doubt concerning developability of the property. It is the intent of the City to levy additional assessments against those portions of the properties not previously assessed either because of changes in the suitability for development or because of the transfer of density credits from marginal property to developable property. 100% PETITIONS Policy'(l2). Developer shall submit a cash advance equal to 5% of the estimated construction costs with.a 100% petition. This money will be utilized to offset expenses inch by the City should the project fail to proceed. The advance will be a credit against the final assessment. Policy (13). The 100% petition form contains a line item that suggests the estimated cost of the improvement. This information is usually generated by the developek's engineer. However, irregardless of the source of the information, the City makes no warrant as to its accuracy. e Policy (14). The method of spreading the assessable cost over property benefited in a 10096 pefition shall be either on a lot unit basis or an area basis - with input by the property owed developer. The City wiU not levy assessments against properties or portions of properties if the land appears to be marginal for development and the potential risk of tax forfeiture exists. Policy (15). Policy (16). Wherever possible during the development process, the City shall secure from the developer a signed special. assessment agreement whereby the property owner waives the right of appeal as to amount and method of computing the special assessment. IMPROVEMENT PROJECTS UTILIZING A FEASIBILITY STUDY Policy (17). Where the class of the property is uniform and the benefit is essentially equal from one property to another, a lot unit assessment will be utilized. Policy (18). Where the class of property varies andor the pa~!cels are large enough to support additional development, a front foot assessment will be utilized for street and utility assessments. a) For fully developed residential lots, an average front foot dimension shall be determined which generally represents the area divided by the depth of the parcel. b) For corner lots in a fully developed residential area subject to front foot assessments, the narrow dimension shall receive a full rate front foot assessment, while the long dimension shall generally receive an assessment equal to 15% of the full rate. Policy (19). Storm sewer, grading, sidewalks, curb and gutter, pavement and'mtoration shall generally be viewed as a category entitled "street improvements" and will be spread consistent with either the front footage or lot unit assessment method. In a complex or non-uniform benefit situation, the CilyEngineer shall recommend and the City Council may approve an alternate method. SUBTRUIWS /COLLECTOR STREETS Policy (20). 'Sanitary sewer lines that provide collector service for a local area, and also may function as a lateral for abutting properties, are defined as subtrunk lines. These lines are assessed to the benefited lands through either area or lot unit assessments, or a combination thereof. Portions of these subtrunk lines may qualify as City trunk lines as determined by the City Council. ' . Policy (21). Where a collector or arterial street provides service for a local area, these streets may be assessed to the benefited land through area, lot unit assessment, front footage or a combination thereof. CITY OWNED PROPEEN Policy (22). . Whm City property, such a park or a park shelter abuts an improvement project, the property shall be assessed as an equivalent single family residential parcel. . A high use facility, such as City Hall, Community Center, etc., would be analyzed at time of feasibility study for proper assessment benefit. Policy (23). Ih a situation where an area-wide street assessment might be applicable, City owned property shall be assessed a percentage of the applicable residential rate equal to: a) 28% for active parks (Round Lake, Miller, etc.) b) 19% for limited use parks (Riley Lake, etc.) c) 8% for neighborhood parks. Policy (24). Assessments will not be levied against such City property as street right-of-way, buffer strips, trails, or easement locations. The test for assessment shall be that the property will benefit from' striet improvement assessments as demonstrated by providing traffic access for use or have a need for lateral utilities for a utility project. Where a Cily parcel e&s as a speciflc benefit to the neighborhood, such as a storm water holding pond, the property shall be excluded from the assessment computations since it would not receive benefit due to street andor utility e improvements. DEFERMENTS Policy (25). The athhed Resolution 83-177 (Exhibit "A") and Ordinance 33- 83 (Exhibit "B") states the City's policy regarding deferments for senior citizens and/or disabled persons. The City of Eden Prairie will conform to the laws and policies as adopted by Henneph County and the State of Minnesota regarding the administration of Green Acres Deferments. Policy(26). Policy (27). Where a parcel of property is generally undeveloped, and an improvement is made that wiU enhance the value of the property, such as a subtrunk improvement adjacent to a 40 acre tract of land, the City shall grant homesteaded parcels a deferment of all but an equivalent single family assessment until the property develops. The original principal plus deferred interest shall be levied for the remaining years of the original assessment period at the original assessment rate, but not less than 5 years. Policy(28). In situations where homesteaded parcels are adjacent to local improvements and have developable acreages beyond the needs of a single family residential parcel for which the guide plan indicates a higher and better use or additional development is possible, the City shall levy an amount not to exceed the assessment limits provided . in Policy (30) of the total assessment and defer the balance with interest until the propexty is developed. At time of development, the original pMcipal plus accrued e interest shall be levied for a five-year period at the original interest rate. Policy (29). When an ehsting homesteaded parcel abuts a utility improvement and the parcel presently has a functional on-site sewer system and water system, the trunk assessment and lateral utility assessment shall be excluded from the assessment role for a period of five years or until.the year of connection whichever comes first. No intenst is added to this principal amount at the time of assessment. This benefit to the property owner is in recognition of expenses incurred to install the on-site systems. . ASSESS MENTms -. Policy (30). When a local street qd utility improvement project abuts a homesteaded single family redential parcel for which additional development is not expected, the maximum amount of the special assessment for street and lateral utilities shall be $19,600.00 for the year 2000. The exclusion policy would be applicable to these parcels. The City reserves the right to make additional assessments or impose a connection fee against the property if additional development occurs. This maximum amount of assessment will be'ind annmy in accordance with data published by the "Engineering News Record" Construction Cost Index (CCI). Policy (31). As per City Code Section 3.07 (Exhibit "C"), the City shall charge a connection fee to parcels which have not been previously assessed for utilities or participated in the original construction cost. The attached petition (Exhibit I'D'') allows for this connection fee to be assessed against the property when properly executed by the OWner. SPECIALSITU ATIONS The basic allocation schemes adopted by the City of Eden Prairie should fit most circumstances, but it should be recognized that some adjustments in assessments for special circumstances will probably be warranted. No method, or methods, even with special assessment adjustments will result in perfect allqtion according to benefit - but the fundamental objective is an equitable distribution of cost based on benefit. MISCELLANEOUS INFO FWATION The above policies are categorized for ease of reference. Any applicable policy will apply to an af€ected property or assessment irregardless of the heading under which it occurs. These policy statements do not include a specific written procedure for storm water special assessments. Because of the changing law in this area and the limited use of this funding mechanism, no policy is proposed. Feasibility studies-shall be the process to determine an on-going policy for storm water special assessments. The attached Exhibit "E"-represents a '2600'' esfimate of additional charges that a property owner would incur in order to make connection to sanitary sewer &d/m watermain improvements. This exhibit comes from information generally available from the Inspection Division. me estimated cost to connect the Service stub to the home &odd be clarified with a contractor experienced in the plumbiig business within the City of Eden Prairie. These figures are subject to change on an annualbasis. 0 These policies and statements are available for public review, however, they are specifically intended for use by.the City Staff and the City Council as a guideline to promote uniformity and equity in special assessments. Anyone reviewing these policies is encouraged to seek interpretations fiom the City Engineer, Djrector of Public Works or City Manager as necessary. EXHIBIT "A" Any homestead property with -an assessor's market value in excess .of $130,000 shall not qualify. • Assessments pending or levied against a %parcel prior to ownership by the applicant shall not be eligible for deferment. Ni t A hardship shall be determined to exist if the . total annual household incorbe.does.not exceed. the following limits:. • • • No: of Persons in Total Annual • lioudehold • ', • Into= •1 2 3 .4 a _. 6 .or over $ 13,700. $ 15,650 $.17,6C0 .$.19,550 r20,750 • $ 22,009 iisgerred interest :the rate provided .for 'e. ,particular assesszmnt shall be added. • to ;the . 'deferred aieessment., tilt not e.liceedi2'1g • tOt. of . •the originarinc:ioal amount of. 'Um assebsPatt. - • . • 6. Multiple dwelling. CP 1 'signed =la organized .for .retir.ement: 1 c1u'e5.ve1iy •shall- not be' .413.c4bl:e•• for difenm.iiii-e'inaless• :ertecif'ically'avithoriked 137 the. City..co*4.1. . . 2%• "disabled person" means. bay person wheee how:estead shap: quali.fy•es "Class icó property". • in .accordance ;with' Set:: 273.3:3, 4i.abd. . • thr-0 . the deferment . of .p.iymant of 'kpecial...ag'sessments and interest * thereon Snail termainete:,. and alL amounts* accumulated, 151u.s:applicable-•interest shall beOimgei du;.: Upon the .ocduxi-etice of any of the .following events: . . . . . . the . death *of the' owner of the homestead thlad the spouse is not othetwiee eligible. • • • it... 'T120 sale, transfer, or stbdivipion of ther.joroPerey or any part thereof. • .. , C. The property adses its. homesteed'status. • If. for any reason the City determines. that there would be no hardship to require immediate or partlil.paaiment. ADOPTED by the Baez; Prairie City tovncil on' the 1 9141 day of . 'July - , 1983. ...•/7. _ • . ,I/Or "411.,f , ,, 411 ATTEST: gall II : PenFell :Mayor. SEAL- p. *. .. . .. , EXHIBIT "B" SECTION 3.06. CONNECTION OR TAPPING PROHIBITED - DELINQUENT ASSESSMENTS OR CHARGES. No permit shall be granted to tap or connect with sewer or water mains when any assessment or connection charge for such sewer or water main against the property to be connected is in default or delinquent. If such assessment or connection charges are payable in installments, no permit shall be granted unless all installments then due and payable have been paid. SECTION 3.07. CONNECTION TO WATER AND SEWER SERVICES. Subd. 1. Certificate Required. Pursuant to the authority conferred by Minnesota Statutes 444.075,1990, in addition to all other charges for tapping into or connecting with the municipal sanitary sewer system or the municipal water system, including inspection of connection, street opening fees and permit fees heretofore established by City Code provisions or resolution, no connection permit shall be issued, nor shall any tap or other connection be installed, or made, with or into any municipal sanitary sewer or municipal water system of the City, either directly or indirectly, from any lot or tract of land unless the City Clerk shall have certified as follows: A. That the lot or tract of lapd to be served has been assessed for the cost of construction of the main with which . the connection is made, but this shall not include lots or pacts assessed under Subavision 5 hereof; If no assessment has been levied for such construction cost that proceedings for the levying of such assessment have been or will be commenced in due course, but this shall not include lots or tracts to be assessed under Subdivision hereof; or, B. C. That the cost of construction for the main has been paid by the developer or builder platting the lot or tract of land, but tliis shall not include lots or tracts served by the main which were not a part of that plat or tract developed. Subd. 2. Additional Connection Charges. If none of the above conditions can be cerlified by the City Clerk, no pennit to tap or &e connection to any sanitary sewer or water main shall be issued unless the applicant shall pay an additional connection fee. Such additional connection fee shall be charged for sanitary sewer and water main made available by agreement with other municipalities, counties or private corporations or individuals, as well as those owned and operated by the City itself. The additional connection fee shall be equal to the average assessment levied against like kind property for a similar public improvement constructed and installed by the City provided, however, for a connection to a residential property, the connection fee shall be equal to the average assessment levied against residential parcels of one-half acre or less. The average assessment shall be determined by taking the total assessment for a similar public improvement and dividing that total by the total number of properties assessed, such determination having regard for construction costs current on &e date of such determination. Whenever more than one (1) tap or other connection is requested for service to any lot or tract or whenever any tap or connection is requested for a lot or tract which has previously been part of a lot or tract for which a connection charge has already been imposed pursuant to this Subdivision, an additional charge shall be imposed for each tap or connection requested. Subd. 3. 'Separate Fund. Any sum collected and received by the City under Subdivision 2 shall be placed in a separate fund and shall be used first to pay the normal, reasonable and current costs of operating and maintaining the municipal sanitary sewer and municipal water system. Net revenues from time to time received in excess of such costs may be used as otherwise provided for by law. Subd. 4. Notice and Hearing. Before the City Manager or his designate makes a final determination of the additional connection fee under Subdivision 2, he shall cause a written notice to be sent to the property owner affected stating the amount of the proposed connection fee and the basis of its calculation. The notice shall also state that the owner may, within ten (10) days of receipt of the notice, demand a hearing on the matter. If the owner requests a hearing within that 3-6 time, a hearing shall be held on the matter by the Council within a reasonable time after the date on which the request is made. The notice shall further state that the owner may request that the charges be levied as an assessment against the lot or tract to be served and an application for such request shall be provided with the notice. The application shall be made within ten (10) days of receipt of the notice referred to above if no hearing is requested, or if a hearing is requested within ten (10) days following the hearing. If as a result of the hearing, the Council finds that the proposed connection fee complies with the requirements of Subdivision 2, it shall so determine. If it determines that the proposed fee is in excess of an amount that would have been assessed had the property been assessed, it shall make a determination of the proper amount of the fee with the limits specified in Subdivision 2. No connection shall be made without payment of the connection fee unless the fee is to be assessed pursuant to Subdivision 5. . Subd. 5. Assessments. Upon application by the owner waiving his right to notice, hearing and appeal, the Council may cause the connection fee to be levied as an assessment against the lot or tract to be served under the procedure authorized by law with reference to other assessments for benefits of local improvements. Subd. 6. Liability for Charge and Certification to County Auditor. All additional connection fees imposed pursuant to this Section, including those assessed pursuant to Subdivision 5, shall be a charge against the owner of the lot or tract of land to be served. The Deputy City Clerk shall certify all unpaid charges to the County Auditor with taxes against the lot or tract to be served for collection as other taxes are collected. .. Source: Ordinance No. 18-83 Effective Date: 6-17-83 (Sections 3.08 through 3.29, inclusive, reserved for future expansion.) 3-7 CITY OF EDEN PRAIRIE APPLICATION FOR ASSESSMENT OF ADDITIONAL CONNECTION CHARGES PURSUANT TO CITY CODE SECTION 3.07 Instructions: . Pursuant to the request for connection to the municipal sanitary sewer andor municipal water system, a fee is imposed pursuant to City Code Section 3.07, SUM. 2 as follows: Water Connection Sewer Connection If the owner wants the fee assessed against the property, complete this application pursuant to the enclosed notice and submit it to the Deputy City Clerk, City of Eden Prairie, 8080 Mitchell Road, Eden Prairie, Minnesota 55344. ' Owner's Name: Address: a street City State Zp Code Telephone No,: proDertv Address: street EXHIBIT "D" Connection RquesWk 0 Water Sewer The undersigned hereby que& that ths City of Eden Prairie assess against the property described above the additional connection charges determined pursuant to City Code Section 3.07. The undersigned understands that.the additional connection charges shall be a charge against the owner in addition to an assessment against the property. THE UNDERSIGNED CONSENTS TO THE LEVYING OF ASSESSMENTS ON ACCOUNT OF THE C0N”ION REQUESTED AND WAIVES NOTICE OF THE ASSESSMENT HEARING AT WHICH HEARING THE ASSESSMENT IS TO BE CONSIDERED BY THE CITY COUNCIL AND THEREAFTER APPROVED AND LEVIED. THE UNDERSIGNED WAIVES ALL NGHTS UNDER M.S.A. SEC. 429.081, 444.075 OR OTHERWISE TO CHALLENGE THE AMOUNT OR VALIDITY OF THE ASSESSMENTS OR THE PROCEDURES USED BY THE CfTy IN LEVYING THE ASSESSMENTS AND HEREBY FZXEASES.THE CITY, ITS OFFICEBS, AGENTS AND EMPLOYEES FROM ANY AND ALL LWBILXIY RELATED TO OR ARISING OUT OF THE. LEVYING OF THE ASSESSMENTS IN ACCORDANCE WITH THIS APPLICATION. Date: Owner Owner (All okers and spouses must sign application.) ESTIMATlb SERVICE CONNECTION COSTS SINGLE FAlbfILY RESIDENTIAL ' (3une,2000) After lateral utilites have been .installed in the-street and the services are extended to the property line in front of a single family hone, the cost to make the final connection is estimated as follows: PERMITFEES/CHARGES(REs IDENTIALONLYl (2000 rates) 1. Metro Sewer Access Charge $1,100.00 2.. City Sewer Access Charge $ 520.00 3. City Water Access Charge $1,940.00 4. Water Meter and Inspection Fee $ 193.50 5. Pressure Regulator Valve $ 41.50 ESTIMATED PLUMBING/SEWER INSTALLER COST 1.' To extend the service from the street right-of-way line (front property line) to the house is approximately $750 - $1,O00: This cost can vary widely depending on site conditions, 2. Approximately $200.00 to re-plumb the interior water system to the new service. This cost can also vq widely depending on the existing plumbmg configmation in the home and whether the existing well will be maintained. EXHIBIT "E"