CR 92-126 Assessing Projects Up-Front
o Why assess up-front?
The main reason that most cities assess projects up-front is to
reduce the city's liability exposure with respect to property
owners successfully appealing a project after it is completed.
Once a project is complete, and property owners assessments are
reduced and/or eliminated through the appeal process, the city is
left with project costs that they now have to fund. Past history
has shown that cities can be left with huge financial burdens
from this process.
Another reason that projects are assessed up-front is that it
gives property owners a guarantee that their assessment will be a
certain amount. Property owners can leave the assessment hearing
with the satisfaction of knowing exactly what their assessments
will be, eliminating some of the uncertainty of an assessment
project. They furthermore know that. the city is assuming the
risk if the project is to go over budget.
o How is the project contingency calculated?
Project contingency is a percentage of the construction bid that
is added to this cost to cover any costs exceeding the
construction bid or engineering contract. Typically, an 8-10%
contingency is used on most proj ects depending on the proj ect
amount, and environmental conditions of the project. Projects
with greater risk usually have slightly higher contingencies.
Past experience of Campbell project, and those experiences of
other cities have shown and 8-10% contingency usually ends up
very close to the final project cost.
o What were the end results of assessing the Campbell project up-
front?
Attached are two project summaries for Project 90-20 and 90-23
detailing the costs associated with each project. The summaries
clearly point out that one project is over the assessed amount,
and the other proj ect is under the assessed amount. However,
when adding the projects together the assessable portions almost
equal the actual cost indicating that the contingency amount in
the projects were very close to being exact.
o How do other cities assess projects?
Attached is a summary of a telephone survey that was conducted
over the last two weeks. The survey points out that of the 21
cities contacted 14 assess projects after they have been
completed, and seven have assessed projects up-front to a certain
degree.
Alternatives
o Council could continue the current practice of assessing
street proj ects up-front as recommended by staff. This
practice would limit the city's liability exposure but may
keep the city open for criticism.
o council could continue the current practice of assessing
street projects up-front but include a provision that the
projects have to be over a certain dollar amount before this
occurs.
o Council could determine that they would like to revert back
to the old method of assessing all projects after they are
completed. This alternative would address some of the
concerns the city recently received and also increase the
city's liability exposure.
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PROJECT 90-20
Campbell Neighborhood
street Costs - Assessable Portion
TYt>e of Work
*Contract Amount
Actual Cost
Const. - GMH **155,819.00
Const. - Killmer Electric
Const. - Resident driveway credit
Engr. - Westwood 23,084.00
Engr. - Braun
Engr. - GME Consultants
Engr. - Westwood (est. additional
cost to close project)
Engr. - GME Consultants (est.
additional cost to close
project)
132,980.55
8,068.94
162.80
37,460.94
1,156.40
1,777.57
1,000.00
750.00
Subtotal 178,903.00 183,357.20
Legal, Financial, Admin. 9,989.43 9,602.44
(6.8% of const.)
Total Improvement Cost 188,892.43 192,959.64
70% Resident Share Assessable ***132,224.70 135,071.75
*Basis for assessment roll
**Includes $11,542 contingency (8%)
***Assessment roll amount adopted
E/JG05202A/3
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PROJECT 90-20
Campbell Neighborhood
Enqineerinq Related:
Westwood Professional Services
Braun Engineering
GME Consultants
*51,316.35
1,156.40
1,777.57
Construction Related:
Killmer Electric
Resident driveway credit
GMH (street bid items only) as of 11/25/91
8,068.94
162.80
132,980.55
*Westwood invoices are split:
70% share to Campbell Neighborhood 90-20
30% share to Campbell Drive 90-23
Street construction portion of engineering = 73% = $37,460.94
E/JG05202A/4
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PROJECT 90-23
campbell Drive
. street Costs - Assessable Portion
type of Work
const. - GMH
Engr - Westwood
Engr - GME Consultants
engr - Westwood (est.
additional cost to
close project)
Engr - GME Consultants
(est. additional cost
to close project)
*Contract Amount
**71,080.00
10,530.00
Subtotal
81,610.00
Legal, Financial, Admin
(6.8% of const.)
4,618.57
Total Improvement Cost
86,228.57
}(H; Resident Share Assessable ***60,360.00
I
*Basis for assessment roll
k*Includes $5,265.50 contingency (8%)
k**Assessment roll amount adopted
I~/ JGG ~2 02A/ 1
Actual Cost
63,425.69
11,403.94
1,000.38
450.00
350.00
76,630.01
4,312.95
80,942.96
56,660.07
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PROJECT 90-23
campbell Drive
Enqineerinq Related:
Westwood Professional Services
GME Consultants
*19,006.56
1,000.38
Construction Related:
GMH (Street bid items only) as of 11/25/91
63,425.69
*Westwood invoices are split:
70% share to Campbell Neighborhood 90-20
30% share to Campbell Drive 90-23
street construction portion of engineering = 60% = $11,403.94
E/JG05202A/2
Campbell Addition streets, City Project 90-20
Estimated Project Costs
street
Construction bid (GMH Asphalt Corp)
8% contingency
$144,277.00
.' 11. 542 . 00
$155,819.00
Estimated construction cost
Engineering:
Design and construction phase -
16% of construction bid
23,084.00
Legal, financing, administration -
6.8% of total estimated construction
Bonds 2.0%
Engineer Admin. 2.5%
Finance Admin. 1.8%
Legal 0.5%
6.8%
9,989.43
Total Improvement
$188,892.43
Costs to be Assessed:
70% Resident Share $132,224.70
Assessable footage = 3,832.6 feet
Assessment rate = $132.224.70 = $34.50/front foot
3,832.6
storm Sewer
Construction bid (GMH Asphalt Corp.)
8% Contingency
$ 44,089.55
3,527.45
$ 47,617.00
7,054.33
$ 54,671.33
Estimated construction cost
Design/construction Engineering -
16% of construction bid
Total (100% City participation)
sanitary Sewer & Water
Estimated construction cost
$ 8,679.00
694.00
$ 9,373.00
1.388.00
$ 10,761.00,
Construction bid
8% contingency
Design/construction Engineering -
16% of construction bid
Total (100% city participation)
Cities That Do Not Assess Improvement Projects Up-Front
,
1. Apple Valley
2. Blaine
3. Bloomington - Except on a couple of very small street modification projects
where they petitioned and waived rights to a hearing.
4. Brooklyn Center
5. Burnsville
6. Chanhassen
7. Columbia Beights
8. Coon Rapids - Haven't done it. Thinking of it for one state aid project.
9. Crystal
10. Eden Prairie
11. Edina
12. Fridley
13. Golden Valley
14. Plymouth
Cities That Have Assessed Improvement Projects Up-Front
1. Andover
2. Brooklyn Park
3. Champlin
4. Maplewood
5. Minnetonka
6. Minnetrista
70 Richfield