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IV.3. Resolution Establishing Legislative Policy 8-K – Green Infrastructure Special Assessment Policy; Larson CITY OF HOPKINS City Council Report 2024-151 To: Honorable Mayor and Council Members Mike Mornson, City Manager From: Mikala Larson, Sustainability Specialist Date: December 17, 2024 Subject: Establishing Legislative Policy 8-K – Green Infrastructure Special Assessment Policy _____________________________________________________________________ RECOMMENDED ACTION MOTION TO adopt Resolution 2024-072 establishing Legislative Policy 8-K – Green Infrastructure Special Assessment Policy. OVERVIEW The City of Hopkins 2024 Strategic Plan identifies the priority of developing a green infrastructure special assessment policy. City Council reviewed the topic at the October 15, 2024 meeting. Minnesota State Statute 429.021 allows the City to establish a policy for assessing the cost of energy-related improvements to private property. This creates a new financing option for property owners to complete voluntary energy improvements at existing commercial and multifamily buildings in Hopkins. Per Minnesota State Statute, eligible projects include improvements to heating, ventilation, and air conditioning equipment, building envelope, and for the installation of renewable energy systems. Staff anticipates special assessments will address energy improvement projects between $10,000 and $60,000; above that amount, funding mechanisms like Property Assessed Clean Energy (PACE) financing are often available, and below that amount, funding mechanisms including Center for Energy and Environment loans and Hopkins Climate Solutions Fund rebates are often available. The new program would fill a gap in financing options for these types of projects. Initial funding for the green infrastructure special assessment policy is anticipated to come from unencumbered 2024 Hopkins Climate Solutions Fund budget, approximately $50,000. For projects that are specially assessed, staff proposes a 4% interest rate and payback term options of 5 years, 10 years, or 15 years. SUPPORTING INFORMATION • Resolution 2024-072 • Legislative Policy 8-K – Green Infrastructure Special Assessment Policy Engineering CITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION 2024-072 ESTABLISHING LEGISLATIVE POLICY 8-K – GREEN INFRASTRUCTURE SPECIAL ASSESSMENT POLICY WHEREAS, the City Council of the City of Hopkins has approved a document entitled the Legislative Policy Manual to provide uniform guidelines on City policies so that actions taken are consistent and fair; and WHEREAS, the City Council has created Legislative Policy 8-K in order to allow the City to specially assess the cost of energy improvement projects; and NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Hopkins hereby adopts the establishment to Legislative Policy 8-K Green Infrastructure Special Assessment Policy as proposed in Council Report 2024-151. Adopted by the City Council of the City of Hopkins this 17th day of December, 2024. By:___________________________ Patrick Hanlon, Mayor ATTEST: _______________________________ Amy Domeier, City Clerk Legislative Policy Manual -- Chapter 8 LEGISLATIVE POLICY MANUAL CHAPTER VIII Policy 8-A Requests for Traffic Controls Policy 8-B Roadway Improvements Policy 8-C Other Local Improvements Policy 8-D Solid Waste Collection Policy 8-E Storm Water Utility Credits and/or Adjustments Policy 8-F Snow and Ice Control Policy 8-G Sidewalk Repair and Maintenance Policy 8-H Street Restoration Reimbursement for Private Utility Repairs Policy 8-I Complete Street Policy Policy 8-J Small Wireless Facility Design and Aesthetic Requirements Policy 8-K Green Infrastructure Special Assessment Policy Revised: April 2019 Legislative Policy Manual -- Chapter 8-K 1 POLICY 8-K GREEN INFRASTRUCTURE SPECIAL ASSESSMENT POLICY 1. PURPOSE 1.01 This policy allows property owners to petition the City to assess the costs to install energy improvements in existing buildings. Petitions for a green infrastructure special assessment shall be reviewed in accordance with state law and this policy. 1.02 The City shall have the option of amending or waiving sections of this policy when determined necessary or appropriate. 2. AUTHORITY 2.01 The City of Hopkins has the authority to assess for voluntary energy improvement projects under Minnesota Statutes, Section 429.021. 3. ELIGIBILITY REQUIREMENTS 3.01 The City may authorize the assessment of the energy improvement if the City determines it is in the best interest of the community and if the following conditions are met: a) For energy improvement projects on residential property, only residential property having five or more units may obtain financing for projects under this clause. b) Assessment is for the construction, reconstruction, alteration, extension, operation, maintenance, and promotion of energy improvement projects in existing buildings. c) Eligible energy systems are heating, ventilation, and air conditioning equipment, building envelope and renewable energy systems. 4. PETITION 4.01 The petition must meet the requirements of Minnesota Statutes, Section 429.021 as they apply to energy improvements. The petition shall be submitted to the City of Hopkins in writing and the petition submission shall include the following items: a) Description of project and estimated costs, b) Cost estimate from three (3) qualified companies (licensed by the State of Minnesota), and c) Written statement that the owner(s) shall be responsible for contracting for the actual installation and proper operation of the improvement, and d) Written statement that all appropriate permits will be obtained, and e) Petitioner(s) must waive all rights to the public hearing and any appeal of the special assessment adopted by the City Council, and f) Signatures of all property owners. Legislative Policy Manual -- Chapter 8-K 2 4.02 Each property owner petitioning for the improvement must receive notice that free or low- cost energy improvements may be available under federal, state, or utility programs. 4.03 All petitions for the special assessment of the project must be received and acted upon by the City Council prior to the start of any improvement. The City shall not approve the petition until it has reviewed and approved the plans, specifications, and cost estimates contained in the petition. 4.04 Consideration of any petition made under this policy is subject to a determination by the City Council, in its sole discretion, that sufficient City funds are available for the project. City staff will periodically advise the Council with regard to the availability of appropriate funds. 5. COSTS TO BE ASSESSED 5.01 The amount to be specially assessed shall not exceed the amount of the construction estimate, plus any City administrative or interest charges. The petitioner shall be responsible for any construction costs exceeding the amount of the construction estimate. 5.02 The administrative fee for processing the energy improvement assessment application shall be set in the City’s fee schedule. 5.03 If the petitioner requests the abandonment of the special assessment project, all City costs incurred shall be reimbursed by the petitioner. 6. PAYMENT OF ASSESSMENTS 6.01 No payment shall be made by the City for any installation until the work is completed and finally approved by the City and the assessment has been adopted. 6.02 If the petitioner requests the abandonment of the special assessment project, all City costs incurred shall be reimbursed by the petitioner.