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CR 2012-145 Revise Legislative Policy 8-B, Roadway Improvements-4m December 18, 2012 City Of Hopki S Council Report 2012-145 REVISE LEGISLATIVE POLICY 8-11 ROADWAY IMPROVEMENTS Proposed Action Staff recommends approval of the following motion: Move that the Hopkins City Council adopt Resolution 2012-094 revising Legislative Policy 8-B, Roadwa�Improvements. Approval of this motion will revise Policy 8-13 by adding section 12 regarding the methodology for establishing the interest rate on assessments. Overview The current Legislative Policy 813 which sets forth roadway improvements, the specific components of the project that are subject to assessments, the assessment percentage of the project, and assessment caps does not address the interest rate on the assessment. In the past the interest rate has been set by resolution with each assessment roll. Recently we have received questions from the public on how the interest rate is established. While we monitor the market rate and adjust the interest rate in response to the market we did not have a set formula for determining the interest rate. In surveying other cities many of them set the assessment interest rate at a percentage above the True Interest Cost (TIC) of the bonds sold to finance the project. The rates are anywhere between P/z to 2% above TIC. This allows the interest rate to fluctuate with the market but in no instance will the interest rate be more that the statutory maximum of 7%. Setting the interest rate on assessments at 2% above TIC allows for delinquencies on assessments and assures that adequate funds are available to retire debt sold for the project. Primary Issues to Consider • Setting a clear methodology for establishing the interest rate of each assessment roll that is consistent with each assessment. Staff Recommendation • Staff recommends setting the interest rate on assessments at 2% above TIC. This allows for potential delinquencies on assessments and assures that adequate funds are available to retire debt sold for the project. Supporting Documents • Resolution 2012-094 • Policy 8-13, Revised Christine M. Harkess, CPA, CGFM Finance Director Financial Impact: $ none Budgeted: Y/N _ N Source: Related Documents (CIP, ERP, etc.): Notes: City of Hopkins Hennepin County, Minnesota RESOLUTION NO. 2012-094 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 established Legislative Policy 8-B in order to establish procedures for Roadway Improvements and related assessments and WHEREAS, the City Council has determined that the existing policy needs to be revised in order to address the interest rate to be charged on assessments, NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Hopkins hereby adopts the revised Legislative Policy 8B. Adopted by the City Council of the City of Hopkins this 18'h day of December 2012. IM ATTEST: Kristine A. Luedke, City Clerk Gene Maxwell, Mayor POLICY &B ROADWAYIMPROVEMENTS INDEX 1. PURPOSE 2. GENERAL 3. DEFINITIONS 4. STATE HIGHWAYS 5. COUNTY ROADS 6. MUNICIPAL STATE AID STREETS 7. MAJOR STREETS 8. LOCAL STREETS 9. ALLEYS 10. ASSESSMENT POLICIES 11. ASSESSMENT FORMULAS Legislative Policy Manual -- Chapter 8-B 1. PURPOSE 1.01 The purpose of these policies is to establish guidelines and procedures for the improvement of roadways within the City of Hopkins. 2. GENERAL 2.01 This policy relates to roadway improvements eligible to be assessed under authorization of Minnesota State Statutes Chapter 429.021. 2.02 Assessable roadway improvement projects shall conform with the procedural requirements of Chapter 429 which generally are as follows: 1. Project Initiation by Petition or Council Resolution 2. Resolution Ordering Preparation of Engineers Report 3. Resolution Approving Engineers Report & Ordering a Hearing 4. Publication and Individual Notification of Hearing 5. Public Hearing 6. Resolution Ordering Improvement 7. Resolution Ordering the Preparation of Assessment Roll 8. Public Notice of Hearing on Assessments 9. Assessment Hearing 10. Resolution Adopting Assessment Roll 11. Filing of Assessments with Hennepin County 2.03 In addition to special assessments, other sources of funds are available to the City for street purposes depending on the type of project involved. 3. DEFINITIONS 3.01 The City of Hopkins contains various types of roadways. Descriptions of the City's street classifications are outlined as follows: State Highways This category includes highways with various designs and traffic capacities. Rights of way are from 150' to 400'. These highways are intended for national or regional service. All of the highways in this category have been designated as principle, intermediate, or minor arterials by the Metropolitan Council. Thoroughfares These are important traffic routes which provide community continuity and interconnect the City with neighboring communities. They are usually spaced at one mile intervals, although they may be closer in more heavily developed areas. When upgraded these roadways will generally have 100' rights-of- way and be of sufficient design to handle anticipated traffic. Collectors Streets which are designed to collect traffic from individual properties and feed into thoroughfares. They have 60-80' rights-of- way with 7 or 9 ton capacity and are generally spaced at one-half mile intervals. Local Relatively short streets which provide access to individual lots in interior areas of development. Minimum right of way is 50-60'. Cul-de-sac Dead-end streets usually designed with a maximum length of 500' Legislative Policy Manual -- Chapter 8-13 and a turnaround area of 120' diameter at the property line. They generally are constructed in interior residential developments. Service Road Streets which run parallel and adjacent to a high volume roadway. They are designed to serve individual properties along streets where it is desirable to control access. Alley Roadways which are generally 12-20 feet in right-of-way width which service properties on the rear property line. 4. STATE HIGHWAYS 4.01 The State Highways within the City of Hopkins are Highway No. 7 and Highway No. 169. State highway projects generally do not directly involve city funds. However, associated improvements such as storm sewer or water trunks may be initiated so that future construction under these highways will not be needed. 5. COUNTY ROADS 5.01 The county roads in Hopkins are: Blake Road (#20) Excelsior Avenue (#3) Hopkins Crossroad (#73) Minnetonka Boulevard (#5) Shady Oak Road (#61) 5.02 These roads were originally designed as part of the county's highway system and were meant to link rural areas with the urban centers. As Hopkins developed, these roads have become an important part of the network of city streets. However many of these county roads need to be upgraded in order to facilitate present and future traffic demand. Since this type of improvement is needed in part because of increased urban use it has been the county policy to share the cost of the project with the city. Costs shared in this manner include: 1. Curb and Gutter 2. Traffic Controls 3. Storm Drainage 5.03 Payment of the City portion of projects may be assessed and/or paid by City funds. 6. MUNICIPAL STATE AID STREETS 6.01 Recent regulations allow a municipality to designate up to 20% of its existing street mileage, excluding county state aid highways and state trunk highways as MSA streets. The City of Hopkins currently has approximately 9.0 miles designated as MSA streets. The City receives MSA funds on an annual basis and are allotted for maintenance and construction of MSA streets. This money is part of the gasoline tax collected in Minnesota and is apportioned to the community according to state guidelines based on population and road needs. Maintenance funds are sent automatically to the City each year while the construction funds are held in an account by the state until the time construction contracts are awarded. Legislative Policy Manual -- Chapter 8-B 6.02 The following are MSA streets: Street From To Mainstreet Co. Rd. #61 5th Ave. (Shady Oak Rd.) St. Louis St County Road #3 Tyler Ave. No. (Excelsior Blvd.) Tyler Ave. No. St. Louis Street 2nd St. N.E. 1 st St. No. 8th Avenue 12th Avenue. 1 st St. So. 1 1 th Ave. So. 8th Ave. So. 5th St. So. 16th Ave. So. 11 th Ave. So. 5th St. So. 10th Ave. So. State Highway No. 169 6th St. So. 11 th Ave. So. 10th Ave. So. 7th St. So. 9th Ave. So. Alley W of 14th Ave. So. Oakridge Rd. City Limits State Highway No. 7 5th Ave. No. State Highway No. 7 Mainstreet 5th Ave. So. Mainstreet 3rd St. So. 6th Ave. So. 3rd Street So. 5th St. So. 8th Ave. No. 1 st St. No. Mainstreet 8th Ave. So. Mainstreet Co. Rd. #3 11th Ave. No. 1 st Street No. Mainstreet 11th Ave. So. Mainstreet Smetana Rd. 12th Ave. No. State Highway No. 7 1 st St. No. 17th Ave. No. State Highway No. 7 Mainstreet 17th Ave. So. Mainstreet Co. Rd. #3 Smetana Rd. West City Limits .38 Mi. E of 1 1 th Ave. So. Minnetonka Mills Road 5th Avenue North Washington Avenue 2nd Street North Washington Avenue Tyler Avenue North Blake Road Excelsior Boulevard South City Limits 6.03 It is not the intent of the State Aid Funding Program to totally finance the MSA system. Rather, it is designed to assist communities with street construction projects in an effort to improve the roadway system state wide. Therefore, when an MSA street is constructed or upgraded, assessments will be levied in accordance with the policies for major streets. The assessment rate will reflect the benefit conveyed by the improved design, additional width, and curb and gutter, and these rates will be set by the City Council on recommendation of the Public Works Director. 7. MAJOR STREETS 7.01 Major streets are considered by the City of Hopkins to be collector and thoroughfare streets. Streets of this variety generally service local traffic as well as traffic from other areas and therefore are designed in accordance with standards of a higher road capacity. Major streets within the City of Hopkins are constructed with a minimum capacity of 9 ton per axle. The primary source of funding for major roadways is special assessments and MSA funds. 7.02 Major new and reconstructed streets shall be constructed with curb and gutter. Street width shall be determined by existing conditions, traffic counts and patterns, and, if applicable, MSA standards. Legislative Policy Manual -- Chapter 8-13 4 8. LOCAL STREETS 8.01 Local Streets are generally streets which service a small area and do not typically involve a movement of traffic between areas. Local streets typically connect two collector streets or county roads. Streets of this type include local streets, cul-de-sacs, and service roads. Local streets within the City of Hopkins are constructed with a minimum capacity of 7 tons per axle. The primary source of funding of local streets is special assessments. 8.02 New local streets shall be constructed with curb and gutter. When reconstructing streets concrete curb and gutter shall be installed in the following instances: 1. All streets with existing concrete curb and gutter or existing vertical asphalt curb. 2. All Municipal State Aid streets Local streets without curb and gutter in a defined residential area where the predominance of existing streets have concrete curb and gutter 4. Other local streets without curb and gutter unless the neighborhood presents a petition of 55% or more of the affected residents objecting to concrete curb and gutter. The affected residents or affected area will be defined by City Council. If a petition is presented, the street shall be reconstructed in such a way that the current design/appearance of the street (prior to reconstruction) is maintained. Once a petition from the affected residents is certified and accepted by City Council, that petition will remain in effect for the affected area until City Council rescinds the petition or changes this legislative policy. If a petition of 55% is not presented to City Council and the local streets are reconstructed with curb and gutter, subsequent street reconstruction in the same affected area will also be reconstructed with curb and gutter. 8.03 New local street minimum unobstructed street width, (face to face of curb) is 30 feet. The standard unobstructed street width for reconstructed streets shall be 26 feet. Streets which do not meet this requirement shall be reconstructed at current width (unless a wider street is desired by the affected residents) but not less than twenty feet (20') unless the Council finds that: A twenty foot (20') width would adversely affect trees or other significant or desirable physical features: and A reduced width would not constitute a distinct hazard to life or property. Factors to be considered shall include, but not be limited to, safe access of emergency vehicles, snow storage requirements, availability of parking, and aesthetics. 8.04 Streets which are twenty-six feet (26) or more in width will have parking allowed on both sides. Streets less than twenty-six feet (26) in width may be subject to parking restrictions on an "as needed" basis. Parking restrictions could be established at the time of street projects or at any future date based upon general City parking requirements. Factors to be considered shall include, but not be limited to, staff report regarding safety and emergency vehicles access and neighborhood input. Where streets are less than twenty-six feet (26) in width, the staff shall assist the neighborhood in identifying areas where existing street width can be increased to provide additional parking. Legislative Policy Manual -- Chapter 8-B 9. ALLEYS 9.01 Alleys are minor roadways which service parcels of property along the rear property line. The primary source of funding of alleys is special assessments. 9.02 All alleys shall be concrete construction. Alley width is generally 10 feet in residential areas and 12 feet in commercial areas. 10. ASSESSMENT POLICIES 10.01 When assessments are levied for roadway improvements, the assessment will be calculated in accordance with the formulas set forth in the section on Assessment Formulas, using either the adjusted front foot method or per lot unit method. The adjusted front foot method will be used for assessment purposes unless the per lot/unit method is requested by petition by at least 55% of the assessed property owners and/or it is determined that the affected lots have received equal benefits. The City Council shall have fmal authority on the type of formula to be used. 10.02 The total project cost for streets constructed or reconstructed in any given project shall be equal to the actual construction cost, plus associated costs such as legal, bonds, administrative and engineering. 10.03 When the city CONSTRUCTS A NEW LOCAL OR MAJOR STREET, 100% of the total project cost, including all utilities, will be recovered by assessing the benefiting property for actual benefit received. A new street shall be defined as a roadway including curb and gutter which had not previously existed. 10.04 When the city RECONSTRUCTS AN EXISTING LOCAL OR MAJOR STREET, 70% of the total project cost will be recovered by assessing the benefiting property for benefit received. The remaining 30% shall be absorbed by the city. A reconstructed street shall be defined as a roadway which existed previously. The addition of curb and gutter when it did not previously exist is still considered reconstruction. 10.05 When the city CONSTRUCTS OR RECONSTRUCTS AN ALLEY, 80% of the total project cost will be recovered by assessing the benefiting property for benefit received. The remaining 20% shall be absorbed by the city. 10.06 When major street construction or reconstruction is partially financed by State Aid Funds to improve the design and capacity, the adjoining properties will be charged an assessment based on the cost of an average street construction. The remainder to be paid by State Aid Funds or General Funds. 10.07 The following assessment policies will apply for existing single family property when a major street is improved: 1. Existing single family residential property abutting two or four lane divided median roads will be assessed using the adjusted front footage method, based on 1/4 of the cost of a standard local street as if built at the time of the assessment. 2. Existing single family residential property abutting two or four lane undivided roads will be assessed using the adjusted front footage method, based on 1/2 of the cost of a standard local street as if built at the time of the assessment. 10.08 Lots which are split subsequent to a roadway improvement project shall be assessed as if in existence at the time the assessment was adopted, using the formula used at the time of assessment plus interest as per current City policy fi•arn date of assessment. Legislative Policy Manual -- Chapter 8-13 10.09 The following items are to be assessable as part of a reconstruction project cost: 1. Remove concrete curb and gutter 2. Remove concrete pavement 3. Remove/replace concrete steps 4. Construct and reinforce concrete steps 5. Remove concrete driveway pavement 6. Remove/construct apron 6" thick concrete pavement (residential) 7. Remove/construct apron 8" thick concrete pavement (commercial) 8. Common excavation 9. Core excavation 10. Construct concrete C & G Design B-618 or surmountable 11. Saw joint in concrete 12. Adjust manholes 13. Adjust catch basin 14. Adjust gate valves 15. Retaining wall 16. Electric conduit 17. Construct 4'x 8" thick valley cone gutter 18. Surfacing aggr. Cl. 2 100% crushed 19. Cultured sod with 4" thick topsoil in place 20. Clearing 21. Grubbing 22. Aggregate backfill 23. Replacement of driveway aprons 24. Construct concrete pedestrian ramps 25. Full -depth asphalt milling and overlay 26. Pavement reclamation 10.10 The following items would not be included in a reconstruction project cost. The items will be billed directly or assessed to the benefited property: 1. Sewer and water service line repairs 2. Random 6-8" concrete pavement 3. Random concrete sidewalk 4. Random sod 10.11 The following items will be paid at city expense when part of a reconstruction project: 1. Remove, replace or relocate hydrants 2. Install hydrants and/or gate valves 3. Sanitary sewer and water mains repair and replacement 4. Storm sewer reconstruction or construction 11. ASSESSMENT FORMULAS 11.01 The adjusted front foot method of assessment uses the actual frontage or adjusts lots to an average frontage by using area ratios or the average lot frontage in the project area. When the adjusted front foot method is used, the individual lot assessment shall be calculated as follows: Assessment = Total Project Cost X Total Adjusted Front Footage Assessable Adjusted Front Footage of Lot Legislative Policy Manual -- Chapter 8-B 7 11.02 The per lot/unit method of assessment is intended to simplify the assessment process by assuming that all properties to be assessed will receive equal benefits. When the per lot/unit method is used, the individual lot assessment shall be calculated as follows: Assessment = Total Project Cost Number of Lots 11.03 The adjusted front foot is calculated using the following methods: 1. In the RECTANGULAR BLOCK AREAS of the city the adjusted front footage for street or alley construction is the actual footage of the lot abutting the improvement. Side streets in these areas are assessed to the entire block on an adjusted front foot basis. See Figure A. East-West alleys, north or south of Mainstreet are assessed 7 feet to Mainstreet properties and 5 feet to the balance of the block on an adjusted front foot basis. 2. In the ODD -SHAPE LOT AREAS the following methods are used: a. In areas where the MAJORITY of lots are odd -shaped, the adjusted front footage of a lot is determined as follows: Adjusted Front Footage = Area of Lot Project Total Area X Centerline of Assessable Footage Lots Adjusted front footage minimum is 100 feet and maximum is 150 feet using this method. b. In areas where the MINORITY of lots are odd -shaped, the adjusted front footage for the odd -shaped lots is determined by the average actual front footage of the rectangular lots assessed. Adjusted front footage maximum is 150 feet using this method. 11.04 Assessment Caps 1. Maximum per foot assessment. The maximum per foot assessment amount to single family residential properties (single unit or duplex unit) may not exceed 120% of the average per foot assessment on the previous three similar street reconstruction projects. This cap applies only to total street reconstruction costs (public improvements) and the associated assessments. It does not apply to partial reconstruction, i.e. curb replacement and asphalt overlay or full -depth milling/overlay or other assessable roadway improvements. The cost of special neighborhood requests which are non-standard construction items are excluded when comparing the current project assessment to the assessment cap amount. The project feasibility report will include the per foot assessment cap amount. 2. Multiple Assessments. There shall be a maximum of two (2) concurrent special assessments for street or alley improvement to any single family residential properties (single unit or duplex unit) within any 10 -year period. Volunteer assessment, i.e. assessments petitioned by property owners, do not apply to the maximum. Assessments created by road/alley construction or reconstruction deemed as emergency work by the City Council do not apply to the maximum. Legislative Policy Manual -- Chapter 8-13 8 11.05 In certain unusual cases assessments may be determined by a "fair" comparison to other assessed property. This will be determined by the Engineering Division of Public Works and can be appealed to the City Council. 12. ASSESSMENT INTEREST RATE 12.01 Following approval of the assessment roll by the City Council, assessments not paid within the timeframe established by the City Council plus 30 days shall bear interest at 2% over the True Interest Cost (TIC) of the bonds sold to finance the project. 12.02 If bonds are not sold in a timely enough fashion to establish the TIC, the assessments shall bear interest at 2% over the anticipated TIC of the bonds sold to finance the project. Established 11/03/87 Revised 04/15/97 Revised 12/15/1998 Revised 04/20/2004 Revised 12/18/2012 City of Hopkins Legislative Policy Manual -- Chapter 8-B FIGURE A ASSESSING POLICIES FOR IMPROVEMENTS IN RECTANGULAR BLOCK AREAS Improvements in this block _ assessed to abutting properties on the basis of adjusted front footage Improvements on side streets assessed to abutting blocks on the basis of adjusted front footage Legislative Policy Manual -- Chapter R -B 10