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RES 2021-23 Policy - Special Assessments (Res)CITY OF OTSEGO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO: 2021-23 ADOPTING A PUBLIC IMPROVEMENT ASSESSMENT POLICY WHEREAS, the City previously adopted a Public Improvement Assessment Policy on January 28, 2013; and WHEREAS, the City Council has met to discuss and review the Public Improvement Assessment Policy; and WHEREAS, the City Council has determined that the Public Improvement Assessment Policy shall be in force and effect upon the date of adoption of this resolution. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA: 1. That the Public Improvement Assessment Policy as attached hereto is hereby adopted effective immediately. ADOPTED by the Otsego City Council this 22nd day of March, 2021. MOTION BY: Darkenwald SECONDED BY: Moores INFAVOR: Stockamp, Dahl, Darkenwald, Goede, and Moores OPPOSED: none CITY OF OTSEGO Jessica L. Stockamp, ATTEST: CITY OF OTSEGO PUBLIC IMPROVEMENT ASSESSMENT POLICY Section 1: Purpose 2 Policies Related to Financing Public Improvements 3: Methods of Assessment 4: Standards for Public Improvement Projects 5: Policies of Reassessment 6: Assessment Computations 7 Amendment SECTION 1: PURPOSE. A. The purpose of this policy is to establish a fair and equitable manner of assessing the increase in market value (special benefit) associated with public improvements. B. It is important to recognize that the actual cost of extending an improvement past a particular parcel is not the controlling factor in determining the amount to be assessed. However, in most cases the method for assigning the value of the benefit received by the improvement, and therefore the amount to be assessed, shall be the cost of providing the improvement. This shall be true provided the cost does not demonstrably exceed the increase in the market value of the property being assessed. The entire project shall be considered as a whole for the purpose of calculating and computing an assessment rate. In the event city staff has doubt as to whether or not the costs of the project may exceed the special benefits to the property, the City Council may obtain such appraisals or other market value information as may be necessary to support the proposed assessment. C. This policy is intended to serve as a guide for a systematic assessment process in the City; there may be exceptions to the policy or unique circumstances or situations which may require special consideration and discretion by the City Council. SECTION 2: POLICIES RELATED TO FINANCING OF PUBLIC IMPROVEMENTS. A. The City encourages public improvement projects as the area(s) benefiting and needing such improvements develop. 1. This policy is evident in the implementation of the Comprehensive Plan, the Subdivision Ordinance, the Zoning Ordinance, and Building Code 1 whereby developers are required to provide the needed improvements and services before development occurs to avoid premature development that results in unexpected hardships on the property owners purchasing such property and the general public. 2. It is further recognized that certain areas of the City have developed without all needed public improvements (e.g, parks, water, sewer, and street improvements) and that methods must be found to provide these improvements without causing undue hardships on the general public or the individual property owner. B. Special assessments are generally accepted as a means by which areas can obtain improvements or services; however, the method of financing these is a critical factor to both the City and the property owner. Full project costs spread over a very short term can cause an undue hardship on the property owner and, likewise, City costs and systems costs spread over a long period of time can produce and undue hardship on the general public of the City. C. It is the policy of the City to not defer assessments except in cases where hardship to senior citizens sixty five (65) years of age or older or persons retired by virtue of a permanent and total disability would result. Also, the City Council may elect to defer assessments on undeveloped land for a specified length of time or until the lands are developed. Terms and conditions of any such deferral will be established in the resolution adopting the assessments. D. The City will charge interest on special assessments at a rate as set forth by the City Code and adopted in the resolution approving the assessment roll SECTION 3: METHODS OF ASSESSMENT. A. There are different possible methods of assessment: per lot, adjusted front foot, and area. The feasibility report will recommend one or a combination of these methods for each project, based upon which method or combination of methods would best reflect the benefit received for the area to be assessed. The City Council, at its discretion, will select the preferred method of calculating the assessments at the time the project is ordered. B. The following methods of assessment, as described and defined below, are hereby established as methods of assessment in the City. 1. "Adjusted Front Footage" Method of Assessment. a. The "cost per adjusted front foot" method of assessment shall be based on the quotient of the "assessable cost" divided by the total assessable frontage benefiting from the improvement. For the 0 purpose of determining the "assessable frontage," all properties, including governmental agencies, shall have their frontages included in such calculation. b. The actual physical dimensions of a parcel abutting an improvement (i.e., street, sewer, water, etc.) shall not be construed as the frontage utilized to calculate the assessment for a particular parcel. Rather, and "adjusted front footage" will be determined. The purpose of this method is to equalize assessment calculations for lots of similar size. Individual parcels by their very nature differ considerably in shape and area. The following procedures will apply when calculating adjusted front footage. The selection of the appropriate procedure will be determined by the specified configuration of the parcel. All measurements will be scaled from available plat and section maps and will be rounded down to the nearest foot dimension with any excess fraction deleted. (1) Rectangular Interior Lots. The rectangular lot is defined as having no more than two (2.0) feet difference between the front and rear lot lines. The adjusted front footage is the actual front footage of the lot. For rectangular lots whose frontage is greater than its depth, the "odd shaped lot" method shall be used. (2) Odd Shaped Lots. For odd shaped lots such as exist on cul- de-sacs and curved streets where there is more than two (2.0) feet of difference between the front and rear lot lines, and where the lots frontage is greater than its depth, the "odd shaped lot" method of determining the adjusted front footage shall be used. (a) The adjusted front footage shall be computed by dividing the area %J the lot by the required minimum lot area of the applicable zoning district to determine the equivalent number of front footage units in the parcel. (b) The number of units multiplied by the required minimum lot width of the applicable zoning district will give the adjusted front footage. (3) Corner Lot Adjustment. (a) For street and trail assessments, the short side will be assessed the actual front footage. The long side will 3 be assessed one-half the actual side footage or seventy-five (75) feet, whichever is greater. (b) Sanitary sewer and watermain will only be assessed on the short side of a corner lot. (4) Zonal Assessment. When the street along the long side of a corner lot is improved, the cost shall be assessed equally to all lots within one-half (Y2) block in each direction of the street improved. This method may be selected rather than the corner lot adjusted. 2. "Area" Method of Assessment. a. The "area" method of assessment shall be based on the number of square feet or acres within the boundaries of the appropriate property lines of the areas benefiting from the project: (1) The City Engineer will make a recommendation on the boundaries or parameters of the benefited area in the feasibility report. (2) The assessment rate (i.e., cost per square foot) shall be calculated by dividing the total assessable cost by the total assessable area. On large lots, the City Engineer may determine that only a portion of the lots receives the benefit and my select a lot depth for the calculations equal to the benefit received. b. All properties included in the benefited area, including other governmental or institutional areas, schools, churches, etc., shall be assessable except that following items may not be included in area calculations: public rights -of -way, and natural waterways, swamps and lakes and other wetlands designated by the Minnesota Department of Natural Resources or the City. 3. "Per Lot" Method of Assessment. a. The "per lot" method of assessment shall be based on equal assessment of all lots within the benefited area. b. The "assessment per lot" shall be the quotient of the "assessable cost" divided by the total assessable lots or parcels benefiting from the improvement. c. For the purpose of determining the "lots" or "parcels" all parcels, including governmental or institutional agencies, shall be included in such calculations. 4. "Per Unit" Method of Assessment. a. The per unit" method of assessment shall be based on equal assessment of equal units such as dwelling units, estimated traffic volume, employees or other standardized measurement determined at the discretion of the City Council to be most applicable related to the benefits of the proposed improvement. b. The "assessment per unit" shall be the quotient of the "assessable cost" divided by the total assessable lots or parcels benefiting from the improvement. c. For the purpose of determining the "units", all properties and uses, including governmental or institutional agencies, shall be included I n such calculations. SECTION 4: STANDARDS FOR PUBLIC IMPROVEMENT PROJECTS. The following standards are hereby established by the City to provide a uniform guide for improvements within the City. A. Surface Improvements. 1. Surface improvements shall normally include all improvements visible on or above the ground within the right-(Df-way, and includes, but is not limited to trees, lighting, sidewalks, signing; street and accessory improvements such as drainage ponds and facilities, parking lots, parks and playgrounds. 2. Prior to construction or completion of surface improvements, all utilities and utility service lines (including sanitary sewers, storm sewers, water lines, gas and electric service) shall be installed to all planned service locations such as residences or buildings. 3. When practicable, no surface improvements to less than both sides of a full block of street shall be approved except as necessary to complete partially completed improvements initiated previously. Concrete curbing or curb and gutter shall be installed at the same time as street surfacing. B. Sub -Surface Improvements, 1. Subsurface improvements shall normally include such items as water distribution, sanitary sewer and storm sewer lines and electric and gas 5 utilities. 2. Main lines are the publicly owned and maintained lines or facilities such as trunk lines, interceptors, mains, and laterals. Service lines are those privately owned lines or facilities extending from the main line to the property line. 3. Sub -surface improvements shall be made to serve current and projected land use. 4. All installations shall conform to applicable standards established by local, state and/or federal agencies of competent jurisdiction. All installations shall also comply, to the maximum extent feasible, with nationally recognized standards such as those of the American Insurance Association. 5. Service lines from the lateral or trunk to the property line of all planned service locations such as residences or buildings shall be installed in conjunction with the construction of the mains. SECTION 5: POLICIES OF REASSESSMENT. A. The City shall design public improvements to last for a definite period. The life expectancy or service life shall be as stated in this Section, or if different, shall be as stated in the resolution ordering improvement and preparation of plans. B. The following are the estimated life expectancies or service lives of public improvements based upon current standards and normal conditions and circumstances and do not preclude City assessments for these improvements prior to the time frames listed if the estimate is deemed incorrect of if unusual conditions or circumstances shorten the life expectancy or service life of any particular public improvement or as may be otherwise stated in the resolution ordering improvement and preparation of plans. 1. Sidewalks: ten (10) years. 2. Street improvements, including surfacing and curb and gutter: T" {29) thin 30 years. 3. Above standard street lighting: Twelve (12) years. 4. Water Mains: Fifty (50) years. 59 Sanitary Sewers: Fifty (50) years. 6. Storm Sewers: Fifty (50) years. SECTION 6: ASSESSMENT COMPUTATIONS. City assessment for various specified improvements. A. Street and Curb and Gutter Improvements. The following is the typical 1. New Construction. New streets are assessed one hundred (100%) percent to the abutting benefited properties. Street and curb and gutter improvements will normally be assessed by the adjusted front foot method, however other methods may be utilized if conditions warrant. a. Cost of construction of local residential streets and all commercial, industrial or institutional streets shall be assessed one hundred percent (100%) based on the minimum design as required by the Engineering Manual. b. The cost for construction of a collector or arterial street, as designated by the Comprehensive Plan, may be paid by any method or combination of methods authorized by the City Council including, but not limited to, the following: (1) State funds. (2) Assessment to benefited properties applied on a per unit basis consistent with assessments for local streets. A developer may agree to pay for the cost of the collector/arterial street construction as part of a development agreement in lieu of assessment. (3) General obligation funds. (4) Any other method or combination of methods authorized by the City Council. 2. Reconstruction, Reclamation. and Overlays: Poo's Street surface reclamation and recons 111 Street surface reconstruction or reclamation for local residential streets shall be assessed up to benefited single family, two-family, and townhouse dwellings up to twenty percent (20%) of the project cost with a maximum individual 7 property assessment not to exceed the amount specified by the Fee Schedule adopted within the City Code. (2) Street surface reclamations and reconstructions for multiple family residential, commercial, industrial and institutional streets are assessed one hundred (100%) percent to the abutting benefited properties. b or residential uses abutting and accessed from collector or arterial streets, an assessment shall be applied that is consistent with the cost for local streets. fib. New curb and gutter are �� nnoi � norc�, , to assessed to the abutting benefit properties in accordance with the policy for street surface reclamation and reconstruction. 3. Gravel Streets. Upgrading of existing gravel street by adding pavement, curb and gutter is considered new construction and all costs are assessed one hundred (100%) percent to abutting benefiting properties. 4. Overlays�Seal Coats, Micro -Surfacing. and Crack Filling. Overlays, seal coats, micro -surfacing, and crack filling of existing streets are considered maintenance costs and not to be assessed to abutting properties or those benefiting from the street. 5. Frontage Roads. Because frontage roads adjacent to arterial streets are deemed to be of benefit to commercial or industrial properties, the entire costs of any improvement on such frontage roads shall be assessable to the benefited properties, even if only those properties on one side of such frontage roads are benefited. Frontage roads adjacent to arterial streets providing access to residential properties shall be assessable to the benefited properties in accordance with City policies equivalent to local streets. B. Sidewalks and Trails. 1. Sidewalks. a. New Construction. New sidewalks are assessed one hundred (100%) percent to the abutting property-era-w iieh-the si��^ leeated. b. Reconstruction. Replacement sidewalks are assessed one hundred (100%) percent to the abutting property-ewner. 2. Trails. a. New subdivisions shall be assessed 100% for bituminous trails. b. Reconstruction of bituminous trails shall not be assessed, but rather funded by the City. C. Stormwater System Improvements. 1. Stormwater system improvements are assessed on aproject-by-project basis although storm sewers in new subdivisions are considered an assessable improvement on an area basis. 2. Oversizing costs due to larger mains and larger appurtenances are paid for by a combination of availability charges, user charges and/or trunk area assessment charges. a. Trunk area stormwater system charges are levied to all unplatted property at the time of platting, to re -plats that have not been charged trunk area charges when the land was originally platted, and to re -plats that have been charged trunk area charges when the land was originally platted but where the use is increasing (only the cost difference based on current and prior use is charged). b. The charges will be set forth in Section 2-4-2 of the City Code. 3. Stormwater system improvements shall be assessed on an area wide basis (square foot or acres), but in certain situations the per lot method or adjusted front method may be utilized at the City Council's discretion. 4. The replacement of existing stormwater system facilities may be assessed as determined by the City Council with the remaining costs paid for by other funding sources identified by the City Council. D. Sanitary Sewer Assessments. E 1. Assessments for sanitary sewer in residential areas are based upon the cost of construction of eight (8) inch mains, which is the smallest size installed in residential areas of the City. 2. Assessments for sanitary sewers in commercial and industrial areas are based upon a standard size of twelve (12) inch mains. 3. Installation of trunk sewer lines or oversizing costs due to larger mains and larger appurtenances will be paid for Sewer Access Charges pursuant to Section 6-1-6 of the City Code. 4. Sanitary sewers shall be assessed on an area wide basis (square foot or acres), but in certain situations the per lot method or adjusted front method may be utilized at the City Council's discretion. 5. The replacement of existing sewers may be assessed as determined by the City Council with the remaining costs paid for by other funding sources identified by the City Council. 6. Individual service lines installed directly to specified properties are fully assessed directly existing sanitary across or ur) to assessment rate hundred (100%) lines. to the benefited properties. Properties that have SE but do not have mainline sewers adjacent, their property lines pay fifty (50%) percent of the for the new mainline sanitary sewer as well as one percent of the cost associated with replacing the service 7. Any existing service lines found to be defective as part of a street reconstruction are replaced as part of the project and assessed directly to the property. Watermain Assessments. 1. Assessments for watermains in residential areas are based upon the cost of construction of eightmains, which is the smallest size installed in residential areas of the City. 2. Assessments for watermains in commercial and industrial areas are based upon the standard size of twelve (12) inch mains. 3. Installation of trunk sewer lines or oversizing costs due to larger mains and larger appurtenances will be paid for Water Access Charges pursuant to Section 6-1-5 of the City Code. 4. Watermains shall be assessed on a per lot basis, but in certain situations the area or adjusted front method may be utilized at the City Council's discretion. 5. The replacement of existing watermains may be assessed as determined by the City Council with the remaining costs paid for by other funding sources identified by the City Council. 6. Individual service lines installed directly to specified properties are fully assessed directly to the benefited properties. 7. Any existing service lines found to be defective as part of the project, are assessed directly to the property. F. Street Boulevard Trees. All street boulevard trees installed as part of new street constructions or in reconstructing existing streets shall be included as part of the overall project costs included in the assessment calculations. G. Street Lights. 1. All costs for new streetlights plus two years) estimated operating costs installed as part of constructing new streets or streetlights relocated as part of reconstructing streets are included in the overall project costs and included in the assessment calculations. 2. In new subdivisions, the City may require the developer to finance street light improvement rather than assessing the cost. H. Other Improvements. Based on the City Council determination, any other improvements may be fully assessed or assessed in part in accordance with City policy and the provisions of the City Code. SECTION 7: AMENDMENTS. A. The City Council may amend this policy at any time. Modifications of the policy shall be effective on the date said modifications are approved by City council resolution. B. The policy will be reviewed periodically by City staff, thriTt�rlicQc� a±;cn (�nmmicoinn and/or City Council. The City Clerk will keep on file comments and complaints received regarding this policy. Any review will consider comments and complaints since the last review and any other factors affecting the policy or its implementation. 11 12