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
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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
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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
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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
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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
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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
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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.
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