ITEM 6.1 Special AssessmentsTY OF
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114 E OT
DEPARTMENT I F F M TI
Request for
City Council Action
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Planning Department
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City Planner Licht
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MEETIN DAT.
28 January 2013
PI E ENTEf ( ;
REVIEWED BY.
ITEM #.
City Planner Licht
City Administrator Lori Johnsn
6.1 ---Special Assessments
City Attorney MacArthur
City Engineer Wagner
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff rec rnmends adoption of an amendment to the City Code and establishment ofa policy t
update the City's criteria and procedures for special assessments of public improvement projects.
ARE YOU SEEKING APPROVAL OF A CONTRACT? T I IS A PUBLIC HEARING REQUIRED?
No. N.
BACKDIJDTIFITIN:
City staff has been working on a comprehensive revision of the City's criteria and procedures for special
assessments currently established by Sections 4 and 5, Chapter 6 of the City Code. The current City
Code is out of date with current statutory requirements for Minnesota Statutes 429 assessments and
does not address Minnesota Statutes 444 levies, which the City has used for st rmwat r drainage
improvements. The existing City Code sections also do not address fully the City's current practices for
computation of assessments r policies for deferred assessment. The existing City Code provisions are
proposed to be repealed and replaced with a new City Code and a separate policy document drafted
based on the existing language as well ars andel language provided by the League of Minnesota Cities.
The City Code revision is to outline the specific criteria and procedures for assessment projects both
under Minnesota Statutes 429 and 444 This includes defining the types of projects that maybe
undertaken as public improvement projects, how such projects may be initiated either by the City or by
petition, the process by which proposed projects are to be considered, approved and assessed, financing
f such projects both by assessment ent and other sources of funds. The proposed City Code language also
outlines the criteria for deferment of special assessments including the Statutory requirements for
deferment due to hardship for seniors or disabled persons as well as the City's practice ofdeferring
assessment for public improvements needed to support urban development guided by the
Comprehensive Plan until such development occurs. This latter element of the deferment policy has
been clarified that deferment is to be allowed for a defined period of time not to exceed five years
although the City Council may approve a subsequent extension.
proposed assessment policy has also been drafted to separate the ity"s practices related to financing
f public improvements In which some discretion exists to define the methods and standards for
assessment that the City will use as part of a systematic process. The policy document defines the
typical m ans by which the City measure the cost of a public improvement and apply it to properties
being assessed, defines the computation of assessments as to Erhart portion of a public improvement
project is to be financed through assessments and establishes typical life expectancies for public
improvements together Frith a policy that replacement infrastructure will be reassessed in the future.
As a po lic r docume nt, the City Council wilI also have greater f lxibi I ity in its application to address
exceptions or unique circumstances that may arise with a specific project or, if necessary, it may b
amended by the City Council at any time.
City staff reviewed the draft ordinance and policy at the Administrative Subcommittee on 9 Januar
2013. The administrative Subcommitteerecommended p roval of the proposed City Code
-amendment and adoption of the assessment policy as presented.
SUPPORTING DOCUMENTS, ATTACHED NONE
A. Ordinance 2013-04
B. Resolution 2013-0
POSSIBLE MOTION
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Please word motion you could likeit to appear in the rn�nute S.
Motion t adopt Ordinance 2013-04 amending the City Code and adopt Resolution 2013-06 adopting
policies both of which are related to the criteria and procedures for special assessments of public
improvement projects.
BUDGET INFORMATION
FUNDING: I BUDGETED: o YES
o NO
ACTION TAKEN
o APPROVED AS REQUESTED DENIED o TABLED o OTHER (List changes)
COMMENTS:
ORDINANCE NO.: 2013-04
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
AN ORDINANCE AMENDING THE CITY CODE of THE CITY of OTSEGO
REGARDING DING SPECIAL ASSESSMENTS FOR PUBLIC IMPROVEMENTS.,
THE CITY COUNCIL of THE CITY OF OTSEGO DOES HEREBY f DAIN:
Section 1, chapter 6, Section 4 of the City code is hereby repealed in its
entirety and replaced by the following provisions:
SECTION
SPECIAL ASSESSMENTS FOR PUBLIC IMPROVEMENTS
Section:
6--1
Purpose
--2
Projects Eligible For Assessment
6-4-3
Initiation of Public Improvement Projects
6-4-4
Public Improvement Procedure
6-4-5
Financing of Public Improvements
-6
Deferment of Special Assessments
6-4-1: P I POSER
A. The procedures used by the City for leering special assessments are those
specified by various sections of Minnesota statutes that provide that all or a part
of the cost of public improvements may be assessed against benefiting or
affected properties,
B. Three following criteria must be satisfied before a particular parcel can be
assessed:
, The land must have received special benefit from the improvement.
ent.
2. The amount of the assessment must not exceed the special benefit.
3. The assessment must be uniform in relation to the same class of property
within the assessment area,
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C. The City has adopted an Assessment policy that includes specific criteria for
different improvements and that may be amended by the City Council from time
to time.
-4-2; PROJECTS ECTS ELIGIBLE FOR SPECIAL ASSESSMENT.
A. The following public improvements and related acquisition, construction,
extension, and maintenance of such improvements are eligible for special
assessment within the City as projects approved at the discretion of the City
Council as may be authorized pursuant to Minnesota Statutes §429.021, Su d. `[
and §459.14, Su d. T.,
To acquire, open, and widen any street, and to improve the salve by
constructing, reconstructing, and maintaining sidewalks, pavement,
ent,
gutters, curbs, and vehicle parking strips of any material, or by grading,
graveling, oiling, or otherwise improving the same, including the
beautification thereof and including storm servers or other street drainage
and connections from severer, water, or similar mains to curb lines.
2. To acquire, develop, construct, reconstruct, extend, and maintain storm
and sanitary sewers and systems, including outlets, holding areas and
ponds, treatment plants, pumps, lift stations, service connections, and
other appurtenances of a sever system, within and without the corporate
limits.
3. To install, replace, extend, and maintain street lights and street lighting
systems and special lighting systems.
4. To acquire, improve, construct, reconstruct, extend, and maintain water
works systems, including mains, valves, hydrants, servi a connections,
wells, pumps, reservoirs, tanks, treatment plants, and other
appurtenances of a grater works system within the corporate limits.
5. To acquire, improve and equip parks, open space areas, playgrounds, and
recreational facilities within the corporate limits.
6. To plant trees on streets and provide for their trimming, care, and removal.
. To mate nuisances and to drain swamps, marshes, and ponds on public
or private property and to fill the sane.
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8. To construct, reconstruct, extend, and maintain dikes and other flood
control works.
9. To construct, reconstruct, extend, and maintain retaining walls and area
walls.
10. To acquire, construct, reconstruct, extend, operate, maintain, and promote
underground pedestrian concourses.
11. To acquire, construct, improve, alter, extend, operate, maintain, and
promote public analis, plazas or courtyards.
2. To acquire, construct, reconstruct, improve, alter, extend, and maintain
highway sound barriers.
3, To acquire real property needed for providing, regulating and operating
on -street or off-street paring lanes or areas, to purchase or lease parking
meters or other parking or traffic -control devices or may construct, or
otherwise provide, equip, maintain and operate automobile parking
facilities.
B. The City is also authorized by this Section adopted pursuant to Minnesota
Statutes §429.101 to recover through special assessment the following special
charges as a special assessment against the property benefited for all or any
part of the cost of:
1. Snow, ice, or rubbish removal from sidewalks.
s.
2. Weed elimination from streets or private property.
3. Installation or repair of grater service lines, street sprinkling, sweeping, or
other dust treatment of streets,
4. The trimming and care of trees and the removal of unsound trees from any
street.
5. The treatment and removal of insect infested or diseased trees on private
property.
6. The repair of sidewalks.
. The operation of a street lighting system.
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. The operation and maintenance of a fire protection system.
9. The City may remove or eliminate of public health or safety hazards from
private property excluding any structure included under the provisions of
Minnesota Statutes §463.15 to §463,26,
C. The City In accordance with Minnesota Statutes §444.075, Subd. 1 a finance the
following projects related to Waterworks, stornserer and sanitary sever
systems through a ferry against affected properties:
Build, construct, reconstruct, repair, enlarge, improve, or in any other
manner obtain these facilities within the corporate limits.
2. Acquire any and all land and easements required for the facilities
3. Following the adoption of an ordinance under Minnesota Statutes §444.16
to §444.21, the City may acquire, construct, reconstruct, extend, maintain,
and otherwise improve storm sewer systems and related facilities within
the Stormwater District. Storm grater holding areas and ponds within and
without the municipality may also be acquired, constructed, maintained,
and improved for the benefit of any such district. The cost of the systems
and facilities described in this subdivision may be recovered by the tax
authorized in Minnesota statutes §444.20.
6-4-,3: INITI TION of PUBLIC IMPROVEMENT PROJECTS: Public
improvement projects can be initiated in the following ways:
A. Petitione.
Public improvement projects may be initiated by petition of owners of the
property benefitted by the proposed improvement.
ent.
2. Public improvements also may be initiated by majority vote of the City
Council when, in its judgment, such action is required including projects
necessary to protect public health safety and welfare from an imminent
threat.
B. Ordering Improvements:
1. Statute §429 Assessment Projects:
a. A resolution ordering any improvements initiated by the City
Council or by owners of less than thirty fire 35 percent of
G!
benefiting property owners shall require a four-fifths majority Grote of
all members of the City Council.
b. A resolution ordering any improvements initiated by owners of not
less than thirty fire 35 percent of benefiting property owners
shall require a majority vote of all members of the City Council.
C. A resolution ordering any improvements initiated by petition of all
owners of benefiting properties waiving all hearing procedures and
appeals and assessing the entire cost against their property, may
be adopted without a public hearing.
2. statute §444 Assessment Projects:
a. A resolution ordering any improvements initiated by the City
Council or by owners fifty percent or less of benefiting property
owners shall require a four-fifths majority vote of all members of the
City Council.
b. A resolution ordering any improvements initiated by owners of more
than fifty 50% percent of benefiting property owners defined in
Section 6-4-3.A of this Chapter requires a majority Grote of all
members of the City Council.
C. A resolution ordering any improvements initiated by petition of all
owners of benefited or affected properties, specifically waiving
public hearing procedures and assessing the entire cost against
their properties, may be adopted without a public hearing.
3. The City Council may consider the petition of a Developer to construct the
improvements within a project under their control and authority and assess
them subject to the Developer agreeing to a waiver of a hearing and a
waiver of appeal in a form approved by the City Attorney with said
improvements to be ordered by a majority Grote of the City Council
- 1 PUBLIC IMPROVEMENT P oc E: The following is the general
procedure followed by the City Council for all public improvement projects from initiation
of such a project through certification of the assessment roil to the County Auditor.
Formats for the various reports and resolutions referenced in this section are made a
part of the policies and procedures of the City.
A. The petition is submitted to the City Clerk together with an agreement approved
k
by the City Attorney and signed by the petitioners to pay all costs related to the
consideration of the petition including preparation of a feasibility report.
B. Cit} staff~ shall review the petition to verify authenticity or Developer's request and
present a request for action to the City Council.
C. The Cit} Council, upon review of the petition or request, shall accept or reject the
petition or request:
If based upon a petition, the City Council shall adopt a resolution declaring
whether the required percentage of property owners has signed.
2. if the petition or request is accepted, the City Council by resolution shall
order preparation of a feasibility report.
D. Preparation and Consideration of a Feasibility Report.
The City Engineer shall prepare the feasibility report which shall
preliminary evaluate whether the proposed improvement is necessary,
cost-effective, and feasible and whether it should be made as proposed or
In conjunction with mother project,
2. The feasibility report shall include:
. An estimate of the cost of the improvement a proposed.
b. A reasonable estimate of the total amount to be assessed, and a
description of the methodology used to calculate individual
assessments for affected properties.
3. If the report is not prepared by ars employee of a municipality, the
compensation for preparing the feasibility report must be based on the
following factors:
. The time and labor required;
. The experience and knowledge of the preparers
C. The complexity and novelty of the problems involved; and
d. The extent of the responsibilities assumed.
C
e. The compensation must not be based primarily on a percentage of
the estimated cost of the improvement.
The City Council may refer the report to the Planning Commission for a
recommendation.
. The City Council shall by resolution accept or reject the feasibility report,
which, if accepted, the City Council by resolution call for a public hearing
to consider the improvements ents unless the right to a hearing is waived by all
affected property owners In a form approved by City Attorney.
E. Consideration of the Improvements.
The City Clerk shall post and publish hearing notice and mails notices to
affected property owners as provided in Minnesota Statues §429.031 (a or
§444.18, Sud 3 as applicable.
2. City Council review and action:
a. The City Council shall conduct the public bearing.
. The information presented at the public hearing shall include a
preliminary assessment amount for each of the affected property
owners.
C. Within six months of the hearing date, the City Council shall
adopt resolution ordering improvement to be constructed and
advertisement of bids or reject the project.
(1) Minnesota Statues §429 Projects: if the City Council orders
the improvement, ent, Cit staff prepares final plans, advertises
for and opens bids as provided in Minnesota Statues
§429.041 , prepares bid tabulation, makes es recommendation
to City Council for award, and prepares proposed
assessment roll.
(2) Minnesota Statues §444 projects: if the City Council orders
the improvement, City staff prepares final plans, advertises
for and opens bids as provided in Minnesota Statues
§471,345, prepares bid tabulation, makes recommendation
to city Council for award of the contract.
d. The City Council may award the contract for the proposed
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improvements ents based on the bids received.
e. city staff shall supervise construction and prepares payment
requests for city Council consideration.
f. The City council may very the order of procedures for any §429
improvement project in accordance with the particular needs of a
specific project or concerns, financial or otherwise, raised by a
specific project.
F. Bonds, Assessments and/or `axes:
1 Bonds to finance project costs may be issued at any time pursuant to
Statutory authority after the improvements are ordered.
2. Process for §429 Assessments:
a. City staff prepares the proposed assessment roll for City Council
review and the City Council by resolution orders assessment
hearing.
b. The City clerk shall publish the required hearing notice, mail notice
of hearing date and proposed assessments to the affected property
owners as provided in Minnesota Statues §429.061.
C. The City council conducts assessment hearing and adopts,
revises, or rejects resolution determining the amount of the total
expense the City will pay, if any, and establishing the assessment
roll.
d. If adopted, the City Council thereby authorizes certification of the
assessment to the County Auditor upon completion of the project
and receipt of all final project costs and the City Clerk shall certify
the assessment roll to the County Auditor.
3. Ley for §444 Takes: The City council shall levy a tax on all taxable
property within the district in an amount necessary to finance the cost of
the improvement, including maintenance and to pay the principal and
interest on bonds issued to finance the improvement.
6-4-5: FINANCING CING of PUBLIC IMPROVEMENTS: The cost of any
improv improvement shall be assessed upon property by the improvements ents based upon
0
benefits received with the following general principles used as a basis for adoption of a
separate, more detailed assessment policy:
A. Project Cost: The "project costal of an improvement includes the costs of all
necessary construction work required to accomplish the improvement, plus
engineering, legal, administrative, financing and other contingent costs, including
acquisition of right-of-way and other property. The finance charges include all
costs of financing the project. These costs include but are not limited to financial
consultant's fees, bond rating agency fee, bond attorney's fees, and capitalized
interest. The interest charged to the project shall be included as financing
charges.
B. City Cost: The "city cost" of an improvement is the amount of the total
Improvement expense the City will pay as determined by City Council resolution.
Where the project cost of an improvement is not entirely attributed to the need for
service to the area served by said improvement, or where unusual conditions
beyond the control of the owners of the property in the area seared by the
improvement would result would result in an inequitable distribution of special
assessments, or for any other reason determined by the City, the City, through
the use of other funds, may pay such "city cost."
C. Assessable Cost; The "assessable cost" of an improvement is equal to the
`project cost', minus the It cost".
D. Interest;
The City will charge interest on special assessments at a rate specified in
the resolution approving the assessment roll.
2. If bonds were sold to finance the improvement project, the interest rate
shall be one and one-half percent 1.5% more than the average interest
rate of the bonds, rounded to the nearest quarter of a percent.
3. If no bonds were sola, the interest rate shall be one and one-half percent
(1.5%)more than the average interest rate as if bonds were issued,
rounded to the nearest quarter of a percent.
E. Prepayment:
1. Property owners may pay their assessments in full interest free for
period of thirty 3 days the adoption of the resolution approving the
assessment roll. After such period interest shall be computed from the
date specified in the assessment resolution.
01
2. The City gill transmit a certified duplicate of the assessment roll with each
installment, including interest, to the County Auditor, or in lieu of such
certification, annually certify to the County Auditor by November 30 in
each year, the total amount of installments of and interest on assessments
on each parcel which are to become dine in the following year.
3. Prior to certification of principal and interest or the first installment thereof,
to the County Auditor, a property owner may make a partial prepayment of
the principal to the City. Such partial prepayment must be at least
$100.00. If the partial prepayment is made after the 30 -day "interest free"
period allowed by Statute, interest will be charged on the amount of the
partial prepayment from the date specified in the resolution and paid along
with the partial prepayment.
. After the City has made the first certification of principal and interest to the
County Auditor, prepayment will be accepted only for the total amount still
owing including interest and must be made prior to November 15 of any
year.
. The remaining principal after the partial prepayment will be paid in equal
installments over the remaining term of the special assessments.
F. Extensions.
.1 Where an improvement is designed for service of an area beyond that
receiving the initial benefit, the City may pay for increased project costs
due to such provisions for future service extensions.
2. The City may lever assessments to cover this cost when a neer
improvement is installed as an extension of the existing improvement
upon identification of such additional amount in the notice of hearing for
the extensions or new improvements. As an alternative, the City may
assess these costs to the area of future benefit immediately.
G. Project t Assistance. if the City receives financial assistance from the Federal
Government, the State of Minnesota, the County, or from any other source to
defray a portion of the costs of a given improvement, such aid will be used first to
reduce the "city cost" of the improvement. If the financial assistance received is
greater than the "city cost,, the remainder of the aid will be placed in the Capital
Improvement Fund to be applied towards other City projects where allowed and
at the discretion of the City Council.
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H. Assessable Property. property owned by the Cit} and other political subdivisions
including municipal building sites, parks and playgrounds, but not including public
streets and right-of-way, shall be regarded as being assessable on the same
basis as if such property was privately owned.
1. Individual Benefits. The City must construct improvements specifically designed
for or shorn to be of benefit solely to one or more properties. The costs for
these improvements will be assessed directly to such properties, and not
included in the assessments for the remainder of the project. An example of this
would be utility service lines running from the main lines to the property.
J. Benefit Appraisals or Studies. In the event that question exists as to whether or
not the proposed assessments exceed the special benefits to the property in
question, the City Council may order benefit appraisals or other studies to
determine market value as it deans necessary to support the proposed
assessments.
K Condemnation Awards. A property owner may elect to offset special
assessments against condemnation awards subject to the property owner
executing a Net Assessment Agreement approved by the City Council.
6-4-6: D FERMEN of SPECIAL ASSESSMENTS.
A. Special assessments may be deferred as a result of hardship for senior citizens
or retired and disabled persons pursuant to Minnesota Statutes §435.193:
The City Council may defer the payment of any special assessment on
homestead property owned by a person who is sixty fire 6 gears of age
or olden or who is retired by virtue of permanent and total disability, and
the City Clerk is hereby authorized to record the deferment of special
assessments where the following conditions are met:
+as The applicant must apply for the deferment not later than ninety
(90) days after the assessment is adopted by the City Council.
b. The applicant must be sixty fire 65 years of age or older or retired
by virtue of permanent and total disability.
C. The applicant must be the owner of the property.
d, The applicant must occupy the property as their principal place of
residence.
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e. The applicant shall meet the eligibility requirements of the
Minnesota Energy Assistance Program.
The average annual payment for assessments levied against the
subject property must exceed one and one-half .5% percent of
the adjusted gross income of the applicant as evidenced by the
applicant's most recent federal income tax return. The average
annual payment of an assessment shall be the total cost of the
assessment divided by the number of years over which It Is spread.
2. Term 0.
a. The deferment shall be granted for as long a period of time as the
hardship exists and the conditions aforementioned have been net.
b. It shall be the duty of the applicant to notify the City Clerk of any
change in their status that would ld affect eligibility for deferment.
3. Payment.
a. The entire amount of deferred special assessments shall be due
within sixty 6 days after loss of eligibility by the applicant:
b. If the special assessment is not paid within the sixty days, the
City clerk shall add hereto interest at a per annurn interest rate of
one and orae -half .5% percent above the bond interest rate and
the total amount of principal and interest shall be certified to the
County Auditor for collection with taxes the following year.
a. Should the applicant demonstrate to the satisfaction of the City
Council that full repayment of the deferred special assessment
would cause the applicant particular undue financial hardship, the
City council may order that the applicant pay within sixty 6 days
a sum equal to the number of installments of deferred special
assessments outstanding and unpaid to date, including principal
and interest, with the balance thereafter paid according to the teras
and conditions of the original special assessments.
. The option to defer the payment of special assessments shall terminate
and all amounts accumulated plus applicable interest shall become due
upon the occurrence of any one of the following:
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a. The death of the owner when there is no spouse who is eligible for
deferment.
b. The sale, transfer or subdivision of all or any part of the property.
C. Loss of homestead status on the property.
d. Determination by the City Council for any reason that immediate or
partial payment would impose no hardship.
B. Deferments until development: ent: The City Council may, at its discretion, defer
special assessments related to urban development consistent with the City's
Comprehensive Plan for benefited properties as follows:
Properties eligible for the option deferments under this section shall meet
the following criteria:
a. The property is zoned A-1, -2, R-1, R-2, or -3 District.
h. Development of the property is limited to one 1 dwelling unit and
related accessory uses.
2. The option to defer the payment of special assessments shall terminate
and all amounts accumulated plus applicable interest shall become due
upon the occurrence of any one of the following, whichever occurs first;
a. rezoning to R -C} R-4, R - 4A, R-5, -6# R-7, R -MH, R - B, ENS or
PUD District t or any commercial or industrial district as defined by
Chapter 50 of the Zoning Ordinance.
. The subdivision of all or any part of the property.
G. Five years from the date the assessment is initially adopted.
d. A date or event specified by the City Council at the time the option
to defer payment of special assessments is approved.
3. The City Council, at its discretion, may approve an extension to defer the
payment of special assessments that would terminate pursuant to Section
6-4-6.B.2 of this Chapter subject to the following:
a. The extension is requested in writing and filed with the City Clerks at
least thirty 3 days prior to the expiration of the initial deferment.
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b. The request states the reasons for which the property owner
believes the deferment should be extended.
C. If approved by the City Council the extension of the deferment shall
terminate as provided for by Section -4-6.D.2 of this Chapter.
Section 2. Chapter 6, Section 5 of the City Code is hereby repealed in its
entirety and this section reserved for future use.
Section 3; This Ordinance shall become effective immediately upon its passage
and publication.
MOTION BY:
SECOND BY:
ALL IN FAVOR:
ADOPTED by the City Council of the City of Oso this day of
120130
CITY of OTSEGO
,Jessica L. stokann, Mayor
ATTEST:
Tani L.off, City Cert
RESOLUTION NO.: 2013.,06
CITY OF OTSEGO
COUNTY OF WRIGHT, MINNESOTA
A RESOLUTION APPROVING A POLIO' RELATED To SPECIAL ASSESSMENTS.
TS.
WHEREAS, Minnesota Statutes establishes authority for the City to levy special
assessments for all or part of the cost of public improvements to affected and benefiting
properties; and,
WHEREAS, EAS, the City Code establishes criteria and specific procedures for
assessments based on Minnesota Statutes; and,
WHEREAS, EAS, the City Council finds it necessary to establish a policy for the
purpose of implementing a fair and equitable manner of assessing the special benefit
associated with public improvements ents to benefitting or affected properties; and,
WHEREAS, this policy is intended to serve as a guide for a systematic
assessment process within the City and that there may be exceptions to the policy or
unique circumstances that may require special consideration and discretion by the City
Council; and,
WHEREAS, EAS, this policy may be amended by the City Council at any time with
such modifications effective on the date they are adopted by Resolution.
WHEREAS, the Administrative Subcommittee at their meeting on g January
2013 reviewed the proposed policy and recommends its approval; and,
NOW, THEREFORE E BE IT RESOLVED ED y the City Council of the City of Otsego
that the policy related to public improvement assessments attached as Exhibit A is
hereby adopted.
MOTION B:
SECOND BY..
ALL IN FAVOR:
THOSE OPPOSED:
ADOPTED by the City Council of the City of Otsego this 28th day of
January, 2013.
ATTEST:
Tani Luff, City Clerk
CITY F OTS EG
Jessica L. Stol n ,Mar r
2
POLICY 03.03
PUBLIC IMP oVE E T ASSESSMENT POLICY
Section
3.03.01:
Purpose
03.03.02
Policies Related to Financing Public Improvements
03,03.03.
Methods of Assessment
03,03.04.
Standards for Public Improvement Projects
03.03.05:
Policies of Reassessment
03.03.06-0
Assessment Computations
03.03.07
Amendment
03,03.01, 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 ..cost 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 tare 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 gale 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 Cita.; there may be exceptions to the policy or unique circumstances or
situations which may require special consideration and discretion by the City
Council.
03.03.02: POLICIES RELATED To FINANCING of PUBLIC IMPROVEMENTS.
A. The City encourages public improvement projects as the areas benefiting and
needing such improvements develop.
This policy is evident in the implementation of the Comprehensive Plan,
the Subdivision Ordinance, the Zoning Ordinance, and Building Code
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 gears 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
03.03.03: METHODS of ASSESSMENTV
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.
. 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 naps and will be rounded down to the
nearest foot dimension with any excess fraction deleted.
Rectangular Interior Lots. The rectangular lot is defined as
having no more than two 2. 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 oncul-
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 of 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
be assessed one-half the actual side footage or
seventy-five 5 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 orae -half Y block in each direction of the
street improved. This method may be selected rather than
the corner let 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 right -of -gays, 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 f9assessable
cost" divided by the total assessable lots or parcels benefiting from
the improvement
C. For the purpose of determining the "lots if or U arcels" 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.
G. For the purpose of determining the "units", all properties and uses,
including governmental or institutional agencies, shall be included
in such calculations.
03.03.04: 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.
Surface improvements shall normally include all improvements visible on
or above the ground within the right-of-way, and includes, but is not limited
to trees, lighting, sidewalks, signing; street and accessory improvements
such as drainage ponds and facilities, paring lots, parrs and
playgrounds.
2. Prier to construction or completion of surface improvements, ents, all utilities
and utility service Innes (including sanitary sewers, storm sewers, grater
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
full block of street shall be approved except as necessary to complete
partially completed improvements initiated previously. Concrete curbing
r curb and gutter shall be installed at the sane time as street surfacing.
B. Sub -Surface Improvements.
'1. Subsurface improvements shall normally include such items as water
distribution, sanitary surer and storm severer Innes 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 min line to the
property line.
3. Sub -surface improvements shall be made to serve current and projected
land use.
. 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.
03,03.05_ 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
ents
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 o years.
2. Street improvements, including surfacing and curb and gutter: Twenty
(20) years
3. Above standard street lighting; Twelve 12 gears.
. Water Mains: Fifty years.
5. Sanitary Sewers: Fifty 5 years.
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6. storm Sewers: Fifty gears.
03.03.06; ASSESSMENT COMPUTATIONS. The following is the typical City
assessment for various specified improvements.
A. Street and Curb and Gutter Improvements.
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 he -assessed one hundred
percent (100%) based on the minimum design as required by the
Engineering Manual.
t The cost for construction of a collector or arterial street, as
designated by the Comprehensive Plan, may r he paid by any
method or combination of methods authorized by the City Council
including, but not limited to, the following:
(1) State funds.
(2) to benefited properties applied on a per unit
basis consistent with assessments for local streets.
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 b
the City Council,
2* Deconstruction and overlays:
a. Street surface reconstructions and overlays for local residential
streets are assessed fifty (50%) percent to the abutting benefited
properties.
b. For residential uses abutting and accessed from collector or arterial
streets, an assessment shall be applied that is consistent with the
cost for local streets.
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C. Street surface reconstructions and overlays for commercial,
industrial and institutional streets are assessed one hundred
(100%)percent to the abutting benefited properties.
d. New curb and gutter are one hundred 100 percent assessed to
the abutting benefit properties.
3. Gravel Streets. Upgrading of existing gravel street by adding pavement,
curb and gutter is considered neer construction and all costs are assessed
one hundred 100%percent to abutting benefiting properties.
, Seal Coats and Crack Filling. Seal coats and crack filling of existing
streets are considered maintenance costs and not to be assessed to
abutting properties or those benefiting from the street.
. Frontage Loads. 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 s and Trails.
I . Sidewalks.
s.
a. New Construction. New r side call s are assessed one hundred
(100%)percent to the abutting property on which the sidewalk is
located.
b. Reconstruction. Replacement sidewalks s are assessed one
hundred 00% percent to the abutting property owner.
2. Trails.
a. New subdivisions s%aII be assessed 10 0% for bituminous trails.
bReconstruction of bituminous trails shall not be assessed, but
rather funded by the City.
C. Storm aster System Improvements.
Stormwater system improvements are assessed on a project -by -project
basis although storm severs 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 chargesand/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 assessed on ars 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.
Assessments for sanitary sewer in residential areas are based upon the
cost of construction of eight 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 2 inch rains.
3. Installation of trunk sewer lines or oversi ing 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 areawide 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 to the benefited properties. Properties that have
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existing sanitary services, but do not have mainline sewers adjacent,
across or up to their property limes pay fifty 50 percent of the
assessment rate for the new mainline sanitary sever as well as one
hundred (100%) percent of the cost associated with replacing the service
lines.
. Any existing service Cines found to be defective as part of a street
reconstruction are replaced as part of the project and assessed directly to
the property.
E. vaterrain Assessments.
Assessments for watermains in residential areas are lased upon the cost
of construction of eight inch rains, which is the smallest size installed
in residential areas of the City.
2. Assessments for watermalns in commercial and industrial areas are based
upon the standard size of twelve 2 inch mains.
3. installation of trunk surer lines or oversi ing 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.
. vatermalns 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 vatermalns 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.
. Any existing service lines found to be defective ars part of the project, are
assessed directly to the property.
F. Street Boulevard Trees. All street boulevard trees installed as part of neer 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,
'l All costs for new streetlights plus two year(s) 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
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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 r be fully assessed or assessed in part in accordance with City
policy and the provisions of the City Code.
3.03.06: 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 b City council
resolution.
B. The policy will be reviewed periodically by City staff, the Pars and Recreation
Commission 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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