HomeMy WebLinkAbout22 IMTF Final Assessment PolicyInfrastructure Maintenance Task Force
Special Assessment Policy
For Public Improvements
September 30, 2005
Special Assessment Policy
City of Cottage Grove
- - Special Assessment Policy
For Public Improvements - -
This policy was assembled by the citizens of the City of Cottage Grove. The
following committee members spent approximately 30 hours discussing and
analyzing all possible assessment options before completing this document:
Ken Brittain
Nancy Hanzlik
Herb Japs
Kathy Klein
Cheryl Kohls
David Olson
Jeff Podoll
David Thiede
The following staff members provided the committee with all the research and
background information of previous assessment policies and materials to write
the new policy:
Ron Hedberg
Jennifer Levitt
Ryan Schroeder
Brian Voelker
Special Assessment Policy
Table of Contents
1. General policy statement
2. Background
3. Types of improvements
3.1. Surface repairs
3.1.1. Minor maintenance
3.1.2. Mill and overlay
3.1.3. Reclamation
3.1.4. Reconstruction
3.2. Street amenities
3.2.1. Transportational trails
3.2.2. Recreational trails
3.2.3. Street lights
3.3. Sub - surface repairs
3.3.1. Storm sewer
3.3.2. Sanitary sewer
3.3.3. Water main
4. Determination of benefit
4.1. Appraisal /valuation
4.2. Benefited property
4.2.1. Urban residential
4.2.2. High and medium residential
4.2.3. Rural residential
4.2.4. Agricultural land
4.2.5. Commercial /industrial /non - profit /tax exempt
4.2.6. Religious institutions /school lots
4.2.7. City -owned
5. Method of assessment
5.1. Benefiting properties
5.2. Urban / residential land use / multi - family
5.3. Rural residential land use
5.4. Agricultural land use
5.5. Commercial/ industrial land use
5.5.1. Lots adjacent to improved street surface
5.5.2. Lots without direct access
5.6. Religious institutions / school land use
5.7. City owned property
6. Financing
6.1. Term of assessment
6.2. Interest rate
7. Deferrals
7.1. Statutorily deferments
8. Definitions
9. Appendixes
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Special Assessment Policy
9.1.Appendix 1: Urban residential /multi - family residential land use
9.2.Appendix 2: Rural residential land use
9.3.Appendix 3: Commercial /industrial tier method
9.4.Appendix 4: Commercial /industrial tier map
9.5.Appendix 5: Previous PMTF map
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Special Assessment Policy
1. General policy statement
Investing in the City of Cottage Grove's infrastructure is an important way to
maintain the safe and efficient movement of people and goods, retain property
values and preserve attractiveness throughout the City. This policy relates only
to maintenance, repair and replacement of existing roads. It does not address
construction of new roads.
The City of Cottage Grove will follow the procedures for special assessments as
defined in Minnesota Statutes Chapter 429. Chapter 429 does not provide
guidance on how costs of public improvements are to be apportioned; therefore,
the purpose of this assessment policy is to establish a manner of distributing and
recovering the cost of infrastructure maintenance. It is understood that this policy
is not intended to address every situation and that certain circumstances may
justify deviations from this policy.
2. Background
In 1994 the City Council received recommendations from the Pavement
Management Task Force regarding the financing of pavement maintenance
projects as the City's infrastructure continued to age. Periodically amended by
resolution over the years, the recommendations were used for infrastructure
maintenance projects through 2005, when a lull in projects offered an opportunity
to reconsider the special assessment procedure and create a new policy. See
appendix 5 for previous Pavement Management map.
3. Types of improvements
3.1. Surface repairs
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For the purpose of this policy, minor maintenance will consist of pothole
repair, patching, crack sealing, sealcoating, skin patch overlays, and
general maintenance that the Public Works Department completes.
3.1.2. Mill and overlay
Mill and overlay is a pavement rehabilitation process that removes the top
layer of bituminous pavement by the grinding action of a large machine
called a "milling machine ". The overlay part of the term refers to the
placement of a new bituminous pavement. The mill and overlay pavement
rehabilitation may also include spot repairs of concrete curb and gutter.
3.1.3. Reclamation
Pavement reclamation is a rehabilitation process that pulverizes old
bituminous pavement and mixes it with the underlying aggregate, which
adds additional stability to the existing subgrade and aggregate base.
Special Assessment Policy
After reclamation and grading, two (2) lifts of bituminous pavement will be
placed. The reclamation process may include spot repairs of existing
concrete curb & gutter.
3.1.4. Reconstruction
Pavement reconstruction involves the complete rebuilding of the
subgrade, aggregate base, and bituminous pavement of a roadway. The
reconstruction process will also involve installation or replacement of
concrete curb and gutter.
3.2. Street amenities
3.2.1. Transportational trails
Transportational trails are designed and built with bituminous, typically 8'
or greater in width. The transportational trails are typically adjacent to
collector streets. Transportational trails will be assessed as the total
project cost.
3.2.2. Recreational trails
Recreational trails are designed and built with bituminous, typically 8' or
greater in width. Recreational trails are mainly used for recreational
purposes and will be are located in public trailway easements or in parks
and open space areas that are not adjacent to improved streets.
Recreational trails will not be assessed as the total project costs.
3.2.3. Street lights
Street lighting improvements consist of repair or replacement to conduits,
hand holes, concrete bases, poles, and luminaries. All repairs and
upgrades to street lights will be assessed as the total project cost.
3.3. Sub - surface
3.3.1. Storm sewer
Storm sewer rehabilitation involves repair, installation, or adjustments of
catch basins, manhole structures, culverts, storm pipe, and ditches.
3.3.2. Sanitary sewer
Sanitary sewer rehabilitation involves repair, installation, or adjustments of
manhole structures, and pipe.
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Water main rehabilitation involves repair, installation, or adjustments of
water main, gate valves, hydrants, and curb stops.
Special Assessment Policy
4. Determination of benefit
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4.1. When infrastructure maintenance / public improvement provides a special
benefit to properties within a definable area, it is the intent of this policy
that market analyses or valuation analyses of sample properties shall be
conducted prior to the project onset to determine project benefit relative to
the proposed special assessment. The method of analysis used may
vary, depending upon the number of impacted parcels and the cost of the
project. The results of the market or valuation analyses will be part of the
feasibility report. Where appraisals are obtained, the appraisals will be
conducted by an appraiser who is licensed by the Department of
Commerce as a certified residential real property appraiser or a certified
general real property appraiser.
4.2. Benefited property
For purposes of this policy, properties are deemed to receive a benefit
under circumstances described below, but the Council shall make the final
determination of which properties receive benefit for any particular project:
4.2.1. Urban residential property will be considered to receive a benefit if
the main entrance to the property has direct access to the street
being improved.
4.2.2. High and medium density residential property will be considered to
receive benefit if it has direct access to the street being improved.
4.2.3. Rural residential lots will be considered to receive benefit if they
have direct access to the street receiving major maintenance.
4.2.4. Agricultural land will be considered to receive benefit from any
major maintenance project on which the property abuts (rear, side,
or front footage), as determined by an appraiser.
4.2.5. Commercial /industrial /non - profit /tax exempt property will be
considered to receive benefit from any major maintenance project
to a street on which the property abuts (rear, side, or front footage).
4.2.6. Commercial /industrial property will be considered to receive a
benefit from major maintenance projects to a street on which the
property does not abut, when justified by the particular
circumstances, including the proximity of the property to the street
and the traffic generated by the property.
Special Assessment Policy
4.2.7. Religious institutions /school lots will be considered to receive a
benefit to receive benefit from any major maintenance project to a
street on which the property abuts (rear, side, or front footage).
4.2.8. City -owned property will be considered to receive benefit from any
major maintenance project to a street on which the property abuts
(rear, side, or front footage).
5. Method of assessment
5.1. When infrastructure maintenance / public improvement provides a special
benefit to properties within a definable area, it is the intent of this policy
that special assessments be levied against the benefited properties within
that area. The public improvements being assessed for will be completed
on homogeneous areas that have same or similar lot sizes. In general,
5.1.1. The amount of assessment will include all statutorily acceptable
project costs (see "Definitions ").
5.1.2. The method of assessment for public improvements in Cottage
Grove will be on a residential buildable lot equivalent basis for
urban residential properties.
5.1.3. The method of assessment may include residential buildable lot
equivalent or area and / or lineal foot basis for non - residential and
multi - family properties.
5.1.4. Minor maintenance improvements, as that term is defined in this
policy will not be assessed against benefited properties.
5.2. Urban residential land use /multi - family residential land use
For urban residential lots on urban /residential streets and for multi - family
lots within or outside the MUSA, 45% of the project costs for both
surface and sub - surface assessments will be assessed. All
urban /residential lots on urban /residential streets shall be assessed
based on the city standard street section even if the width is greater.
Special Assessment Policy
The assessment will be apportioned among benefited urban residential
and multi - family residential properties based on the number of residential
buildable lot equivalent (RBLE) units for each property. The number of
residential buildable lot equivalent units for each property shall be
determined based on the maximum dwelling units (see "Definitions ") for
the property, and multiplied by the applicable factor as determined by the
Council (see example in Appendix 1). The following chart of factors will
be used, subject to adjustment by the Council for any inequities:
Residential Buildable Lot
Single Family lot
1.0
Duplex lot
1.0
Condominiums
.40
Apartment
.40
Town house
.60
5.3. Rural Residential land
For rural residential land within or outside the MUSA, 45% of the total
project cost will be assessed for major maintenance improvements to
rural roads, as that term is defined in this policy. The assessments will be
apportioned among the benefited rural residential lots on a unit basis, with
each lot being one unit (see example in appendix 2).
5.3.1. Minor maintenance improvements, as that term is defined in this
policy, will not be assessed against benefited properties.
5.3.2. This assessment policy applies only to major maintenance
improvements to rural roads that involve 'replace -like- kind," i.e.,
maintaining, repairing or replacing an existing road section to the
same width and type of road surface as existed prior to the
improvement. This policy does not apply to any road improvements
that would involve reconstruction of an existing road (that does not
meet the rural standard) to the full rural standard, and it does not
apply to road improvements that would involve reconstruction of an
existing rural road to a standard urban street design. Rural roads
would not be brought to complete urban street standards until after
the area surrounding the road is brought into the MUSA.
5.4. Agricultural land use
For agricultural land, assessment will be based on a benefit appraisal
given that each project in an agricultural area will likely have unique
circumstances and benefit levels not fitting clearly into a standard
assessment formula. These appraisals would be done under the current
Special Assessment Policy 10
zoning and land use as opposed to the potential future zoning and land
use.
5.5. Commercial / Industrial land use
For commercial / industrial lots within or outside the MUSA, 100% of the
project costs will be assessed against benefited commercial /industrial
lots. The assessment shall include both surface and sub - surface
assessments and will be apportioned among the benefited
commercial /industrial lots as follows:
5.5.1. Commercial / Industrial lots adjacent to the improved street surface
5.5.1.1. Surface improvements
One third of the project costs will be apportioned among the
commercial properties based on the number of linear feet
abutting the improved street surface. Two thirds of the
project costs will be apportioned among the commercial
properties based on the areas of the properties, in square
feet.
5.5.1.2. Sub - surface improvements
5.5.1.2.1. Storm sewer- One third of the project costs will be
apportioned among the commercial properties based on
the number of linear feet abutting the project. Two thirds
of the project costs will be apportioned among the
commercial properties based on the areas of the
properties, in square feet.
5.5.1.2.2. Sanitary sewer- One third of the project costs will be
apportioned among the commercial properties based on
the number of linear feet abutting the project. Two thirds
of the project costs will be apportioned among the
commercial properties based on the areas of the
properties, in square feet.
Special Assessment Policy 11
5.5.1.2.3. Water main- One third of the project costs will be
apportioned among the commercial properties based on
the number of linear feet abutting the project. Two thirds
of the project costs will be apportioned among the
commercial properties based on the areas of the
properties, in square feet.
5.5.2. Commercial / Industrial lots not abutting the improved street
surface.
The maintenance, repair and replacement of certain streets will
benefit commercial properties even though the properties do not
abut the street. The following streets are listed as examples, and
the list is not intended to be exclusive: 70 Street; 80 Street;
Jamaica Avenue; CSAH 19. The Council will determine which
projects involve benefit to non - abutting commercial properties
based on the facts and circumstances of the particular project.
Commercial /industrial properties may be assessed for project costs
under both 5.5.1 and 5.5.2 of this policy, depending upon the
particular project.
5.5.2.1. Commercial / Industrial Tier Method
For property located in a commercial district without frontage
on the reconstructed street, a tier system will be utilized.
Fifty percent (50 %) of the total project costs will be assessed
to benefited commercial /industrial properties. The benefited
area would be divided into a tier system based on proximity
and trip generation. The costs to be assessed would be
apportioned to benefited properties based on a percentage
of parcel area, with the highest percentage assigned to the
most benefited tier and the lowest percentage assigned to
the least benefited tier. The number of tiers and the
percentages assigned to each tier will be determined based
on the facts and circumstances of the particular project (see
Appendix 3 and 4 for an example).
5.6. Religious Institutions / School land use
For religious institutions / school lots within or outside the MUSA, 75% of
the total project costs will be assessed. For purposes of this policy, a
property is considered to have a school land use only if the land is
improved with a school building at which students attend classes. Other
properties owned by a school district but not used for classes will be
assessed in the same manner as city -owned property. The assessment
Special Assessment Policy 12
will be apportioned among benefited properties as follows, and shall
include both surface and sub - surface assessments.
5.6.1. Property Front Footage
Assessments against religious institutions and school properties
are apportioned based on front footage on the street that is being
improved.
5.7. City -owned property
City -owned property within or outside the MUSA will be assessed in the
same manner as commercial /industrial lots.
6. Financing
6.1. Term of assessment
The term of special assessments shall be fifteen (15) years.
6.2. Interest Rate
The interest rate of special assessments shall be at a rate established
annually by the City Council at the time of certification of the levy.
7. Deferrals
All assessments, whether or not they are in deferment status, will continue to
accrue interest on the unpaid principle balance at the rate established at the
time of certification of the levy.
7.1. Statutory deferments
The following deferments may be available:
7.1.1. Pursuant to Minnesota Statutes sections 435.193 through 435.195,
senior citizens and retired, disabled homeowners may defer special
assessments levied against homestead properties, as also noted in
City Code 1- 10 -04.
7.1.2. Deferment for unimproved land. The payment of the first
installment of any assessment levied upon unimproved property
may be deferred until a designated future year (not to exceed 15
years from the date of the levy), or until the platting of the property
or the construction of improvements thereon, upon such terms and
Special Assessment Policy 13
conditions and based upon such standards and criteria as may be
provided by resolution of the Council. If special assessments
against the property have been deferred, the City Clerk will file with
the Washington County Recorder or Registrar of Titles a certificate
containing the legal description of the affected property and of the
amount deferred. In any event, every assessment the payment of
which is so deferred, when it becomes payable, shall be divided
into a number of installments such that the last installment thereof
will be payable not more than 30 years after the levy of the
assessment or such shorter period as the Council may specify in
the resolution. All such assessments shall bear interest at the rate
as the resolution determines.
Special Assessment Policy
8. Definitions
Agricultural Land
Agricultural land means land that is not served by
that has contiguous acreage of ten acres, and that
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municipal sewer and water,
is in the agricultural use.
Agricultural Use
Agricultural use means that production for sale of livestock, dairy animals,
dairy products, poultry or poultry products, fur - bearing animals, horticultural or
nursery stock, fruit, vegetables, forage, grains, or bees and apiary products.
Wetlands, pasture and woodlands accompanying land in agricultural use shall
be deemed to be in agricultural use.
Assessment
The dollar amount charged against a property receiving an improvement
benefit.
Bituminous /Hot Mix Asphalt /Asphalt Pavement
A mixture of asphalt cement and aggregate thoroughly mixed and compacted
into a mass. Typically placed in 1 Y2 to 2 Y2 inch lifts.
Commercial /Industrial
Commercial /industrial property is any property that is not residential land or
agricultural land and that is not used for school or religious institution
purposes.
Condominium
Individual ownership of a unit in a multi -unit structure (similar to an apartment
building). A special relationship exists whereby the individual owns the actual
air space within the physical confines of the unit but not the barrier wall
themselves. The owners of all of the condominium units each own a
fractional share of common areas such as hallways and open space areas.
Direct Access
For the purpose of this policy, a property has direct access to a public street if
gains access to the street via curb cut, driveway or private road, but not via
an intervening public street.
Feasibility Report
A report presented to City Council to determine feasibility as to whether the
improvements should best be made as proposed or in connection with some
other improvement. The report must also include the estimated cost of the
improvement as recommended. A reasonable estimate of the total amount to
be assessed, and a description of the methodology used to calculate
individual assessments for affected parcels, must be available at the hearing.
Special Assessment Policy 15
Major Maintenance
For the purpose of this policy, major maintenance will consist of overlays,
partial or total reconstruction together with other associated infrastructure
repairs, reconstruction, and construction.
Maximum Dwelling Units
Maximum dwelling units means the greatest number of dwelling units that
could be developed on improved property under the current zoning
classification for the property. For unimproved property, the City Council may
consider the greatest number of dwelling units that could be developed under
either the current zoning classification or under a potential future zoning
classification, depending upon the likelihood that the property will be rezoned
in the near future.
Minor Maintenance
For the purpose of this policy, minor maintenance will consist of pothole
repair, patching, crack sealing, sealcoating, skin patch overlays, and general
maintenance that the Public Works Department completes.
Multi - family Residential
A residential property that is /or may be improved with two or more dwelling
units.
MUSA
Metropolitan Urban Services Area as established in the City's comprehensive
plan and approved by the Metropolitan Council.
Patch & Repair
This procedure involves the repair of the typical "pothole" or other similar
small isolated section of structural failure. It involves removal and repair of
the street section.
Project Cost
Project cost shall include, but not be limited to the following for both surface
and sub - surface improvements: Construction costs; Engineering fees,
Administrative fees; Legal fees; Signage; Lighting; Right -of -way costs;
Public Improvement
This term is intended to have the same meaning as the term "improvement"
as defined in Minnesota Statutes, Section 429.011.
Religious Institution Use
A religious institution use is the use of land by a nonprofit, religious
organization as a place of worship.
Special Assessment Policy
Residential
Residential land is property that is used to provide dwelling unit(s) for
individuals or, if property is unimproved, that is zoned for development with
dwelling units.
Rural Residential
Rural residential land means land that is not served by municipal sewer and
water, that is used for single family residential purposes, and that is not
agricultural land.
Rural Roads
Rural roads are defined as all roads outside of the MUSA that are not
classified as arterials.
Sealcoat
This is the surface application of an asphalt emulsion followed by the
placement of small graded aggregate. It's a wear - resistant coating that
protects pavements from oxidation and the effects of moisture.
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Single Family Residential
A single family residential property is one that is or can be improved with only
one dwelling unit.
Townhouse
Single family attached units in structures housing two or more contiguous
dwelling units that share a common wall, each having separate individual
front or rear entrance; the structure is that of a row -type house as
distinguished from multi - dwelling apartment buildings.
Urban /Residential Lots
Any lots with municipal sewer and water available that are used for single
family residential purposes or, if unimproved, are zoned for single residential
development.
Special Assessment Policy 17
9. Appendices
Appendices 1 through 5 are examples that are intended to demonstrate
particular provisions of the assessment policy. The examples are based on
hypothetical projects and demonstrate the methods by which assessments
will be calculated. The examples are not representative of actual costs or
actual assessment amounts. Project costs for an actual project may vary
greatly from project to project, based on physical and market conditions that
exist at the time the particular project is undertaken. Assessment amounts
will also vary, depending upon actual project costs and other circumstances.
9.1.Appendix 1: Urban residential land use /Multi - Family
Residential land use
Total project costs are $300,000, of which $240,000 is surface
improvements and $60,000 is subsurface improvements of storm sewer,
water and sanitary sewer. The benefited properties include 5 single
family properties with no potential for further subdivision; one
undeveloped property that could be subdivided into 5 single family lots;
one condominium property with 10 condominium units; and one town
house property with 10 town house units.
Amount assessed for surface: 45% of $240,000 = $108,000
Amount assessed for subsurface: 45% of 60,000 $27,000
Total amount to be assessed: $135,000
Total number of RBLE units: 5 + 5 + (10 x .4) + (10 x .6) = 20
Assessed amount per RBLE unit: $135,000 + 20 = $6,750 per RBLE unit
Assessment for each single family property: $6,750 ($33,750 total)
Assessment for undeveloped property: $33,750
Assessment for condominium property: $27,000
Assessment for town house property: $40,500
$135,000
9.2.Appendix 2: Rural Residential land use
Example of Replace- Like -Kind: Pine Coulee subdivision will have the
existing bituminous reclaimed and the new bituminous mat will be the
same width as the previous surface. Pine Coulee is not anticipated to
enter into the MUSA for quite some time. This will enable residents to
have a new road surface without undergoing substantial reconstruction
until City utilities are made available to the area.
Special Assessment Policy 18
9.3.Appendix 3: Commercial / Industrial Tier Method
One example area would be the Gateway South Area (Hwy 61 &
Jamaica from East Point Douglas south to 95 street). For this area we
have attached a map that would show the different areas.
A $200,000 project that benefits 12 commercial properties, all without
direct frontage to the street being improved. Amount assessed is
$100,000. The Council determines that, based on proximity and trip
generation, the benefited properties fall into four different tiers in level of
benefit. There are three properties in each tier.
Tier #1: Properties within Tier #1 are assessed based on 100% of the
parcel areas. Properties in this tier have areas of 100,000 s.f., 75,000
s.f.,. and 50,000 s.f.. With a proximity factor of 100 %, the adjusted
parcel areas are the same.
Tier #2: Properties within Tier #2 are assessed based on 75% of the
parcel areas. Properties in this tier have areas of 100,000 s.f., 75,000
s.f., and 50,000 s.f. With a proximity factor of 75 %, the adjusted parcel
areas are 75,000 s.f., 56,250 s.f. and 37,500 s.f.
Tier #3: Properties within Tier #3 are assessed based on 50% of the
parcel areas. Properties in this tier have areas of 100,000 s.f., 75,000
s.f. and 50,000 s.f. With a proximity factor of 50 %, the adjusted parcel
areas are 50,000 s.f., 37,500 s.f. and 25,000 s.f.
Tier #4: Properties within Tier #4 are assessed based on 25% of the
parcel areas. Properties in this tier have areas of 100,000 s.f., 75,000
s.f. and 50,000 s.f. With a proximity factor of 25 %, the adjusted parcel
areas are 25,000 s.f., 18,750 s.f. and 12,500 s.f.
Total of adjusted parcel areas: 562,500 s.f.
Assessment per s.f.: $100,000 = 562,500 s.f. _ $.177/s.f.
Assessments in Tier #1: $17,700, $13,275, and $8,850
Assessments in Tier #2: $13,275, $9,956, and $6,638
Assessments in Tier #3: $8,850, $6,638, and $4,425
Assessments in Tier #4: $4,425, $3,319, and $2,213
Special Assessment Policy 19
9.4.Appendix 4. Commercial/ Industrial Tier Map
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Special Assessment Policy 20
Appendix 5: Pavement Management Map
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