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HomeMy WebLinkAbout1998-10-07 PACKET 06.B.REQUES�f dF CITY COUNCIL ACTIC7N - .•. � COUNCIL AGENdA MEETING ITEM # DRTE 10/7/98 (p . (�j < Finance Liz Johnson ORIGIRIATING DEPART�flENT STAFF AUTHOR # it t # * 4 * * 'u rt # W Y •k * W Yt t k d k rt > < # 'k k ! * 'k t # * * 4 t t k * W 'h * Ye # * k •k k COUNCIL ACTION REQUEST Adnpt resolution revising costs to be declared for the 80th Street Reconstruction Project BUDGET IMPLICATION $ $ BUDGETED AMOUNT ACTUAL AMOUNT FUNDING SOURCE ADVISORY COMMISSION ACTIOhJ ❑ PLANNING ❑ PUBLIC SAFETY ❑ PUBLIC WORKS ❑ PARKS AfVD RECREATION ❑ HUMAN SERVICEStRIGHTS ❑ EGONOMIC DEV. AUTHORfIY ❑ SUPPORTING DOCUME{VTS '� � ■ � � DATE MEMO/LETTER: 9/23/98, and 9/9/98 RESOLUTION: revising costs to be declared ORDINANCE: ENGINEERING RECOMMEIVDATfON: LEGAL RECOMMENDATION: OTHER: assessment camparison ADMINISTRATORS COMMEtVTS REVIEWED ❑ ❑ ❑ ❑ ❑ ❑ ❑ APPROVED ❑ ❑ ❑ ❑ ❑ ❑ ❑ DENIED ❑ ❑ ❑ ❑ ❑ ❑ ❑ c � City Administrator Date 'k R 'k * 4 rt * & k b 4 ik '& * k * 3 O * k * W �4 4 % 'X Yt 8 k * A' R Y: M M[ # 'k 'k t * 'k * tF 'x * 'k * * cau�ce� �,c �r�K��: � A�pRav�� ❑ oEN«� ❑ o�r��� To: Ryan Schroeder, City Administrator CC: Micheile Wolfe, Assistant City AdministraCor From: Elizabeth Johnson, Finance Director Date: 09/23/98 Re: 80 street costs Introduction The City Council adopted a resolution declaring costs for the 80` street reconstruction project at the September 2, 1998 regular meeting. The Council further discussed an assessment for commercial properties at a workshop at the end of that meeting. Staff received direction from Council to contact Gerald McKinzie from McKinzie Metro Appraisal to give an opinion on the assessment basis recommended by staff. Background I contacted Gerald McKinzie on September 3, 1998 and forwarded the pertinent information to him. He reviewed the information and discussed his opinions wifh me on September 4, 1998. I have prepared a revised recommendation in my memo to you dated September 9, 1998. Requesfed Action Based on these revisions, the total assessments for 80` street changed to $613,430. The Council, therefore, should adopt the attached resolution revising the costs declared for the 80 street reconstruction project. RESOLUTION NO. 98- RESOLUTION REVISING COSTS DECL.ARED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL FOR 80 STREET RECONSTRUCTION PROJECT WHEREAS, contracts were let for 80 street reconstruction project and the contract price for such improvements was $2,863,033.48, with expenses incurred in the construction of improvements and other construction amounting to $310,669.77 for a total cost of improvements of $3,173,703.25 WHEREAS, the City Council of the City of Cottage Grove declared net costs to be assessed in the amount of $804,736.30 on R98-147 on September 2, 1998. WHEREAS, the net cost deciared to be assessed were adjusted by Council direction NOW THEREFORE BE IT RESOLVED, the City Council of the City of Coitage Grove, County of Washington, State of Minnesota, as follows: i. The net cost of such lmproveme�ts to be assessed is decfared to be $613,430 2. The Finance Director, with the assistance of the City Engineer, Bonestroo, Rosene Anderlik and Associates, Inc. will calculate the proper amount to be assessed for such improvements against every assessable lot or piece of parcel or land within the district affected without regard to cash valuation as provided by law, and shall file a copy of proposed assessment roll in the City Clerk's o�ce for public inspection. 3. The City Clerk, sha14, upon compietion of such assessment roll, notify the City Council therefore AND FURTHER BE IT RESO�VED, that Resolution 98-147 be rescinded. Passed this 7th day of October, 1998. John D. Denzer, Mayor Attest: Caron M. Stransky, City Clerk To: Ryan Schroeder, City Administrator CC: Michetle Wolfe, Assistant City Administrator From: Elizabeth Johnson, Finance Director Date: 9/9/98 Re: 80` Street Commercial Assessments I faxed the 80"' Street Commercial assessment information Yo Gerald McKinzie of McKinzie Metro Appraisal on September 3, 1998 at Yhe request of City Council. Mr McKinzie reviewed the information and I spent some time taiking to him on September 4,1998. His general impressions of the assessments are described below. Mr'MeKinzie stated to me that his general approach to residential and commercial assessments are b�sed on judgment and opinion of how much the property would be worth before and after the improvement. He uses this basis i� considering whether the improvement provides benefiY. I3is-definition of benefit is the increase in market value affer the project has been comp9eted. Benefit is discussed in market value terms. He uses an "income approach" to detennine the basis for a business assessment. This approach may be described as the additional value of a potential lease that an investor in the business could realize as a result of the improveme�t. The lessee would have to have the benefit of an improved appearance an additional tra�c flow to realize greaYer revenues. Greater revenues, in turn, may translate to higher lease values. Mr. McKinzie made some specific comments on the items included. He specifically made a comment regarding the proposed assessment amount for water mains and storm sewer. He does not believe that these costs would be something that would necessarily relate into a higher market value, or purchase price. I discussed the rationale for assessing costs. I suggested that the Ciry calculate a total project cost and determine the total assessable front feet, from which we would derive a cosY per foot. We would then apply thaY cost per foot to the applicable number of front feet for each commercial property to arrive at a total assessment. This assessment would be compared to a mazket value range of 2.5% to 3%. We would then use the market value amount if it was less than the cost amount. Total cost would equal street and a prorated amount of storm sewer and water main. We would be basin� the assessment on the September 23, 1998 prorated cost, but capped at no more than 3% of market value. Mr McKinzie felt that this approach would be reasonable. I have completed the schedule, which is attached for your review. The schedule shows a comparison of the prorated cost, which includes water main and storn� sewer applied to all parcels, to a 3% of mazket valne. I would suggest thaY we use Yhe assessment amount column (*) to prepare the notices for the public hearing. Please review the attached information so we can discuss this. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 .� o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 — O O N W O O O N'�t O d' CV (O O W � � tn O N�f5 O O O O W(O N� O O(O a U� W I� N I� N N N O� CO I� M O� N oJ i� �.- N cY N � N O'- I� 1�- tfj �[i � t� o� �y � •- •- o N C N N N N O N V Q � N N � �<J > N � � � E j 0 U � o � c 10 o � N C � O a 'a � U m � � @ O a` O Ll. C O 6i 0 O M C � � N N y Q 0 0 � N � N � N '� N � O U m h V' N W(D tD tn N� u� N W N N � N N M M(O N V(O N N(D O M ch tn tfi V t+J (O V' M tn M� . r� � � � P V V' �. 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O� � N M N N W O M W N N N O th (O � I� y� N N N� f`�'1 tf�J (D O(O �� t0 OJ (O M� c� oa v vi .= r c�i �ri .= ui v oi o �i N � N � M N e- N N � � � U � — _ N U H ao O c� � in m Y m c ' `° � m t� m � °' � � • a 'a m ��_ � c� � a a � m �� CJ m tD �� - d cn t'o :; � o mtp0��m �=UO�C.>5[nti�- �A � O O O� O O(O N V�(O y N~ N N M V�' � d�' N(�O � N � t�0 � ti r� � � n r ti � � � � � � � v G N s � N R c O � E U N � d N Project 80th Street Reconstruct Interest rate � 7%, Adopted 10l7/98 Term 15 years Project SOth Street Reconstruct Interest rete 7°/ Adopted 10/7/98 Term �5years \\CG FSt\SYS\GROUPSIFINANCEWSSESSi[80thstreetassessrollxis]Sheett