City Council Minutes 04-17-2001 SpecialMINUTES
SPECIAL MEETING - MONTICELLO CITY COUNCIL
April l 7, 2001 - 5 p.m.
Members Present: Roger Belsaas, Roger Carlson. Clint Herbst and Brucc Thicicn.
Members Absent: Brian Stumpf
Staff Present: City Administrator, Ricl: Wolfsteller, Deputy City Administrator, .Jeff
O'Neill. Public Works Director. John Simola and City Engineer, Bret
Weiss.
The special meeting was called to order at 5 p.m. A quorum of the Council was present. The
purpose of the special meeting was to discuss and formulate an assessment policy for street and utility
reconstruction projects.
City Engineer, Bret Weiss submitted a list of the projects that the City would need to consider doing
within the next ten years. These projects include:
Reconstruction of "core" streets and related Lit] I ity repairs
CSAH 75
CSAH 18 Interchange (partial)
Fallon Avenue Overpass
7"' Street Widening
Cedar Street
The City Engineer and City Administrator met with officials from the City of Minnetonka regarding
their "no assessment" policy for reconstruction projects and how it was set LIP. Bret Weiss then
presented information on two assessment options:
1. No Assessment - Under this option the cost of reconstruction of existing
infrastructures would be done through City funding sources. Bret Weiss pointed out
however, that new or expanded development would be assessed at full cost. If a street
was reconstructed and curb and gutter was where no curb and gutter existed
previously, the full cost of the curb and gutter would be assessed. Also under this
option any improvements initiated by a developer would be fully assessed.
2. 25% Assessment - This option would assess 25% ofthe cost of a reconstruction
project and the remaining 75% of the cost the City would fund. Since at least 20% of
cost was bein<gassessed, it would allow the City to bond for the remainin�L costs.
(� Based on the estimated costs of the projects being considered. the City would be looking at a
$1.700.000 per year expenditure or if state aid funds are included $1.00.000 per year. If the City
used the 25% assessment option, they would still need to levy $1.12,000 per year.
The Council discussed the figures submitted by the City Administrator showing the tax impact for
properties of various values if the Citv was to raise an additional $1,00,00 per year throuph taxes to
cover the cost of the reconstruction projects.
One of the issues discussed was if the Citv went with a no assessment policy could the projects be
delaved until such time as sufficient fiinds were collected through the tax levy to fund the projects. It
was pointed out that the earliest any amounts could be levied would be in 2002. The (Yeneral feeling
of the Council and staff was that some of these projects would need to be started shortly and therefore
the City did not have enough time to build up a fiend to use for financing these projects. Another
option the Council discussed was to assess a portion of the cost of the project (at least 20% to allow
the City to bond) and levy the amount needed for debt service. It was generally thought that the
taxpayer would be more hostile to this since they were not only being assessed but were also having
their taxes increased to cover the improvement. It was stated that when a property owner is assessed
for the cost of the improvement lie has some idea of the value of the improvement. If the City levies
an amount for all properties, the value of the improvement to the property owner is not quite so
obvious.
Clint Herbst felt that City should set tip their- policy so that some money was being generated now
that would be going into a fund for reconstruction projects. If initially the City bonded to cover the
cost of the projects, the property owner could see on his taxes an assessment,(if the City goes with the
25% assessment option) the cost of the debt service and a surcharge or cost that would be used to
establish the reconstruction fund. Going this route would allow construction on the projects to start
earlier since the City could bond for the projects and it would still put in place the means to establish
and build a fiend to handle future reconstruction projects. Clint Herbst felt that since it would take a
number of years to build up the reconstruction fund, the bonding process would still allow projects to
take place as they were needed. Roger Belsaas felt that there should be some assessments but that the
shouldn't distract the City from getting the perpetual reconstruction fund established.
The consensus was that assessments would be a part of the City's policy on reconstruction projects,
and there was some discussion on whether the assessments would just be initially until there was a
good fund balance in the reconstruction fund or whether the assessments would always be a part of
any reconstruction project. Public Works Director, John Simola felt that if you start a policy of
assessing a portion of the cost that policy should remain throughout. Since the City alread}7 charges
SAC/WAC charges and area trunk charges, the City does need to make an effort to make clear to
property owners and developers what these charges are and the need for the levy increase in order for
the City to be able to fund reconstruction projects. The Council agreed that the City would have to
do a good job of explaining the assessment policy to the public. Roger Belsaas asked about the
current debt load and how soon there would be significant reduction in debt service. Cit\'
Administrator. Rick Wolfsteller replied that there would not be any significant decline in the debt
service until 2013.
The Council discussed the various projects proposed and seemed to feel that the extension of 7"'
Street and the Cedar- Street projects would most likely be ones that would be started this year.
Comparing the Cedar Street project to reconstruction of the City's core street, the question came up if
the street width was expanded how is that cost handled. In the case of Cedar Street because the
street width is beim increased to accommodate development. the cost of the difference between what
the existing width is and what the final width of the street is would be assessed 100%. The Council
also determined that unique features, i.e. tut -n lanes, drive'vvays. would be assessed 100%.
Bret Weiss will formalize an assessment policy for street reconstruction based on:
• 20% of s-lreel reconstniction costs to be u.s.ses.s-ed.
• Ulilily reconslrtrclion cosls to be fitndecl hl, Cite, - not assessed.
• E.thun.sion,v or enhancelnen/s olvei- irhut is exislin( ird/ he us.s,es.ssed 100%.
• Developnnent iniliated w7prolvements ussessed 100%.
• Debt service costs. for reconvil-nclion projects levied.
• Additional levy umounl to eslahlish/f tml fitnti-e sheet r-econslrllciion projects.
The special meeting closed at 6 p.m.
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Recording Secretary
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