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City Council Minutes 05-28-2002 SpecialMINUTES SPECIAL MEETING - MONTICELLO CITY COUNCIL Tuesday, May 28, 2002 - 5 p.m. Members Present: Roger Belsaas, Roger Carlson, Brian Stumpf and Bruce Thielen. Members Absent: Clint Herbst 1. Call to Order. Mayor Belsaas called the special meeting to order at 5 p.m. and declared a quorum present. 2. Assessment Policv City Engineer, Bret Weiss reviewed the City's current assessment policy. Historically the City has been responsible for the utility lines and the services were the responsibility of the property owner. Assessing for replacement of sewer and water lines is questionable because it is difficult to show value to the benefitting property. However services are commonly assessed. Bret Weiss stated that there is a limited amount that the City will be able to assess on a reconstruction project. The City should determine the amount the lowest valued house could support and from that establish a median value. He added that most cities have assessed reconstruction costs using a flat rate which is adjusted annually for inflation. Handling it in this way makes the residents feel that everyone is treated the same. Bruce Thielen asked if there were streets in the City if some work was invested in now such as overlay, etc. would it add enough additional years of service before major reconstruction would be needed to justify that type of expenditure now. The Council discussed the condition of the various streets and Bret Weiss submitted a street inventory map showing the ages of the streets within the City . The street reconstruction fund was discussed. Bret Weiss felt that unless the levy amount was increased the fund would never catch up to the amount that was needed for street reconstruction projects. The $500,000 levied for the street reconstruction fund would only reduce the amount the City would have to bond for and unless the levy was increased dramatically there would not be enough money to totally fund reconstruction projects. The Council reviewed some of the projects that will need to be considered in the next few years. Bret Weiss suggested setting up at least a 5 year CIP program for the streets but felt a 10 year CIP would be even better. This would help in planning funding for these improvements. Assessment methods were considered. The Council discussed whether the property would be assessed on an unit basis or by front footage. Bret Weiss felt that assessing the residential property on a unit basis was the best way to go and that commercial property should be on a front footage Special Meeting Minutes - 5/28/02 basis. Roger Belsaas asked how apartment units would be handled. Bret Weiss replied they would be considered as commercial property and, be assessed on a front foot basis. Jeff O'Neill asked whether the assessment would be based on the actual use of the property or the zoning of the property. Roger Belsaas suggested assessing based on current use and if it is different from the zoning classification the difference could be deferred until such time as the use changed to match the zoning. Brian Stumpf asked how a property abutting Broadway (CSAH 75) but having driveway access off a side street would be handled. Bret Weiss responded that it would not be assessed under this project but would be assessed when the street where is driveway is located is improved. Roger Belsaas asked how properties with horseshoe driveways would be handled. Bret Weiss stated they would probably receive two units since they technically had two driveways. However he added that most of the properties would have sufficient room to construct a turn around and thus eliminate one driveway. The Council also discussed how large lots that could be subdivided would be handled. Bret Weiss felt that when driveway access was established additional charges could then be collected. At this point it is not known how many vacant lots or lots without driveway access there were in this project. Roger Belsaas felt that if there was a separate parcel with a separate PID then each parcel should be assessed. Roger Carlson asked about the assessment of commercial property along Broadway. Bret Weiss responded that the commercial properties are getting visibility even though they may not have access to the street being improved. He added that even though you set a rate for commercial properties you still have to prove benefit. Bret Weiss felt it would be better to assess a set rate rather than assess a percentage of the cost. He noted that other cities have assessed $2,500-$4,500 per unit for residential property. What number would the city feel comfortable with. He felt if they went with $2,000-$2,500 the City would have trouble making the 20% assessment amount for bonding purposes. There are 64 residential properties with access to Broadway and 20 commercial properties. Bret Weiss showed the breakdown of an assessment of $4,000 at 8% interest spread over ten years. Bret Weiss felt a set rate adjusted for inflation would be preferable to establishing a rate on a project cost basis. Rick Wolfsteller noted that with the establishment of the street reconstruction fund, residents may think there won't be any assessments but that would not be the case. Bret Weiss stated that once a policy was in place the public information process would be very important to make sure that residents are fully aware of the policy and how they are impacted by it. He felt that by conducting informational meetings most of the concerns of the residents could be addressed prior to the assessment hearing. He believed that most residents are concerned that they are not paying more than someone else. Rick Wolfsteller stated that once a rate was established you would have to work backwards and make adjustments to other funding sources to come up with the amount needed to fiend the project. Bret Weiss said on commercial property the question is whether the city wants to go with whatever the cost is for the particular project or if they want to go with a set rate. A $5,000 assessment on a $2,000,000 property may not be a major item but $2,000 assessment on a $80,000 property could be difficult. Roger Belsaas felt assessing 25% for residential and 50% for commercial. Bret Weiss will come up with some examples using various 2 Special Meeting Minutes - 5/28/02 assessment percentages. However he added that the city would still have to prove benefit. Bret Weiss suggested the policy be set carefully as there are some streets where the amount of assessments would be limited. There was additional discussion on charging the commercial properties. The staff will check with other communities as to what they are assessing commercial properties. Bret Weiss recommended that the Council look at the following: 1. Pavement Management Plan. This plan would rate the streets based on the condition of the street. This work should be done in 2002. 2. Update Rate Study - It was noted that utility rates were looked at to determine if enough fields were being generated to cover operating costs but did not address funding for reconstruction of existing utilities. Replacement costs should be factored into the utility rates. 3. Public Information Sessions. -The need to get appropriate information communicated well to property owners affected by reconstruction projects was emphasized. Bruce Thielen asked if the pavement management plan would give an indication of value of existing streets or just their physical condition. Bret Weiss indicated just the condition of the streets. Bret Weiss stated that an amount is budgeted each year for sealcoating work and - the City should look at increasing this amount because each year approximately 1.5 miles of streets are added to the system. 4. Stormwater Utility - Bret Weiss explained that some communities to charge a fee for stormwater improvements based on the impervious surface of each property (such as parking lot, roof area). This charge is included with utility bills and it is a way that non- taxable entities pay for a portion of improvements. It is not popular with residents and Bret Weiss was not advocating that the City institute this charge but was rather presenting this as information. 5. Benefit appraisals - Bret Weiss did support the Council doing this since it would provide information on how much different properties could assume as an assessment for reconstruction projects. Rick Wolfsteller asked how the City is going to address those projects such as the CR 18 overpass and Fallon Avenue where the City would not be able to assess 20%. It was felt that there should be some participation by the state in these projects. Rick Wolfsteller pointed out that even if the state would participate, it would not be fully funded by the state so where would the City's portion of the $5,000,000 estimated cost for the CR 18 overpass/Fallon Avenue projects come from. Bruce Thielen felt the county and state needed to contribute because local communities have been pretty much been tapped out. J Special Meeting Minutes - 5/28/02 Mayor -Belsaas closed the workshop at 6:35 P.M. Recording Secretary