Watertown City Council

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1 City of Watertown Agenda Item: Request for Action: Department: Watertown City Council Consider 2012 Street and Park Assessments Request for Action Review and consider 2012 Street and Park Assessments, hold a Public Hearing related to the project, discuss a Special Assessment Deferment Policy, and adopt a Special Assessment Roll and Certify it to Carver County. Luke Fischer, City Administrator Background: On March 27, 2012, the Watertown City Council first reviewed a Feasibility Study for the 2012 Street and Park Improvement Project. At that time, the City Council determined that the project was economically feasible, prudent to complete at that time, and would provide special benefit to impacted properties and directed the use of its 429 Assessment authority. The City issued $2,265,000 in bonds to support the construction of the 2012 Street and Park Improvement Project. These bonds were sold at an interest rate of 1.7% -- the lowest rate the City has experienced to date. These bonds require the City to collect assessments from benefitting property owners, consistent with the City s Assessment Policy (Adopted July 3, 1973). Property owners were notified of the pending assessments at the time of the Feasibility Study and were also mailed notice of assessments on October 24, At the time mailed notices were distributed, soft costs were somewhat fluid and interest rates were reflected at 2.3% above the bond amount, rather than 2% as directed by Council. Included in tonight s packet is the recommended Assessment Roll which reflects amended (reduced) soft costs and appropriate interest. The City Council has received feedback that this project comes at a higher cost than past projects. While the actual expenditures may be higher, staff has prepared the attached summary comparing recent projects to the 2012 Street and Park Improvement Project. Public Hearing: In order to certify assessments to the tax rolls, the City Council must hold a public hearing to take comment from impacted property owners. If contested, there is a process available to impacted property owners if they object to an assessment amount. First, the property owner must file an objection as to the assessment with the City Council. Next, the property owner is required to file the objection with the District Court which then considers the assessment. Deferment Resolution: At the time the City Council first considered the project, it indicated that it would provide a deferral mechanism for senior citizens with limited income. Attached is a standard deferment policy that would enable those over 65, with an annual assessment amount of greater than 1.5% of the prior year income, to delay payment until the property changes hands or the financial condition of the owner changes. Recommendation: Staff recommends the City Council review the project, conduct a public hearing, consider the Special Assessment Deferment Policy and adopt the 2012 Street and Park Improvement Special Assessments.

2 Attachments: Special Assessment Comparison Special Assessment Deferment Policy (RESOLUTION) RESOLUTION Adopting Special Assessments (Attached Assessment Roll)

3 2012 Assessment Comparison - Assumes 100' front footage Feasibility - Front Footage $ $ $ $ $ $ $ Actual - Front Footage $ $ $ $ $ $ $ Bond Interest Rate 6.42% 7.00% 6.25% 6.00% 6.00% 5.75% 1.70% Inflation Adjuster (in 2012 dollars) Feasibility $ $ $ $ $ $ $ Actual $ $ $ $ $ $ $ Measuring Impacts Front Feet - Adjusted for Inflation Total Assessment - Feasibility $ 5,646 $ 7,434 $ 5,636 $ 6,338 $ 7,106 $ 6,641 $ 6,569 Total Assessment - Actual $ 5,132 $ 6,613 $ 5,053 $ 5,751 $ 6,457 $ 5,095 $ 6,625 Feasibility plus Financing Charges (2%) $ 8,360 $ 11,300 $ 8,296 $ 9,228 $ 10,346 $ 9,564 $ 7,981 Actual plus Financing Charges (2%) $ 7,609 $ 10,052 $ 7,438 $ 8,374 $ 9,401 $ 7,338 $ 7,936 Inflation Calculator Source: Payment Calculator Source: (Accessed March 2012)

4 RESOLUTION #2012- CITY OF WATERTOWN RESOLUTION ADOPTING THE SPEICIAL DEFERRMENT POLICY WHEREAS, Minnesota State Statutes Section allows the City, at its own discretion, to defer payment of any assessment for any homestead property owned by a person 65 years or age or older or retired by virtue of permanent and total disability for whom it would be a hardship t make the payments, or is a member of the Minnesota National Guard on active duty for whom it would be a hardship to make the payments; and WHEREAS, the City Council considered the special assessment deferment policy at its regular meeting of November 13, NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Watertown, Minnesota that the following special assessment deferment policy is hereby adopted: 1. Purpose of Deferment. The City Council hereby finds that there is a need to establish a procedure permitting deferment of special assessments pursuant to Minnesota Statutes Sections through in case where immediate payment thereof would create a hardship for qualifying homeowners where are elderly, disabled or members of the military. 2. Eligibility for Deferment. To be eligible for a deferment, a person must be the owner of homestead property and: a. Is 65 years of age or older for whom it would be a hardship to make payments; or b. Is retired by virtue of a permanent and total disability for whom it would be a hardship to make the payments; or c. Is a member of the Minnesota National Guard or other military service who, as stated in the person s military orders, is ordered into active military service, as defined by Minnesota Statues Section , subdivisions 5b or 5c for whom it would be a hardship to make the payments. 3. Application. Application for deferred assessments shall be made to the City Administrator upon forms prescribed by Carver County and the City, and shall contain true statements of such information as requested thereon. Application for deferment of assessments beginning in any year shall be made by October 15 th of the preceding year. 4. Approval of Deferment. The City Administrator shall recommend approval or disapproval of each application on the basis of whether payment of the assessment 1

5 would constitute a hardship. No person shall be deemed to have a hardship unless: a. The annual assessment installment exceeds one and one-half percent (1.5%) of the previous year s total adjusted gross incomes, for Federal Income Tax purposes, for all owners of the property. In no event shall total adjusted gross income include Social Security benefits, Railroad Retirement Benefits, retirement benefits attributable to employee contributions, disability benefits, personal injury awards or workers compensation payments. b. Nothing herein shall be construed to prohibit the determination of hardship on the basis of exceptional and unusual circumstances not covered by the standards and guidelines where the determination is made in a nondiscriminatory manner and does not give the applicant an unreasonable preference or advantage over other applicants. 5. Interest. Interest at the rate determined by the City Council at the time the assessment is established shall continue to accrue on any principal amount of special assessment which may be deferred until the same is paid. 6. Termination of Right to Deferred Payment. The option to defer the payment of special assessments shall terminate and all amounts accumulated plus accrued interest shall become due upon the occurrence of any of the following events: a. The death of the owner provided that the spouse is otherwise not eligible for the benefits hereunder; b. The sale, transfer or subdivision of the property or any part thereof; c. The property should for any reason lose its homestead status; d. If for any reason the City Council shall determine that there would be no hardship to require immediate or partial payment; e. At the request of the property owner; or f. For active military deferments, they will terminate for assessments payable the year after they are off active duty status. 2

6 Motion to approve the foregoing Resolution was made by and seconded by, upon a vote being duly taken thereon, the following voted in favor thereof: and the following were against: and the following were absent: where upon, the resolution was declared duly passed and adopted the 13 th day of November, ATTEST: Rick Mann Mayor Clerk 3

7 FINAL ROLE-UPDATED FOR 2012 STREET AND PARK IMPROVEMENTS CITY OF WATERTOWN, MINNESOTA 11/7/2012 Recommended Assessment Role for Park Area Improvements PROP. NO.** OWNER LOT NO./ P.I.D. STREET ERU'S SANITARY SEWER WATERMAIN TOTAL *ANNUAL PAYMENT (10 YEAR) 1 TBD 1 $ $5, $6, $11, $1, TBD 2 $ $5, $6, $11, $1, TBD 3 $ $5, $6, $11, $1, TBD 4 $ $5, $6, $11, $1, TBD 5 $ $5, $6, $11, $1, TBD 6 $ $5, $6, $11, $1, TBD 7 $ $5, $6, $11, $1, TBD 8 $ $5, $6, $11, $1, TBD 9 $ $5, $6, $11, $1, TBD 10 $ $5, $6, $11, $1, TBD 11 $ $5, $6, $11, $1, TBD 12 $ $5, $6, $11, $1, TBD 13 $ $5, $6, $11, $1, TBD 14 $ $5, $6, $11, $1, TBD 15 $ $5, $6, $11, $1, TBD 16 $ $5, $6, $11, $1, TBD 17 $ $5, $6, $11, $1, TBD 18 $ $5, $6, $11, $1, TBD 19 $ $5, $6, $11, $1, TBD 20 $ $5, $6, $11, $1, TBD 21 $ $5, $6, $11, $1, TBD 22 $ $5, $6, $11, $1, TBD 23 $ $5, $6, $11, $1, TBD 24 $ $5, $6, $11, $1, TBD 25 $ $5, $6, $11, $1, TBD 26 $ $5, $6, $11, $1, TBD 27 $ $5, $6, $11, $1, TBD 28 $ $5, $6, $11, $1, CHURCH $17, $54, $19, $56, $6, SCHOOL $102, $0.00 $0.00 $102, $12, PARK $ $5, $6, $11, $1, TOTALS: $84, $208, $194, $487, * Based on Interest Rate 2% Above Bonding Cost (=1.7% + 2.0%=3.7%) And Term Equal to Bond Term ( =10 Years) ** Thru Agreement with Developer, Lots 1-28 sanitary and water assessments to be accounted for in the City Assessment Agreement.

8 Recommended Assessment Roll for Street Reconstruction PROP. NO. OWNER 1 RYAN A BUSCH 101 JACKSON AVE SW 101 JACKSON AVE SW CORNER $7, $7, $ $ WALTER JR & KAY D NEUMANN PO BOX JACKSON AVE SW $11, $11, $1, $1, ROBBIE A & MARGIE F WILKENING 117 JACKSON AVE SW 117 JACKSON AVE SW $7, $7, $ $ TRACY J & DEBRA ANN BOGEMA 80 S 8TH ST STE 3500, MPLS, MN 513 WHITE ST SW CORNER $13, $13, $1, $1, THOMAS M POMEROY & MARGARET DORWEILER-POMEROY 104 JACKSON AVE SW 104 JACKSON AVE SW $4, $4, $ $ MARK A LENZ 108 JACKSON AVE SW 108 JACKSON AVE SW $4, $4, $ $ WILSON R JR & GINGER M KUHN 112 JACKSON AVE SW 112 JACKSON AVE SW $4, $4, $ $ JOHN & SHARON J WEINZIERL PO BOX JACKSON AVE SW $4, $4, $ $ RICKY A & DENISE D LEFFLER 948 DUTCHMANS WAY SE 948 DUTCHMANS WAY SE CORNER $14, $14, $1, $1, TROY L & AMY K MAISCH 944 DUTCHMANS WAY 944 DUTCHMANS WAY SE $6, $6, $ $ KENNETH L ELLINGSWORTH 940 DUTCHMANS WAY SE 940 DUTCHMANS WAY SE $6, $6, $ $ DAVID J KAHL 936 DUTCHMANS WAY SE 936 DUTCHMANS WAY SE $6, $6, $ $ JOANN M SULLIVAN 932 DUTCHMANS WAY SE 932 DUTCHMANS WAY SE $9, $9, $1, $1, WILLIAM J & DEBORAH L MINNEHAN 928 DUTCHMANS WAY SE 928 DUTCHMANS WAY SE $4, $4, $ $ STEPHEN A & KIMBERLY A MILTICH 924 DUTCHMANS WAY SE 924 DUTCHMANS WAY SE $4, $4, $ $ BRETT C & JULIE K SWEENEY 920 DUTCHMANS WAY SE 920 DUTCHMANS WAY SE $4, $4, $ $ JAMES P & SUZANNE L SMITH 916 DUTCHMANS WAY SE 916 DUTCHMANS WAY SE $5, $6, $ $ MARK H & JOYCE M STUTSMAN PO BOX DUTCHMANS WAY SE $6, $6, $ $ JEREMY & HOLLI ARTHUR 908 DUTCHMANS WAY SE 908 DUTCHMANS WAY SE $6, $6, $ $ ROBERT F & GAIL M GALLUS 904 DUTCHMANS WAY SE 904 DUTCHMANS WAY SE $6, $6, $ $ FRANK E LONG & VICKY L EISCHENS 900 DUTCHMANS WAY SE 900 DUTCHMANS WAY SE CORNER $13, $13, $1, $1, MATTHEW K & KATHY HAVLIK PO BOX DUTCHMANS WAY SE CORNER $13, $13, $1, $1, MARGARET A MUELLER & DEBRA M STACKEN 833 DUTCHMANS WAY SE 833 DUTCHMANS WAY SE $6, $6, $ $ DANIEL S & GINA M HENDERSON 829 DUTCHMANS WAY SE 829 DUTCHMANS WAY SE $8, $8, $1, $1, IGOR M MARCHUK & LILIYA A MARCHUK 825 DUTCHMANS WAY SE 825 DUTCHMANS WAY SE $3, $3, $ $ MARCUS R WAHLSTROM 821 DUTCHMANS WAY SE 821 DUTCHMANS WAY SE $3, $3, $ $ NICOLAY GORLOV & OLGA GORLOV 817 DUTCHMANS WAY SE 817 DUTCHMANS WAY SE $3, $3, $ $ BRADLEY ALAN JOHNSON 813 DUTCHMANS WAY SE 813 DUTCHMANS WAY SE $3, $3, $ $ JOHN H & MARLYS A HONOUR 495 MOHAWK TRL, MERRIT ISLD, FL 809 DUTCHMANS WAY SE $7, $7, $ $ MARK L & ANNE M ELSENPETER 805 DUTCHMANS WAY SE 805 DUTCHMANS WAY SE $6, $6, $ $ STEPHEN E & ROXANNE DANIELSON 801 DUTCHMANS WAY SE 801 DUTCHMANS WAY SE CORNER $13, $13, $1, $1, RONALD D & DIANE D SCHROEDER 809 MADISON ST SE 809 MADISON SE SE $8, $8, $1, $ RONALD G HOLT 447 HUNTER DR SE 447 HUNTER DR SE CORNER $13, $13, $1, $1, JACOB K & STEPHANIE L HODGE 443 HUNTER DR SE 443 HUNTER DR SE $5, $5, $ $ RANDALL W NICHOLS & ELIZABTEH A NICHOLS 439 HUNTER DR SE 439 HUNTER DR SE $6, $6, $ $ KIMBERLY A NOVAK 435 HUNTER DR SE 435 HUNTER DR SE $3, $3, $ $ JUSTIN J THOMAS 431 HUNTER DR SE 431 HUNTER DR SE $3, $3, $ $ ** CRAIG D & TONYA L GUETZKOW PO BOX HUNTER DR SE CHAD G SWECKER & NICOLE S TEAGUE 427 HUNTER DR SE 427 HUNTER DR SE $4, $4, $ $ OPPORTUNITY KNOX II LLC, C/O AVALON REAL ESTATE 3801 LESLEE CURV, EXCELSIOR, MN CORNER $34, $34, $4, $4, ** LINDA RAE ZYLMAN 1850 CRAINE CREEK AVE SW,PALM CITY, FL CITY OF WATERTOWN PO BOX MADISON ST SE $28, $28, $3, $3, STEVEN D TABOR & SANDRA J GERLACH 704 HUTCHINSON RD 704 HUTCHINSON RD $13, $14, $1, $1, KATHY MARIE RADDE PO BOX HUTCHINSON RD $6, $6, $ $ JOSEPH WREN 712 HUTCHINSON RD 712 HUTCHINSON RD $9, $9, $1, $1, GARY & DEBRA BONK 792 HUTCHINSON RD 792 HUTCHINSON RD $6, $6, $ $ CAROL MADDEN 800 HUTCHINSON RD 800 HUTCHINSON RD $6, $6, $ $ ** QUINTEN ENTERPRISE LLC 1365 WATERS WAY 800 HUTCHINSON RD CORY THOMES 806 HUTCHINSON RD 806 HUTCHINSON RD $7, $7, $ $ STEPHEN A & JULIE L STEINBORN 808 HUTCHINSON RD 808 HUTCHINSON RD $6, $6, $ $ JOHN O & KATHRYN M ENGEL 812 HUTCHINSON RD 812 HUTCHINSON RD $6, $6, $ $ JOHN G & JUDITH A VANDERLINDE TH ST SE, DELANO, MN 816 HUTCHINSON RD $10, $10, $1, $1, CITY OF WATERTOWN PO BOX HUTCHINSON RD $17, $17, $2, $2, CITY OF WATERTOWN PO BOX HIGH ST $52, $53, $6, $6, ** Property Owners Listed on Preliminary Assessment Roll * Based on Interest Rate 2% Above Bonding Cost (=1.7% + 2.0%=3.7%) And Term Equal to Bond Term (=10 Years) OWNER ADDRESS FINAL ROLE-UPDATED FOR 2012 STREET AND PARK IMPROVEMENTS CITY OF WATERTOWN, MINNESOTA 11/7/2012 PROPERTY ADDRESS P.I.D. FRONT FOOTAGE (F/F) BASIS F/F PARAMETER FEASIBILITY STREET FINAL STREET TOTALS: 7, , $473, $477, FEASIBILITY ANNUAL PAYMENT (10 YEARS) FINAL ANNUAL PAYMENT (10 YEARS)

9 RESOLUTION #2012- CITY OF WATERTOWN RESOLUTION ADOPTING FOR STREET AND PARK IMPROVEMENTS OF 2012 WHEREAS, pursuant to notice duly given as required by law, the City Council has met, heard and passed upon all objections to the proposed assessment for Street and Park Improvements of 2012, and has amended such proposed assessment as it deems just. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Watertown, Minnesota, as follows: 1. Such proposed assessment, a copy of which is attached hereto and made a part hereof is hereby accepted and shall constitute the special assessment against the lands named therein, and each tract of land therein is hereby found to be benefitted by the proposed improvement. 2. Such assessments shall be as follows: a. The assessments shall be payable in equal annual installments extending over a period of ten (10) years, the first of said installments to be payable with general taxes for the year 2013, collectible with such taxes during the year b. To the first installment shall be added interest at the rate of 3.7% per annum on the entire principal amount of the assessment from the date of this resolution until December 31 of the year in which such installment is payable. To each subsequent installment, when due there shall be added interest for one year at said rate on the unpaid principal amount of the assessment. c. The owner of any property so assessed may at any time prior to the certification of the assessment or the first installment thereof to the County Auditor, pay the whole of the principal amount of the assessment on such property with interest accrued to the date of payment to the City Treasurer, except that no interest shall be charged if the entire assessment is paid within 30 days from the date hereof; and such property owner may at any time prior to November 15 of any year pay to the County Auditor the entire principal amount of the assessment remaining due with interest accrued to December 31 of the year in which said payment is made. 3. The City Clerk shall forthwith transmit a certified duplicate copy of this assessment to the County Auditor to be extended on the tax list of the County. 1

10 Motion to approve the foregoing Resolution was made by and seconded by, upon a vote being duly taken thereon, the following voted in favor thereof: and the following were against: and the following were absent: where upon, the resolution was declared duly passed and adopted the 13 th day of November, ATTEST: Rick Mann Mayor Clerk 2