Council Minutes

MINUTES/COMMITTEE OF THE WHOLE
Monday, March 27, 2000 - 7:00 p.m.________

The city council met as the Committee of the Whole on Monday, March 27, 2000 in the council chambers with Mayor Owens presiding. Members present: Council Member Brooks, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Klave, Beyer, Babinchak, Bakken, Hafner, Martinson - 12; absent: Council Member Polovitz - 1.

1. Matter of special assessments for Project No. 5048, District No. 563, paving on South 42nd Street from University Avenue to 29th Avenue South, 11th Avenue South from South 40th Street to South 42nd Street, and on 17th Avenue south from South 35th Street to South 42nd Street.____________________________________________________________
Mayor Owens stated any recommendation would not be a final decision but possible recommendation from the committee would be presented to the city council , which will meet on April 3, and the formal protest period will end on April 3. She asked staff to present information relative to the process, to give options and recommendation to the council for their consideration; and that that anyone wishing to speak to this item to please give his/her name and address and if they have a spokesperson for that person to present the information.

Al Grasser, assistant city engineer, presented information relative to process used in developing this project and reviewed City policies as they relate to this project. He stated that guidelines used in setting district boundaries which is in the jurisdiction of the city council, that when a portion of a lot appears to have a benefit, the entire lot will be included in the district; and if an area is in doubt as to inclusion in a district, in general it will be added to allow the Special Assessment Commission discretion in assigning benefits. He stated that normally a lot will have a local street assessment and a classified street assessment and read the policies; and under these policies each property within the city would be included in one north/south classified street and one east/west classified street. He reported that the determination of benefits is the jurisdiction of the Special Assessment Commission, and in determining benefits consideration is often given to past benefits received; the general direction of this consideration is to recognize that each property should participate in each category of infrastructure development but try to avoid giving double benefits on a particular property or portion of property. He stated that the Commission will often reserve an area for future special assessments if it is recognized that there is a need to provide assessable properties for a future project. He also noted that each property is generally recognized as receiving a frontage and a sideage, and these benefits are generally based on the lots affective front footage, lots with exceptional depth may also be allocated a rearage benefits. Typical past benefit allocations have been l.0 for frontage and 1/3 for sideage and variable for rearage; under classified streets these benefits are generally based on the sq. footage of the lot, typical past benefit allocations have been l.0 for a lot fronting on the street and for calculation purposes that generally applies to a depth of 150 to 300 feet. He stated for non-fronting property the typical past benefits calculations have been one-quarter, and if benefit is determined to have frontage the cost of driveways and sidewalks are generally assessed against the specific property; if sidewalk is not against the frontage the cost is generally not separated by specific property but included in the general project cost.

COUNCIL MEMBER LUNAK REPORTED PRESENT
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Mr. Grasser stated that tapping areas and future assessment districts, in general tapping areas and future assessment districts are set by the city council after recommendation and review by the Special Assessment Commission. In general initial benefits calculated will be reduced over time to take into account depreciation when public funds are used. He stated that the City carries the cost on the future assessment district and the City does not recoup the cost of the depreciation for the carrying costs.

Mr. Grasser reported that the Capital Improvements Program (CIP) is when the first street goes in the benefiting property owners according to these policies pay a portion of that street but once that initial street gets paid for, when it comes time to do reconstruction and rehab, the City has a lot of programs to keep those costs very low or in a lot of cases eliminated.

Mr. Grasser briefly reviewed history of the area, dates when properties platted: Lynwood Circle platted in May, 1992; advance R/W construction for a RR overpass/underpass was purchased in 1993 in anticipation of grade separated crossing at DeMers and 42nd Street; the temporary asphalt road was constructed on 17th Avenue and 42nd Street in 1994 because of increased traffic loads and was done by the City as a temporary fix; 42nd Street mobile home park plan approved in 1995 that was in the vicinity of where the Aurora sits now; The Aurora location vote was done in 1995; and Johnson’s Addn. platted in 1996. He briefly reviewed the assessment district where assessments for classified street would go to the next classified street; areas assessing a portion of 17th Avenue South, and district separated where certain areas are only assessed for 42nd; some assessed for both projects, based on basic policies and other assessment districts. He reviewed various projects that impact or are related to this project.

Mark Lambrecht, CPS, Ltd., stated their firm was retained to draw the plans and prepare specifications for this project, and reviewed the engineer’s report and the timetable that was presented to the city council. He stated they assisted the city engineering staff in the preparation of the engineer’s report, and that forms the basis that the council uses to establish an assessment district and in doing so followed the standard City policies. He stated the report contains the recap of estimated project cost, a special assessment timetable and the assessment distrait map. He stated that the engineer’s report was presented to the public service committee on January 31 and then to the city council on February 7, plans and specifications were approved and authorization obtained to obtain bids on February14 and February22 at council; and bids for this project will be obtained on two different dates, the project is divided into two phases because of the size of the project, and in order to get most competitive bids possible and to accomplish the work in the most expedient way, the northerly half of the project will be bid on April 14 and the southerly half on May 19. There was a public input meeting and open house on this project with notice to council members and 350 property owners, and notice was also advertised in the Herald and the Public Information Office disseminated information to the radio and TV stations. He stated several council members were present along with about 50 persons from the affected area; however, there were no cost information presentations at this meeting. He reported that there was an engineer’s report which was prepared early on the project based on best rule of thumb information and that cost indicated an est. total project cost of $11.4 million; and after that
information presented to public service at the end of January, they were well into preparing plans
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for the project, and before the letters were prepared and the finance office had time to calculate all the estimated assessments, they were done with preparing the plans, and at that time had a much better basis for preparing a project cost estimate, they prepared a more detailed estimate based on the actual quantities of work included in the construction plans, they worked with the engineering department to update the engineer’s report. He stated that the total estimate project went to $10.1 million which was a reduction of about $1.3 million, and the estimated special assessments went down to about $5.1 million which was a reduction of $1.8 million from the earlier estimate. He stated that the revised engineer’s report became the basis for the letters that were sent to the property owners and the assessments calculated by the city finance office. He reviewed the summary of funding sources: $5.1 million special assessments; less special assessment makeup, less City's Share (50% of street lights, 50% of box culvert, 20% of 41’ wide street, engineering on City share) of $1,042,189; Urban Road Funds, $3.5 million; Federal Emg. Repair Funds, $198,520; and CDBG funds of $65,000; for a total est. cost of $10,133,127.

The city auditor presented a cost comparison to similar projects and some of the per unit costs for a typical lot. He stated that the estimated unit cost that they are using on this project: for 42nd Street is 0.52 cents per unit and for 17th Avenue South, 0.65 cents per unit; and those costs are net of any costs associated with widening the road and other costs associated with The Aurora project. He noted that they have included 34th Avenue South, 55th Street and Cherry Street and that on 34th Avenue est. at 0.31 cents per unit, 55th Street was 0.53 cents, and Cherry was 0.33 cents. He stated that when they send out the notices, they do the estimated calculation and give a range from 10% below amount to 25% above the amount. He also reviewed for private owned developed residential properties, and reported that on 42nd Street 92 of the properties run between zero to $1,000, 127 from $1,000 to $2,000, 44 from $2,000 to $3,000; and on 17th Avenue 2 between zero to $1,000, 63 between $1,000 to $2,000, etc. and the large lot that they’ve heard about at the $24,000 amount is with the 25% on it and is a lot that’s included in both 42nd Street and 17th Avenue. He stated there’s a wide range of properties and that they have still felt some concern whether these are still reasonable assessments based on the policy that we have for the classified streets. He stated that they realized when they were sending out the letters that the costs were high, that they knew they needed to review it and also requested the extension of the hearing and the protest period.

Mr. Grasser presented several alternatives for the council and that they realize that these assessments are not what you would consider fair and reasonable, that they aren’t the type of assessments they were envisioning when the original policies were put together, and policies have worked very well on a large number projects:
Alternative #1 Modify/change policy (normalize costs, normalize district, remove mark-up estimate and voluntary doubling of Aurora assessment)
Alternative #2 set arbitrary limits (set unit costs not to exceed most recent project), $0.39/per unit
Alternate #3 Complete new policy (citywide assessment, gas tax, mill levy)
Mr. Grasser reported that under Alt. #1 the cost of assessments would include a 40% decrease on 42nd St. S. and 41% decrease on 17th Avenue South; that under Alt. #2 at a 0.39 cents per unit, the percent of change from original cost for 42nd Street would be 40% decrease and for 17th
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Avenue south a decrease of 52%.

Mayor Owens asked for comments/questions from the council.

It was noted that when 42nd Street was originally paved none of these properties were special assessed. Mr. Lambrecht noted that they had quite an extensive sub-grade and sub-surface exploration report done, and it identified that they were in a swampy area with some silts below, but the roadbed itself is comprised of topsoil, and the thick gravel base used beneath the road is not all a cost increase because in any event to build the street properly would have to sub/cut the black soil out and replace it with something, whether compacted clay or granular material, and the 24” of gravel base plus 9” of concrete is on the higher side of the designs that are used in Grand Forks but was done with forethought. Mr. Grasser reported that 55th Street used 18”, 36th Street went greater than 24” and several classified street (when done by DOT) - Gateway Drive, DeMers Avenue all had substantial subgrades, some even in excess of 24”. Council Member Beyer asked if engineering was willing to make recommendation re. any of the alternatives and which acceptable. Mr. Grasser stated he didn’t know if this was recommendation from the engineering department, but his own. He stated that if they did Alt. #1 are making so many modifications of current policy not comfortable with that; and his own tendency was going with Alt. #2 and set an arbitrary limit.

There was general discussion by the council, Council Member Hafner stated their goal was to try to normalize what didn’t happen through engineering figures, and if they pick an arbitrary figure asked what the effect of 30 cents per unit would be on this project - trying to consider what is fair to the rest of the community, and asked the cost of these arbitrary figures in dollars for both the 0.39 cents per unit and/or 0.30 cents per unit , and what are additional dollars and where is money coming from to make up the difference and if they could use an average of the last three projects.

The city auditor stated that if the council should decide to go with Alt. #2 , his suggestion would be the Aurora property for the tapping fees that are involved in that, leave those costs and pay the 52 cents off of 42nd and 65 cents for 17th, and they would need to come up with an additional $1.1 million if dropped to 39 cents, and what that amounts to on a debt service payment is approx. $120,000/year for 20 years. He stated his suggestion for that funding source when they look at the sales tax infrastructure account would be able to fund that dollar amount, and perhaps slightly more than that, and not sure what the 30 cent per unit impact would be, and when the look at the 5-year capital plan they don’t have any project designated to use those funds, except the floodway project which they are talking about using $500-600,000 but this funding would be over and above that.

Council Member Babinchak stated she was concerned that if want to get tapping area into the city why would they come in when their assessments are going to be 40% more than what anybody else paid out there. The city auditor reported that they have those funds available in the Aurora account for the infrastructure, that when they sold the bonds they allowed $4.3 million of funding to pay for the infrastructure and if you pay it at 52 and 65, it helps buy down the other
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costs and those are the future assessment areas, and when they come in you don’t have to be assessing them at that dollar amount but use the Aurora funds as much as possible because that’s what they were for. He reported that he did a quick calculation at 30 cents and estimating at about a $2 million amount at 30 cents that they would need to fund and if at that amount would still have the possibility of funding it. Mr. Grasser presented the assessment district boundary map showing the future assessment district and are outside the city limits and 57% is being carried by the City and Federal and local shares, 20% is future special assessments and 23% currently assessed.

Mr. Swanson stated that the process outlined is a general process and there is more detail that he has eliminated: 1) initially the city council has the role of establishing a district for a given project, following the establishment of a district or at the same time the council is also acting upon a preliminary engineer’s report and approval of plans and specifications, following that there is a resolution of necessity adopted for certain improvements (not required for all special assessments and excludes things such as water, stormwater, sanitary sewer, etc.) and limiting it to roadway improvements it does require a resolution of necessity, following that the resolution is published along with a map of the district, that is the initiation of the thirty day protest period, not the letters that have been sent out. He stated that once the thirty-day protest period expires the council must determine whether there are adequate protests against that particular project (more than 50% of the owners of the area within the district), assuming that the protest is successful, the project stops there, if you wish to go forward with the project you have to go back to ground zero. If the protests are insufficient you may then take action of either canceling the project or moving forward for a call for bids, and if move forward and advertise for bids, after the advertising period, you can accept the bids and either award or reject the bids at that point. He stated that only after that stage is the Special Assessment Commission given any authority to officially act, they may have been reviewing the project previously or given preliminary information as to their methodology of assessment, but it is after the contract is awarded that they can officially begin to act. The Commission will provide notices to those property owners within the district and those notices will establish when the Commission will hold a hearing, the Commission in its sole discretion establishes the manner in which the assessments are levied, the Commission will hold a hearing and confirm their decisions or assessment and will have a requirement that those assessments be published. At that point the publication also identifies that a public hearing will be held in front of the city council to determine whether or not the assessments are uniformly spread or applied, no ability to alter the total number of dollars that are being assessed, may only redistribute those assessments within the same district. The following action of the public hearing the council would then certify the assessments or refer them back to the Special Assessment Commission, and when the council does approve them, they are reported to the County Auditor and appear on tax statements.

Mayor Owens asked for comments from the audience.

Mike Polovitz, 2529 9th Avenue North, suggested that they might consider as being a part of a total project, that in 1984 they voted to tax ourselves and the whole County which amounts to approx. 10 mills for roads and maintenance for the County, and this has a sunset clause after 20
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years, and in 2004 that will sunset, and that the City should put this to a vote of the people where this money could be used towards this project. The mill levy of the County comes to about $100,000 per mill and applied towards the cost of this project, thinks it has merit for City to approach the people or the County to continue this and use it as part of a formula to pay for this infrastructure. He stated he has been told that the County has one of the best systems of any county in the State - re. county roads and nobody who lives along a county road has ever paid an assessment for that road. He stated that everyone in the county and region will benefit by taxing through the mills for this project and everyone pay their equal share.

Jeremy Davis, l31 Conklin Avenue, stated he serves as general counsel for the University of North Dakota, asked when the protest period begins to run and the protest by property owners within the assessed area. Mr. Swanson stated that the protest period was extended to April 3, and the protest is petition of the owners of more than 50% of the area within the district, and non-annexed property would not be calculated in the 50% and is entirely excluded for both the tapping fees as well as future special assessments.

Don Olson, 3302 Belmont Road, attorney representing some of the property owners that own property south of 17th Avenue South and along 42nd Street on the west side of the road, stated that with respect to tapping areas if there was an assessment unit charged that is imposed against that property or if that is determined later. Mr. Swanson stated that the formula is pre-established and is essentially the same unit charge. Mr. Schmisek stated that if the council goes to a 39 cents per unit, his suggestion is to pay the difference between the 39 cents and the 52 or 65 cents out of the Aurora funds rather than taking them from infrastructure sales tax, as a source of funding.

Duane Espegard, 3649 Lynwood Circle, representing home owners of the district, 98% have signed the petition of protest and are encouraged by the council’s actions tonight, that he doesn’t believe they should have no assessment, should be assessment that is equal to other assessments that have been done in the community. He stated that the petitions say that they have to have something done, that they cannot afford this assessment and don’t think it’s right and want a conclusive answer as to what will be done by the end of the week.

Rosie Black, 1717 S. 35th Street, stated they would like clarification before hearing, that when built 34th Street received assessment for that strip of 34th Street, received assessment in 1979 for 17th Avenue South and paid off last year, that many of them have already paid for 17th and shouldn’t have to pay for twice.

Georgia Heitmann, 91 Grassy Hills, own property on 42nd Street and are assessed for this project,
and protested the assessment.

Earl Strinden, 2812 Chestnut Street, not in the district but has an association with the University of North Dakota, but not representing the University, and that he is concerned about assessments that would go on University of North Dakota and particularly the Ray Richard’s Golf Course,
which could put that out of business. He stated some time ago he was in meeting with Dept. of
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Transp. regarding putting the 42nd Street project on as a State/Federal participation project, and Mr. Moore made statement at that time that they are scheduled out a decade or so in their projects in the State of North Dakota, and if the City of Grand Forks wanted to give up the S. Washington Street project and give a priority to 42nd, they would look at that - and it wouldn’t have been advisable to do that; and question is if the State had been willing to make this a Federal/State participation project, and we know that what’s happening is because of the Aurora, that if it wasn’t for the Aurora you would leave 42nd the way it is for a long time in the future, and by that time the land that’s going to benefit most of all from the Aurora is outside of the city limits would be annexed and be part of the whole project.

Others protesting and making comments re. assessments and sq. footage of area, etc.
Lynn Kvitt, 3665 Lynwood Circle, protested the assessment of property.
Terry Swenson, 3934 15th Avenue South, protested the assessment of the property; that there is a large portion of the property on the map that was not assessed a dollar amount and questioned sq. footage of the area.
Carmen Marchell, 1811 S. 38th Street, stated that 42nd Street is adequate as it is for everyone in the neighborhood to drive it now; that they don’t need five lanes.

COUNCIL MEMBERS MARTINSON AND LUNAK
EXCUSED

After further discussion Mr. Swanson stated that the mailing that was made by the City is not required by statute and any protest that would be turned in by property owners regardless of what facts existed under which they were collected have to be assumed by the City to be valid protests, a property owner having once signed a protest does have the ability to withdraw his protest, individually or collectively but the City would not be in a position to try to determine the intent or subjective thought of why somebody executed the document.

It was moved by Council Member Hafner and seconded by Council Member Brooks that we change the assessment to 35 cents per unit.

Council Member Carpenter asked to be excused from voting on this matter as he and his wife have purchased a lot in this area and a change in policy would benefit him financially. It was moved by Council Member Beyer and seconded by Council Member Klave to excuse Council Member Carpenter from voting on this matter. Carried 10 votes affirmative.

The city auditor stated that the difference in the figures from 39 cents at $1.1 million and at 30 cents stating $2 million, this will be at about $1.6 million and his suggestion is that they take that from the Sales Tax Infrastructure account.

Council Member Hafner stated that the only thing he was changing was the amount and not the effect of the Aurora on unannexed areas.

Council Member Beyer asked for clarification on the motion, that the motion on the floor is 35
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cents per unit. The city auditor stated that what he was suggesting is not necessarily leaving the per unit cost the same on those properties but saying the cost up to that per unit cost would come from Aurora funds, that it maybe a 35 cent unit cost but rather than doing that on the whole area including the future assessments and taking that from Infrastructure Account, is to allow us to pay up to the cost of 52 or 65 cents on those properties out of the Aurora funds, because that will save funds in the Infrastructure Account. The mover and seconded agreed to include this in their motion.

Upon call for the question and upon voice vote, the motion carried 11 votes affirmative.

Peggy Lucke, 514 Harvard Street, stated she was representing the University, and that the University is a large property owner within the district, and they’ve been approached by the individual property owners who are interested in what position the University is going to take and at this point don’t know for sure. She stated she has looked at the golf course, that they have been assessed $240,000 for the South 34th Street project and for the watermain and the sewer, and they are looking at additional $240,000 to $338,000 in estimates they’ve currently received, and in total would be looking at about $1 million in assessments. She stated that she is aware that this project will have the improvement to the intersection of 42nd and DeMers at grade, and there’s a master plan to do additional improvements to that intersection, and questioned who will pay for that as that is a multi-million dollar project. Mr. Grasser stated that the CIP show there are zero special assessments for the underpass/overpass, and are attempting to use regional money from the State which isn’t discretionary to the city, our Urban monies and Highway Users; there are no special assessments shown for that specific project in CIP.

Mayor Owens stated that this will be continued at the council meeting on April 3 at 7:30 p.m. for the public hearing and this motion will move forward to city council.

ADJOURN

It was moved by Council Member Hamerlik and seconded by Council Member Lucke to adjourn. Carried 11 votes affirmative.

Alice Fontaine
City Clerk

Dated: 3/28/00