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7.0. SR 01-05-1998~,ty of Item River MEMORANDUM TO: Mayor and City Council FROM: DATE: SUBJECT: Patrick D. Klaers, City Ad~vistrator January 5, 1998 ~ Capital Improvement Worksession At the Mayor's request on December 22, 1997, a City Council worksession on "development issues" is scheduled for January 5, 1998, after the regular City Council meeting. The last City Council worksession on development issues was in September, 1997. This worksession concentrated on western Elk River Business Park areas, the extension of trunk sewer and water (Western Area Phase III), the County building expansion project and its need for better access and water, and the extension of Business Center Drive including its future connection to a realigned Waco Street. Due to time constraints, the Council did not get an opportunity to discuss east Elk River development issues in any amount of detail. This City Council worksession on 1/5/98 will concentrate on possible trunk sewer and water and street projects for the east Elk River area. (I think that everyone understands that when we say, "an east Elk River project", that we are talking about the area south of County Road 13 east of Highway 169 going down to Highway 10.) A large amount of preliminary work for an east Elk River project has already been completed. This preliminary work includes an area wide trunk utility study, a feasibility study for trunk utilities and streets for specific areas, appraisals, the official mapping of streets, and topographical work. Additionally, a few different Elk River trunk sewer and water and street proposals have been discussed, reviewed, and evaluated by the City Council over the past few years. At this time, it now appears that the City Council will be facing a "moment of truth" regarding an east Elk River project. Two landowners/developers (the Waddy Schulze area and the Earl Hohlen area) are expected to petition the city for trunk utilities. As such, utilities are expected to be "pulled" across Highway 169. When the petitions from the landowners/developers are received, which includes a waiver of their rights to appeal assessments, the 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 City Council Meeting Page 2 Capital Improvement Worksession January 5, 1998 City Council will then be faced with the issue of how large of a trunk utility project it should support. In general, after numerous different options have been looked at and evaluated over the years, it appears that the City Council is down to two basic options. The first option is the smallest project possible (just the Earl H. and Waddy S. properties) and the second option is the largest project possible that can be ordered on a 3/5 Council vote. This 3/5 City Council vote relates to state law that refers to a valid petition being submitted by 35% of the benefited property owners. It should be noted to the City Council that staff firmly believes that the largest possible project that can be authorized on a 3/5 vote ultimately must and will be constructed. However, staff supports the smallest project possible in 1998-99 with the balance of the larger project being completed in phases as the market dictates and as property owners petition. On the other hand, the Mayor supports the largest project possible being done all at once in1998-99. The only real difference between the Mayor's desires and the staff recommendation is the phasing of the improvements and the cost of the project being spread out over time. Based on previous discussions with the City Council on possible projects and the financial issues associated with any east Elk River public improvement project, some Councilmembers may already know if they support the minimum or maximum project. At this time, all we have had to work from in analyzing the finances of the projects are estimates as provided by the engineer based on maps of the area and standard construction figures. In order for the most accurate information possible to be available for the Council to base its decision on, the Mayor plans to recommend to the Council that the City Engineer be authorized to design the ultimate trunk utility and street project down to 171st Avenue and that this part of the project be put out for bids when the minimum project for (Waddy S. and Earl H.) moves forward. The Mayor believes that once the true costs are known for the project, then the Council will be in a better position to make an informed decision on whether the maximum or minimum project should move forward. Two points need to be mentioned regarding the Mayor's request. The first point is that we need to get a cost estimate from Terry Maurer so we know what we are looking at for the ultimate design plus we need to know if this design work will be usable in five years. The second point is that in addition to the actual overhead and construction costs of the ultimate project, the Council also has to keep in mind the other costs associated with this project. By this I mean that with the area C project, the city may be purchasing some Business Park land, including its assessments, with the development fund. City Council Meeting Page 3 Capital Improvement Worksession January 5, 1998 Accordingly, the development fund may not be an available source of money to help with the project financial shortfall. An outline for the Council worksession is as follows: · History of the east Elk River trunk utility proposals · Status of current activities associated with an east Elk River project · Area A (smallest) and financial analysis · Area C (largest) and financial analysis · Summary of positives and negatives for area A · Summary of positives and negatives for area C Attachments · Exhibit lA, lB, 1C, and pages 23-30 including exhibit 10 from the July, 1997, Feasibility Study \\elkriver\sys\shrdoc\council\cip 10598.doc C3 pROJECT AREA 1500 _EAST ELK RIVER PROJECT AREA A ER220-PA © 0 PROJECT AREA 0 150O RKM A.JB JULY 1997 230-220 JOB NO. EAST ELK RIVER PROJECT AREA B ER220-PA I i RKM . ORAWN: AJD APPRETV[O: JULY lgg7 OM~ 250-220 J~ NO. L~$~ PROJECT AREA EAST ELK RIVER PROJECT AREA C 150O VII. low-lying areas at Tyler Street and 173rd Avenue and along the proposed transportation corridor within Earl Hohlen's property. Based on this preliminary report, subgrade correction will be required in the form of peat and muck excavation and the placement of a granular borrow material. A complete geotechnical investigation will be conducted prior to the final design of the proposed road to verify the above assumptions. OTHER ISSUES A. Permits Be Several permits will be required as part of the proposed construction. The permits required and the regulatory agencies are listed below: Minnesota Pollution Control Agency (MPCA) Sanitary Sewer Minnesota Pollution Control Agency (MPCA) General Stormwater Permit Grading and Storm Sewer Minnesota Department of Health Watermain Minnesota Department of Transportation (Mn.DOT) Utility Crossings and Signal System Minnesota Department of Natural Resources (MnDNR) Wetland Impacts Army Corps of Engineers Wetland Impacts Sherburne County Street and Utilities Burlington Northern/Sante Fe Railroad Street and Utilities Land Acquisition Proposed construction of the transportation corridor and trunk sanitary sewer and water improvements will require the acquisition of right-of-way and utility easements from various property owners within the study area. The proposed right-of-way width for the transportation corridor is 120 feet to provide area for the construction of a 72-foot wide urban street with concrete channelization, pedestrian facilities, and other amenities. Additional street right-of-way ~vidth will be required at intersections where turn lanes will be located. Where proposed utility alignments do not correspond with proposed or existing street rights-of- way, utility easements will need to be acquired. Feas-800. 110 2.3 800-110-J Street rights-of-way and utility easements will be acquired through a land acquisition process as presented in the planning study and also from the platting of individual properties as they develop. Rights-of-way and easements needed for the proposed improvements within the Earl Hohlen and Wadde Schulze properties will be acquired through platting and/or cooperation with the Developers. In areas where right-of-way is proposed to be acquired for the transportation corridor, several properties have been identified to be acquired in their entirety as the remaining areas of the parcels would be to small in size to maintain a marketable value. These properties proposed to be acquired in their entirety have been identified on the East Elk River Urban Service Area color maps. Other remnant areas created by the proposed transportation alignment have also been shown to be acquired as a part of the right-of-way acquisition. The width of utility easements required will vary depending on the depth of proposed utilities. Pond easements will also need to be acquired for proposed regional stormwater ponds. C. Official Map As a part of this study, an official map is being prepared for the proposed transportation corridor from CSAH 13 south to 171st Avenue. Minnesota State Statues, Chapter 462.359, Subdivision 1, states that, "Identification on an official map of land needed for future public uses permits both the public and private property owners to adjust their building plans equitably and conveniently before investments are made which will make such adjustments difficult to accomplish." Subdivision 3 goes on to say that "The adoption of an official map does not give the municipality any right, title, or interest in areas identified for public purposes thereon, but the adoption of the map does authorize the municipality to acquire such interests without paying compensation for buildings or structures erected in such areas without a permit or in violation of the conditions of a permit." Deviations from the official map may be made in the future to correspond with potential development plans of individual property owners. VIII. ESTIMATED COSTS The estimated construction costs and associated overhead costs have been determined for the construction of the proposed trunk sanitary sewer and water improvements, storm drainage improvements, and transportation corridor within each project area. Estimated costs associated with the construction of streets include the construction of the proposed transportation corridor from County Road 12 to 171st Avenue and the realignment of CSAH 13 as 72-foot wide streets with concrete channelization and barrier curb and gutter. Costs associated with the construction of pedestrian facilities, street lights, and other amenities have also been included in the estimated street construction costs. Estimated costs have also been included for the construction of signal systems at TH 10/ 171st Avenue and County Road 12/CSAH 13 and for intersection improvements along Main Street at Earl Hohlen's property, including a signal system. No costs for the acquisition of rights-of-way and easements have been included. Feas-800.110 24 800-110-J Estimated construction costs for the proposed trunk sanitary sewer and water improvements have been taken from the September 1994 Draft East Trunk Highway 10 Study and modified to reflect changes to the proposed alignments. Estimated costs for trunk sanitary sewer include a regional lift station adjacent to TH 169, a regional lift station within the Trott Creek Farms development, horizontal borings under TH 169 and the BNSF Railroad, forcemain, and gravity sewer ranging in size from 8 to 24-inch diameter pipe. Trunk watermain costs include horizontal borings under TH 169, the BNSF Railroad, and TH 10, 10 to 16-inch trunk watermain, hydrants, valves and other appurtenances. Costs have been estimated for the construction of storm drainage improvements along the proposed transportation corridor and the realignment of CSAH 13. These estimated costs include storm sewer pipe, manhole structures, and stormwater ponds as needed to treat surface runoff from the proposed transportation corridor. Costs associated with the construction of a regional pond and culvert construction under the BNSF Railroad have also been included in the estimate. In accordance with the City's assessment manual, the overhead costs have been estimated as 28% of the total estimated construction costs for each project area. For a project of this size, an overhead cost of 28% of the total estimated construction cost is a conservative estimate. As land acquisition costs have not been estimated a 28% overhead cost may provide monies for administration costs associated with land acquisition. The overhead cost includes city administration, engineering design, construction staking and inspection, and fiscal and legal expenses. The estimated costs are as shown in Table 1. Feas-800.1 I0 25 800-110-J PROJECT AREA A Street Construction TABLE 1 EAST ELK RIVER URBAN SERVICE AREA PHASE I IMPROVEMENTS ESTIMATED PROJECT COSTS $1,200,740.00 Main Street Improvements and Signal System $166,587.00 Signal System- County Road 12/CSAH 13 $145,000.00 Sanitary Sewer Construction $1,739,100.00 Watermain Construction $1,379,994.00 Storm Drainage Construction $561,605.00 Subtotal $5,193,026.00 Overhead (28%) Total Estimated Project Cost PROJECT AREA B Street Construction $1,454,048.00 $6,647,074.00 $1,593,855.00 Main Street Improvements and Signal System $166,587.00 Signal System - County Road 12/CSAH 13 $145,000.00 Sanitary Sewer Construction $1,835,020.00 Watermain Construction $1,661,913.00 Storm Drainage Construction $902,605.00 Subtotal $6,304,980.00 Overhead (28%) Total Estimated Project Cost PROJECT AREA Street Construction $1,765,394.00 $8,070,374.00 $2,861,450.00 Main Street Improvements and Signal System $166,587.00 Signal System - County Road 12/CSAH 13 $145,000.00 Signal System - TH 10/171st Avenue $165,000.00 Railroad Crossing $50,000.00 Sanitary Sexver Construction $2,316,160.00 Watermain Construction $2,547,619.00 Storm Drainage Construction $1,287,682.00 Subtotal $9,539,498.00 Overhead (28%) $2,671,060.00 Total Estimated Project Cost $12,210,558.00 Fcas-800.110 26 s00-110-J IX. Costs associated with the acquisition of rights-of-way and easements have not been included in the estimated costs. These costs will vary depending if rights-of-way and easements are acquired through an acquisition process or from the platting of property within the project areas. FINANCING Costs associated with the proposed improvements will be financed through trunk and lateral sanitary sewer and water assessments to benefitting property owners, street and storm drainage assessments to the Developers of the Earl Hohlen and Wadde Schulze properties, MSA funds, Intermodal Surface Transportation Efficiency Act (ISTEA) funds, and County funds. At the time that a signal system is installed at TH 10 and 171st Avenue, MnDOT funds for the two TH 10 legs of the intersection would likely be available. Proposed assessments will be based on the City's Assessment Manual and current City assessment policies. An appraisal report prepared by Peter J. Patchin and Associates, Inc. was discussed in the planning study and is included in Appendix C for reference. This report concluded that the market benefit of trunk sanitary sewer and water within the East Elk River Urban Service Area is $6,000 per acre for residential and industrial lands, and $8,000 per acre for commercial lands. It is proposed to assess for trunk sanitary sewer and water at a single rate of $6,000 per acre regardless of zoning, following previous City assessment policies. Assessments are levied against gross acreage, subtracting designated wetland and flood plain areas only. Exhibit 10 shows the property owners proposed to be assessed for trunk sanitary sewer and water and associated gross acreage. The exact boundaries of wetlands and floodplains will need to be verified at the time of construction and prior to assessments being established. Trunk sanitary sewer and water lines have been shown to provide additional benefit to the Earl Hohlen and Wadde Schulze properties as lateral sanitary sewer and water. This lateral benefit is proposed to assessed at the City's current assessment rate of $50.00 per front foot for lateral sanitary sewer and water. In areas where only lateral sanitary sewer or lateral water service is present, a rate of $25.00 per front foot will be assessed. Costs associated with the construction of streets and storm drainage are proposed to be funded through the use of MSA funds, and through assessments to the Developers of the Earl Hohlen and Wadde Schulze properties. The proposed transportation corridor was added to the MSA system in 1995 making costs associated with street and storm drainage eligible for MSA funds. As projects develop, an application for ISTEA funds will be made for proposed street and storm drainage construction. The application of Surface water Management Fees to developments within the area will also be used to fund proposed storm drainage construction. The Developers of the Earl Hohlen and Wadde Schulze properties are proposed to be assessed for the entire street and storm drainage improvements costs within each development. The cost associated with the proposed Main Street improvements will be assessed to the Developer of the Earl Hohlen property. Feas-800.110 27 800- l 10-J EXHIBIT 10 PROPERTIES TO BE ASSESSED Feas-800.110 28 800-I lO-J MACZIEWSKI 0.93-0.90 DESCHENES PROPERTY TO BE AQUIRED INDUSIRIAL HARDFACIN, 3.74-3.38 PLAISTED 75.85- SCHULZE ' 282.92-200.91 MULVANEY 28.0-: DIVINE 4.15-3.99 -"CHRISTIAN 2.0-1.84 v 0 ENRON ~ · 17-0.17 ~,, / -, '""' BLACK 2.0-1.72 DE 2.0-2.0 FIR: BARRETA 5.51-4.33 HICKMAN 2.8-2.8 LEFEBVRE EBNER 7.30-5.7 0 1000 SLIHNIK HEA'rH 0.64-0.51 1.85-1.85 AUST 2.0-2.0 LEGEND PROPERTY OWNER GROSS ACREAGE-ASSESSABLE ACREAGE EBNER PROPERTY TO BE AQUIRED WARDEN 4.33-4.20 MEVISSEN 2.04-1.98 PRICE 6.89-6.89 MAJKRZAK 3.98-3.98 KRUSE BELL 12.55-12.55 1.37-1.37 LUNDQUIST WORTS DEHN 4.21-4.21 0.97-0.97 3.6-3.6 __230-27L NO. SNYDER 1.28-1.10 POWELL 34.12-33.48 L&W LIMITED 1.6-1.6 LOCHER 0.66-0.66 HOULE 7.73-4.08 HOULE 1.06-0.82 When in the future an S JR warrants the construction of a signal system at the intersection of TH 10 and 171st Avenue, MnDOT funds should be available for the two MnDOT legs of the intersection. The City's share of the signal system cost for the 171st Avenue leg would be MSA-fundable. If in the future a signal system is justified at the proposed intersection of County Road 12 and CSAH 13. County funds may be available for the respective County legs of the intersection. Proposed financing methods are shown in Table 2. TABLE 2 EAST ELK RIVER URBAN SERVICE AREA PHASE I IMPROVEMENTS PROPOSED FINANCING PROJECT AREA A Trunk Sanitary Sewer and Water Assessment Lateral Sanitary Sewer and Water Assessment Street Assessment $1,639,620.00 $930,110.00 $1,750,179.00 $396,653.00 $4,716,562.00 Storm Drainage Assessment Total Assessment 1 Total Estimated Project Cost $6,647,074.00 Shortfall $<1,930,512.00> PROJECT AREA B Trunk Sanitary Sewer and Water Assessment $2,809,224.00 Lateral Sanitary Sewer and Water Assessment $930,110.00 ?zreet Assessment $1,750,179.00 ~torm~. Drainage Assessment $396,653.00 Total Assessment $5,886,166.00 Total Estimated Project Cost $8,070,374.00 Shortfall <$2,184,208.00> PROJECT AREA C Trunk SanitaD7 Sewer and Water Assessment I $4,205,142.00 Lateral Sanitary. Sewer and Water Assessment ! $930,110.00 Street Assessment $1,750,179.00 Storm Drainage Assessment Total Assessment Total Estimated Project Cost Shortfall $396,653.00 $7,282,084.00 $12,210,558.00 $<4,928,474.00> Feas-800.110 29 800-1 Proposed assessments to the Developers of the Earl Hohlen and Wadde Schulze properties for trunk sanitary sewer and water, lateral sanitary sewer and water, and street and storm drainage improvements have been separated out as shown in Table 3. TABLE 3 EAST ELK RIVER URBAN SERVICE AREA PHASE I IMPROVEMENTS DEVELOPER ASSESSMENTS EARL HOHLEN PROPERTY i Trunk Sanitary Sewer and Water Assessment Lateral Sanitary Sewer and Water Assessment $434,160.00 $207,500.00 Street Assessment $753,104.00 Storm Drainage Assessment $192.550.00 Main Street Improvements and Signal System Total Assessment WADDE SCHULZE PROPERTY Trunk Sanitary Sewer and Water Assessment $1,205,460.00 Lateral Sanitary Sewer and Water Assessment $722,610.00 Street Assessment $783,843.00 Storm Drainage Assessment $204,103.00 Total Assessment $2,916,016.00 $213,232.00 $1,608,087.00 XI. PROJECT SCHEDULE The schedule for the East Elk River Phase I Improvements will be based on guidelines established in Minnesota State Statues, Chapter 429, Local Improvements, Special Assessments. Whe project schedule will be dependent on the advancement of projects by the Developers of the Earl Hohlen and Wadde Schulze properties. As these projects progress, a project schedule for the proposed improvements will be established. The project schedule will provide for the commencement of Phase I improvements in the summer o~7 1998. CONCLUSION The total estimated project cost for each project area is $6,647,074.00, $8,070,374.00, and $12,210,558.00 for Project Areas A, B, and C respectively. As previously stated, the cost will be financed through trunk and lateral sanitary sewer and water assessments, street and storm drainage assessments, through the use of MSA funds, ISTEA finds, Country funds, and MnDOT funds. Based on the reformation gathered and the analysis presented, the ,?roposed improvements discussed in this study are feasible from an engineering standpoint. Feas-800.110 3 0 800-110-J Peter J. Patchin & Associates, Inc. Valuation Consultants (612) 895-1205 101 West Burnsville Parkway, Suite 200, Burnsville, Minnesota 55337 FAX (612) 895-1521 December 31, 1997 City of Elk River 13065 Orono Parkway P.O. Box 490 Elk River, MN 55330 ATT N: Mr. Terry Maurer RE: Valuation Consulting and Appraisal Services Peter J. Patchin & Associates, Inc. 101 W. Bumsville Parkway, Ste. 200 Burnsville, Minnesota 55337 To whom it may concern: This letter is intended to be a memorandum of understanding concerning the engagement of Peter J. Patchin & Associates, Inc. for purpose of rendering valuation consultation and/or appraisal reports. It is understood by both parties that the nature of the assignment is as follows: Type of Property/ Location: Function of Appraisal/ Consultation: Type of Services to be Provided: Commercial, Residential and Industrial Lands Located West of Highway #169, Along Highway #10 Elk River, Minnesota Estimate the market benefit of water and sewer trunks within the proposed project area. Update our limited appraisal, summary report, dated May 1, 1996 to a current date of value, in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP). Estimated Cost of Services Rendered: Delivery Date: Terms: Retainer Fee- to be paid in advance: Date of Proposal: $6,000.00; plus professional fees of $100.00 per hour for time after delivery of appraisal report, including meetings, testimony, etc. We will furnish three copies of the appraisal within 8 to 10 weeks following return of authorization to proceed. Total amount due within 30 days following date of invoice, 1-1/2% per month interest charges will be added to accounts not paid by that time. None. December 31, 1997 Respectfully submitted, PETER J. PATCHIN & ASSOCIATES, INC. Jason L. Messner, MAI JLM:prj Authorization To Proceed Client Name: Individual Responsible: Signature: Date Accepted: Patchin & Associates, Inc. Valuation Consultants , j CC 4 P~,-.¢,'.44 .z ,¢/.,,.),~ O..o ngD' ~,c.'f i on ,¸! 04<.69o CR 2 PLAZ~ UFT STAllON AVENUE HILL~DE Ol'~f' pA~K KUEVER°$ PROJECT AREA C STREET ALIGNMENT PROPOSED WATERMAIN PROPOSI~ SANITARY SEWER DESIGNED BY; __ DRAWN BY: AJB JOB DATE: JANUARY 1998 RKM JOB NUMBER 230220M APPROVED: CAD FILE: ER220-PA CAD DATE: EAST ELK RIVER PROJECT AREA C I: EXHIBIT 2 HILLSIDE ~ PROJECT AREA A ~ S~T AUONMENT o · ' ' ' ' = PROPO~D WA~RMAIN = = = = = = PR~O~D SANIT~Y SE~ DESIGNED BY: AJB ~B DA~: JANUARY 1998 ~. ~ ~TA ~1~ DRA~ BY: RKM JOB NUMBER 25022~ ~ EA~ E~ ~R APPRO~D: CAD DA~: J~UARY 1998 ~ 1 ~T ~ A CONSULT~G E~ERS