4.1. SR 02-09-1998~,~y of
ITEM 4.1.
MEMORANDUM
iver
FROM:
MAYOR AND CITY COUNCIL
STEPHEN ROHLF, BUILDING
ZONING ADMINISTRATOR
DATE: FEBRUARY 9, 1998
SUBJECT: LAKE ORONO PROJECT
Staff is proposing the assessable area for the Lake Orono project includes the shoreland
from the dam as for up river as sediment is removed. The assessment role still needs
adjustment, but the area described includes property under approximately 117 different
ownerships that equal 201 equivalency units.
The vast majority of the owners (102) are proposed to be assessed as one unit. The
breakdown of units per owner is as follows:
Owners # of units
102 ~ 1
7 @ 2
6 (between 4 & 10 units each) 39
1 ~., 20
1 ~ 26
117 201
Guardian Angels is proposed at 20 equivalency units and the city is the owner with 26.
Included in this packet is a memo from Pat Klaers with a recommendation on how the
city's units should be treated.
The numbers above are preliminary. It is estimated that approximately 20 of the 201
equivalency units need to be reviewed closer.
The estimated cost of the recommended project is $750,000. Overhead was figured into
this price at 28%, the same as an urban service project. The plans required for this project
will not need to be as detailed as an urban service project and it will require less survey
stacking and inspection.
The 28% was used to add a cushion. The bids for the project may come in higher than
the estimates the city received. If the overhead is less than what was estimated, the city
contribution will be less.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
Staff will be at Monday night's meeting to discuss these issues with you further. Staff
will also be back in front of the Council on the 2/17/98 meeting to request that the
Council orders a feasibility study for the project.
~ty of
MEMORANDUM
Item #4.1.
TO:
FROM:
DATE:
SUBJECT:
Mayor & City Council
Pat Klaers, City~trator
February 9, 1998
Lake Orono Update
On December 15, 1997, a presentation was made to the City Council regarding
options for a Lake Orono sedimentation improvement project. Based on available
disposal sites and area of land for material, the minimum type of sedimentation
removal project that would be necessary to do any long term good for the river/lake,
and an acceptable range of assessments to benefited property owners, everyone
seemed to agree with the Task Force recommendation of moving forward with a
1998 project that was in the $750,000 range.
At the February 2, 1998, capital improvement meeting, discussion took place on a
Lake Orono improvement project. Questions were raised regarding the overhead
expenses for the project, the total cost of the project, the disposal areas, the
assessment amounts, and the total number of assessment units. Some of the land
owners along the lake will receive more than one assessment unit based on the
amount of frontage which they own and based on whether or not the property can be
subdivided and part of the property sold off for another home site. At this time, it
appears that we will end up with a total of about 186 assessment units. This total
includes 26 assessment units for city property. The 186 total units is less than the
amount shown in Steve Rohlfs memo as we both believe his estimate of 201 will be
reduced after additional analysis.
A $750,000 project will require city participation in addition to any assessments
which the city receives. The city participation or contribution will either increase or
decrease slightly depending on if the overhead is less than 28 percent and if the
project comes in above or below the preliminary estimate. The City Council, at a
later date, can discuss how the city will finance its participation in the project. It is
assumed that whatever units are assessed to the city will be paid back over a five to
seven year assessment schedule. However, a contribution of $200,000 to $400,000
above and beyond the assessments can be funded by the city over time either within
or outside of the levy limit. Nonetheless, all the city participation will come from tax
dollars.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
Below are a number of examples on how the total cost of the project could be split up
between the property owners and the city. Also attached are sample assessment
schedules as prepared by Assistant City Administrator Lori Johnson.
Examples
$750,000 Total Project
160 Property Owner Assessment Units
26 City Owned Land Assessment Units
$2,000/assessable unit
$2,200/assessable unit
$2,350/assessable unit
$2,500/assessable unit
$3,000/assessable unit
186 units @ $2,000 = $372,000
* Property owners share = $320,000
· City Share = $52,000
Additional city contribution = $378,000
Total city participation (including assessments) = $430,000
Total property owners expense (excluding city) -- $320,000
186 units @$2,200 = $409,200
· Property owners share = $352,000
· City share -- $57,200
Additional city contribution = $340,800
Total city participation (including assessments) = $398,000
Total property owners expense (excluding city) = $352,000
186 units @$2,350 = $437,100
· Property owners share = $376,000
· City share = $61,100
Additional city contribution = $312,900
Total city participation (including assessments) = $374,000
Total property owners expense (excluding city) -- $376,000
186 units @$2,500 -- $465,000
· Property owners share-- $400,000
· City share = $65,000
Additional city contribution -- $285,000
Total city participation (including assessments) -- $350,000
Total property owners expense (excluding city) = $400,000
186 units @$3,000 = $558,000
· Property owners share = $480,000
· City share -- $78,000
Additional city contribution = $192,000
Total city participation (including assessments) = $270,000
Total property owners expense (excluding city) = $480,000
SAMPLE A
Principal Outstanding:
Interest Rate:
Interest Start Date:
Term:
Payment Year
LAKE ORONO
SAMPLE ASSESSMENT SCHEDULE
$2,000.00
7.00%
Jan. 1
5
Payment Principal
Year 1 540.00 400.00
Year 2 512.00 400.00
Year 3 484.00 400.00
Year 4 456.00 400.00
Year 5 428.00 400.00
SAMPLE B
Principal Outstanding:
Interest Rate:
Interest Start Date:
Term:
Payment Year
Year 1
Year2
Year3
Year 4
Year 5
SAMPLE C
Principal Outstanding;
Interest Rate:
Interest Start Date:
Term:
Payment Year
Pdncipal
Interest Outstanding
$2,000.00
140.00 1,600.00
112.00 1,200.00
84.00 800.00
56.00 400.00
28.00
$2,420.00 $2,000.00 $420.00
$2,200.00
7.00%
Jan. 1
5
Payment Principal
594.00 440.00
563.00 440.00
532.00 440.00
502.00 440.00
471.00 440.00
Pdncipal
Interest Outstanding
$2,200.00
154.00 1,760.00
123.00 1,320.00
92.00 880.00
62.00 440.00
31.00
$2,662.00 $2,200.00 $462.00
$2,350.00
7.00%
Jan. 1
5
Payment Principal
Year 1 635.00 470.00
Year 2 602.00 470.00
Year 3 56900 470.00
Year 4 536.00 470.00
Year 5 503.00 470.00
SAMPLE D
Principal Outstanding:
Interest Rate:
Interest Start Date;
Term:
Payment Year
SAMPLE E
Principal Outstanding:
Interest Rate:
Interest Start Date:
Term:
$2,845.00 $2,350.00
Payment Year
$2,50Q00
7.00%
Jan, 1
5
Payment Principal
Principal
Interest Outstanding
$2,350.00
165.00 1,880.00
132.00 1,410.00
99.00 940.00
66.00 470.00
33.00
$495.00
Year 1 675.00 500.00
Year 2 640.00 500.00
Year 3 605.00 500.00
Year 4 570.00 500.00
Year 5 535.00 500.00
$3,025.00 $2,500.00
$3,000.00
7.00%
Jan. 1
7
Principal
Interest Outstanding
$2,500.00
175.00 2,000.00
140,00 1,500.00
105.00 1,000.00
70.00 500.00
35.00
$525.00
Payment Principal
Year 1 638.57 428.57
Year 2 608.57 428.57
Year 3 578.57 428.57
Year 4 548.57 428.57
Year 5 518.57 428.57
Year 6 488.57 428.57
Year 7 458.57 428.57
Principal
Interest Outstanding
$3,000.00
210.00 2,571.43
180.00 2,142.86
150.00 1,714.29
120.00 1,285.71
90.00 857.14
60.00 428.57
30.00
$3,840.00 $3,000.00 $840.00