5.2. SR 12-17-2007REQUEST FOR ACTION
ver
To Item Number
Ci Council 5.2.
Agenda Section Meeting Date Prepared by
Public Works December 17, 2007 Lori ohnson, Ci Administrator
Item Description Reviewed by
Discuss Right-of-Way Acquisition along TH 169
Reviewed by
Action. Requested
Discuss whether the City wants to pursue acquiring right-of--way along Highway 169 as it becomes
available.
Background/Discussion
At a previous meeting, staff made the Council aware of a property along Highway 169 that is for sale that
will be required as right-of--way for the Highway 169 improvement project. The Council briefly discussed
the acquisition of right-of-way property prior to the project being authorized. The purchase of land prior
to an approved project is not MSA eligible until the project is approved and would need to be funded
through City reserves. At the meeting we did not have information from MnDOT regarding how it
would value the property the City acquires early when it becomes eligible for MSA reimbursement, so the
discussion was delayed until that information was available.
MnDOT representative Craig Robinson responded stating that MnDOT's policy "is to determine a
property's value at the time MnDOT obtains it, not the value at the time the City purchased it. In most
cases the property will appreciate in value, although in some cases, it could go the other way." Again, the
City would need to fund this purchase until the project is approved and the land is eligible for MSA
reimbursement. Considering these two facts, in order for the City to come out ahead financially on an
early acquisition, the value of the property would need to appreciate more than the interest cost for
holding the property plus the costs for maintenance, repair, and staff time of maintaining the property
until it is needed for this project. Since this project is not programmed in MnDOT's long range plan, the
City may hold this property for many years before it is needed for the project. Further, although
ownership of this land may be advantageous when applying for federal funds, it is unlikely that the City
will be in a financial position to purchase much of the needed right-of--way property. Therefore, the
question is whether holding one or two properties will help in the quest to obtain federal funding since
the majority of the right-of--way will still need to be acquired.
Financial Impact
The Capital Improvement Plan (CIP) includes $250,000 in both 2011 and 2012 for Highway 1691and
acquisition. If the council chooses to proceed with the purchase of the property currently available, the
2008 CIP would need to be adjusted by reducing one of the programmed projects by an amount equal to
the land acquisition cost.
S:\Council\Lori\2007\TH 169 ROW Accquisition 12 17 07.doc
Attachments
None
ACtlon Motion by Second by Vote
Follow Up
S:\Council\Lozi\2007\TH 1G9 ROW Accquisition 12 17 07.doc