|DATE:||May 9, 2007|
|TO:||Mayor Morrison & City Council Members|
|FROM:||James H. Olson|
|RE:||ADDENDUM TO MAY 1, 2007 COUNCIL COMMUNICATION |
ASSESSMENT RATE OPTIONS FOR THE NEVADA STREET LID
The purpose of the public hearing that was convened on May 1, 2007 was to hear written objections to the proposed assessments to be levied under the Nevada Street LID. All property owners within the district were apprised of the pending assessment amounts in the hearing notice, sent by first class mail by the City Recorder. The same information was also published in the Daily Tidings.
Although it is common to have one or more owners within the district contest the assessment rate, in this instance no written objections have been received. Historically, the final assessment hearing has been the means by which small adjustments in individual assessments have been made as requested in writing by a property owner. Although it is not impossible to do so, large whole scale adjustments in the rates are generally not made without additional noticing with the new proposed rates and with adequate time provided for comments and objectives to the new rate.
The original 2004 estimate for this project was $173,500. The LID credits for City participation were computed based upon a flat 60 percent City participation for all construction activities. This approach was used as staff considered this project to be a sidewalk project rather than a street improvement project for which the participation rates as developed for Resolution 99-09. On a standard street improvement project, sidewalk costs generally total less than 10 percent of the cost with paving costs usually at 75 to 80 percent. The reverse is true in this instance and to apply a 60 percent participation rate to the entire project provided a more equitable and slightly reduced assessment rate. It was felt that the reduced rate and simplified method of computation would be more easily supported among the owners within the district.
CIRCUIT COURT CASE NO. 04-397123(7), BULLOCK VS. CITY OF ASHLAND
In the Bullock vs. City case, Judge Snively ruled on the City's behalf on nearly 80 allegations of wrong doing by Art Bullock. The identified an error in that the City did not have the option of varying from the specified formula for City participation as set forth in Resolution 99-09. The Judge further ruled that even though the City erred in its computation of credits, no harm was done to anyone within the district and the City was not required to revise the formula.
RESOLUTION NO. 2004-31
On September 7, 2004, following a public hearing, Council approved Resolution 2004-31 which ordered and authorized the improvement of Nevada Street and the formed the Nevada Street Local Improvement District No. 85.
The assessment rate was computed at $575.20 per assessment unit which was based upon the following assumptions:
|1.||Estimated project cost of $173,500.00|
|2.||City participation of $101,600.00 (60% of construction costs)|
|3.||Assessment amount of $71,900.00|
|4.||Number of assessment units - 125|
Public hearing notices were sent to all owners within the district with rates and information included.
Following the approval of Resolution 2004-31 staff completed the project design and requested bids for the work. Bidder interest was dismal and the first bid was rejected. In an effort to gain a more competitive cost the project was re-bid with results similar to the first bid. The single bid was received from LTM Inc. for $249,050.50.
On January 17, 2006 the bid was reviewed by Council. Since the bid was over 40% higher than the 2004 estimate the following options were considered:
|1.||Reject the bid and attempt to find a lower cost method to accomplish the work.|
|2.||Adjust the assessment to accommodate the costs based upon the bid. This would require that another public hearing be held with notices be sent to all owners with the new assessment rate shown.|
|3.||Accept the bid and award a contract to LTM Inc. in the amount of $249,050.50, and in accordance with AMC 13.20.060 (B) the City would find additional funding sources to cover the extra cost. This option requires that the assessment rate as specified in Resolution 2004-31 can not be increased by more than 10 percent.|
Council selected Option No. 3 and assurances were made to the district that any possible increase would be limited to 10 percent over the originally specified rate of $575.20 per unit. A contract was entered into with LTM Inc. and the project was constructed.
FINAL PROJECT COSTS
The final project development cost was $295,837.63 including engineering costs.
|1.||The assessment rate as specified under Resolution 2004-31 is $575.20/unit.|
|2.||The maximum increase of ten percent results in a rate of $632.72.|
|3.||If the formula specified under Resolution 99-09 had been strictly adhered to the rate would have been $716.48/unit, an increase of 24.5% (based upon the original estimate).|
|4.||If the assessment were to be recomputed based upon the final project cost and at the correct participation rate as specified under Resolution 99-09, the final assessment rate would be $1,347.08/unit, an increase of $134.2%.|
If the Council elects to vary the original assessment rate of $575.20/unit as stated in Resolution 2004-31 by more than 10 percent, than this public hearing should be terminated and property owners sent a notice of the new assessment rate and a new public hearing date be set with adequate time provided for written comments.
|•||A Resolution Levying Special Benefit Assessments in the Amount of $79,090.00 for the Nevada Street Local Improvement District.|
Click on the PDF file below to view the following:
|•||Council Commmunication and Packet Materials from May 1, 2007 Council Agenda. |
- Vicinity Map
|•||Written Testimony/Challenges Submitted at May 15, 2007 Council Meeting|
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