Item C: Street Assessment Policies

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improvement remonstrate against the project, the hearing before the hearings official is continued to the City Council. It then requires that two-thirds of all councilors vote in support of a resolution for an LID to be formed. Normally a simple majority of affirmative council votes is necessary to form an LID. Once an LID is formed the City proceeds with construction of the improvement project. Upon completion of construction, a second public hearing is held before a hearings official. The purpose of the second public hearing is to determine if the assessments to the benefiting properties were determined appropriately. After considering the findings of the hearings official, the council adopts an ordinance levying the assessments against the benefiting property owners. After adoption of the ordinance levying assessments, property owners have 10 days to pay the assessment in full or to finance the assessment through the City over a 10-year period. City financing is available to all property owners as long as the value of the property is greater than the amount of the assessment. Assessments financed through the City may be paid off early without any penalty. There are several financial assistance programs available to property owners. Both the City and the State have deferral programs that are based on age and income. In addition, the City has a subsidy program based on income with subsidies ranging from 1/3 to 5/6 of the total assessment. Council Ad Hoc Committee on Street Improvement Funding Beginning in 1999, and continuing over the course of several years, a council Ad Hoc Committee on Street Improvement Funding reviewed the assessment policies for all functional street classifications. The goal of the subcommittee was to more equitably and fairly allocate the cost of street improvements to the benefiting properties. Based upon the work of the subcommittee, in October 2000, the council adopted an ordinance that substantially changed the assessment methods for arterial and collector streets (see Attachment A). A year later in November 2001, the council adopted an ordinance that substantially changed the assessment method for local streets (see Attachment B). The major changes addressed partially developed and vacant property, location of the primary access to a property, corner lots, and assessable width for different classifications of streets. In May 2004, the assessment method for alleys was changed to assess 100 percent of the costs associated with an alley improvement to the benefiting property owners. The changes to the assessment methods for arterial, collector, and local streets have met the goal of more equitably and fairly allocating the cost of street improvements to the benefiting properties. However, the changes resulted in a much more complex methodology and shifted costs from property owners to the City. While staff have worked through the complexity of the changes in managing specific projects, explaining the assessment methodology and how much an individual property may pay for an improvement project has proved problematic. Numerous arterial and collector streets have been improved under the revised assessment methodology. Recently completed projects include River Avenue and Shelton McMurphey Boulevard. Projects that have been initiated but where an LID has not yet been formed include Maple and Elmira Streets and Chad Drive (Old Coburg Road). For arterial and collector streets the majority of assessment projects are initiated by the City Council with the adoption of the annual capital budget. Transportation system development charges have been used to fund the City’s share of assessment projects on arterial and collector streets. Z:\CMO\2009 Council Agendas\M090309\S090309C.doc