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HomeMy WebLinkAboutItem C: Street Assessment Policies ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Street Assessment Policy Meeting Date: March 9, 2009 Agenda Item Number: C Department: Public Works Staff Contact: Mark Schoening www.ci.eugene.or.us Contact Telephone Number: 682-5243 ISSUE STATEMENT This work session will provide an overview of the City’s street assessment policy and a summary of the issues identified by the City Council at its June 16, 2008, work session. BACKGROUND Unimproved Streets There are approximately 75 miles of unimproved streets in the City of Eugene, or about 14% of the total 538 miles of streets in Eugene. Approximately 63 miles are unimproved local streets and 12 miles are unimproved arterial and collector streets. These are streets with soil, gravel, or asphalt mat surfaces. These streets typically have not been structurally designed, have few drainage facilities, and lack curbs, gutters and sidewalks. The cost of bringing all the unimproved streets in Eugene up to City standards is estimated to be in excess of $90 million. The City bears a portion of the street improvement costs including storm drainage improvements, intersection costs, some corner lot costs, individual lot frontage costs in excess of 100 feet, and other related costs that historically have been about equivalent to the property owner assessments. Local Improvement District Process The formation of a local improvement district (LID) provides a method of financing public infrastructure in which the cost of the infrastructure is assessed to the benefiting properties. The majority of Eugene’s street system has been financed through assessments to benefiting properties. LIDs can be initiated by the City Council or by the City Engineer. The City Council can initiate an LID by the adoption of the annual capital budget or by a council motion. River Avenue and Shelton McMurphey Boulevard are examples of LIDs initiated by the council with the adoption of the annual capital budget. The West University Neighborhood alley improvement project is an example of an LID initiated by a council motion. The City Engineer may initiate an LID after receiving a petition poll from property owners representing properties that will bear over 50 percent of the cost of the improvement. The Sixth Alley constructed this past summer is an example of an LID initiated by the City Engineer. Upon initiation of an LID, the City proceeds with the design and bidding of a project. After a project is bid, and prior to awarding a construction contract, a public hearing is held before a hearings official to determine whether or not the City should proceed with the improvement project. After considering the findings of the hearings official, the City Council forms the LID by resolution. However, if property owners representing properties that will bear over 50 percent of the cost of the Z:\CMO\2009 Council Agendas\M090309\S090309C.doc 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 Very few local streets have been improved under the revised assessment methodology. For local streets the City Council generally does not initiate assessment projects through either adoption of the annual capital budget or by council motion. The petition poll process is the method that the City has relied upon to initiate assessment projects on local streets. This process is time consuming and expensive because property owners want to know what the street improvement will look like and how much their assessment will be before signing a petition poll. It is rarely successful because it requires property owners bearing over 50 percent of the cost to sign the petition poll. In addition, for local streets there is not a viable funding source to fund the City’s share of assessment projects. The Crest Drive, Storey Boulevard, and Friendly Street project is a local street improvement project that has been initiated, but where an LID has not yet been formed. In 2001, the Agenda Item Summary for the ordinance amending the Eugene Code for local streets included the following information – In the past 20 years, approximately 3.31 miles of substandard local streets have been improved to City standards, representing a street improvement rate of 0.17 miles per year. At this rate, it would take 280 years to bring all of the 48 miles of currently existing substandard local streets up to standards. City Council Identified Issues The City Council identified the following issues with the current assessment policy at its June 16, 2008, work session – Financing ? Extend payment period beyond 10 years ? Defer assessments until the sale of the property LID Boundaries ? Use a travelshed approach to identify benefiting properties ? Include cul de sacs to the street being improved ? Include all properties that must use the street to be improved to access property Individual Properties ? Consider the depth of the property in the assessment formula ? Consider a per property assessment regardless of the property frontage RELATED CITY POLICIES Chapter 223 of the Oregon Revised Statutes prescribes the rights and responsibilities of cities to levy assessments for local improvements. The Municipal Charter, Chapter IX – Public Improvements provides the regulatory framework for public improvement procedures and assessments. The Eugene Code, Chapter 7 – Public Improvements prescribes the process for initiation of an assessment project, formation of a local improvement district, and computation and allocation of assessments to benefiting properties. Z:\CMO\2009 Council Agendas\M090309\S090309C.doc COUNCIL OPTIONS At the June 16, 2008, council work session several members of the City Council discussed the idea of convening a council subcommittee to review the City’s assessment policy. The City Council may establish a council subcommittee at this time, defer the establishment of a subcommittee to a later date, or take no action. CITY MANAGER’S RECOMMENDATION The Eugene Charter stipulates that any changes to the Eugene Code regarding assessments must be done by general ordinance and that changes do not become effective until six months after adoption. Therefore, any changes to the assessment policy will not affect the three street improvement projects that are scheduled for council action in the next two months. The next street improvement project included in the recently adopted FY 2010 – FY 2015 Capital Improvement Program is planned for 2012. With the financial uncertainty of funding transportation services and the long time until the next planned improvement is scheduled, the City Manager recommends that the City Council defer forming a council subcommittee at this time. SUGGESTED MOTION The City Manager recommends that the City Council defer establishing a council subcommittee on assessment policy at this time. ATTACHMENTS A. New Assessment Policy for Arterial and Collector Streets B. New Assessment Policy for Local Streets FOR MORE INFORMATION Staff Contact: Mark Schoening Telephone: 682-5243 Staff E-Mail: mark.a.schoening@ci.eugene.or.us Z:\CMO\2009 Council Agendas\M090309\S090309C.doc öûùè ìÇÚÐÓÙåÍÊÑÉ éô÷÷è ÷ÎÕÓÎ××ÊÓÎÕ ùÓÈÃÍÖ÷ÇÕ×Î× ì×ÛÊÐéÈ ÷ÇÕ×Î×íê ÙÍÎÈÓÎÇ×ØÍÎÎ×ÄÈÌÛÕ× öíêïíê÷ óîöíêïûèóíî öûùè ìÇÚÐÓÙåÍÊÑÉ éô÷÷è ÷ÎÕÓÎ××ÊÓÎÕ ùÓÈÃÍÖ÷ÇÕ×Î× î×ÅûÉÉ×ÉÉÏ×ÎÈìÍÐÓÙÃÖÍÊóÏÌÊÍÆ×Ï×ÎÈÉ ÈÍðÍÙÛÐéÈÊ××ÈÉ ÙÍÎÈÓÎÇ×ØÍÎÎ×ÄÈÌÛÕ× öíêïíê÷ óîöíêïûèóíî