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HomeMy WebLinkAboutItem B: Street Assessment Policy ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: Street Assessment Policy Meeting Date: September 28, 2009 Agenda Item Number: B Department: Public Works Staff Contact: Mark Schoening www.eugene-or.gov Contact Telephone Number: 682-5243 ISSUE STATEMENT The purpose of this work session is to review issues with the existing Eugene Code regarding assessments as identified by the City Council in previous work sessions and for the council to consider the formation of a council subcommittee to develop recommended changes in the Eugene Code to address the issues. BACKGROUND Council Work Sessions The City Council has held work sessions on the City’s street assessment policy on June 23, 2008, and March 9, 2009. From those two work sessions there was general consensus that street assessments are too high, and that there are inequities in the existing Eugene Code regarding street assessments. Subsequent to the March 9, 2009, work session, the council adopted resolutions forming three separate local improvement districts for street improvement projects. The council took the following actions to help mitigate the cost of the individual assessments for the three projects – ? Allocated additional funds to each of the projects to decrease the assessable costs for each of the projects by approximately 13 percent. The council may take similar action on future assessment projects, provided a source of funds can be identified. ? Directed staff to amend the administrative order that establishes the interim interest rate to tie the rate more closely to the market rate. This change will be in effect for the three current assessment projects and for future assessment projects. ? Directed staff to include in the ordinances levying the assessments for the three current assessment projects the option of financing the assessments over a 15-year period of time. Extending the repayment period will lower the monthly or semi-annual payments, but will also increase the interest costs. The council may take similar action on future assessment projects. Assessments too High There are three avenues to reduce the assessments that individual property owners pay. An overview of each avenue and specific options follows: Z:\CMO\2009 Council Agendas\M090928\S090928B.doc 1. By increasing the number of property owners that share in the assessable cost of a street improvement project, the individual assessments will be reduced. However, this will result in some property owners paying for multiple street improvements over time and paying for more than the street from which their home or business takes access. The boundary of a local improvement district could be based upon a travelshed or by identifying properties on cul-de- sacs or dead end streets that must take access to the street being improved. 2.The scope of individual projects could be reduced with the effect of lowering the total project and assessable costs and thereby reducing the individual assessments. Assessable components that could be reduced or eliminated include street trees, sidewalks, and street lights. However, the existing street design standards are consistent with the council policies supporting alternative modes and neighborhood livability. In addition, the Crest Drive/Storey Boulevard/Friendly Street and Maple Street/Elmira Road projects included numerous exceptions to the City’s design standards and the estimated assessments were still considered too high. An alternative to fully improving unimproved streets is to change the practice regarding the maintenance of unimproved streets. The enhanced pothole program funded in FY09 and FY10 provided an opportunity to maintain several unimproved local streets. The maintenance provided a smooth driving surface, but did not address other needs such as stormwater runoff, traffic calming or the lack of sidewalks or bicycle lanes. At this time, there is not a viable funding source to continue this program. 3.The City’s share of project costs could be increased and thereby reduce the assessable costs and individual assessments. However, increasing the City’s share would require identifying a funding source for the costs. For arterial and collector streets, the City’s share is funded through transportation systems development charges (SDCs) and federal Surface Transportation Program – Urban (STP-U) funds. A source of funds has not been identified for funding the City’s share of costs on local streets. Without any changes to the Eugene Code, the City Council may “buy down” the cost of assessments by increasing the City’s share of project costs. The City Council may also limit the assessable components of an individual project. Both of these options require a funding source to be identified and the allocation method identified in the Eugene Code must still be followed. Through changes to the Eugene Code, the City Council could cap individual assessments or defer the payment of assessments until the sale of property. Capping assessments would require identifying a source of City funds to pay the additional costs. The interest cost of deferring the payment of assessments until the sale of property would increase the cost to individual property owners. Inequities in the Eugene Code Regarding Assessments In the previous work sessions the City Council identified the following two inequities in the Eugene Code regarding assessments: ? The depth of the property as measured from the street to the back property line is not considered in the assessment methodology. Z:\CMO\2009 Council Agendas\M090928\S090928B.doc ? The assessments for individual residential properties vary based upon the property frontage and the benefit derived from a street improvement project may not be significantly different for properties with different frontages. 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. COUNCIL OPTIONS At the June 16, 2008, council work session, several members of the City Council discussed the idea of convening a council sub-committee to review the City’s assessment policy. The City Council may establish a council sub-committee at this time, defer the establishment of a sub-committee to a later date, or take no action. CITY MANAGER’S RECOMMENDATION The City Council is scheduled to discuss federal Surface Transportation Program – Urban (STP-U) funding for transportation improvements at its November 23, 2009, work session. It is recommended that the council discussion include street improvement projects in developing the City’s priorities for future allocations of federal STP-U funds by the Metropolitan Policy Committee. The passage of House Bill 2001, will provide a 50-percent increase in funding for cities from a six-cent increase in the state gas tax, beginning no later than January 1, 2011, increases in vehicle title and registration fees, and weight-mile fees paid by truckers. This will provide the City additional revenues to fully fund the transportation operating budget and to consider an overlay maintenance program of the City’s unimproved local streets. The program would be similar to the enhanced pothole program funded in FY09 and FY10. The City Manager recommends that the City Council form a sub-committee to review the existing Eugene Code regarding assessments with the objective of addressing inequities in the code and identifying measures to reduce the assessments for individual properties. SUGGESTED MOTION Move to form a council sub-committee to review the existing Eugene Code regarding assessments with the objective of addressing inequities in the code and identifying measures to reduce the assessments for individual properties. Z:\CMO\2009 Council Agendas\M090928\S090928B.doc 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\M090928\S090928B.doc