HomeMy WebLinkAbout2021-06-01 City Council Work Session Meeting PacketAgenda
City Council Work Session
City of Edina, Minnesota
VIRTUAL MEETING
Call 800-374-0221, enter Conference ID 1685871 to listen to meeting
Tuesday, June 1, 2021
5:30 PM
I.Call To Order
II.Roll Call
III.Street Funding Discussion
IV.Adjournment
The City of Edina wants all residents to be comfortable being part of the public
process. If you need assistance in the way of hearing ampli#cation, an
interpreter, large-print documents or something else, please call 952-927-8861
72 hours in advance of the meeting.
Date: June 1, 2021 Agenda Item #: III.
To:Mayor and City Council Item Type:
Reports / Recommendation
From:Chad A. Millner, P.E., Director fof Engineering
Item Activity:
Subject:Street Funding Discussion Discussion
CITY OF EDINA
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
None; discussion only.
INTRODUCTION:
Staff is looking for direction from the City Council on how to fund street reconstruction. Direction is needed to
maintain the City's street reconstruction program as discussions with residents for the 2022 projects are starting
soon. If direction is given, staff would return to a City Council meeting with suggested edits to the street
reconstruction assessment policy. See attached staff report for recent background.
ATTACHMENTS:
Description
Staff Report: Street Funding Discussion
Street Reconstruction History Graphic
Staff Presentation
June 1, 2021
Mayor and City Council
Chad A. Millner, P.E., Director of Engineering
Street Funding Discussion at City Council Work Session
Executive Summary:
At the March 13, 2021 Council Retreat, staff reinforced that a decision is required on a permanent funding
solution this summer otherwise the street reconstruction program may be paused.
Questions that need to be answered
1. What is the post-transition funding breakdown? Percent assessed vs funded by taxes.
2. What is the transition plan? How many years (6-, 11- or 16-years).
3. What is the change management plan? TBD based on #’s 1 and 2 above.
March 13, 2021 City Council Retreat Summary:
Staff heard council members needed more information on the following topics.
1. How does Minneapolis and Bloomington pay for streets and how did they transition?
2. How many of Edina streets have been reconstructed?
3. Review the laws on refunds and taxing properties differently if they were previously assessed or not.
We also heard and want to confirm the following.
1. Assessments will be part of the funding structure long term.
2. Assessment percentages were between 0% and 50% assessment. Comments supported 25% range.
3. Transition time support between 6 and 11-years.
STAFF REPORT Page 2
Questions that need to be answered
1. What is the post-transition funding breakdown? Percent assessed vs funded by taxes.
2. What is the transition plan? How many years – 6, 11 or 16-years.
3. What is the change management plan?
Information / Background:
On April 6, 2021, the City Council revised the assessment policy to align with the recommendations of the
Street Funding Task Force. Those revisions removed subcuts and public retaining walls immediately from
street reconstruction assessments for 2021 Projects.
Staff reinforced that a decision is required on a permanent funding solution this summer otherwise the
street reconstruction program may be paused. Noted in the table below are the recent dates where street
funding was discussed.
Dates of Recent Street Funding Discussions
May 2020 Street Funding Task Force Appointed
November 2020 Council Work Session with Task Force
January 2021 Community Engagement on Task Force Recommendations
March 2, 2021 Council Accepts Task Force Final Report & Recommendations
March 13, 2021 Council Retreat to Discuss Street Funding
April 6, 2021 Council Revised Assessment Policy to remove subcuts and public retaining walls
June 1, 2021 Council Work Session to Discuss Street Funding
Legal Review:
Council members have had questions on refunds and taxing. City Attorney David Kendall and Attorney Jay
Lindgren will discuss legal opinions on those topics.
STAFF REPORT Page 3
Financial Analysis:
Options #1 and #2 in the table below are the original recommendations from the Task Force. Option #3A
and #3B is what staff heard from council at the March Council Retreat. The difference between #3A and
#3B is the transition time of 6-years or 11-years.
Table 1. ESTIMATED Funding Option Impacts to Assessments, Levy & Taxes
Impact to City Tax Levy Impact to Taxes Paid by Median
Value House (5)
% Reduction in
Special
Assessments
by Year
Annual $$$
Increase
in Levy (3)
Annual %
Increase
in Levy (3)
Annual $$$ Tax
Increase to
Median
Value House
(1)(3)
Annual % Tax
Increase
to Median
Value House
(1)(3)
Option # 1 (TASK FORCE REC) - 50% Special Assessments / 50% Tax Levy Dollars transition
over 16-years
Year 1 21.1% $950k (2) 2.3% $37.90 2.46%
Year 2 - 16 1.9% $100k -$211K (4) 0.2% $4.28 0.28%
Option # 2 (TASK FORCE REC) - 100% Tax Levy Dollars transition over 16-years
Year 1 21.1% $950k (2) 2.3% $37.90 2.46%
Year 2 - 16 5.3% $260K-$510K (4) 0.6% $10.49 0.67%
Option # 3A - 25% Special Assessments / 75% Tax Levy Dollar transition over 6-years
Year 1 21.1% $950k (2) 2.3% $37.90 2.46%
Year 2 - 6 10.8% $513K-$598K (4) 1.2% $20.49 1.33%
Option # 3B - 25% Special Assessments / 75% Tax Levy Dollar transition over 11-years
Year 1 21.1% $950k (2) 2.3% $37.90 2.46%
Year 2 – 11 3.6% $2184K-$370K (4) 0.4% $7.34 0.48%
(1) Increase on City portion of property tax levy only. Median Value Home = $551,300
(2) $950,000 is an estimated subcut amount for year 1.
(3) All values are estimates with a 2% annual inflation factor. Estimated impacts are related to the future
market value of the city. Increases or decreases in market value will impact the values shown in the
table.
STAFF REPORT Page 4
(4) The ranges reflect the estimated impact of the decrease in assessments and impacts of inflation
during the transition period. Typically, the levy increases gradually during the transition period to
account for these forces.
(5) See Informational Flyer on Proposed 2020 City of Edina Tax Levy in Appendix N for a Comparison
of 2019 City Property Tax to other Cities.
Neighboring City Policy’s:
At the council retreat, members referenced that the policies of Bloomington and Minneapolis could be a
source of information for staff to consider as we determine the direction of street funding and a transition
plan. Summaries for each city is provided.
City of Bloomington
• Prior to 1993, projects were assessed 100% and only if residents petitioned – limited projects
occurred.
• Transition was easy because rare to have projects at 100%.
• 1993 25% assessments for street reconstruction on residential properties.
• 1993 50% assessments for street reconstruction on other property classes including churches.
• Two assessment classes with and without curb and gutter.
• Range of assessments are $4,000 to $8,000 – the higher are assessments without curb and gutter.
• 10-yr pay back – 30% - 40% pay off right away.
• 1 legal challenge from an attorney representing self – not against the amount but against the legality
of the statue and system – city won.
• Benefit letters are completed to justify assessment.
• Remaining funding is general levy tax dollars.
• Franchise fees are used for pavement maintenance of trails, street seal coats, and street mill and
overlays.
City of Minneapolis
• They use a Uniform Assessment Rate (UAR) for street reconstruction.
• UAR is calculated yearly based on all bids received for street reconstruction.
• Assessments for street resurfacing and reconstruction projects are based on the square footage of
your lot multiplied by UAR.
• Assessments for alley resurfacing and reconstruction projects are based on the total square footage
of your lot multiplied by UAR.
• Assessments are spread over a 5, 10 or 20-year term (depending on the project) and collected
through property taxes. Street construction assessments are collected over a 20-year term. Street
resurfacing assessments are collected over a 5-year term. Alley construction assessments are
collected over a 10-year term. Alley resurfacing assessments are collected over a 5-year term.
• Typically $4,000 for signal family homes, trying to be in the 20-25% range of the project cost but
can range from 10% - 35%.
• $0.88 per SF residential, $2.66 per SF non-residential.
• Taxes cover remaining costs.
• 1960’s – 1970’s policy was 25% of project costs.
STAFF REPORT Page 5
• 1980 Uniform assessment rates.
• 1998 added influence areas.
• Some legal challenges mostly on non-residential properties.
• Street maintenance UAR is a fraction of the street reconstruction UAR.
City of Edina Street Reconstruction Background:
In 24 years, 83 of the 164 miles of local streets (or ~51%) have been reconstructed and funded by special
assessments. If this pace continues, all local streets will be reconstructed in a period of 50 years. Although
many of these streets were initially constructed in the 1950s and 1960s with a design life of 30 years, many
have surpassed their intended design life. Our goal with the street reconstruction program is to level out
annual street reconstruction needs to better align with an industry-standard 50-year design life.
In 19 years, 14 of 42 miles of Municipal State Aid (MSA) designated streets (or ~33%) have been
reconstructed and funded by a combination of MSA and special assessments. Current funding allows 0.5 mile
of MSA reconstruction every year. At this pace, it will take 56 years to reconstruct the remaining 28 miles
of MSA designated streets. This is a concern.
A graphic of the recently completed street reconstruction is attached.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!HWY 16978TH ST W
VALLEY VIEW RD
VALLEY VIEW RD
DEWEY HILL RD
76TH ST W
70TH ST WGLEASON RD58TH ST W
54TH ST W
50TH ST W
4 4 T H S T W
MALONEY AVE
INTERLACHEN BLVD
YORK AVE S66TH ST W
70TH ST W
CAHILL RDXERXES AVE SFRANCE AVE SVER N O N A V ESCHAEFER RDBLAKE RDGLEA
S
O
N R
D
§¨¦169
§¨¦169
§¨¦62
§¨¦62
§¨¦100
§¨¦100
INTERLACHENCOUNTRYCLUB
VANVALKENBURGPARK
BREDESENPARK
BRAEMAR PARKGOLF COURSE
FRED RICHARDSPARK
EDINACOUNTRYCLUB
City of EdinaRoadway Reconstruction History 1998 - 2020
Engineering Dept.May 2021
Legend
µ
19981999
2000200120022003200420052006200720082009
2010201120122013201420152016201720182019
2020!!!!!
The CITY ofEDINAStreet Funding Discussion
City Council Work Session June 1, 2021
The CITY ofEDINA
1.Funding Breakdown -% Assessed vs % Taxes –25% Assessed
2.Transition Period –6 or 11-years
3.Change Management Plan –TBD after #1 & #2
www.EdinaMN.gov 2
Discussion Topics
The CITY ofEDINA
1.Minneapolis
1.~20-25% Assessments since 1960’s with some small changes
2.Bloomington
1.~25% Assessments Residential in 1993
2.~50% Assessments for Other Property Classes in 1993
www.EdinaMN.gov 3
Background
The CITY ofEDINA
1.Edina Street Reconstruction History –See Map
1.Local –83 of 164 miles (51%)
2.Municipal State Aid (MSA) –14 of 42 miles (33%)
www.EdinaMN.gov 4
Background
The CITY ofEDINA
www.EdinaMN.gov 5
Background
The CITY ofEDINA
1.Legal Review –Refunds and Taxing
1.David Kendall –City Attorney
2.Jay Lindgren –Dorsey & Whitney Attorney
www.EdinaMN.gov 6
Background
The CITY ofEDINA
1.Comments from March Council Retreat
1.25% Assessed vs 75% Taxes
2.Transition Period –6 or 11-years
www.EdinaMN.gov 7
Funding Discussion
The CITY ofEDINA25% Assessment / 75% Taxes
Transition Period % Reduction in
Special Assessments
by Year
Annual $$$
Increase
in Levy
Annual %
Increase
in Levy
Annual $$$ Tax
Increase to
Median
Value House
Annual % Tax
Increase
to Median
Value House
Year 1 21.1%$950k (2)2.3%$37.90 2.46%
Year 2 -6 10.8%$513K-$598K (4)1.2%$20.49 1.33%
Year 1 21.1%$950k (2)2.3%$37.90 2.46%
Year 2 –11 3.6%$2184K-$370K (4)0.4%$7.34 0.48%
www.EdinaMN.gov 8
The CITY ofEDINA
•Step 1: Complete for 1-yr: Removed subcuts and retaining walls (April 6)
•Step 2: Revisit final street funding decision with 2022/2023 Budget
Ideally direction tonight for a change in policy prior to 2022 Projects
•Questions
www.EdinaMN.gov 9
Discussion