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ARDEN HILLS CITY COUNCIL—APRIL 9, 2018 5 Public Works Director/City Engineer Polka reported the low bid of $2,491,595.86 received from Northwest Asphalt, Inc. compares favorably with the construction engineer's estimate which is $2,686,970.00. Further analysis of the low bid; adding overhead and dividing it into the cost for the reconstruction and reclamation neighborhoods results in the following total project costs: • $3,103,300.00 Total Project Cost for the Reconstruction Neighborhood • $237,100.00 Total Project Cost for the Reclamation Neighborhood Public Works Director/City Engineer Polka commented each of these total project costs were then analyzed for the assessable cost which as described in the City's Assessment Policy is half of the street project cost. The results of this analysis are as follows: • Reconstruction Assessment Rate of $10,219.52 per unit as compared to the Feasibility Report estimate of$10,300. • Reclamation Assessment Rate of$1,816.52 per unit as compared to the Feasibility Report estimate of$2,000. Public Works Director/City Engineer Polka stated in the past, the City Council has set the interest rate for unpaid assessments with the resolution declaring costs to be assessed. The current assessment policy states: "H. Interest Rate on Unpaid Balance The interest rate used for the assessment shall be designated at the prime rate plus two (2) percentage points, fixed for the duration of the outstanding balance. The effective date of the interest shall be the date the Council approval of the assessment role." Public Works Director/City Engineer Polka reported two items have been identified upon review of the City's 2004 Assessment Policy and past practice: I. The proposed resolution reflects the current assessment policy language. Staff would recommend setting the interest rate at 2% over the City's bond interest rate which is approximately 3%, resulting in an assessment interest rate of 5%. 2. The City's current assessment policy allows for property owners to pay the entire assessment in full within thirty days without an interest charge. In addition, the assessment policy states that "a property owner may pay the total assessment against their property with accrued interest at any time during the life of the project assessment period". In 2015, property owners were allowed to make partial payments. It is staff s recommendation that the policy language regarding payment of the total assessment amount be followed and that partial payments would not be allowed. Public Works Director/City Engineer Polka commented in order to move both of these projects forward, it would be appropriate for the Council to consider adopting a resolution with a potential amendment to the interest rate language.