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Page 2 of 3 consistent with City policy and past practice and is summarized in the table below. The project costs include 27% engineering and overhead costs. Also, the Council must establish the interest rate at tonight’s Council Meeting. Many cities set their interest rate for assessments at two (2) percentage points over the bond interest rate. The City’s assessment policy states that the interest rate used for the assessment shall be designated at the prime rate plus two (2) percentage points. For the 2021 PMP, the assessment interest rate was set at two (2) percentage points over the assumed bond interest rate which was based on current market conditions at the time, our AAA rating, plus 15 basis points. The result was an assessment interest rate of 3.15%. Our current assumed bond interest rate is 2.90% and the prime rate is 3.50%. Staff would recommend following the City’s assessment policy and setting the assessment rate at 5.50%. Each of these total project costs were analyzed for the assessable cost. The calculation of the amount to be assessed as approved by Council Resolution 2022-014 is shown below. • The assessments related to Snelling Avenue North is calculated following the residential equivalent unit explained on Page 21 in the Feasibility Report: Given the non-standard lot configuration and limited number of eligible properties along the Snelling Avenue corridor based on mailing addresses, assessments for Area 1 street improvements on Snelling Avenue were calculated by dividing 50 percent of street costs (trail costs not included) by the total length of roadway improvement frontage (8220-feet) to determine a cost per foot. This unit cost per foot was then multiplied by the minimum lot frontage for R1 zoned properties at 95 feet to arrive at a residential equivalent unit (REU) assessment rate. • Snelling Avenue North assessment rate of $3,905.00 per unit as compared to the Feasibility Report estimate of $5,631.88. SNELLING AVENUE NORTH Item Calculation (REU) Result Half of Construction Cost $531,978/2 $265,989 Add 27% Overhead $265,989 x 1.27 $337,806 REU Assessment Rate $337,806/(8220-feet)x(95-feet) $3,905 • The assessments related to Cummings Lane are calculated in accordance with the City’s Assessment policy, is half of the street project cost for residential properties. Cummings Lane assessment rate of $3,886.00 per unit as compared to the Feasibility Report estimate of $4,870.85. CUMMINGS LANE Item Calculation Result Half of Construction Cost $48,957/2 $24,478.5 Add 27% Overhead $115,639.06 x 1.27 $31,087 Assessment Rate $31,087/(8-units) $3,886