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ARDEN HILLS CITY COUNCIL—June 28, 2010 4 4. Consent Calendar (continued) MOTION: Councilmember McClung moved and Councilmember Holden seconded a motion to approve the Consent Calendar as presented and to authorize execution of all necessary documents contained therein. The motion carried unanimously (4-0). 5. PULLED CONSENT ITEMS None. 6, PUBLIC HEARINGS None. 7, NEW BUSINESS A. Resolution 2010-034: Receiving Proposed Special Assessment Roll and Proving for Hearings for the 2010 Pavement Management Program Civil Engineer Kristine Giga stated on May 10, 2010, the City Council awarded the 2010 PMP project to T.A. Schifsky and Sons, Inc. Portions of the costs for the 2010 PMP project are proposed to be assessed to the benefiting properties. In order to assess these costs, the City must follow the Public Hearing steps outlined in State Statute 429. At the June 14, 2010, City Council meeting, the City Council adopted a resolution declaring costs to be assessed and ordering the preparation of assessment rolls. The next step is for the City Council to adopt a resolution receiving the proposed assessment roll and setting a hearing date for the assessments. The project is proposed to be assessed consistent with the City's assessment policy, which states that 50% of the costs for roadway improvements will be assessed to residential properties, and the remaining portion financed using various City funds. The two properties at 1645 Valentine Avenue and 4093 Valentine Crest Road have been identified as sub-dividable, according to current City Code. Council directed Staff to move forward with the option where the City and the property owners sign an agreement which would be recorded against the property and contain the following elements: property owner acknowledges that benefit will accrue upon subdivision of the property, the property owner waives hearing requirements of Minn. Stat. 429 if subdivision occurs, and the property owner agrees that the City does not have to approve a subdivision unless the second assessment if paid. The lot at 3 317 Katie Lane'is a vacant lot owned by the residents living on the adjacent lot. The City Council directed Staff to proceed with this lot in the assessment roll. The total amount to be assessed is $306,528.86. There are two proposed assessment rates; one for the streets to be reconstructed (Valentine Avenue, Valentine Crest Road, and Valentine Court), and one for the streets to be milled and overlaid (Katie Lane, and Katie Court). The current reconstruction assessment rate is $8,268.46 per unit based on 31 units. The current mill and overlay assessment rate is $1,476.67 per unit based on 34 units. The assessment policy states that the interest rate shall be set at prime plus two percent. Prime rate is currently 3.25%. The current annualized rate of return on the City's portfolio is 2.5%. If the City Council were to set the interest rate at 2% over the annualized rate of return, the rate would be 4.5%. The standard payment period is 5 years for a mill and overlay, and 10 years for a reconstruction project.