HomeMy WebLinkAbout10-09-07 FPAC Agenda
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---A~HILLS
FINANCIAL PLANNING & ANALYSIS COMMITTEE
TUESDAY, October 9,2007
6:00 P.M.
Upstairs Conference Room, Arden Hills City Hall
I. CALL MEETING TO ORDER AND ROLL CALL
II. APPROVAL OF AGENDA
III. APPROVAL OF September 11,2007 MINUTES
IV. CITY COUNCIL UPDATE - Councilmember Grant
V. FUND BALANCE POLICY DISCUSSION
VI. QUESTIONS/COMMENTS FROM COMMITTEE
VII. NEXT MEETING AGENDA - November 13, 2007
A. Continue Fund Balance Policy Discussion
B. Use of Capital Improvement Funds/Fund Balance
VIII. ADJOURN
A quorum of the City Council may be present at this meeting.
City of Arden Hills
1245 West Highway 96. Arden Hills Minnesota 55112
Phone 651.634.5120' Fax 651.634.5137
www.ci.arden-hills.mn.us
MINUTES
ARZE._1\1 HILLS
S
FINANCIAL PLANNING & ANALYSIS COMMITTEE
TUESDAY, September 11, 2007
6:00 P.M.
Upstairs Conference Room, Arden Hills City Hall
CALL MEETING TO ORDER AND ROLL CALL
The meeting was called to order by committee chair, Scott Bronson at 6:04pm.
MEMBERS PRESENT: Scott Bronson; Maurice Gieske; David Grant, Council
Liaison; Al Hilgers; Jeff Johnson; Jim Ostlund
OTHERS PRESENT: Sue Iverson, Finance Director; Jonathon North; Joe Rueb,
Accounting Analyst
II. APPROVAL OF AGENDA
Correction: Next Meeting — October 9th, 2007
Motioned: Jeff Johnson
Seconded: Al Hilgers
III. APPROVAL OF August 14, 2007 MINUTES
Motioned: Jeff Johnson
Seconded: Jim Ostlund
IV. CITY COUNCIL UPDATE — Councilmember Grant
The preliminary levy was set at $2,838,757, with the City's portion of the levy
equating to a 4.9% increase over 2007. The final levy can decrease but it cannot
increase. The levy was based off staff recommendations and council input. The
actual tax rate with this proposed levy will result in a 2.2% decrease. County and
schools impact is estimated to be about a 1.3% increase. Market value has
increase on average 3.2%.
There is still no financial analysis on TCAAP. Ehlers is our project manager and
City of Arden Hills
1245 West Highway 96 •Arden Hills Minnesota 551 12
Phone 651.634.5120 •Fax 651.634.5137
www.ci.arden-hills.mn.us
„was
• financial consultant. Council members Grant and Holden met with the
developers regarding the residential density. It is now at 1700 households; down
from 2100 households. At this time Master Developer Status has not been given.
Ryan Company has bought out Rehbein's interest. Ryan Company would like to
claim the land developer status. Tentative land closing date will be June 30tn
2008.
The Council has had discussions concerning the displacement of Arden Manor
residents.
Council denied a permit for the electronic bill-board on 1694.
V. FUND BALANCE POLICY DISCUSSION
A. Guest Speaker
Jonathan North, former Vice-President and Co-Manager of the
Midwest office for Moody's Public Finance Group
49/ Finance Director Iverson gave an introduction on Jonathan, his career history, as
well as an introduction into his presentation.
Presentation concentrated on Jonathan's experience at Moody's Investor
Services. Jonathan discussed how the rating agencies looked at fund balances,
policies, and other factors when assigning credit ratings. He used various
examples from his experience as a rating analyst.
Presentation:
• Know your destination: Examine community needs, long term goals
and map out how to get there.
• Funding options include: pay-as-you-go, grants, loans, bonds, and
TIFs
• A municipal debt is a pledge to repay an obligation; it is a contract
between the issuer and the investor. There are several options as
to what the pledge could be.
• Benefits and drawbacks for borrowing
• • Bonds can be used for development; provides flexibility
City of Arden Hills
EN HILLS
•
• • Economic development tools: TIF, Abatement, Bonds, Other Tools
or doing nothing
• Brief TIF discussion; facilitates the development, covers
infrastructure
• Municipal bonds have a lower level of risk than corporate bonds
• Municipal constituents may include voters, taxpayers, other
governmental entities, investors and more
• Rating agencies: Moody's investors services, Standard and Poors,
Fitch
• Credit ratings: indicator of risk; not indicators of quality of life or
status. High ratings don't always mean it is a high quality of life.
• Rating factors include: operating performance, balance sheet,
revenue stability and flexibility, expenditure control and flexibility,
the economy
• Long range financial plan is very important; use a 5-10 year
benchmark to figure out next plan
• B. Current CIP Plan
Finance Director Iverson presented the current draft of the Capital Improvement
Plan. She explained that this will be more refined as the budget process moves
forward, but will not be finalized until December.
C. Review of information that staff is still gathering
A copy of the rating agency report was provided for each committee member in
their packet. Copies of reports run from the State Auditor's website were
discussed. These reports were run with data provided to the OSA through the
reporting process. Finance Director Iverson explained the reports and cautioned
the committee that not all entities classify expenditures and groupings the same
way. The reports run compared Arden Hills to neighboring communities and also
Arden Hill's history from 1995 through 2005. In total Tax Capacity, the City
ranked 26 out of 218 which was a positive, on total expenditures the City ranked
205 out of 218 which is also positive as they are lower than 204 communities and
higher than 13 communities. These are just meant to be a quick comparison,
any detailed comparisons need further research as not all information is reported
41 the same from city to city.
City of Arden Hills
EN HILLS
4110
VI. QUESTIONS/COMMENTS FROM COMMITTEE
Preliminary budgets are being worked on and will be given to the Council in mid-
October. Final budgets will not be approved until Early December.
Discussion was had on what the Council's priority was on fund balance. Finance
Director Iverson stated that the committee was to start with General Fund
balance and then we would work on the capital and reserve funds. This will take
some time to develop as we need to finish the financial plan and the 2008 budget
process in order to complete those policies. She cautioned that we need to
come up with initial policies and that we would probably refine them over time as
we work through the issues.
VII. NEXT MEETING AGENDA— October 9th, 2007
A. Continue Fund Balance Policy Discussion
VIII. ADJOURN
Motioned: Jim Ostlund
• Seconded: Maurice Gieske
Scott Bronson, Chair Susan K. Iverson, Finance Director
II
City of Arden Hills
411
�S EN HILLS
MEMORANDUM
DATE: October 5, 2007
TO: Financial Planning and Analysis Committee
FROM: Sue Iverson, Finance Director
SUBJECT: Fund Balance Policy Discussions
BACKGROUND:
One of the priorities that the Council has assigned to this committee is to work on a Fund
Balance Policy. At the August 14, 2007 meeting we began these discussions. We looked at the
reasons and objectives for such a policy and discussed factors that we wanted to consider in
developing our policy. We also looked at what information we would need in order to make
these decisions.
DISCUSSION:
In looking back at our previous discussions and what needs to be accomplished, we need to draft
a general fund balance policy. Once we have done this we can begin to work on the next
Council directive of determining the appropriate balance in the Capital Improvement Fund (PIR)
and then work on policies to determine 1)How financial resources are to be set aside for
unreserved fund balances, 2)Determine the appropriate size of unreserved fund balances, and 3)
Methods for utilizing unreserved fund balance resources. This will involve looking at the
finalized CIP, long-range financial plan, and other data which is not available yet.
I have attached a"draft" fund balance policy with highlighted areas that will need discussion. I
have also included sample copies from surrounding communities. This should help us to achieve
our objective of recommending a"general" fund balance policy, which we can present to the
City Council at the November 19, 2007 work session. We will have one more meeting before
that work session in order to complete this policy.
RECOMMENDED ACTION:
Provide feedback and discussion on draft fund balance policy.
al
• A.R EN jfiLLs
CITY OF ARDEN HILLS
COUNTY OF RAMSEY
STATE OF MINNESOTA
FINANCIAL POLICIES-
FUND BALANCE
Purpose
The purpose of this policy is to establish guidelines for the City of Arden Hills' components of
fund balances and net assets.
Primary Policy Considerations
1. To meet the cash flow requirements of the City.
2. To maintain adequate fund balances and net assets in each individual fund of the City.
3. To provide for emergencies and contingency needs of the City.
• Policy Statements
1. The Finance Director as a part of the annual budget process shall prepare an analysis of
this policy. The analysis shall project the status of the budget year ending fund balances
and net assets.
2. The Finance Director shall as a part of the annual audit and year-end financial statement
preparation process see that the appropriate reservations and designations are correctly
made. The designations established through this policy shall be used in designating funds
for the year-end financial statement purposes.
3. The General Fund balance shall be designated for the following purposes in the amounts
described below:
a. To meet the cash flow needs of the city, a fund balance designation of not less
than' of the ensuing years General Fund tax levy(less debt service transfers
included in the General Fund levy)plus the ensuing years certified Local
Government Aid (LGA) and Market Value Homestead Credit Aid(MVHC).
b. To cover accumulated vacation and compensatory time balances and that portion
of PTO leave that would be payable under the City's severance pay policy or
union contracts. This amount shall be adjusted annually as part of the year-end
• close and annual financial report process.
\\Metro-inet\ArdenHills\Finance\Policies and Prmcedures\Policies\Fund Balance Policy.doc
Last printed 10/5/2007 10:56 AM
c. To provide for emergencies or contingencies, such as revenue shortfalls,that the
City may encounter as part of its operations. This reserve shall be set at a of
the ensuing years General Fund operating expenditures (not including capital
outlay, debt service or transfers to other funds).
d. For specific purposes as authorized by the City Council.
Funds shall be designated first for compensated absences, second for cash flow needs and
lastly for emergencies/contingencies.
The amount of the General Fund balance greater than the sum of all General Fund
designations will be transferred to a fund or funds determined by the City Council. Such
transfer is pursuant to Council approval.
5. Fund balances held in Special Revenue Funds or Capital Project Funds for future
program and/or project costs and net yet legally obligated will be designated.
6. Fund balances in Debt Service Funds for future debt payments will be designated.
7. City enterprise funds shall have operating cash reserves sufficient to provide for monthly
cash flow, and for a reasonable level of equipment and infrastructure replacement. Major
• reconstruction or system upgrades,may need to be funded from enterprise revenue bonds.
Annual utility rate reviews will be made in regard to projected operating expenses and
capital improvements. The Council will, on an annual basis, establish rates in accordance
to operating cost recovery and the projected capital improvement.
8. Fund balances will be designated according to the above guidelines up to the amount
available after other designations. This policy is not intended to require the reporting of
deficit undesignated fund balances.
Review and Approval
The fund balance policy shall be formally approved and adopted by resolution of the City
Council and any future changes to the policy must be approved by the City Council.
Approval by the City Council the_Day of , 2007.
Stanley D. Harpstead, Mayor Date
41111 Michelle A. Wolfe, City Administrator Date
\\Metro-inet\ArdenHills\Finance\Policies and Prreedures\Policies\Fund Balance Policy.doe
Last printed 10/5/2007 10:56 AM
City of Cloquet
• Fund Balance Policy
Purpose:
The purpose of this policy is to establish guidelines for the City of Cloquet's components of fund
balances and net assets.
Primary Policy Considerations:
1. To meet the cash flow requirements of the City.
2. To maintain adequate fund balances and net assets in each individual fund of the City.
3. To provide for emergencies and contingency needs of the City.
Policy Statements:
1. The Finance Director as a part of the annual budget process shall prepare an analysis of
this policy. The analysis shall project the status of the budget year ending fund balances
and net assets.
2. The Finance Director shall as a part of the annual audit and year-end financial statement
preparation process see that the appropriate reservations and designations are correctly
made. The designations established through this policy shall be used in designating funds
for the year end financial statement purposes.
3. Shortages from the requirements of this policy shall be built up through the annual budget
process. Funds shall be budgeted and then not spent in the ensuing year. Shortage shall
be defined as having less than the minimum policy requirement at the prior year-end, or
having a projection at budget time that would indicate the policy will not be met at the
current year-end. Shortages can be made up in one or several years, as determined by the
City Administrator and the Finance Director.
4. Overages from the requirements shall be used in one of the following ways. First, any
excess, or portion thereof, may be transferred to other funds as authorized by the City
Council (i.e., Revolving Capital Project Fund for future funding source for City projects).
Second, the overage, or any portion thereof, may be used to offset a projected shortfall in
current or future year projections. Third, the excess or any part thereof, may be used to
reduce the property tax levy required for the ensuing year. Fourth, the overage will be
accumulated with the intent to be used in future years as planned by the City
Administrator and Finance Director.
•
Approved
City of Cloquet
Fund Balance Policy
Fund Balance and Net Asset Guidelines(Fiscal Year End)
Reserved Fund Balance and Restricted Net Assets- Portion of fund balance that is not appropriable
for expenditure or is legally segregated(restricted net assets)for specific future uses.
The City has several items that are legal restricted to a certain use such as: police forfeiture funds,federal
and state economic development revolving loans,park dedication fees,and bond proceeds. The City has
several amounts unavailable for appropriation such as: advances and deposits,inventories,etc. These
types of items will be reported as reserved fund balance and/or restricted net assets as required.
Designated Fund Balance—Designations represent management's intended use of resources.
Designation for cash flows—This designation will be established for the General Fund and Special
Revenue Funds that are funded largely from local government aid,property taxes,and market value
credit. The amount will be 50%of these items since the majority of these revenues are normally received
in July.
Designation for capital projects—All amounts in the Permanent Improvement and Public Works Reserve
are used to fund the capital improvement program. The fund balance in these funds will all be designated
for capital.
Designation for economic development-The City has grants and property tax levy dedicated for
economic development. These funds will be designated for economic development.
Designation for revenue stabilization—Revenues can fluctuate greatly from year to year,especially
interest earnings, and, in previous years,local government aid. This designation will be used if
determined to be needed by the City Administrator and Finance Director.
Undesignated Fund Balance and Unrestricted Net Assets—Current resources available for which
there are no government self-imposed limitations or set spending plan.
General Fund—To provide for emergencies or contingencies, such as revenue shortfalls,that the City
may encounter as part of its operations,the unreserved undesignated fund balance shall be set at ten
percent(10%)of the ensuing years General Fund operating expenditures(not including capital outlay,
debt service or transfers to other Funds). The unreserved fund balance should be at a minimum of 35%to
50%of fund operating revenues or no less than five months of operating expenditures according to the
Office of the State Auditor(this includes the designation for cash flows). The City's goal will be to
follow this recommendation.
•
Approved
City of Cloquet
Fund Balance Policy
Special Revenue Funds—The City has several special revenue funds that vary greatly in the type of
activity. The unreserved fund balances of special revenue funds should be at a minimum of 35%to 50%
of fund operating revenues or no less than five months of operating expenditures according to the Office
of the State Auditor(this includes the designation for cash flows). The City's goal will be to follow this
recommendation if determined appropriate for the individual fund's type of activities.
Debt Service Funds—Most of these funds will be reserved for debt service and the undesignated fund
balance should be near zero.
Capital Project s Funds—Most of these funds will be designated for the capital improvement plan or
reserved for a specific project and the undesignated fund balance should be near zero. Specific capital
improvement funds may be negative because they are waiting on funding but should zero out at the end of
the project.
Internal Service Fund-Accrued compensated absences and severances are recognized as a liability and
fund balance should be near zero.
Enterprise Funds—It is expected that unrestricted net assets will be large. These funds have large
• investments in infrastructure that need to be maintained. The City will periodically complete a rate study
for these funds to ensure rates and unrestricted net assets are sufficient to operate and maintain these
activities.
•
Approved
SEP-28-2007 13:20 CITY OF SHOREUIEW 6514904699 P.05/06
EXTRACT OF MINUTES OF THE MEETING OF
THE CITY COUNCIL OF SHOREVIEW,MINNESOTA
HELD APRIL 6, 1998
* * * * * * * * * * * * * * $ * * * * * * * * * * * * ,K *
Pursuant to due call and notice thereof, a meeting of the City Council of the City of
Shoreview, Minnesota,was duly called and held at the Shoreview City Hall in said City
on April 6, 1998, at 7:00 p.m. The following members were present: Mayor Martin,
Councilmembers Huffman, Landwehr, Reiter, and Wickstrom;
and the following members were absent: none.
Councilmember Landwehr introduced the following resolution and moved for its
adoption.
RESOLUTION NO. 98-25
RESOLUTION.ESTABLISHING A POLICY FOR
DESIGNATING GOVERNMENTAL AND TRUST FUND BALANCES
WHEREAS, major General Fund revenues, including property taxes, homestead
and agricultural credit aid(I-IACA), local government aid(LGA) and local performance
• aid (LPA) are received in the second half of each year, and
WHEREAS, fund balances are necessary in order to maintain adequate cash flow
reserves and fund unanticipated costs, and
WHEREAS,the City has established certain Special Revenue Funds for the purpose
of collecting revenues dedicated to specific programs and related expenditures, and
WHEREAS,the City has established certain Capital Project Funds for the purpose
of collecting revenues dedicated to specific projects and related expenditures.
NOW, THEREFORE BE 1T RESOLVED, by the City Council of the City of
Shoreview, County of Ramsey, State of Minnesota, that the following policy be
established for designations of fund balance reported at December 31 of each year
• beginning with the year ended December 31, 1997.
1. Cash flow—General Fund balances will be designated for cash flow purposes in an
amount equal to fifty percent (50%) of the ensuing years General fund tax levy,
HACA, LGA and LPA.
•
SEP-28-2007 13:21 CITY OF SHOREVIEWJ 6514904699 P.06/06
Page 2
Resolution 98-25
4111 Fund Balance Designations
2. Unanticipated Expenditures—General Fund balances will be designated for future
expenditures or revenue shortfalls in an amount up to five percent (5%) of actual
General. Fund expenditures (not including transfers to other funds).
3. Priority Order—The General Fund cash flow designation shall be of a higher
priority than the unanticipated expenditure designation.
4. Authorization of Annual Transfer-The amount of the General Fund balance
greater than the sum of all General Fund designations will be transferred to a fund or
funds determined by the City Council. Such transfer is pursuant to Council approval.
5. City Programs and Projects —Fund balances held in Special Revenue Funds or
Capital Project Funds for future program and/or project costs and not yet legally
obligated will be designated.
6. Debt Funds—Fund balances held in Debt Service Funds for future debt payments
will be designated.
7. Guidelines—Fund balances will be designated according to the above guidelines up
to the amount available after other designations. This policy is not intended to
require the reporting of deficit undesignated fund balances.
NOW, THEREFORE BE IT RESOLVED that the provisions of resolution 90-64
are rescinded.
The motion for the adoption of the foregoing resolution was duly seconded by
Councilmember Huffman, and upon vote taken thereon, the following voted in favor
thereof: all present;
and the following voted against the same: none.
WHEREUPON, said resolution was declared duly passed and adopted this 7Ch day
of April, 1998_
TOTAL P.06
SEP-28-200? 13:20 CITY OF SHOREVIEId 6514904699 P.01/06
4110 PROPOSED MOTION
Moved by Councilmember
Seconded by Councilmember
To adopt proposed resolution number 9$-25 establishing a policy for designating
governmental and trust fund balances.
ROLL CALL Aycs Nays
Huffman
Landwehr
Reiter
• Wickstrom
Martin
Jeanne A. Haapala
Finance Director
City Council Meeting
April 6, 1998
•
SEP-28-2007 13:20 CITY OF SHOREVIEW 6514904699 P.02/06
TO: Terry Schwerm., City Manager
Mayor and City Council
40
FROM: Jeanne A. Haapala, Finance Director
DATE: March 31, 1998
RE: Proposed General fund Balance Policy Revision
INTRODUCTION
In April of 1990 the City of Shoreview adopted a policy designating a portion of the
City's General Fund balance for cash flow purposes. The policy was necessary then and
is still necessary today because: 1)property taxes and state aids represent 75 percent of
General Fund revenues,and 2) property tax and aid payments are received in July and
December of each year.
This means that the City's primary operating fund must operate during the first 6 months
of the year without tax and state aid revenues. Consistent with the cash flow needs
dictated by the items mentioned above, the City's policy requires that 50 percent of the
ensuing year's General Fund tax levy and state aids be designated for cash flow purposes.
From time to time Council and staff have also discussed the possibility of determining
• guidelines for a maximum General Fund balance. The mechanism for establishing the
maximum fund balance has been discussed as an allowance for unanticipated General
Fund expenditures or revenue shortfalls.
Proposed Revision
During the budget and capital improvement program (CIP) workshops held last
November, and at a Council workshop in early March, staff described a proposed plan to
revise and expand the City's fund balance policy to include an unanticipated expenditure
designation. The proposed annual designation would equal 5 percent of General Fund
expenditures, and the policy would require that at year-end any fund balance in excess of
the combined cash flow and expenditure designations would be transferred to the City's
• General Fixed Asset Revolving (GFAR) Fund_
In effect the policy establishes a minimum and maximum General Fund balance. The
minimum balance would be equal to the cash flow designation, and the maximum would
be equal to the sum of the cash flow designation and the expenditure designation
combined.
SEP-28-2007 13:20 CITY OF SHOREVIEW 6514904699 P.03/06
•
Page 2
Proposed Fund Balance Policy Revisions
March 31, 1998
Previous estimates indicated that as of the end of 1997 this proposal would amount to
approximately a $130,000 transfer from the General Fund to the GFAR Fund. Based on
the discussion with the City Council during the budget workshops, the CIP and CHIRP
were prepared assuming the $130,000 transfer from the General Fund.
Current estimates indicate that if the City creates the Tax Increment Investment Fund,
and adopts the revised General Fund balance policy, that the transfer from the General
Fund to the GFAR Fund at the end of 1997 will equal approximately $160,000.
The primary advantages of this proposed policy are that it:
1. Sets a minimum and maximum General fund balance through a written policy.
2. Reinvests fund balances in excess of the policy in the efforts addressed by the City's
CHIRP, which continues to be a high priority for the City.
3. Provides additional funding for replacement, which in turn will reduce the need for
higher tax levy increases to support future replacement costs in the GFAR Fund.
This action is important because the City receives significantly less state aid per capita
than communities of similar size. This means the City has fewer state aid dollars to
balance operating costs and replacement needs, which makes it a bigger challenge to
maintain competitive property tax levels.
•
Since 1989 the GFAR Fund has supported two million dollars in replacement costs. As
shown in the most recent CIP and CHIRP, the GFAR fund balance fluctuates up and
down from year to year depending on replacement costs. Although the fluctuations have
been anticipated from the beginning, fund balances are not growing as fast as originally
designed or projected.
The CIP indicates that although the GEAR Fund balance was $329,000 at the end of
1996, it is expected to drop as low as $156,000 by the end of 2000, and increase again to
$286,000 by the end of 2002. The City's first CHIRP projected that the fund balance
would equal $870,000 by the end of the year 2000, and would be even higher by 2002.
Lower fund balances are caused by increased replacement needs and tax levies that have
been lower than necessary to create the fund balance growth. In any case, both of these
occurrences illustrate the need for additional funding in the GFAR Fund_ The proposed
fund balance policy will provide additional funding whenever the General Fund balance
exceeds the maximum established by the policy.
•
SEP-28-2007 13:20 CITY OF SHOREUIEW 6514904699 P.04/06
Page 3
Proposed Fund Balance Policy Revisions
• March 31, 1998
For the year ended December 31, 1997,the proposed designations would be as follows:
Cash flow designation:
▪ General Fund property taxes $2,496,347
• Fiscal disparities 365,660
- Homestead and ag credit aid(HACA) 985,216
■ Local performance aid 34,618
Total $3,881,841.
50% cash flow designation $1,940,921
Unanticipated expenditure designation:
• 5%of expenditures (estimated at $4,905,106) $ 245,255 *
Current estimates indicate that the proposed policy would result in a General Fund
balance of$2,186,176 ($1,940,921 + $245,255), with a $159,894 transfer to the GFAR
Fund.
It should be noted that although this policy is established by resolution, the City Council
may revise the fund balance policy at any time.
• SUMMARY
Staff recommends adoption of the attached proposed resolution amending the General
Fund Balance policy.
File: t\data\word\Gnrep\fund hal policy adopt
Link: t\data\cxcel\tit\tif change
•
EXTRACT OF MINUTES OF MEETING OF THE
CITY COUNCIL OF THE CITY OF ROSEVILLE
* * * * * * * * * * *
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of
Roseville, County of Ramsey, Minnesota was duly held on the 23rd day of July 2007 at 6:00
p.m.
The following members were present: Pust, Roe, IhIan,Kough and KIausing.
and the following were absent: none.
Member Kough introduced the following resolution and moved its adoption:
RESOLUTION 10523
RESOLUTION ADOPTING THE OPERATING FUND RESERVE POLICY
FOR THE CITY OF ROSEVILLE
4111 WHEREAS, the City Council of the City of Roseville, Minnesota desires to establish financial
and budget policies that provide for the sustainability of City programs, services and
infrastructure;and
WHEREAS, the City Council of the City of Roseville, Minnesota desires to maintain the City's
strong financial condition; and
WHEREAS, the City Council of the City of Roseville, Minnesota desires to provide appropriate
fiscal and budgeting controls.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Roseville,
Minnesota, that the following Operating Fund Reserve Policy be adopted and remain in effect
until such time that a subsequent policy action is taken.
•
•
Operating Fund Reserve Policy
Purpose
❑ To provide a cushion against unexpected revenue and income interruptions
❑ To provide working capital by ensuring sufficient cash flow to meet the City's needs
throughout the year
Policy
❑ The City will maintain a general fund reserve of 50% of the general fund's total annual
operating budget. This ensures that the City has adequate funds on hand to provide for
operations between bi-annual property tax collection periods. Any surplus beyond the
requiredgeneral fund reserve maybe transferred to another reserve fund with a funding
shortfall
❑ The City will strive to create a reserve in the Recreation Fund to equal 25% of the
annual recreation budget. This reserve will provide a cash flow cushion and reduce the
inter-fund borrowing expense to the Recreation Fund. Because of more frequent cash
inflows,a 25%reserve will be adequate to support the daily cash needs of the fund
• O The Community Development Fund is supported solely by building permit fees and
charges. Because the economic environment has a major effect on this Fund, a fund
balance of 25-50 % of the annual budget is a reasonable target. It is expected that as
economic downturns take place, this reserve will provide for a transition period during
which the Council will be able to assess and to better match operations with the
economic need
❑ City enterprise funds shall have operating cash reserves sufficient to provide for
monthly cash flow, and for a reasonable level of equipment and infrastructure
replacement. Major reconstruction or system upgrades, may need to be funded from
enterprise revenue bonds. Annual utility rate reviews will be made in regard to
projected operating expenses and capital improvements. The Council will,on an annual
basis, establish rates in accordance to operating cost recovery and the projected capital
improvements
❑ All other operational funds e.g. License Center, Information Technology, etc are
expected to operate with positive reserve balances of 10-25% of the annual operating
budget. Each operational fund shall be reviewed on an annual basis to assure the fund
balance is in line with the fund's objectives
❑ A one time capital gain on the City's treasury portfolio in 1998 has provided for a
Taxpayer Reduction fund which has been dedicated to providing an ongoing tax
reduction to Roseville property taxpayers. The intent of this fund is to transfer the
•
• annual interest earnings to the General Fund to partially reduce the necessary tax levy.
This Fund has been formally categorized by the Council as a permanent fund, whereby
only the interest proceeds are used each year for the stated purpose. The original
principal amount remains intact
Implementation
All fund reserves shall be reviewed each year at the time of the annual budget preparation for the
purpose of complying with this policy. Budgets shall be prepared on an "All Resources" basis,
so that the City Council and Community can readily discern the current and projected
management of all reserves.
The motion for the adoption of the foregoing resolution was duly seconded by Member IhIan
and upon a vote being taken thereon, the following voted in favor thereof: Pust, Roe, Ihlan,
Kough and Klausing.
and the following voted against the same: none.
WHEREUPON,said resolution was declared duly passed and adopted.
•
•
STATE OF MINNESOTA )
)ss
COUNTY OF RAMSEY )
I,the undersigned,being the duly qualified City Manager of the City of Roseville,Minnesota,do
hereby certify that I have carefully compared the attached and forgoing extract of minutes of a
regular meeting of the City Council of said City held on the 23rd day of July,2007,with the
original thereof on file in my office,and the same is a full,true and complete transcript.
Adopted by the Council this 23rd day of July, 2007.
r
SEAL William . alinen CityManager
(SEAL) g
•
.
CITY OF CAMBRIDGE
• GENERAL FUND FUND BALANCE POLICY
Purpose:
The purpose of this policy is to establish guidelines for the size of the General Fund fund balance for
the City of Cambridge.
Policy Considerations:
1. Fund balance is the reserves of the General Fund of the City of Cambridge. The General
Fund is the primary operating fund for the City.
2. The designations established through this policy shall be used in designating funds for the
year end financial statement purposes.
3. This policy is established to address three(3)primary considerations. First,to meet the cash
flow requirements of the General Fund. Second, to cover compensated absences(accrued
vacation, compensatory time, and sick leave severance) liabilities. Last, to provide for
emergencies and contingency needs of the City.
• Policy Statements:
l. The City Administrator and Director of Finance as a part of the annual budget process shall
prepare an analysis of this policy. The analysis shall include the prior year actual status
(where possible) and project the status of the current year.
2. The Director of Finance shall as a part of the annual audit and year-end financial statement
preparation process see that the appropriate designations are correctly made.
3. The General Fund fund balance shall be designated for the following purposes in the
amounts described below:
1. To meet the cash flow needs of the City a fund balance designation not less than 30%
nor more than 50% of the ensuing years General Fund tax levy (less debt service
transfers included in the General Fund levy) plus the ensuing years certified Local
Government Aid (LGA) and Homestead and Agricultural Credit Aid(HACA).
2. To cover accumulated vacation and compensatory time balances and that portion of
sick leave that would be payable under the CityLs severance pay policy or union
contracts. This amount shall be adjusted annually as part of the year-end close and
annual financial report process.
•
CITY OF CAMBRIDGE
• GENERAL FUND FUND BALANCE POLICY
Page 2
3. To provide for emergencies or contingencies,such as revenue shortfalls,that the City
may encounter as part of its operations. This reserve shall be set at five percent(5%)
of the ensuing years General Fund operating expenditures (not including capital
outlay, debt service or transfers to other Funds).
4. For specific purposes as authorized by the City Council
Funds shall be designated first for compensated absences,second for cash flow needs and lastly for
emergencies/contingencies.
4. Shortages from the requirements of this policy shall be built up through the annual budget
process. Funds shall be budgeted as emergency reserves and then not spent in the ensuing
year. Shortage shall be defined as having less than the minimum policy requirement at the
prior year-end,or having a projection at budget time that would indicate the policy will not
be met at the current year-end
Shortages of less than two percent (2%) of the policy requirement shall be made up in one
0 year. Shortages of more than two percent (2%) shall be made up by a minimum of two
percent (2%)per year.
5. Overages from the requirements shall be used in one of the following ways. First, any
excess, or portion thereof, may be transferred to other funds as authorized by the City
Council (i.e., Revolving Capital Project Fund for future funding source for City projects).
Second, the overage, or any portion thereof, may be used to offset a projected shortfall in
current or future years projections. Third, the excess or any part thereof, may be used to
reduce the property tax levy required for the ensuing year.
0 Adopted by the Cambridge City Council on November 23, 1998
•
MEMORANDUM
TO: Mayor Blesener and Members of the City Council
FROM: Shelly Rueckert, Finance Director
DATE: September 20, 2007
RE: Reserve Policy Amendment
The Council adopted the following policy in April of 2006, superseding the City's prior
Reserve Policy and retiring the General Fund Surplus Transfer Policy.
• ❖ City of Little Canada Reserve Policy Statement
a. In order to provide adequate reserves for future expenditures,the
City's General Fund balance and Special Revenue Fund balances should
be at no time greater than 50%of the prior year's current expenditures.
Current expenditures are defined as current expenditures in the General
Fund, Special Revenue Funds, and Capital Projects Funds.
b. Upon the receipt of the annual audit, the Finance Director will
compute the transfer necessary to bring the prior year's fund balances in
line with a 42.5%reserve ratio. The fund providing the transfer will be
the General Fund. A copy of the initial calculation is attached as Exhibit
A.
c. The Parks and Recreation Special Fund, Economic Development
Fund, Cable Fund, and Gambling Fund are excluded from the requirement
to transfer funds because these funds were established for specific needs,
therefore their fund balances should remain for those purposes.
d. The reserve funds in excess of the 42.5%will be transferred and
maintained in the General Capital Improvement Fund. These funds will
only be available for future transfer back to the General Fund or for levy
• adjustments which would have the same effect.
•
Proposed Amendment
Replace Section d. language with the following language:
The reserve funds in excess of 42.5%will be transferred to the General Capital
Improvement Fund. The portion of the transfer that represents an unused General
Fund surplus from the prior year will be available for use by the General Capital
Improvement Fund. The remainder of the balance transferred will only be
available for future transfer back to the General Fund, emergency General Fund
expenditures, or for levy adjustments which would have the same effect.
The above amendment will re-establish the prior policy of using the General Fund
• surplus to help support the GOP. The surplus transferred will be limited to the prior
year's audited surplus less any amount of that surplus designated for use in the upcoming
budget year. This will increase the amount available in the 2008 GCIP Budget by
$255,238, see documents attached as Exhibit B.
Finally, this amendment will not impact our goal of a 42.5%reserve balance at the
beginning of the fiscal year. This goal is consistent with the original intent to be mid-
range of the State Auditor's suggested range of reserve balances equal to 35-50% of
current expenses.
•
Joe Rueb
From: Al Mahlum
.nt:
Friday, September 28, 2007 1:17 PM C
Joe Rueb /o J-` Pakj-
Subject: RE: Fund Balance Policy Request
Joe
Our fund balance policy for the General Fund is that it should be 25% of the budgeted expenditures for the subsequent
year.
Al Mahlum
From: Joe Rueb
Sent: Friday, September 28, 2007 1:04 PM
To: Chris Miller; Roland Olson; Shelly Rueckert; Al Mahlum; 'jvogt@cityvadnaisheights.com'; Judy Moll; Mark Beer
Cc: Sue Iverson
Subject: Fund Balance Policy Request
Hello,
Sue Iverson and I are collecting an assortment of Fund Balance Policies from the surrounding cities as well as cities
similar in population. We would like to request a copy of your Fund Balance Policy to provide to our Financial Planning
and Analysis Committee as we work on our Fund Balance Policy. If possible please respond by Wednesday, October 3rd.
Thank you,
Joe Rueb
ccounting41
Analyst
yof ArdeeHills
Hills
51) 792.7814 direct
(651) 634 .5137 fax
joe.rueb@ci.arden-hills.mn.us
www.ci.arden-hills.mn.us
•
1
Chair
Scott Bronson t-- 1245 W. Highway 96
Committee Members �RnFN HILLS Arden Hills, MN 55112
Maurice Gieske _'�. 651.792.7800
fil Al Hilgers www.ci.arden-hills.mn.us
Jeff Johnson Arden Hills
James Ostlund
Council Liason Financial Planning and
David Grant Analysis Committee
January 8, 2008
City Vision
A strong community that values our unique environment, our fiscal soundness,
and our tradition as a desirable city in which to live, work, and play.
Agenda
Regular Committee Meeting Convenes 6:00 PM
Call to Order
1. APPROVAL OF THE AGENDA
2. MINUTES
A. October 9, 2007 Regular Meeting
3. UNFINISHED AND NEW BUSINESS
A. Assessment Policy Discussion - New
B. Fund Balance Policy Discussion - Continued
411) 4. REPORTS
A. Report from the City Council
B. Financial Planning and Analysis Committee Comments and Requests
6. ADJOURNMENT
A quorum of the City Council may be present at this meeting.
•
MINUTES
'1 DWEEN HILLS
S
FINANCIAL PLANNING & ANALYSIS COMMITTEE
TUESDAY, October 9, 2007
6:00 P.M.
Upstairs Conference Room, Arden Hills City
I. CALL MEETING TO ORDER AND ROLL CALL:
The meeting was called to order by committee::chair, S'eott Bronson at 6 Qapm.
MEMBERS PRESENT: Scott Bronson; Maurice G:ioske; David Grant, Council
Liaison; Al Hilgers; Jeff Johnson; Jim Ostlund
OTHERS PRESENT: Sue Iverson, Finance Director; Joe ; ueb, Accounting
Analyst
II. APPROVAL OF AGENDA
Next meeting changed to November '14 due to Council meeting date change.
Jeff Johnson
• Motioned:
Seconded: Jim Ostlund
III. APPROVAL OF September 11 2007 MINUTES
Motions Jf Johnson
Seconded Al Hilgers
IV. CITY COUNCIL UPDATE Gouncilmember Grant
Nothing has been endorsed for the 10/96 project. The city has received a lot of press
about the miniature horse. Council decided not to allow it as a domestic pet. Council is
still waiting for TCAAP financial standings; although some information is starting to be
presented. The chimney:<is„fixed; however, a new leak was found. Fire station #1 has
roof leaks as well. Karen;::Barton, our Community Development Director, turned in her
resignation. Our new Assistance City Administrator, Noah Simon, starts on the 29th of
• City of Arden Hills
1245 West Highway 96•Arden Hills Minnesota 55112
Phone 651.634.5120•Fax 651.634.5137
www.ci.arden-hills.mn.us
-AREN HILLS
• October. Noah is from Virginia; his wife is originally from Roseville.
V. FUND BALANCE POLICY DISCUSSION
Finance Director Iverson discussed priorities with City Council. hey decided to start
with general fund balance policy. We gathered fund balance policies from surrounding
cities and reviewed auditing requirements. The plan is to start small and work towards
improving the policy. We will discuss Capital improvement fund and others-at a later
date. Keep it separate from the general fund balance policy. Finance Director Iverson
drafted a policy to be discussed and built on. This ;draft s> a hybrid of the City of
Roseville, City of Shoreview and parts of the City of Cloquet Guidelines are from the
GFOA and from the auditors. If complete we can present this policy to the Council on
the 19th. Policies can be amended once adoption. Most of our revenue is from our tax
levy and a little from other sources. No local govern ent Did; our main source of aid is
the market value homestead credit. In 2t 0 we toad:total,revenue or $3.3 million; of that
$2.4 million is general property taxes, $122000 is inter-governmental revenue. The rest
4111 consists of fines and forfeitures, franchise fees and very little form other sources. Do
we have reserves in the enterprise funds? There is...a, sufficient amount for normal cash
flow and infrastructure replacement Rate studies are conducted each year to make
changes accordingly Monthly revenue goes to each fund except for the recycling fund.
According to recording standards we!rtustshow that we have funds set a side to fully
compensate an employee if their employment,is terminated. Our Enterprise fund is full
accrual To give more flexibility we;could provide a range for the fund balance. At the
end of 2006 we were at 53% Are expenditures level throughout the year? No, as
invoices vary €rom month to month; some invoices are only paid twice per year for a full
year contract Ourincome revenue is based off of the two tax payments. Other cities
may depend en othp.r revenues throughout the year. Our risk is within our major
businesses taxes•during.the year. Are contingencies built into the budget? This year
we are trying to, last yearthere was a little, although it was designated. There haven't
been many budgeted contingencies. Some cities budget 10% contingency each year
based off the previous years budget. They take previous years expenditures for the
levy, less any debt levy and less any transfers. This amount was used as well as a
separate contingency fund; both are budgeted each year. End of the year requirements
io are establish to decide where those funds will go. Budget contingencies cannot be
City of Arden Hills
�I�EN�HILLS
carried from year to year. Can make the contingency part of the budget process.
Currently the city is under spending in the budget. At this time the park capital fund has
lost its funding source and we want to start a capital equipment fund but we don't know
where to get the funds from. This policy does not look at month to month cash flow; it is
based off of a one point in time comparison. It may be much: easier to have a separate
contingency fund. Section 3.A states 50%, which is a good (umber based off of
expenditures. In order to keep compliant we need to follow the budget closely. There is
a sinking fund for public safety capital and for capital. protects Thera is of a> eparate
one for other capital or capital equipment. Johnson asked if we have a li ne:of:credit.
We can do tax anticipation notes; borrowing money; f: your expected taxes from
the county. We will be working on a policy for reserved'funds
Suggestion: Within Section 3 add a speciWttakiRRoplace Section 3.0 with Section
3.D. Consider rewording Section 3. Section 5 replace reset,with not. Consider adding
definitions for further clarification, add as an; ddendum
io VI. QUESTIONS/COMMENTS FROM COMMITTEE
VII. NEXT MEETING AGENDA:- lovember 13, 2007
A. Continue Fund Balance Policy,Discussion
B. Use f Capital Improvement Funds/Fund Balance
* Send snapshots of cash flow PEW from auditors.
* Separate'contingency fund agenda items.
VII. ADJOURN
Motioned Jinn Ostlund
Seconded: Jeff.Johnson
• Scott Bronson, Chair Susan K. Iverson, Finance Director
City of Arden Hills
•
-AR EN HILLS
MEMORANDUM
DATE: January 4, 2008
TO: Financial Planning and Analysis Committee
FROM: Sue Iverson, Finance Director
SUBJECT: Fund Balance Policy Discussions
BACKGROUND:
One of the priorities that the Council has assigned to this committee is to work on a Fund
Balance Policy. At the August 14, 2007 meeting we began these discussions. We looked at the
reasons and objectives for such a policy and discussed factors that we wanted to consider in
• developing our policy. We also looked at what information we would need in order to make
these decisions. We continued the discussions at our October 9, 2007 and made revisions and
recommendations to the draft policy.
DISCUSSION:
I have updated the draft policy we worked on at our last meeting per committee consensus. I
have highlighted one area that needs clarification under the general fund undesignated area. This
area may be deleted,but I was unsure if we wanted to include a contingency amount in the
policy or not.
The committee may find it helpful to look at your last packet which contained the sample
policies from cities,which we used for a basis of our discussions last time.
RECOMMENDED ACTION:
Provide feedback and discussion on draft fund balance policy.
0 A EN HILLS
CITY OF ARDEN HILLS
COUNTY OF RAMSEY
STATE OF MINNESOTA
FINANCIAL POLICIES-
FUND BALANCE
Fund Balance and Net Asset Guidelines (Fiscal Year-End)
Reserved Fund Balance and Restricted Net Assets—Portion of fund balance that is not
appropriable for expenditure or is legally segregated(restricted net assets) for specific future
uses.
The City has several items that are legally restricted to a certain use such as: police forfeiture
funds, federal and state economic development revolving loans,park dedication fees, and bond
proceeds. The City has several amounts unavailable for appropriation such as: advances and
deposits, inventories, etc. These types of items will be reported as reserved fund balance and/or
ID
restricted net assets as required.
Designated Fund Balance—Designations represent management's intended use of resources.
Designation for cash flows—This designation will be established for the General Fund which is
funded largely from local government aid,property taxes, and market value credit.
Designation for special revenue funds—All amounts in the TCAAP Fund, Cable Fund, Risk
Management Fund, Park Fund, and Community Services Fund are used for special or specific
purposes and will be designated for such.
Designation for capital projects—All amounts in the Equipment, Building &Replacement Fund,
Public Safety Capital Fund, and the Capital Improvement Fund(PIR) are used to fund the capital
improvement program. The fund balances in these funds will all be designated for capital.
Designation for economic development—The City has grants and property tax monies (TIF)
dedicated for economic development. These funds will be designated for economic
development.
Designation for revenue stabilization—Revenues can fluctuate greatly from year to year,
especially interest earnings, and, in previous years, local government aid. This designation will
be used if determined to be needed by the City Administrator and Finance Director.
1110
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Undesignated Fund Balance and Unrestricted Net Assets—Current resources available for
• which there are no government self-imposed limitation or set spending plan.
General Fund—To provide for emergencies or contingencies, such as revenue shortfalls, that the
City may encounter as part of its operations, the unreserved undesignated fund balance shall be
set at percent ( %) of the ensuing years General Fund operation expenditures (not
including capital outlay, debt service or transfers to other Funds). The unreserved fund balance
should be at a minimum 50%of operating expenditures (this includes the designation for cash
flows). The City's goal will be to follow this recommendation.
Special Revenue Funds—Most of these funds will be designated for specific purposes and the
undesignated fund balances should be near zero.
Debt Service Funds—Most of these funds will be reserved for debt service and the undesignated
fund balance should be near zero.
Capital Projects Funds—Most of these funds will be designated for the capital improvement
plan or reserved for a specific project and the undesignated fund balance should be near zero.
Specific capital improvement funds may be negative because they are waiting on funding but
should zero our at the end of the project.
Enterprise Funds—It is expected that unrestricted net assets will be large. These funds have
large investment in infrastructure that need to be maintained. The City will periodically
. complete a rate study for these funds to ensure rates and unrestricted net assets are sufficient to
operate and maintain these activities.
Purpose
The purpose of this policy is to establish guidelines for the City of Arden Hills' components of
fund balances and net assets.
Primary Policy Considerations
1. To meet the cash flow requirements of the City.
2. To maintain adequate fund balances and net assets in each individual fund of the City.
3. To provide for emergencies and contingency needs of the City.
Policy Statements
1. The Finance Director as a part of the annual budget process shall prepare an analysis of
this policy. The analysis shall project the status of the budget year ending fund balances
and net assets.
2. The Finance Director shall as a part of the annual audit and year-end financial statement
preparation process see that the appropriate reservations and designations are correctly
•
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. made. The designations established through this policy shall be used in designating funds
for the year-end financial statement purposes.
3. The General Fund balance shall be designated as of December 31st for the following
purposes in the amounts described below:
a. The City will maintain a general fund reserve of 50% of the general fund's total
annual operating budget. This ensures that the City has adequate funds on hand to
provide for operations between bi-annual property tax collection periods
b. The City will maintain an amount sufficient to cover accumulated vacation and
compensatory time balances and that portion of PTO leave that would be payable
under the City's severance pay policy or union contracts. This amount shall be
adjusted annually as part of the year-end close and annual financial report
process.
c. For specific purposes as authorized by the City Council.
Funds shall be designated first for compensated absences, second for cash flow needs and
lastly for emergencies/contingencies.
4. The amount of the General Fund balance greater than the sum of all General Fund
• designations will be transferred to a fund or funds determined by the City Council. Such
transfer is pursuant to Council approval.
5. Fund balances held in Special Revenue Funds or Capital Project Funds for future
program and/or project costs and not yet legally obligated will be designated.
6. Fund balances in Debt Service Funds for future debt payments will be designated.
7. City enterprise funds shall have operating cash reserves sufficient to provide for monthly
cash flow, and for a reasonable level of equipment and infrastructure replacement. Major
reconstruction or system upgrades, may need to be funded from enterprise revenue bonds.
Annual utility rate reviews will be made in regard to projected operating expenses and
capital improvements. The Council will, on an annual basis, establish rates in accordance
to operating cost recovery and the projected capital improvement.
8. Fund balances will be designated according to the above guidelines up to the amount
available after other designations. This policy is not intended to require the reporting of
deficit undesignated fund balances.
•
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Review and Approval
The fund balance policy shall be formally approved and adopted by resolution of the City
Council and any future changes to the policy must be approved by the City Council.
Approval by the City Council the_Day of , 2008.
Stanley D. Harpstead, Mayor Date
, City Administrator Date
•
•
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-AIEN HILLS
MEMORANDUM
DATE: January 4, 2008
TO: Financial Planning and Analysis Committee
FROM: Sue Iverson, Finance Director
Kristine Giga, City Engineer
SUBJECT: Assessment Policy Discussions
BACKGROUND:
The City's Assessment Policy was revised in 2004 by a resident task force with staff and City
Council liaisons. Since the adoption of this policy, we have completed several street
• improvement projects. When applying the policy to these projects, we found some areas of the
policy that staff feels need clarification or additional information. Prior to bringing proposed
changes to the City Council,we would like the Financial Planning and Analysis Committee to
review some of our questions.
DISCUSSION:
This first discussion will be an introduction to the policy and some of the items staff would like
to review. Our Civil Engineer, Kris Giga will be present to discuss these issues and the policy
with the committee.
RECOMMENDED ACTION:
Provide feedback and discussion on the City's assessment policy.
-AR EN HILLS
City of Arden Hills
2004 Assessment Policy
Index
Page
General Information 1
Part I—Assessment Policy for Existing Streets 1
Street Reconstruction 3
Mill and Overlay Improvements 4
Alley 5
• Appurtenances 5
Maintenance/Rehabilitation Projects 6
Definitions and General Provisions 6
Assessment Units 10
Hardship Deferrals 11
Appeals Process 12
Part II—Policy for New Developments 13
Sanitary Sewer 14
Water Distribution System 16
Storm Sewer 20
Additional Definitions and General Provisions 22
City of Arden Hills
2004 Assessment Policy
General Information
The City of Arden Hills has adopted a revised Assessment Policy for its existing streets that
are part of the Pavement Management Program (PMP). The PMP is a long-term, multi-year
plan that consists of proposed reconstruction and repair of the city's streets. The goal and
intent of this policy revision was to simplify and make the process easy to understand and
implement. The Policy was drafted by a group of local citizens who served on the City's
2004 Assessment Policy Task Force. This Policy document is divided into two parts. Part I
deals with existing streets and Part II deals with new developments.
Part I— Assessment Policy for Existing Streets
The purpose of this assessment policy manual is to establish procedures to be utilized by the
City of Arden Hills when preparing assessment rolls, so as to assure uniform and consistent
treatment of the affected properties.
• Minnesota State Law, Chapter 429 provides that a municipality shall have the power to make
public improvements such as sanitary sewers, storm sewers, water source and distribution
facilities, street improvements including grading, curb and gutter, surfacing, sidewalks, street
lighting and recreational facilities, etc. The various procedures that the municipality must
follow including reports, notices and public hearings are well defined within the law.
The Statute further defines that the cost of any improvement may be assessed upon property
benefited by the improvement based upon the benefits received whether or not the property
abuts on the improvement and whether or not any part of the cost of the improvement is paid
from other funding sources. The law is not specific on how these benefits are to be measured
or how the costs are to be apportioned, but rather makes it incumbent upon the municipality
to determine with assistance of the City Engineer, City Attorney, appraisers or other qualified
personnel, a fair and equitable method of cost-sharing among the properties involved.
Throughout this policy manual, the total cost of an improvement shall include the
construction cost, plus all associated overhead costs. The total cost of the associated
overhead for a public improvement project would typically include the following as a
percentage of the construction costs:
2004 Assessment Policy—Page 1
City Administration 2.5%
Design Engineering 10.0%
Construction Engineering 10.0%
Legal 2.0%
Fiscal 3.0%
Interest During Construction 4.5%
Assessment Roll Preparation 1.0%
Contingencies 4.0%
TOTAL 37.0%
These overhead costs are estimates however; they are used to calculate actual assessments.
The initiation of public improvement projects may happen utilizing two (2) different
methods. The first method is by a petition of the affected property owners. The petition
must be signed by not less than thirty-five percent (35%) of the owners of the frontage of the
real property abutting the proposed improvements. It should be noted that the City Council
retains the right to review the merits of each project or improvement and establishes the
priority as it deems proper. The second method is to initiate the proceedings by City Council
direction, in which case no petition is needed.
Any reference to land zoning in this policy manual shall mean the most current approved
City Zoning Map available at the time. It should be emphasized that the special assessment
methods and policies summarized herein cannot be considered as all-inclusive and that
unusual circumstances may at times justify special consideration. Also, any fixed cost data
and rates presented herein will be adjusted from year to year so as to reflect current costs.
The City Council shall retain the right to review each project on its own merit and to deviate
from any portion of this Assessment Policy Manual, as it deems proper. These deviations
may occur in unique situations or where application of the policy produces unfair or
undesirable results.
The City of Arden Hills utilizes a Unit Cost methodology for the assessment of existing
residential homes on a per-lot unit basis, with a lot unit being defined as a platted single-
family residential lot or equivalent, which, according to current Arden Hills Municipal Code
cannot be further subdivided for R-1 and R-2 residential use. The City will assess fifty
percent (50%) of the total charges, as assessment, to the residents for existing roadways.
Generally, no assessments are made to the residents for sanitary sewer, water, and storm
water that are part of the PMP.
•
2004 Assessment Policy—Page 2
• Street Reconstruction
A. Residential Equivalent Assessment Rate
All R-1 and R-2 residentially zoned properties with frontage abutting a street that is
reconstructed shall be assessed on a per unit basis at the residential equivalent assessment
rate.
This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk
highway); designation (County State-Aid Highway, Municipal State-Aid Street); or
jurisdiction(State, County or City).
The residential equivalent assessment rate shall be based on fifty percent (50%) of the total
cost of street reconstruction, including all associated overhead costs for a typical residential
street section. This residential equivalent assessment rate shall be determined by the City
Council.
B. Commercial Equivalent Assessment Rate/All Other Zoning Classifications
Assessment Rate
Commercial properties with frontage abutting a street that is reconstructed shall be assessed
on a per unit basis at the commercial/industrial equivalent assessment rate. The per unit basis
IIIis calculated based on the average neighborhood unit size, particularly in a mixed(residential
and commercial) neighborhood. Larger sized commercial lots may be sub-divided into
smaller units for assessment purposes and to ensure equity.
This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk
highway); designation (County State-Aid Highway, Municipal State-Aid Street); or
jurisdiction (State, County or City).
The commercial/industrial equivalent assessment rate shall be based on seventy percent
(70%) of the cost of street reconstruction plus all associated overhead costs for a typical
commercial street section. This commercial/industrial equivalent assessment rate shall be
determined by the City Council.
C. Tax Exempt(non-profits, churches, schools, organizations, groups) Equivalent
Assessment Rate
The tax exempt equivalent assessment rate shall be based on one hundred percent (100%) of
the total cost of street reconstruction, including all associated overhead costs for a typical
residential street
•
2004 Assessment Policy—Page 3
• section. This assessment rate shall be determined by the City Council. All properties with
frontage abutting a street that is reconstructed shall be assessed on a per unit basis at the tax
exempt equivalent assessment rate.
This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk
highway); designation (County State-Aid Highway, Municipal State-Aid Street); or
jurisdiction (State, County or City).
Mill and Overlay Improvements
Mill and overlay improvements are placed as a cost-effective measure to extend the useful
street life of a particular roadway and to delay street
reconstruction needs. As bituminous mill and overlays are constructed as long-term
rehabilitation improvements, the cost of these improvements shall be assessed as described
below.
From time to time, however, the City's Operations and Maintenance Department may
determine that small street areas need immediate bituminous overlay improvements for short-
term maintenance purposes. These types of bituminous overlays, determined to be "stop
gap" maintenance needs rather than long-term street rehabilitation improvements, shall not
be assessed to abutting properties and shall be funded by the City.
A. Residential Equivalent Assessment Rate
All R-1 and R-2 residentially zoned properties with frontage abutting a street that is overlaid
with bituminous surfacing shall be assessed on a per unit basis at the residential equivalent
assessment rate.
This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk
highway); designation (County State-Aid Highway, Municipal State-Aid Street); or
jurisdiction(State, County or City).
The residential equivalent assessment rate shall be based on fifty percent (50%) of the cost of
bituminous overlay plus all associated overhead costs for a typical residential street section.
This residential equivalent assessment rate shall be determined by the City Council.
B. Commercial/Industrial Equivalent Assessment Rate
All commercially or industrially zoned properties with frontage abutting a street that is
overlaid with bituminous surfacing shall be assessed on a unit basis at the
commercial/industrial equivalent assessment rate.
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2004 Assessment Policy—Page 4
This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk
•
highway); designation (County State-Aid Highway, Municipal State-Aid Street); or
jurisdiction(State, County or City).
The commercial/industrial equivalent assessment rate shall be based on seventy percent
(70%) of the cost of a bituminous overlay plus all associated overhead costs for a typical
commercial street section. This commercial/industrial equivalent assessment rate shall be
determined by the City Council.
C. Tax Exempt (non-profits, churches, schools, organizations, groups) Equivalent
Assessment Rate
All tax exempt properties with frontage abutting a street that is overlaid with bituminous
surfacing shall be assessed on a per unit basis at the tax exempt equivalent assessment rate.
This rate shall apply, regardless of the street's classification (local, collector, arterial, trunk
highway); designation(County State-Aid
Highway, Municipal State-Aid Street); or jurisdiction(State, County or City).
The tax exempt equivalent assessment rate shall be based on one hundred percent (100%) of
the cost of bituminous overlay plus all associated overhead costs for a typical residential
street section. This tax exempt equivalent assessment rate shall be determined by the City
1111 Council.
Alley
All reconstruction shall be assessed 50% to the abutting properties. The assessment shall be
on a per unit basis for the property frontage on the alley.
Appurtenances
Appurtenances such as sidewalks, street lighting, trees, or other landscaping features are
often encountered during street improvement projects. Appurtenances to new street
construction, street reconstruction, or bituminous overlay improvements that are either
existing or needed by the City shall be included in the cost of the street improvement project.
Appurtenances constructed or provided in areas along an improvement project where they do
not currently exist, shall be one hundred percent
(100%) assessed to the benefiting properties on a per unit basis. The cost of these
appurtenances shall be separated from the cost of the street improvement project. All costs
of ornamental street lighting and/or any lighting shall be one hundred percent (100%)
assessed to the benefiting properties on a per unit basis.
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2004 Assessment Policy—Page 5
• Maintenance/Rehabilitation Projects
Concrete Pavement Restoration — Concrete pavement restoration is a maintenance procedure
funded by the City.
Crack Sealing—Crack sealing is a maintenance procedure funded by the city.
Bituminous Seal Coating — Bituminous seal coating is a maintenance procedure funded by
the City.
Bituminous Surface Patching — Bituminous surfacing patching is a maintenance procedure
funded by the City.
Definitions & General Provisions
A. Assessment Rate
The assessment rate for any special assessment district is computed by dividing the total
assessable costs of such improvement by the total number of assessment units.
Residential Example:
41111 Roadway Project Cost $601,000
Drainage Improvements $205,000
Sanitary Improvements $245,000
Water Main Improvements $38,000
Total Project Cost: $1,089,000
Assessed to Property Owners:
Roadway Project Cost $601,000
50% assessed $300,500
Number of units in the neighborhood 60
Per Unit Assessment: $300,500 divided by 60 equals $5,008
B. Assessable Costs
The assessable cost of an improvement shall be defined as those costs that, in the opinion of
the City Council, are attributable to the need for service in the area served by the
improvement.
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2004 Assessment Policy—Page 6
• C. Petition
Petition shall mean a written document presented to the City Council for purpose of initiating
a public improvement project. The address of each signatory, the date of the signature and a
printing of each signatory's name shall accompany all signatures.
D. Total Project Cost
Total project cost shall mean the total estimated construction cost plus all associated
overhead costs. Overhead costs shall include, but not be limited to, City administration,
engineering, legal, fiscal, and interest during construction and land acquisition.
E. Assessment Period
The length of payment period of various types of improvement projects shall be as follows:
• Mill and Overlay= 5 years
• Street Reconstruction= 10 years
In the case where several areas of the improvements listed above are included in the same
project, the assessment period shall be determined by the City Council. In no event shall an
• assessment period exceed ten (10) years.
F. Municipal State-Aid Streets
Municipal State-Aid Streets are routes designated by the City Council and approved by the
Commissioner of Transportation for inclusion in the City's State-Aid system. All routes
typically begin and end on another municipal state-aid road, county state-aid road, or trunk
highway.
The criteria used in selecting such routes are as follows:
• The route is projected to carry a relatively heavier traffic volume or is functionally
classified as collector or arterial as identified on the City's functional plan as
approved by the City Council; and,
• The route connects the points of a major traffic interest within the City; and,
• The route provides an integrated street system affording, within practical limits, a
state-aid street network consistent with projected traffic demands.
•
2004 Assessment Policy—Page 7
G. Municipal State-Aid Construction Funds
Municipal State-Aid construction funds are monies apportioned to the City from the State to
be used for the construction of routes designated on the Municipal State-Aid system. All
construction funded with these monies must be in accordance with the Minnesota
Department of Transportation(MnDOT) Office of State-Aid design criteria.
Municipal State Aid (MSA) Funds will be utilized to offset the city's portion of the project
cost.
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.
I. Land Not Included in Assessment
The City may reserve the right to delete land within the assessable area from the assessment
roles if, in its opinion, the land cannot be developed and/or the improvement does not
provide benefit. No development of that property shall be permitted, nor shall any physical
. connection to the City's utility or drainage facilities be made by any development on that
property until the assessment or connection fees are paid.
J. Service District
A service district is the area, as determined by the City Engineer and approved by the City
Council, which will receive benefit from a proposed improvement project. This type of
approach for assessment purposes is typically used for trunk and subtrunk sanitary sewer
projects; trunk, subtrunk, source, storage and treatment water projects; and trunk storm sewer
projects.
K. Certification of Assessment Roll
At the time the assessment rolls are adopted by the City Council by resolution (refer to
Appendix for a sample resolution), the property owner may pay the entire assessment against
their property in full at Arden Hills City Hall, 1245 W. Highway 96, within thirty (30) days
without interest charge. Beyond thirty (30) days, but prior to certification to the County,
payment (principal plus interest from the assessment roll date) can be made at the City Hall.
After the certification of assessment to the County is made, a resident may make a payment
directly at the Ramsey County Government Center, 50 Kellogg Boulevard, St. Paul. Interest
•
2004 Assessment Policy—Page 8
• charges apply effective from the date of Council approval of the assessment role. It should
be noted that the certification is made to the County in early September.
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.
If paid before November 15th, interest is calculated to December 31st of the year the
payment is made. If paid after November 15th, interest will be calculated through December
31st of the next year.
Once the assessments are certified to the County, it is the responsibility of the County staff to
calculate the interest charges and include them in the annual property tax payment schedule.
Example:
Assessment Amount $4,500
No. of years assessed 10
Interest Rate 6%
Assessment Roll Approval Date 5/1/2005
Est. Total Interest over the life $1665
Schedule of Payments:
Interest Principal Total Balance
Year 1* $ 450.00 $ 450.00 $ 900.00 $4,050.00
Year 2 $ 243.00 $ 450.00 $ 693.00 $3,600.00
Year 3 $ 216.00 $ 450.00 $ 666.00 $3,150.00
Year 4 $ 189.00 $ 450.00 $ 639.00 $2,700.00
Year 5 $ 162.00 $ 450.00 $ 612.00 $2,250.00
Year 6 $ 135.00 $ 450.00 $ 585.00 $1,800.00
Year 7 $ 108.00 $ 450.00 $ 558.00 $1,350.00
Year 8 $ 81.00 $ 450.00 $ 531.00 $ 900.00
Year 9 $ 54.00 $ 450.00 $ 504.00 $ 450.00
Year 10 $ 27.00 $ 450.00 $ 477.00 $ -
$1,665.00 $4,500.00 $6,165.00
* Note: Interest in year 1 is for twenty(20)months (May 1 ,2005 -December 31, 2006).
1. Ad Valorem Tax
The City Council may, at their discretion, utilize ad valorem taxes to fund
portions of the project cost of any public improvement. This shall be done in
accordance with the appropriate Minnesota State Statutes.
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2004 Assessment Policy-Page 9
• 2. Petition for Non-Programmed Projects
The City of Arden Hills has established a formal capital improvement
program for street reconstruction and rehabilitation projects. It is the intent of
the City to generally follow this established program. The Arden Hills City
Council will accept petitions from property owners requesting non-
programmed projects. Generally, the assessment rate for non-programmed
improvement projects initiated by petition of the affected property owners,
and approved by the Council, shall be one-hundred percent (100%) of the total
project cost.
3. Improvements to Roadways Not Under City Jurisdiction
The City may assess properties that abut roadways not under City jurisdiction,
but receiving reconstruction or bituminous overlay improvements. The
assessment rate levied against these properties shall be the same as those
established for City reconstruction or bituminous overlay projects.
Assessment Units
The City shall levy special assessments on adjacent benefiting properties for street
improvement projects. The assessment rate shall be computed on a per-lot unit basis, with a
lot unit being defined as a platted single-family residential lot or equivalent, which,
0 according to current Arden Hills Municipal Code cannot be further subdivided for R-1 and
R-2 residential use.
If a property has been assessed on a lot unit basis for a public improvement, and
subsequently a property division is made creating additional lot units, then a supplemental
charge shall be made to the property at the same rate which applied under the original
assessments.
All tax exempt status properties shall be subdivided to determine the assessable lot units or
part thereof.
Corner lots shall be assessed on the street that is used for the mailing address.
If a street improvement project is requested to be constructed to a greater width and/or
thickness than the standard by the abutting property owners, the excess cost above that of the
standard reconstruction cost shall be assessed one hundred percent (100%) to those
properties.
All properties with tax exempt status and abutting new street reconstruction, street
reconstruction, or bituminous overlay improvements shall be assessed at one hundred percent
(100%) of the cost of the improvement.
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2004 Assessment Policy—Page 10
The assessment process shall be carried out in accordance with Minnesota Statutes Chapter
429. The assessment rate shall be on a per-lot unit basis and shall be calculated and processed
in accordance with the current Arden Hills Pavement Management Program and Assessment
Policy.
Hardship Deferrals
Minnesota Statute No. 435.193 allows the City, at its own discretion, to defer the payment of
any assessment for any homestead property, that is a primary place of residence, owned by a
person sixty-five (65) years of age or older, or retired by virtue of a permanent and total
disability for which it would be a hardship to make the payments. Under the hardship criteria,
no payment amount is reduced or eliminated, but deferred to a future date. Eventually, a
payment in full with interest will be due to the City/County.
The person filing for a senior deferment must be sixty-five (65) of age on or before
December 31st of the assessment year.
In order to receive such a deferment, the affected person must establish the economic
hardship that would be incurred to the reasonable satisfaction of the Arden Hills City Council
by providing documentation showing an annual gross income less than fifty percent (50%) of
the Ramsey County median household income as determined by the most recent census.
The deferral will last for a period of not more than ten (10) years, and will terminate before
ten(10) years if any one of the following conditions is present:
4111 • The owner of the property dies and the spouse is not eligible for a deferment;
• The property is sold;
• The property is no longer homestead;
• The City Council determines that there is no longer hardship incurred in immediately
requiring either full or partial payment of the assessment.
The City reserves the right to periodically request verification of continued eligibility for a
hardship deferral.
It should be noted that during the term of the deferral, interest will accrue. At the termination
of the deferral period, interest and principal will be due in a lump sum amount.
An application for deferment of special assessments is available at the City Offices. It is the
responsibility of the resident to submit a completed deferral form, along with tax documents,
to the Finance Director for approval. This application must be filed within 30 days of the
assessment role. The submission of a deferral form to the City does not automatically qualify
a resident for the deferral. If a resident is approved for the deferral, the City staff will notify
the resident of the approval. The City staff on a periodic basis may request the resident to
verify their eligibility.
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2004 Assessment Policy—Page 11
Appeals Process
•
An owner of the property has the opportunity to appeal the assessment amount at various
stages of the assessment process. The first stage is when the assessment amount is initially
estimated by staff based on the interpretation of the existing Assessment Policy. If the
estimate was based on inaccurate or incomplete information, the owner may work directly
with staff to clarify or rectify the situation.
If the owner is not satisfied with the outcome at this stage, known as the first stage, they may
file a formal appeal with the City Council, prior to the adoption of the assessment roll. This
is known as the second stage of the appeal's process.
If the appeal is denied by the City Council, the owner may appeal to the district court
pursuant to Minnesota Statutes, Section 429.081, by serving notice of the appeal to the
Mayor or the City Administrator within thirty(30) days after the adoption of the assessment.
•
2004 Assessment Policy—Page 12
• Part II — Policy for New Developments
The assessment policy for anyone who wishes to make public improvements within the City
of Arden Hills, as part of a proposed development shall conform to the policies established
herein and as modified below. It is the responsibility of the developer to assume total costs
(100%) for all new road and street construction including, lights, sanitary sewer, water, and
storm water.
Prior to any action on the part of the City to determine the feasibility of providing public
improvements, the developer shall deposit such amount as determined by the City
Administrator to adequately reimburse the City for all engineering, legal and planning, and
other consultant fees for work performed in regard to such improvements.
In addition, the developer shall be required prior to the City ordering the installation of any
City financed improvements, to enter into a Development Contract insuring compliance with
the policies set out herein and all subdivision requirements of the
City. The developer shall also be required to post all cash deposits, and/or letters of credit
prior to such action by the City Council. In all projects that the City constructs and finances,
the following security provisions shall apply.
A. For single family, two family or townhouse residential developments, the developer
shall deposit with the City a cash escrow or an irrevocable letter of credit of not less
• than one hundred twenty-five percent (125%) of the estimated project cost as
determined by the City Engineer. If the estimated project cost, as determined after
receipt of bids for construction, exceeds the Engineer's estimate by ten percent (10%)
or more, the deposit shall be increased proportionately. The total project costs shall
be assessed in equal annual installments according to the assessment period.
B. In the case where the improvements benefit not only the property being developed,
but other areas within the City, the developer shall provide to the City a security
deposit in accordance with paragraphs described above for the portion of the
estimated project costs that represent the benefit to the proposed development. Such
portion shall be assessed against the properties benefited.
For all other types of development, the developer shall deposit with the City a cash
escrow or irrevocable letter of credit of not less than one hundred twenty-five percent
(125%) of the estimated project cost as determined by the City Engineer. If the
estimated project cost as determined after receipt of bids for construction exceeds the
Engineer's estimate by ten percent (10%) or more, the deposit shall be increased
proportionately. The total project costs shall be assessed in equal annual installments
according to the assessment period.
The security deposit shall be irrevocable for the full term of any assessments for
which given. The agreement shall be so conditioned as to guarantee payment of the
1111
2004 Assessment Policy—Page 13
assessments as due or to pay for the cost of all improvements that the developer
• agreed to install.
The required security deposit may consist of a cash escrow deposit or irrevocable letter of
credit, in form acceptable to the City Attorney, and with firms authorized to do business in
the State of Minnesota.
Sanitary Sewer
A. Definitions and General Provisions
1. Sanitary Sewer Interceptors
A network of relatively large diameter, deep sewer pipe and associated
pumping stations and appurtenances. The interceptors are designed as
collectors for large areas within the sanitary sewer service area.
2. Sanitary Sewer Trunks and Subtrunks
Sanitary sewer pumping stations, including associated forcemain and/or a
network of gravity pipes ranging in size generally from ten inch (10") through
eighteen inch (18") and extending away from respective interceptor mains.
Pumping station, forcemains, trunks and subtrunks are designed as collectors
for areas usually less than three hundred (300) acres. Because sewer lines flow
by gravity, the pipes can become quite deep at some locations and very costly
to install. A trunk or subtrunk assessment is, in certain cases, utilized so that
costs due to extra depth (and/or oversizing) will be spread over the entire
service district rather than becoming a burden on just those properties abutting
that portion of the pipe network constructed.
3. Sanitary Sewer Laterals
A network of pipes, usually eight inch (8") in size that are installed eight (8)
to twenty (20) feet deep and are designed to serve those buildings abutting a
given street or easement. The laterals drain to trunks, subtrunks or directly to
interceptors.
4. Sanitary Sewer Building Services
Those pipes, usually four-inch (4") or six-inch (6") in size leading from
laterals (or sometimes from trunks, subtrunks and interceptors) that serve
individual buildings. The services are plugged at the property line until such
time that a building is connected to the sewer system. The property owner
must make arrangements with a licensed, bonded plumber to complete the
service connection.
40
2004 Assessment Policy—Page 14
5. Sanitary Sewer Availability Charge (SAC)
• This is a charge billed to all properties at the time of connection to the sanitary
sewer system. The charge is the individual property share of the cost of the
interceptor trunk and treatment facilities that make sewer service available.
The charge is based on an equivalent unit basis. The method used to calculate
the total number of units for any specific property and the current unit charge
are based on the Metropolitan Council Environmental Services (MCES) for
expected sewage flow from various
dwellings or businesses. A listing of the MCES sewer availability charges is
available on the Metropolitan Council website: www.metrocouncil.org. This
charge may not be assessed against the property.
6. Sanitary Sewer Lateral Benefits
Lateral benefit may be provided by connection to trunk, subtrunk or lateral
pipes. The calculation of lateral benefit from a trunk or subtrunk pipe will be
based on the cost of an eight inch (8") pipe along the same alignment at a
depth adequate to provide services to the abutting properties.
7. Infrastructure Rehabilitation Projects
Any project or portion of a project that reconstructs an existing sanitary sewer
• facility. A rehabilitation project may occur on the existing alignment of the
sewer line or on a new alignment, thus allowing the existing line to be
abandoned or its status downgraded (i.e.,trunk or subtrunk to lateral).
B. Determining Sanitary Sewer Assessment Rates
1. Sanitary Sewer Interceptor Rates
All properties that lie within the approved Service District shall bear the cost
of sanitary sewer interceptor projects. The costs shall be spread equally,
based on a gross area basis within the Service District, and will be known as
an interceptor assessment.
2. Sanitary Sewer Trunk/Subtrunk Rates
The lateral and building service assessments described below will be deducted
from the total improvement cost to be assessed. The amount remaining after
said deductions will be assessed on a gross area basis to all propertied within
the Service District, and will be known as a trunk assessment and/or subtrunk
assessment.
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2004 Assessment Policy—Page 15
• 3. Sanitary Sewer Lateral Rates
The building service assessments described below will be deducted from the
total improvement cost to be assessed. The amount remaining after said
deductions will be assessed by the following method. The resulting
assessment will be known as a lateral benefit assessment.
Each assessable unit shall be assessed as follows:
• R-1 and R-2 residential lots at 100% of the total project cost
• All other land uses at 100% of the total project cost
4, Sanitary Sewer Building Service
The assessment rate for each size of building service; four inch (4"), six inch
(6"), or eight inch (8") shall be determined by adding all the costs associated
with each size of service and dividing by the total number of services
constructed. Each unit will be assessed at the determined rate for each size
and number of services installed. This will be known as the building service
assessment.
• Water Distribution System
A. Definitions and General Provisions
1. Water Source and Treatment Facilities
The City of Arden Hills purchases water from the City of Roseville to supply
the water distribution system. Water enters the system at three (3) separate
meter stations.
The water purchased from Roseville is treated, and Arden Hill does not add
any water treatment to the distribution system.
2. Water Storage Facilities
The City of Arden Hills has a total water storage capacity of 1.5 million
gallons comprised by two (2) elevated storage tanks. One tank has a capacity
of 1.0 million gallons and is located south of I-694 along Red Fox Road. The
other storage tank has a capacity of 0.5 million gallons and is located north of
I-694 along Fernwood Avenue.
•
2004 Assessment Policy—Page 16
3. Water Trunk and Subtrunk Distribution Mains
•
A network of pipes and related appurtenances usually in the size range of ten
inch (10") to sixteen inch (16"). These pipes are designed to carry large
volumes of water and interconnect various point sources of water supply and
storage reservoirs. Appurtenances to these facilities would include valves and
fittings,but not fire hydrants.
4. Water Main Laterals
A network of water pipes and related appurtenances usually six inches (6") or
eight inches (8") in size that are installed with approximately eight feet (8') of
ground cover to retard freezing and are designed to serve those buildings
abutting a given street or easement. Lateral mains are "looped" wherever
possible to balance pressures and to provide water from at least two (2)
directions so that continuous water service is maintained for most people
during a water main break. Looping of lateral mains eliminates dead end
water mains that cause a variety of distribution and stagnation problems.
Appurtenances to these facilities would include valves, fittings and fire
hydrants.
5. Water Main Building Service
• These pipes lead from laterals (or sometimes from trunk and subtrunk mains)
and serve individual buildings abutting thereon. The size of the service
usually ranges from three-quarter inch (3/4") to six-inch (6"), depending upon
the type of building served. The lines terminate at the property line with a
shut off valve and are plugged until such time that the building is connected to
the water system.
The property owner must make arrangements with a licensed, bonded plumber
to complete the service connection.
6. Water Connection Charge
This is a charge billed to all properties at the time of connection to the water
system. The charge is the individual property share of the cost of the trunk,
source, and storage facilities that make water service available. The charge is
based on the size of the connection, plus the material and installation cost of a
water meter. The current charges are outlined in the City Fee Schedule.
Neither of these charges may be assessed against the property.
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2004 Assessment Policy—Page 17
7. Water Main Lateral Benefits
• The benefit resulting to a property abutting or utilizing a water main where a
direct connection to that water main via a building service is reasonably
possible without additional lateral pipes.
Lateral benefit may be provided by connection to trunk, subtrunk or lateral
pipes. The calculation of lateral benefit from a trunk or subtrunk pipe will be
based on the cost of an eight inch (8") pipe along the same alignment for
commercial or industrial zoned property and a six inch (6") pipe for all other
areas.
8. Infrastructure Rehabilitation Projects
Any project or portion of a project that reconstructs an existing water system
facility. A rehabilitation project may occur on the existing alignment of the
water line or on a new alignment, thus allowing the existing line to be
abandoned or its status downgraded (i.e., trunk or subtrunk to lateral).
B. Determining Water Main Assessment Rates
1. Trunk, Subtrunk, Storage and Treatment Facility Rates
• Any lateral and building service assessments described below will be
deducted from the total improvement cost to be assessed. The remaining costs
shall be spread equally to all properties that lie within the approved Service
District. The costs shall be spread on a gross area basis and will be known as
all or any of the following as appropriate: trunk, subtrunk, source, storage, and
treatment assessment.
2. Water Main Lateral Rates
The building service assessments described below will be deducted from the
total improvement cost to be assessed. The amount remaining after said
deductions will be assessed by the following method.
• R-1 and R-2 residential lots at 100% of the total project cost
• All other land uses at 100% of the total project cost
3. Water Main Building Service
The assessment rate for each size of building service three-quarter inch (3/4")
to eight inch (8") inch shall be determined by adding all the costs associated
0 with each size of service and dividing by the total number of services
2004 Assessment Policy—Page 18
constructed. Each unit will be assessed at the determined rate for each size
• and number of services installed. This will be known as the building service
assessment.
Storm Sewer
A. Definitions and General Provisions
1. Storm Sewer Improvement District
The City Council may, at its discretion, construct and finance storm sewer
improvements by utilizing a storm sewer tax district, pursuant to Minnesota
Statute 444.16 through 444.21.
2. Storm Sewer Trunk Facilities
a. Ponds
A basin or wetland constructed or naturally located within a permanent
easement for the purpose of containing storm runoff. May be a
retention (permanent) pond; detention (temporary) pond; or a
combination of both. Arden Hills is within the Rice Creek Watershed
• District (RCWD), which may require additional improvement to
control flow discharge from the ponds. The RCWD has a formal
permitting process governing pond construction.
b. Pipe Network
A network of pipes ranging in size generally from thirty inches (30")
through seventy-two inches (72"). The trunk pipe networks are
designed to collect stormwater runoff from an area generally larger
than forty(40) acres.
3. Channels, Ditches and Swales
Conveyance network constructed within permanent easements for the
purposes of transporting stormwater runoff.
4. Storm Sewer Lateral Facilities
A network of pipes ranging in size generally from twelve inches (12") to
twenty-seven inches (27") designed to collect stormwater runoff from a
specified small area to a trunk facility. The lateral facilities also include street
2004 Assessment Policy—Page 19
overland flow and inlet structures such as catch basins, manholes and flared
• end sections.
5. Storm Sewer Taxing District
A drainage area determined by using topographical maps and surveys that
mutually benefit from storm sewer improvements in conformance with
Minnesota Statute, Section 444.16 through 444.21
6. Watershed District
A formally established area and Board that protects and controls the water
management aspects of subdivisions and developments within the region.
B. Determining Storm Sewer Assessment Rates
1. Storm Sewer Trunk Rates
Design and estimate the total improvement cost of the ultimate trunk system
needed to provide complete service to each property in the Service District
• considered. Also, include the total cost of any existing facilities and/or
previous storm sewer assessments to be credited.
Determine the base assessment rate by dividing the ultimate system cost
described above by the sum total of the following:
• Gross area of low-density residential properties times 1.0.
• Gross area of medium and high density residential, church and
school properties times 1.25.
• Gross area of commercial property times 1.5.
• Gross area of industrial property times 2.0.
Assessment rates would be set as follows:
• The base rate shall apply to low density residential properties.
• The base rate times 1.25 shall apply to medium and high-
density residential, church and school properties.
• The base rate times 1.5 shall apply to commercial property.
• The base rate times 2.0 shall apply to industrial property.
Credits may be given for previous storm sewer assessments, existing systems
and any future additional construction that may be necessary as determined by
i
2004 Assessment Policy—Page 20
m.
the City Engineer for complete service to each property. Credit rates for
• future construction shall be based on current prices.
The City may determine that storm sewer trunk cost be assessed to all
properties within a respective storm sewer taxing district under Minnesota
Statute 444.16 through 444.21
2. Storm Sewer Lateral Rates
The lateral storm sewer project costs will be assessed by one of the following
methods as determined by the City Council after the project feasibility study.
3. Lot/Equivalent Lot Basis
Determine the total number of lots and equivalent lot units receiving lateral
benefit and divide the project cost equally among them.
• R-1 and R-2 residential lots at 100% of the total project cost
• All other land uses at 100% of the total project cost
B. Municipal State-Aid Construction Fund Contributions
0 When a Municipal State-Aid Street project includes either trunk or lateral storm sewer, which
the Minnesota Department of Transportation (MnDOT) determines may be funded by
Municipal State-Aid construction funds, the amount determined to be actually funded by
MnDOT may be deducted from the total improvement costs to be assessed.
C. Infrastructure Reconstruction Projects
Any project or portion of a project that reconstructs an existing storm sewer system facility.
A reconstruction project may occur in the existing alignment of the storm sewer pipe or on a
new alignment, thus allowing the existing line to be abandoned or its status downgraded (i.e.,
trunk to lateral).
All properties with tax exempt status and abutting new street reconstruction, street
reconstruction, or bituminous overlay improvements shall be assessed at one hundred percent
(100%) of the cost of the improvement.
•
2004 Assessment Policy—Page 21
• Additional Definitions and General Provisions
A. Federal, State and County Highways
These streets are classified as expressways, freeways, and principal arterials constructed and
maintained by the State or County Highway Departments. They will carry large volumes of
traffic at peak loading times.
B. Minnesota State-Aid (MSA) Streets
These are termed collector streets that interconnect other collector streets, State or County
highways, or with Minnesota State-Aid streets in the municipality. Municipal State-Aid
funds, apportioned from the gasoline tax, are used to help finance the cost of Minnesota
State-Aid Street. The design for a Minnesota State-Aid road is dependent on traffic volumes
and the urban setting.
C. Commercial/Industrial Streets
These are streets that generally serve commercial/industrial property. They would typically
have a projected traffic volume higher than a residential street. A typical design would be
• thirty-six feet (36') wide with concrete curb and gutter, and nine (9) tone design in
accordance with current MnDOT standards.
D. Residential Streets
Primarily serve adjoining residents with little or no through traffic. Almost all trips have
either an origin or destination on that street. (18.5 miles throughout the City) Street width:
Minimum of 28 feet.
E. Neighborhood Streets
Provide access to residences on that street and provide a route through neighborhood for
residents on other streets. A large proportion of trips have neither an origin nor destination on
that street. (4.5 miles throughout the City) Street width: Minimum of 30 feet.
F. Community Street
Provide access to the residences, institutions and businesses on that street, providing a route
through the neighborhood or business district for residents of other neighborhoods. (6.0 miles
• throughout the City) Street width: Case specific, 32 foot minimum.
2004 Assessment Policy—Page 22
• G. Special Cases
Streets which do not fir into any of the above descriptions and have a very low usage, (1-3
residences); streets which provide secondary access (i.e. alleys); or, streets defined by
extreme limitations due to narrow right-of-way, topography, etc.
H. Appurtenances
1. Sidewalks
The City may require sidewalks or trails on or adjacent to selected streets or in
selected subdivisions.
2. Street Lighting
The City has a separate plan that indicates where lights are typically installed.
Additional street lights or ornamental lights may be installed at the written
request of the abutting property owners.
• 3. Trees
Trees and other types of landscaping may be required on selected streets.
4. Seeding/Sod
Boulevard restoration by seeding/sodding may be required to prevent erosion.
5. Existing Street Reconstruction Projects
Projects that reconstruct existing City streets shall be to the minimum
applicable standards for the type of street classification, consistent with the
Arden Hills Pavement Management Program (PMP) (as found in the
Appendix)
6. Maintenance/Rehabilitation Projects
a. Cold in Place Recycling and Repaving(CIR/Repaving)
•
2004 Assessment Policy—Page 23
Recycling of existing deteriorated pavements by pulverizing, mixing
with new asphaltic oils and compacting in place. New paving
materials are then placed over the cold recycled pavement similar to a
standard overlay.
b. Bituminous Overlay
Placement of an additional bituminous layer, generally one inch(1")to
two inches (2") thick, over an existing bituminous surfaced street.
c. Concrete Pavement Restoration
Replacement of existing concrete panels that have deteriorated,
mudjacking panels to improve rideability, and the filling of joints and
cracks with petroleum based material to eliminate flow water to the
base below the surface.
d. Crack Sealing
Placement of petroleum based material in the cracks of a bituminous
• surfaced street for the purpose of eliminating the flow of water from
the surface to the aggregate base material blow.
e. Bituminous Seal Coating
Placement of petroleum based material and aggregate on an existing
bituminous surfaced street for the purpose of filling cracks and
covering mild wear.
f. Bituminous Surfacing Patching
Repair or replacement of existing bituminous surfacing that has
deteriorated.
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2004 Assessment Policy—Page 24
•
The City of Arden Hills appreciates and acknowledges all the contributions made by the
Assessment Policy Task Force in the drafting of this document.
The City acknowledges the following individuals who served on the Task Force:
Gerald Garski
Bill Gillies
Jim Holden
Andy Holewa
Raymond McGraw
Charles Stoddard
David Grant (Council Liaison)
Gregg Larson (Council Liaison)
Murtuza Siddiqui, Finance Director (staff liaison)
Tom Moore, Operations and Maintenance Director (staff liaison)
•
•
2004 Assessment Policy—Page 25