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February 22 , 19 80 TO: dim Andre,, City Manager FMM* Charles Schell, Public Works Director Special Assessment Rates In the 1960's, the City began a policy of assessing for varicus public -_ j rprovenents by establishing a fixed dollar amount for each inprovement on a per lot, or per assessable foot, basis., As time went on and ,inflation occurred, these specified dollar mounts naturally had to be increased periodically, That type of procedure, hcwever, results in having assessment rates that are either too high to begin with , if they are to last several years ; or too low after just one year . This causes confusion And procedural difficulty. The assessment rate must be altered again at this time because feasibility studies being prepared have shown that it will be in-possible to follow the existing special assessment figures and reach the nunir 3rn 20 level that is required for these, storm sewer projects. Inasmuch as a change to bring the assessments into line with today' s prices nust be done, it is reconmvzided that this would be the appropriate time to alter the fixed price system in the as ses sent po licy . A percentage of the actual cost- s,lar to that used in the . street assessment policy * would be more manageable, fair, and able to be retained throughout future projects without rraking artificial juTps in specific years in the fixed assessment rate. A brief review of the history of the three types of assessreents and a re- commended amendment to each follows, stonn Sewers. Phrch of 19 65 saw the first established . storm sewer rate set at $200 per residential lot, IItiples of this amount for ccunr..rcial Property and acreage were s imilarly es tablished . at that time # ' . I his rate was expected to bring in 28 , 30 of the overall costs, It might' be mated that the' dons on for Minneapolis . at that tiro had 'a figure equivalent to less than one th of what ..it is today. 'In 1970, this rate was adjusted to $250 for res idential lots, again atteMting to have a rate that would achieve 8% assessment from the total empenses * ..- The - last increase was in June of 1976, when the rate was changed to $295 per' lot to- achieve a 30% - return on the tot�al . Fro j ects in the last two years have been able to retain. utilization of that figure because al st none of the-. work required the' reconstruction of the roadways as part of t ' - pro j ct , . The' roads were either+ redone as part of an iq=ovement project, pr ' the " work was in undeveloped land. This year's projects? however, are in areas which do not call for . stmt construction and, there fore { aside from inflation, ax e alms t� one third higher to cover -street reconstruction, The current assessnmt rate of 95 per lot wed produce only about 1 return on one prof t and 18 % on a second. If a fixed rate were to be established