Waconia City Council: The process behind funding street reconstruction projects

Dear Property Owners of Waconia:

During the past few weeks, you may have read or heard about the City’s Street Reconstruction project for 2014. On April 7, the Council awarded a contract for the planned work to commence later this spring/summer. We wanted to give you some background about how these projects are both selected and financed.
The City has a Capital Improvement Plan (CIP) identifying planned projects over the next 10 years. This plan includes a wide variety of projects, including street reconstruction, and proposed funding. We plan and prioritize funding for the projects as part of this CIP, which allows us to think long term.
As part of our street reconstruction program, we use a variety of funding sources for the projects.
Taxes, grants, utility funds, intergovernmental revenue, and special assessments are all sources used to fund projects. The City typically pays for 75 to 80 percent of total project costs with taxes, grants, utility funds, and/or intergovernmental revenue. The remaining 20 to 25 percent of project costs are paid with special assessments by the abutting property owners.
The City’s financial policy, adopted in 2005 and amended in 2008, identifies how these assessments are determined. Our policy mirrors the policy used by a majority of cities in Minnesota. In addition, all cities in Carver County, Minnetrista, and St. Bonifacius have a policy similar to ours. In the policies, the main components that can vary are the percentage of and which components are assessed. A copy of the City’s policy can be found on the Finance Department page on our website, www.waconia.org.
With the use of special assessments, the City must show that the assessments create or have benefit for the property owner. The City has used this tool for financing to assist a number of projects.
In addition to street reconstruction, we used this tool to finance the development of new neighborhoods in the community including: Hunters Crossing, Bent Creek, Provence Creek, Willowbrooke, Sugarbush, Weatherfield, Ravenwood, Pheasant Ridge, Fox Run, and Interlaken. As for street reconstruction, this tool has been used to finance the reconstruction of Birch Street, Lake Street, Old Beach Lane, and several blocks of the downtown that were part of last year’s project.
In 2013, we updated our process to include obtaining summary appraisal data prior to awarding a contract. The summary appraisal of properties in the project area is used to assist in determining the proposed assessments. Our current practice has been to consider assessing the lower of the amount recommended by our assessment policy or that of the appraisal. This information is obtained following the completion of a feasibility study of the proposed project in the late summer/early fall. After the feasibility study and appraisal amounts are obtained, the City Council will make determinations on whether to continue to pursue the project or revise the project’s scope. Once this work is completed, the project will be ordered by a 4/5 vote of the City Council.
While the above information only speaks to the project design and assessment processes, it is important to note that we also hold project information meetings in the fall to discuss the proposed project with property owners.
During these meetings, we have the opportunity to share details about the project and learn from property owners about other issues of which we may not be aware.
These meetings are extremely helpful in creating contacts, learning about the project on both sides, and identifying issues that need further revision or study. Information gathered from these meetings is helpful to us in determining and working through construction details.
As we work on future year’s projects, we encourage you to attend meetings, ask questions, and allow us to listen to your feedback.
For more information about street reconstruction, please check out our website www.waconia.org or contact us at citycouncilmembers@waconia.org.

Waconia City Council
Jim Nash, Mayor
Marc Carrier, City Councilmember, Ward 1
Lynn Ayers, City Councilmember, Ward 1
Kent Bloudek, City Councilmember, Ward 2
Charles Erickson, City Councilmember, Ward 2

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