PUEBLO BOULEVARD, XANADU AVENUE AND 168TH STREET W PROJECT

FREQUENTLY ASKED QUESTIONS

What is the scope and potential cost of the proposed road improvement project?

Pueblo Boulevard, Xanadu Avenue and 168th Street W are not currently paved with bituminous. Residents with property fronting these roads have asked the Town Board to consider paving all of Xanadu, all of 168th Street W and that part of Pueblo Boulevard from Bluff Drive on the north to just south of the last curve these roads with bituminous. The Town Board has engaged the services of the Town Engineer to conduct a preliminary examination of the proposed road improvements. Mr. Stordahl has estimated the cost to improve the roads with bituminous to be approximately $830,000. Please note that this cost is an estimate only and not a guaranteed price. The estimated cost is based on historical bid prices from projects of similar scope and adjusted for inflation. Should this project move forward, final project costs will be determined based on actual bids received for this proposed project. It is proposed that the Township will assess 92.3 percent of the total project costs to the benefitting properties on a per parcel basis. The Town has identified 40 parcels that have direct access on to the roads proposed to be improved and that will receive benefit from the proposed improvements.

The total estimated project cost to be assessed to the benefiting property owners is $766,090. The total estimated cost to be paid by the Township is $63,910 (20% of cost of road construction, not including paving costs). The estimated project cost to the benefitting properties of this project on a per parcel basis would yield an assessment of approximately $19,643 per parcel. The per parcel assessment for this project is proportionate to the large lot size. The Town Board has retained the services of Nagell Appraisal Incorporated to advise the Town Board in a preliminary way the amount of increase in property value residents could expect if this project were completed. According to the appraiser, the benefit per parcel range from $12,000 to $20,000 with higher value building or larger lots being on the upper end of the range.

The assessments may be paid in full up front or amortized over a period of time, typically 10 years, with an interest rate as determined by the Town Board. Generally, interest rates on assessments are on the order of 6 percent or less.

The Township is proposing to finance the requested improvements by creating a subordinate service district under Minnesota Statutes Chapter 365A to facilitate financing of this project.

Why does the Township propose to assess on a per-parcel basis instead of charging the individual properties by feet of road frontage?

The Township prefers to assess on a per-parcel basis because all properties generally use the road equally in a residential district. Front footage assessment is more common with commercial properties, or lots with significant development potential.

1 What is a subordinate service district?

A subordinate service district is a geographic area within a township, smaller than the entire township, in which the Town Board provides services at a higher level than are provided generally throughout the jurisdiction or provides services that are not provided at all in the jurisdiction. A district can be set up to provide any governmental service or function that the township is otherwise authorized by law to undertake. Districts have been created for many purposes including the improvement of roads with bituminous. It is a way for residents to request that the Town Board to provide a service (i.e. bituminous roads) that is not currently available to the rest of the Township as long as they agree to pay for the cost of providing the service.

How are services paid for?

The services are paid for by revenues from within the district. A service may be paid for through a property tax (assessment) or service charge, or a combination of the two, against the users of the service. Townships may issue general obligation bonds without an election for capital projects in subordinate service districts, payable primarily from the taxes or charges from the district but also ultimately backed by the general taxing power of the township. The taxes or fees supporting the bonds must continue to be imposed until the bonds are repaid, even if the district is dissolved.

How is a subordinate service district formed?

In a township, a subordinate service district may be established by petition. The petition must be signed by at least 50 percent of the property owners in the area to be served. The petition must describe the proposed district boundaries and services. Within 30 days, the Town Board must hold a public hearing and then approve, approve with modifications, or disapprove the request.

The creation of a subordinate service district may be subject to reverse referendum. If 25 percent of property owners in the district petition for a referendum, a special election must be held. When this occurs, the district is not established unless approved by a majority of those voting on the question. The general procedure for establishing a subordinate service district is as follows:

Subordinate Service District Procedure Minnesota Statutes Chapter 365A

Residents Petition for District:

a. Signatures of at least 50% of the names of all “property owners” in proposed area are required b. Area of proposed District must be identified. Map is generally attached. c. Petition is usually presented at a regular Town Board meeting

Township Board Adopts Resolution calling for a Public Hearing:

2 a. Petition must be validated by Clerk for 50% (signatures are correct) b. Town Board adopts resolution calling for public hearing within 30 days of verification c. Notice of public hearing is published once at least 14 days prior to public hearing d. Notice of public hearing be mailed to all property owners (Recommended)

Town Board holds Public Hearing:

a. Township Board adopts/denies resolution establishing Subordinate Service District b. Within 20 days of adoption of resolution, publication of resolution in newspaper c. Notice sent to all property owners in District d. Property Owners have 60 days from date of publication to petition for referendum. Signatures of at least 25% of “property owners” in proposed area are required e. If no petition for referendum is filed within the 60 days, the district is established f. If valid petition is received then Township holds special election on the creation of the district. Majority rules!

Who is a property owner for purposes of signing the required petition?

Only official property owners, those with their name on the property's deed, can sign the petition. Many properties have numerous owners, in which case, yes, they can all sign the petition. Others have purchased their house on a Contract for Deed or are renters. In these cases, only the legal owner(s) can sign the petition. Much of the time, there are more property owners than homes in the proposed district.

What if the property is in a Trust? Who gets to sign the petition?

For properties held in a trust, the trustee authorized to act on behalf of the trust according to the terms of the trust document would be considered the “owner” for signing the petition. The Trust document may list several persons to act as “co-trustees” such that all co-trustees must sign documents on behalf of the Trust. In such an instance, each co-trustee would be considered an “owner” for signing the petition. If you have any questions regarding who is considered an owner with regard to a trust, please contact the Township with a copy of the trust document. The Township will review the trust document and provide an answer as to who can sign the petition as an owner.

How is a subordinate service district discontinued?

A subordinate service district may be discontinued if a petition requesting it is approved. The petition must be signed by at least 75 percent of the property owners in the area. The Town board must hold a public hearing before deciding whether to discontinue a subordinate service district, but no election is held.

If revenues remain after a town subordinate service district is discontinued and all outstanding obligations have been paid, the Town Board may deposit the surplus revenues in the town general fund or refund them to the owners of property charged during the last year a tax or fee was imposed in the district.

3 The costs of the project covered by the Township?

Based on the current condition of the road, the Township’s contribution to the project costs would be capped at 20% of the non-paving portion of the project ($64,000).

The Township Engineer believes that the current condition of Pueblo Boulevard is really good. The Town Board is not aware of any frost boils or other soft spots that might need more costly subgrade corrections. The ditches generally look in good shape. If the road was in rough shape and needed a lot of maintenance, the argument could be made that the Township investment should be higher as those dollars would be spent anyway.

Prior to construction a deeper assessment into what work is really needed out there and what it would actually cost to prep the road for paving. What condition are the culverts in, how much ditch grading is really needed, etc.

How many parcels are located within the proposed subordinate services district?

There are approximately 40 parcels of land that boarder both sides of the roadways proposed for the paving. One of the parcels is owned by the Mdewakanton Sioux. This property will not be included within the district as the parcel will not have access to Pueblo Boulevard. Please note that any parcel deemed by the Township to be an unbuildable lot would also not be included within the district.

What is the breakdown of the estimated costs?

The estimated costs for the project are as follows: Road Preparation $320,000 Road Paving $510,000 Total Project Costs $830,000 Township Investment $ 64,000 20% of Road Preparation Neighborhood Investment $766,000 Number of parcels included 40 39 38 37

Assessment per parcel $19,150 $19,641 $20,158 $20,703

Road capability and maintenance?

The roads would be built to Scott County load requirements which would be a 10-ton capable road. After the project is completed, the Township would be responsible for all routine maintenance and normal upkeep such as snow removal and minor repairs due to traffic damage such as crack filling and seal coating. The normal life of the paved surface is estimated to be 20 to 30 years. After this time, the paved surface would require replacement. It is anticipated that most of those costs for this repair would be assessed back to the parcel owners within the district pursuant to Minnesota Statutes Chapter 429.

4 What is the list of property owners in the subordinate service district?

See attached list of property owners and tax info for 2019 as provided on the Scott County GIS website.

Land values and assessments?

The paved roads would increase the value of all parcels except for any unbuildable parcels. The estimated market value increase for each parcel would be between $12,000 to $20,000. Please see the attached report from Nagell Appraisal Inc. According to Michael Thompson Scott, the Scott County Assessor (952) 496-8972, they currently do not automatically adjust property valuations when an unpaved road becomes paved. If, over time, sale prices in the immediate area reflect that the street improvements are having a positive impact on property values, then it is expected that the County would the adjust the parcels assessed values accordingly.

If the project moves forward, when would we have to pay the first installment of the assessment (tax year)?

The first installment would be payable in 2021. However, if you choose you can pay off your assessment in full usually prior to November 15, 2020. If this project moves forward, the Township would send each resident a detailed letter explaining payment options and timelines.

If this project moves forward, will we have access to our property at all times during construction?

Yes, the Township will require the contractor to maintain access to all properties at all times. However, there will be certain time periods when access is delayed (ex. during paving operations).

Will my mailbox be adjusted?

No, unless they protrude into the road and will interfere with the construction equipment. Mailbox supports that will interfere with the construction equipment will be removed and replaced.

Are there any documents that provide further information regarding this project?

At the Public Hearing on May 7 there were 5 documents that were presented and the additional Property Owners & Tax Info can be found on the Sand Creek Township Website. www.sandcreekmn.org => (Under News) => Pueblo Blvd/168th St/Xanadu Ave Information Meeting =>

Stantec - Pueblo Blvd / Xanadu Ave / 168th Paving Couri & Ruppe - Frequently Asked Questions Couri & Ruppe - Petition for Subordinate Service District Couri & Ruppe - SSD Presentation

5 Nagell Appraisal Inc - V2003002 - Pueblo - Xanadu - 168th Property Owners and Tax Info for 2019 for SSD

For additional questions, please contact:

Maggie Gallentine, Town Clerk 5325 Circle Drive Jordan, MN 55352 (952) 423-8177 [email protected]

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