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Fair Ave. homeowners facing sticker shock

The Park Rapids City Council holds a special assessment hearing on the street, utility project Nov. 22.

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Jerry Cole was among several residents of the Fair Avenue neighborhood who voiced concerns at a Park Rapids City Council hearing on Nov. 22, 2022 about costs to be assessed to homeowners for a proposed street and utility project along the corridor, connecting State Hwy. 34 to the west end of Industrial Park Road.
Robin Fish / Park Rapids Enterprise
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The Park Rapids City Council on Tuesday approved the plans and specifications for the Fair Avenue street and utility reconstruction project, and put the project out to bid.

The action was taken as part of the council’s consent agenda following a special assessment hearing at which several residents of the Fair Avenue and 5th Street project area asked questions and expressed concerns.

The resolution calls for bids to be opened at 11 a.m. on Jan. 18, 2023 and considered by the city council at its Jan. 24 meeting, if possible.

Costs went up

City Engineer Jon Olson with Apex Engineering reminded attendees that the base bid for the project covers full reconstruction of Fair Avenue from State Hwy. 34 south to 8th Street, and of 5th Street from Fair Avenue east through Lindquist Park, plus overlay and shoulder widening on Fair Avenue from 8th Street to Industrial Park Road.

Also, the city is requesting an alternate bid to rebuild 5th Street as far east as Pleasant Avenue, the first block of Front and Court avenues south of 5th, and an adjacent alley.

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Olson said the plan is to:

  • Widen the north part of Fair Ave. from 22-24 feet to 40 feet wide, with parking lanes on both sides and a 6-foot sidewalk on the east side.
  • Widen the south part of Fair from 24 to 32 feet wide to strengthen the road, improve ride quality and accommodate pedestrians.
  • Widen 5th, Front and Court from 24 to 36 feet with mountable curbs, in keeping with the city’s policy for urban streets.
  • Extend storm sewers throughout the area.
  • Extend sanitary sewer utilities to eight unserved properties on the west side of Fair Ave.
  • Replace elderly clay sewer and lead water mains.
  • Reroute, replace or insulate shallow utility crossings.
  • Bring new service lines to each owner’s property line.

Since an assessment hearing on the project a year ago, Olson said, Apex has been negotiating with property owners to obtain easements for the project, while presumptive easements for other properties are under state review after being approved by the county.
Meanwhile, he said, increases in materials costs and inflation changed the project’s likely cost from last year’s estimate of $3.8 million to about $5.7 million.

However, he noted the project was awarded a $1.25 million grant from the Minnesota Department of Transportation’s Local Road Improvement Program (LRIP). He said this funding may go away if the project isn’t completed by the end of 2023.

Council member Erika Randall said one of the reasons this project wasn’t done sooner is the city’s lack of funds for such a project. Olson added that the LRIP grant put the project on the front burner, and the opportunity may not come again.

Regarding the city’s assessment policy, Olson explained that city-owned parcels are included in the rate calculation but are funded as city share. Based on the assessment rate formula for each part of the project, Olson estimated a total cost distribution of $1,986,000 in special assessments vs. $3.75 million in city share.

He said a typical assessment for a 50-foot lot in the full reconstruction zone would be about $23,700; for a 100-foot lot, $38,200; and for a 100-foot lot in the overlay/widening zone, $3,500.

Olson said a final assessment hearing would be held after the work is completed, payable in full or in part by 2024 and then assessed on owners’ property tax bills for a 20-year term, starting in 2024, financed at 1-2% above the city’s bond rate.

Acknowledging that this is a big ask, Olson stressed the importance of putting the project out to bid to find out if actual costs may come in lower than the current estimate. He advised residents that they can attend the bid award meeting to hear an update on the costs and financing for the project.

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Resident feedback

As the hearing moved to the public comment phase, homeowners in the project area voiced skepticism about whether the need for the project is worth the cost.

Jerry Cole asked about the width of the easement from the center of the road, due to finding a stake in line with a row of pine trees on his property. Olson said the stake had to do with the power company planning to relocate its buried utilities. Cole voiced concern about losing his buffer from Fair Avenue traffic and his investment in caring for the trees.

Council member Bob Wills asked about lead in the watermains. Olson said this likely does not pose an immediate risk but the lead will be removed during the project. He said the issues Flint, Mich. had were due to the city changing its water chemistry, removing the protective layer of corrosion from the lead pipes.

Charlotte Foster asked whether the rise in estimated assessments was due to residents paying a bigger share or an increase in the scope of the project. Olson said no, it was because the actual costs of the project went up.

Foster said that with inflation at a 40-year high and many residents living on a fixed income, the special assessment – sometimes half the value of the house – will be a hardship.

“I understand the need for the work,” she said. “I’d love to have a new sewer line. But I don’t want a new sewer line at $24,000.”

Foster also challenged the council about junk properties not being cleaned up, asking, “Why give them a really nice street?”

She said she doesn’t want on-street parking in front of her house, with traffic nuisances already taking place on Fair Avenue “that nothing is ever done about. … You’re asking me to pay for something that I don’t want.”

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Foster asked whether anyone on the council lives in the assessment area. Randall said no, not for the present project, but they all live within city limits and could be assessed for a street project in their neighborhood.

“For this kind of money, I’m against it,” Foster concluded. “The value of the property isn’t there for this kind of assessment. … People are barely making it, and you’re asking them to really, even if you give them 20 years … I’m assuming, too, that every year, property taxes are going to keep going up. Then you have the assessment, to boot. So, it’s a hardship.”

Foster asked people who agreed with her to stand up, and several people stood.

Business will be doubly hard-hit

Lois Bauer made a tearful plea against going forward with the project. Living on $1,200 per month of Social Security income, she said she doesn’t know how she can afford a $27,000 assessment.

“I can’t even hardly afford to pay what I pay now,” she said, adding that the city hasn’t touched the alley behind her house in 40 years and it doesn’t need to be touched now.

Erik Lageson with Forest and Floral Nursery acknowledged his business may have caused damage to the road with semis and equipment pulling in and out of his driveway. “It’s on me,” he said, “but I feel as if this may be a little overkill. My assessment is $160,000. That’s another house. That’s insane.”

In addition, he said, the construction will close the road during the time of year when his business pays the bills. He estimated his sales will drop 70% as his customers shop elsewhere. “It’s kind of a lose-lose for me,” he said.

Lageson said the road does need improvement, noting that he puts about 20 trucks on the road every day. “It’s pretty hard on them,” he said, adding that he’s in favor of redoing the road but questioning the extent of the project.

“That’s a lot of money for a nursery to swallow,” he said. “It would be a real failure for the community to see it go under due to this. I don’t want to lose my livelihood due to it, either.”

Georgia Nolting said the letter estimating her special assessment almost gave her a heart attack.

She asked what the city’s bond rate will be, relevant to financing homeowners’ assessments. City Administrator Angel Weasner the city won’t start the bonding process until it knows the cost of the project, but based on past experience she guessed it might be around 6%.

Nolting asked whether the MnDOT shed and the fairground are assessable, and Olson said yes.

She also asked why utility lines froze in a previous project area after the work was completed. Olson said he would have to look at the records.

Nolting also had questions about why the project wasn’t done years ago when the need was first identified, whether the U.S. Hwy. 71 roundabout project caused the delay – it didn’t – and whether the streets need to be so wide, quipping, “We don’t need a freeway.” Olson said the road widths conform to a standard the city has been working toward.

Pam Mueller, who said she still has one year left to pay on the 6th Street assessment, had questions about her utility service, the way her two lots were assessed and how much of a platted alley would be paved.

Olson said her service will be unchanged and only what is actually an alley will be paved, and he offered to talk with her and other residents privately about their individual concerns.

Ben Stumbo, whose property only has a driveway frontage on Fair Avenue, said he considers his $63,000 assessment to be way too much.

“It would be nice to build that road,” he said. “We do need something on there, maybe tar it or whatever. But I think at this cost, it’s just outrageous.”

Acknowledging costs could go higher in the future, Stumbo said, “We can’t afford this. Granted, we have a grant now. But with the inflation, I think we need to wait. Do a pause and look at this and decide whether or not we can go forward with this. … If I were going to build a house and I looked at these rates, I wouldn’t do it.”

Possible change orders

Patty Selbitschka’s questions brought out Olson’s explanation of the delays since last year’s assessment hearing, with the rise in costs. Olson suggested that even in 2021, the market was already becoming volatile and with “reasonable change orders,” the costs might have gone up just as much.

Selbitschka said the project, with prices they are now, will be a “huge hardship” for residents.

Foster asked who bears the burden if costs go up during construction. Olson said he can’t predict that, but the builders must be paid. He said it depends on what the change order is and how that part of the project is assessed, but it may not significantly impact the assessments. He added that Apex holds a 5% contingency fund during construction.

Mary Jo Zweerink advised cutting back where possible, such as alleys, sidewalks and curbs. Nolting said the parking lanes on Fair Avenue could go.

Council members assured residents they were listening and would take their views into account before making a final decision. Randall said the council may have to make decisions about the project scope or whether it makes sense at all – though the LRIP grant is a tempting incentive.

Olson said even with inflation running high right now, waiting a few years may see costs come down. He said he would ask MnDOT whether it will allow a deadline extension or a change in the project scope.

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This map, presented at a Park Rapids City Council meeting in September 2021, shows the Fair Avenue project area with north to the left. Outlined in red is the full reconstruction part of the base bid, extending south from State Hwy. 34 to 8th Street and one block east on 5th Street. In blue is the overlay/widening part of the base bid, south along Fair Avenue to Industrial Park Road. In purple is the alternate bid area, including additional portions of 5th Street, Front Avenue, Court Avenue and an alley off Front Avenue.
Contributed / City of Park Rapids

Selected assessment amounts

According to a map/table showing the latest estimates of special assessments on properties adjacent to the Fair Avenue project:

  • The Shell Prairie Agriculture Association (Hubbard County Fairground) faces the biggest bill at about $285,000.
  • Not far behind, Lageson Forest Products LLC (Forest and Floral) may be assessed over $155,000.
  • Five county-owned parcels, home to the Heritage Community and adjacent lots, may be assessed a total of about $324,000.
  • St. Peter’s Catholic Church, at the east end of the alternate bid corridor, has two parcels that may be assessed a combined $37,000.
  • A Heartland Homes facility, next to the Heritage Community, faces an assessment of about $11,000.
  • A state parcel at the corner of Fair Ave. and Industrial Park Road may be assessed about $12,000.
  • Assessments for individual homeowners’ parcels in the “full rebuild” zone range from $3,700 for Ben Stumbo’s driveway frontage to about $58,000 for a second parcel, also owned by Stumbo. 
  • Assessments in the “overlay/widening” zone, south of 8th Street, range from about $1,500 on several lots to one property being assessed about $3,900.
  • Assessments in the alternate bid area, east of Stevens Avenue, range from about $8,800 on three parcels south of the alley proceeding west from Front Avenue to over $23,700 on five parcels on the north side of 5th Street.
Robin Fish is a staff reporter at the Park Rapids Enterprise. Contact him at rfish@parkrapidsenterprise.com or 218-252-3053.
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