6.1. SR 02-11-2008 - Laserfiche WebLink

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Ji Elk REQUEST FOR ACTION ..._. River To Item Number Ci Council 5.2. Agenda Section Public Works Meeting Date December 17, 2007 Prepared by Lori ohnson, Ci Administrator Item Description Reviewed by Acquisition along TH 169 ht-of-Wa Llliscuss Ri y g Reviewed by Action. Requested Discuss whether the City wants to pursue acquiring right-of--way along Highway 169 as it becomes available. Background/Discussion At a previous meeting, staff made the Council aware of a property along Highway 169 that is fox sale that will be required as right-of-way for the Highway 169 improvement project. The Council briefly discussed the acquisition of right-of-way property prior to the project being authorized. The purchase of land prior to an approved project is not MSA eligible until the project is approved and would need to be funded through City reserves. At the meeting we did not have information from MnDOT regarding how it would value the property the City acquires early when it becomes eligible fox MSA reimbursement, so the discussion was delayed until that information was available. MnDOT representative Craig Robinson responded stating that MnDOT's policy "is to deterxntue a property's value at the time MnDOT obtains it, not the value at the tune the City purchased it. In most cases the property will appreciate in value, although in some cases, it could go the other way." Again, the City would need to fund this purchase until the project is approved and the land is eligible for MSA reunbursement. Considering these two facts, in order for the City to come out ahead fmancially on an early acquisition, the value of the property would need to appreciate more than the interest cost for holding the property plus the costs fox maintenance, repair, and staff time of maintaining the property until it is needed fox this project. Since this project is not programmed in MnDOT's long range plan, the City may hold this property for many years before it is needed for the project. Further, although ownership of this land may be advantageous when applying for federal funds, it is unlikely that the City will be in a financial position to purchase much of the needed right-of-way property. Therefore, the question is whether holding one or two properties will help in the quest to obtain federal funding since the majority of the right-of--way will still need to be acquired. Financial Impact The Capital Improvement Plan (CIP) includes $250,000 in both 2011 and 2012 for Highway 1691and acquisition. If the council chooses to proceed with the purchase of the property currently available, the 2008 CIP would need to be adjusted by reducing one of the programmed projects by an amount equal to the land acquisition cost. S:\Council\Lori\2007\TH 169 ROW Accquisidon 12 17 07.doc