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WA9401-CS 940218 (2)TO: From: Date: MEMORANDUM Jim Witt, City Manager Kenneth M. Griffin, P.E., City Engineer ~ Estimated recoupment of cost associated with the extension of a water line on East Beltline Road February 18, 1994 I have received and reviewed the amended letter from Nicholas, Jackson, Dillard, Hagar and Smith, L.L.P. concerning the City's ability to recoup a portion of its cost for the extension of utilities. The letter refers the City to Chapter 402 of the Local Government Cede, which I have included. It very similar to the paving assessment requirements. I also highlighted the following sections: 402.061 Sec. 2A, (a) (1) & (2) pg. 474 402.062 (1), (2), 4 pg. 475 402,063 (e) pg. 476 402.065 (a) ( 1 ), (c) pg. 477 402,066 (a), (b) pg. 478 402,068 (a) pg. 479 402.069 (a) pg. 480 402,075 pg. 484 I have had to make several assumptions in trying to ascertain the amount of money that the City could recoup. The Lone Star Gas Substation on the southwest corner of Ledbetter and Bel~ine would not be enhanced by the extension of the waterline, so therefore I excluded them from the calculations. The cost for the boring beneath Bel~ine to Mr. Thompson property on the north side was excluded from the total cost because it is my understanding that Mr. Thompson will not be assessed for the construction of the line, but will only pay the regular connection fees. e Only property on the south side would a benefit of the extension of this water line. Any property on the north side would be required to extend the 8" water line back to the proposed Fairway Dr. They could then take their water service from that line. Therefore, the north side gains a very negligible benefit from the extension of this line. The numbers I used to calculate the cost are as follows: ITEM [ QUANTITY [ UNIT COST [ TOTAL COST 8" WATER PIPE 2250 L.F. $25 $56,250 12" WATER PIPE 1150 L.F. $36 $41,400 8~ VALVES 3 EACH $800 $2,400 TRENCH SAFETY 3400 L.F. $1 S3,400 PLUG PIPE I EACH $500 $500 AIR RELEASE VALVE 1 EACH $3000 $3000 TOTAL $106.950 Plus 1595 $16,050 $123,000 INCIDENTALS Because this is an assessment policy, by ordinance the governing body of the municipality may not assess more than 9/10's of the estimated cost of improvements against the benefitted property. Therefore, the maximum amount of money, based on the above assumptions, that the City could recoup would be $110,700. This number is based on my estimated cost for the improvement. If the cost for the improvement went up or down, the percentage that the City could recoup would still be the same. The large unknown associated with the recoupment of the cost is that the City can only assess up to the enhanced value to the property. Therefore, while there is an estimated maximum that the City could recoup it is still unknown how much in actuality the City could recoup. That amount would be based on the appraised value of the property before and after the installation of the water line. According to State law, the apportionment of the assessment is on a front foot basis. The total adjacent footage is 3,400 L.F. Therefore, the total per foot cost would be approximately $29.62. We recently received prices on the extension of the water line associated with Valley Ranch Baptist Church. The cost for 500 feet of water line was $14,500. This works out to approximately $29 L.F. Typically, when a City bids a project the construction prices are higher. However, using the assumptions above and this estimated cost, an assessment against the property of approximately $29 does not seem to be out of line with what the developer of the property would pay to have the water line installed. In summary the City can recoup 90% of the cost associated with the extension of the water line so long as that does not exceed the enhanced value of the property caused by the extension of the water line. I have included a copy of Subsection D from Chapter 402 of the Local Government Code. If you should have any questions please feel free to contact me at your convenience.