City staff held several input sessions with property owners in the area of LID #322 in early 2019 to plan improvements to the South Hermiston Industrial Area at a total cost of $2.9 million.  As part of the outreach process, it was explained that the City would seek a 50% grant from the US Economic Development Administration, with the rest having to come from local sources.  A Local Improvement District was identified as the preferred method to equitably assign costs proportionate to the benefit to properties within the area.

A process to initiate formation of LID #322 began in July, 2019, where impacted properties had the opportunity to oppose it's formation in a public hearing.  The City received two valid remonstrances out of the 20 parcels included within the LID benefit area.  City Council elected to proceed with LID formation on the condition that EDA grant funding was awarded.

US EDA, in October, 2020, awarded grant funding for the project on a 50/50 basis, not to exceed $1.45 million.  City Staff, and Anderson Perry Engineering began full-scale design through the winter and awarded a contract for the improvements in early 2021 to Tapani, Inc.  Construction broke ground in July, 2021, and fully completed in December, 2021.  City Staff & Anderson Perry worked through the winter to finalize all closeout items to arrive at a full accounting of all costs; ensuring that all benefits correspond with properties according to their frontage on the improvements.

The project consisted of several different improvement areas.  Campbell Drive, being flanked by lots which have utility access from streets on the other side, was only paved, with no new utilities installed.  Some of the parcels within LID #322 only have frontage on to Campbell, and therefore are only assessed costs for paving, with no utilities.  Conversely, some lots are bounded by both Campbell and the newly constructed SE 10th; and therefore are assessed costs for paving of both streets as well as utilities.

Property owners within LID #322, in early March, 2022, were mailed a notice of a Public Hearing to take place on March 28, 2022, along with an itemized breakdown of how costs have been assessed to each property based on their linear frontage on the improvements.  That breakdown is included here as an attachment.

Total final actual costs for all improvements came in at $1,995,467.90.  A significant savings compared to the conservative estimate provided to property owners in the LID formation process.  Enclosed is a table that shows how the estimated cost to each property changed throughout the process.  The original estimate of $2.9M assumed a 50% grant from EDA, $50,000 from Umatilla County, and a contribution of $250,000 from the City.  The "May '21 Estimate" is a list of updated estimated costs provided to the property owners taking in to account the actual contract award, and still assuming a $250,000 contribution from the City.  The "March '22 Final" estimate is what is being proposed for assessment, and is a reduction for all but one property from the "May '21 Estimate," but reduces the City's contribution to $0 for the purposes of this calculation.

I specify that the City's contribution goes to $0 for the purposes of this calculation, because as the project progressed, it made more sense to re-allocate that contribution to other improvements within the SHIP that aren't covered by the LID itself.  Namely, as it became obvious that the standard 10% contingency needed for unforeseen issues, would not be needed, the opportunity arose to upgrade power infrastructure in to the SHIP.  We were able to do this by utilizing the City's funds that would have gone toward water, sewer, and streets, while still keeping the benefitting properties' assessments well below original estimates. 

The power upgrades improve power reliability to the entire SHIP area by looping the system, and increase power capacity by replacing existing line that feeds the area.  Utilizing the City's funds for the power enhancements allowed the project to maximize the Federal EDA grant, without muddying the waters of the LID for water, sewer, and street infrastructure.

1. Approve Ordinance #2338

2. Table Ordinance #2338

3. Reject Ordinance #2338