The North Mankato City Council is reassessing its assessment formula and the final decision will mean thousands of dollars of difference — for better or worse — for homeowners facing major street work in front of their homes.

Various options examined by the council at a recent work session would vary the charge to a typical homeowner from around $7,000 to nearly twice that amount. The first set of homeowners to be impacted will probably be those along Cornelia Street in lower North Mankato, along with a single block of Grant Avenue, where a $1.2 million street reconstruction is slated to begin next year.

Divide the total cost of $1.2 million by the 42 assessable properties along the route, and the per lot cost is $29,000. The council’s question is how much of that should be assessed to the property owners. Anything not paid for through assessments will fall on North Mankato taxpayers in general — or possibly on people and businesses through their water and sewer bills.

Councilman Dave Pearson said it’s unfair for owners of new homes — who pay assessments of as much as $30,000 when their home is constructed to cover the cost of new streets and utilities — to subsidize the replacement of other homeowners’ aging utilities and streets.

At the same time, the council is worried about the sticker shock of having individual homeowners paying five-figure assessments.

“So therein lies the dilemma,” said City Administrator Wendell Sande.

The council is taking another look at its formula because the Cornelia Street project is the first major reconstruction of a city street in a decade. The city finished a multi-year reconstruction of several streets in lower North Mankato in 1995.

Back then, homeowners were asked to pay 40 percent of the total construction costs, and the assessments were typically $3,500 to $4,000.

Assessments for upcoming projects such as the Cornelia Street project, which will also involve Grant Avenue from Cornelia to Sherman Street, could be triple that amount. Costs to property owners could range from $9,000 to $14,000 because of rising costs — particularly concrete and oil-based asphalt and plastic piping — and the possibility that the council will ask property owners to pay 50 percent of the construction costs.

The city is looking at the assessment formula in Mankato, where 100 percent of the cost of sewer and water main replacement is covered by water and sewer utility funds — and ultimately utility rate-payers citywide. One-third of the remaining cost of street reconstruction is paid by the city with the rest paid by the homeowner.

Construction costs in Mankato are estimated based on averages from the three previous construction seasons, so Mankato homeowners get a break when prices are rising fast as they are now.

A copy of a Mankato assessment roll completed six weeks ago was provided to North Mankato. The Mankato homeowners are paying total assessments, including the sewer and water services from their home to their property line, ranging from $4,726 on a 48-foot lot to $6,891 for a 89-foot lot.

So that’s about half what Cornelia Street homeowners might be facing.

North Mankato plans to continue to build its streets with a thicker base, something city officials believe pays off in the long run. But some frills have been cut from the Cornelia Street project to try to drive down the overall cost, including the elimination of a sub-drain and going with grass seed rather than sod on boulevards.

“I’m not sure we can do much more to reduce the anticipated cost,” Sande said.

Pearson suggested that the assessment formula be discussed further at a meeting when Councilman Bill Schindle, who was absent from the work session, could participate. A final decision will need to be made sometime this winter to keep the Cornelia and Grant project on schedule for construction next summer.

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