CITY OF HOMER
HOMER, ALASKA
Mayor/City Council
ORDINANCE 03-01
AN ORDINANCE AMENDING HOMER CITY CODE CHAPTER 17.04 TO REVISE LOCAL IMPROVEMENT DISTRICT PROCEDURES
THE CITY OF HOMER HEREBY ORDAINS:
Section 1. Homer City Code Chapter 17.04 is hereby amended as follows:
17.04.010 Definitions. In this chapter, unless otherwise provided, or the context otherwise requires, the following words and phrases shall have the meanings set forth in this section:
a. "A.C.R.P" means the Accelerated Roads Program, criteria
for which is set forth in Resolution 88-47, duly adopted by the City Council.
b.a.
"Cost" means all expenses incurred by the City for making an
improvement and includes, but is not limited to costs of acquiring, installing, making, or constructing the
improvement; advertising,
publishing and mailing expenses, ; engineering and architect fees, ; legal
fees;, construction contracts, interest and costs of interim financing, ;
interest and costs of permanently financing the improvement, including
the issuance of bonds; and
administrative overhead as established by the Council of the City.
c.b.
"Improvement" includes, but is not limited to erecting, building,
establishing, laying out, altering, opening, improving and repairing of
streets, sewer, water supply and distribution systems, avenues, sidewalks,
alleys, bridges, squares and other public highways and places within the City,
and draining, sprinkling and street lighting them; removing all obstructions;
establishing grades, grading, planking, paving, macadamizing, graveling and
curbing them, in whole or in part, and constructing gutters, culverts,
sidewalks and crosswalks; acquiring and constructing parks and playgrounds,
making changes in channels of streams or watercourses or constructing, erecting,
strengthening or repairing bulkheads, embankments or dikes for streams or
watercourses.
d.c.
"Local improvement district" means all parcels and rights-of-way
included within the boundaries being benefited by a specific improvement. The
term "special assessment district" may be used interchangeably with
"local improvement district".
e.d.
"Record owner" means the person in whose name property is listed on
the property tax roll as provided by the Kenai Peninsula Borough and is
conclusively presumed to be the legal owner of record. If the owner is unknown,
the assessment may be made against "unknown owner".
17.04.020 General intent. It is the intent of this section to define the procedures for a local improvement district from its inception to conclusion, step-by-step, for public information as well as administrative guidance.
Generally, the validity of a special or local assessment has been held dependent upon whether the improvement for which the costs are assessed confers a benefit on the owners of property in the assessment district. No assessment can be made unless the property to be assessed is of such a nature that it is capable of actual enhancement in value as the result of the improvement.
An improvement district which is initiated according to
procedures outlined in this section shall constitute a legal and valid
improvement district and any costs incurred for preliminary design and
engineering services will become an assessment on the property owners of the
district in the event that at a later date, the district is dissolved by the
request of fifty-one percent of the property owners and that the City
engineer's estimate is within fifteen percent of the Design Engineer's
estimate.
17.04.030
Improvement districts--Formation and assessmentAuthorization and proposals. a. The Council may create
local improvement districts and assess the real property benefiting from such
capital improvements for all or a portion of the cost of acquiring, installing and constructing such
improvements.
b. An improvement proposal may be initiated by:
a.(1)
Petition to the City Council of the owners of at least one-half or more in
value of the property to be benefited by the improvement. The property owners may
file a petition with the City Clerk requesting that an improvement district be
formed and stating what specific public improvement is to be made. Petition
forms shall be available from the City Clerk. ; or
(2) the City Council.
17.04.033 Improvement districts--Creation
and finding of necessity. a. Upon
receipt of a petition proposal for an improvement
district the City Clerk shall forward the request to the City Council who may, after holding a public hearing on
the necessity of the proposed improvement, create the improvement district by
the adoption of a resolution including the following findings:shall find by resolution whether:
1.
The proposed improvement requested is necessary and should be made; and
2. The request If
by proposed by petition, the petition has sufficient and proper
petitioners.
The findings adopted by resolution under this section are conclusive.
b.
The City Council may determine that an improvement
is needed, and initiate by passing a resolution by approval of not fewer than three-fourths
vote of the Council so declaring and shall proceed as provided in Sections
17.04.040 through 17.04.060 of this chapter. If protests as to the necessity of a proposed local improvement are
made by owners of property that will bear 50 percent or more of the estimated
cost of the improvement, the City Council may not create the improvement
district under (a) of this section until the objections have been reduced to
less than 50 percent, except on approval of not fewer than three-fourths of the
City Council.
c. An improvement district created under (a) of this section is a legal and valid improvement district and any costs incurred in preparation of an improvement plan, including without limitation costs of preliminary and final design and engineering services, will in the discretion of the City Council become an assessment on the property in the district in the event that at a later date the district is dissolved as a result of the objections of the property owners.
17.04.040
Necessity of improvement--Improvement
plan--Preparation and Hearing.
a. Upon passage of a resolution as specified in
Section 17.04.030 of this chapterAfter the creation of an improvement district under section
17.04.033, the City Manager shall prepare an
a proposed improvement
plan which shall include the extent of the improvement, boundaries of the
district, the estimated cost, the percentage
of the improvement plan cost to be
assessed against the property benefited, length of time for financing, and a preliminary
assessment roll.
b.
At the time of the passage of the resolution noted
in Section 17.04.030 of this chapter,Upon receipt of the improvement plan, the City Council shall
set a time for public hearing on the necessity of
the improvement and proposed improvement plan and the period for filing objections to the plan. Notice of
such hearing and the period during
which objections may be filed shall be published at least once a week
for four consecutive weeks in a newspaper of general circulation within the
City. Notices shall also be sent by
mail to every record owner of property within the improvement district,
not less than fifteen days prior to the hearing.
c.
Property Owner Petitioners Waiver. If there is one hundred percent
participation by property owners of the district, such owners may request and
give written waiver of notice and right to public hearing as outlined in
subsection b. of this section, and waive the sixty-day objection period as
outlined in Section 17.04.050(a), whereby the Council shall pass the resolution
approving the plan and proceeding with the improvement. If at any time during the preliminary improvement plan process,
should added costs appear to cause the total project cost to exceed the
engineer's estimate by fifteen percent or more, which was given to the property
owners in the preliminary plan, the project may not proceed until the owners of
said property have been notified in writing, and the provisions of Section
17.04.060 have been met.
17.04.050
Improvement plan--Objections and revisions. a. The owner of property to be assessed may file a written
objection to the plan no later than sixty days after the public hearingfirst
publication of the notice required in Section 17.04.040(b). At the end
of the sixty daysperiod for filing objections, the City Council may by resolution
approve the plan and order the improvement subject to the limitation of (b) of
this section., if the owners of property in
the district who shall bear fifty-one percent or more of the total costs have
not objected, the Council may pass a resolution approving the plan and
proceeding with the improvement.
b.
If timely objections are made received
in writing during the period set forth for objections by from
owners of property who shall bear fifty percent or more of the total estimated
cost of the improvement, the Council may not proceed with the improvement
unless the plan is revised to meet the objections and the objections are
reduced to less than fifty percent. The Council may
then pass a resolution approving the revised plan, which shall now become an
original plan, and proceed with the improvement.A revised plan, including any revisions resulting from a change in
the district boundary, shall be approved and adopted as an original plan in
accordance with section 17.04.040.
c. If a change is made by Council in an improvement district
boundary, such change shall be made promptly by the City Clerk after any
amendment thereof has been passed. Property owner(s) affected by the change
will be notified promptly by the City Clerk in writing.
17.04.060
Award of project bidImprovement cost exceeds estimate in improvement plan--contract award,
objections, validity of assessments. a. Prior to the award of the contract(s) for the construction of the
projectto acquire,
construct, or install the improvement, if the bid costs for such work indicate the cost of the
improvement will not exceed one hundred fifteen percent of the engineer's estimateestimated cost of the improvement stated in the improvement plan,
the city council may approve the
award of the contract(s) and authorize the improvement to proceed.
b.
If the bid amounts indicate that the cost of the improvement will exceed
115 percent of the cost estimate stated in the improvement plan, the project the
contract(s) may not be awarded until such time as all property owners
of record have been notified in writingby mail of such coststhe
higher cost estimate and of their right to file a written objection that must
be received by the city clerk within 21 days of the date the notice is mailed.
If property owners, who shall bear one-half50
percent or more of the estimated cost,
do not file written objections object in writing to the additional costs of the improvement that are received by
the city clerk within 21 days of the date the notice is mailed, the
Council may award the contract(s) for construction and the improvement project will proceed. If the property
owners do not consent,who will bear 50 percent or more of the
cost do file timely written objections and the City Council is unable
to reduce the costs to 115 percent or
less of the estimate or reduce the objections to less than 50 percent,
the City will not award the projectcontract(s), and the property owner
owners shall be liable for
any and all costs incurred, which may
be levied as assessments, except where Council specifically assumes
such costs. If the Council assumes
such costs, theThe Council shall
dissolve the district.
c.
After the award of the contract(s) to acquire, construct, or install the
improvement, or after the commencement of the work if the work is performed by
city employees without the award of a contract, no subsequent cost overrun or
inaccuracy in the estimated cost stated in the improvement plan, regardless of
amount, will invalidate the assessment.
All or any portion of the cost of the improvement in excess of the
contract award amount(s) or the cost estimate, or both, may be included in the
assessment if approved by resolution of the city council.
17.04.070
Assessments and assessment roll. a. At any time after project completion and acceptance,approval of an improvement plan,
the Council shall assess the authorized
percentage or other authorized portion of the cost against the properties in
the district in proportion to the benefit received.properties benefited their proportionate share of the cost of
the improvement.
b. The Homer City Council shall be the sole authority for determining the method of assessments to the affected district.
c. An assessment roll shall be prepared which shall contain the name of the record owner, address, description of the properties, the assessment percentages and amounts, and the property assessed value as determined by the Borough Assessor.
d. The City Council shall fix a time to hear objections to the roll. The City Clerk shall send an assessment and hearing notice by certified mail to each record owner of an assessed property not less than fifteen days prior to the hearing. A notice shall also be published in a newspaper of general circulation within the City.
17.04.080
Certification Hearing and confirmation of assessment roll. After the hearing
the Council shall correct any errors or inequalities in the roll. If an assessment
is increased as a result of such
corrections, a new hearing shall be set and notice published, except
that a new hearing and notice is not required if all record owners of property
subject to the increased assessment consent in writing to the increase.
Objection to the increased assessment shall be limited to record owners of
property in on which the assessment was increased. When the roll is
corrected, the Council shall pass a resolution confirming the assessment roll
and the City Clerk shall so certify.
17.04.085 Assessment lien; lien
attachment date; enforcement. a. Assessments are liens upon the property
assessed and are prior and paramount to all liens except those having priority
under State law.
b.
The assessment lien attaches to the assessed property on the date the
city council adopts the resolution confirming the assessment roll as provided
in section 17.04.080. If the actual
amount of the assessment is finally determined at a later date, the lien priority
shall nevertheless relate back to the date the lien attaches.
c. Assessment liens shall be enforced by foreclosure as provided in Title 9 of this Code. An action may also be maintained against the property owner for the amounts due, including principal, interest, penalties, costs, attorney fees, and any other sums due.
17.04.090
Payment. a. The Council shall fix the final
amount of the assessments against each property, the time and method of payment,
penalties on delinquent payments, and the rate of interest on the unpaid
balance of the assessment by resolution at the time any time after the assessment
roll is confirmed. Payments may not be required sooner than sixty days after billing first
mailing the assessment statement, if payment is to be in one sum.
b. Within thirty days after fixing the final amount of the assessments and the time and method of payment, the City Treasurer shall mail a statement to the record owner of each property assessed. The statement shall designate the property, the assessment amount, time and method of payment, rate of interest on the unpaid balance, the time of delinquency and penalties.
c. Within five days after the first statements are mailed, the City Treasurer shall have published a notice that the statements have been mailed.
17.04.095
Terms of paymentPayment of assessments after subsequent subdivision. a. Procedures for handling initial assessment payments,
annual payments on assessments financed by the City or other institution and
setting of penalties and interest shall be set by Resolution of the City
Council.
b.a.
Except as provided in subsection (d)(c), if a landowner subdivides a
tract originally assessed as one entire parcel, a proportionate share of the
total amount of the assessment may be allocated to each individual subdivided
lot abutting or benefiting from the improvement;, e.g., road, waterline and/or
sewer line. As individual lots are sold, the purchasers may elect to assume and
pay assessment for that lot in installments as set by Council Resolution under
section 17.04.090. Full payment shall be made within the same period as the
number of years remaining on the installment plan for the specific assessment
district.
c.b.
The seller and purchaser of a subdivided lot shall execute an agreement
providing for the assignment of the installment plan by the original landowner
and an assumption of the terms and conditions of the installment plan by the
purchaser. This agreement shall be executed on the date of closing or within
five days thereafter. This agreement shall take effect only upon approval
thereof by the City and after payment of a transfer fee to the City in the
amount of twenty-five dollars. Subsequent purchasers of lots may also elect to
assume the balance of any installment plan in the same manner as set forth in
this section above.
d.c.
If a landowner subdivides a parcel of land (including without limitation lots
and tracts of any size) originally assessed as one parcel in a local
improvement district where assessments were set as a fixed and equal amount per
parcel without regard to the characteristics of the parcel, i.e., without
regard to the parcel size or dimensions, then section 17.04.180 shall govern
and subsections 17.04.095(b) — (c)this section shall not apply.
17.04.100 Assessments to be liens. Assessments are liens upon the property assessed and are
prior and paramount to all liens except those having priority under State law.
They shall be enforced as provided in Title 9 of this Code.
17.04.110
Reassessment. a. The City Council shall within one year correct any deficiency
in a special assessment found by a court. Procedures
set forth in Sections 17.04.070 through 17.04.100 shall apply.Notice and hearing prior to any such
correction must conform to the initial assessment procedures.
b. Payments on the initial assessment are credited to the property upon reassessment. The reassessment becomes a charge upon the property notwithstanding failure to comply with any provision of the assessment procedure.
17.04.120 Objection and appeal. a. The regularity or validity of an assessment may not be contested by a person who did not file with the municipal clerk a written objection to the assessment roll before its confirmation.
b. The decision of the City Council upon an objection may be appealed to the superior court within thirty days of the date of confirmation of the assessment roll.
c. If no objection is filed or an appeal taken within the time provided in this section, the assessment procedure shall be considered regular and valid in all respects.
17.04.125 Interim financing. a. The City Council may provide by resolution or ordinance for the issuance of notes in payment of the costs of a local improvement project, payable out of special assessments for the improvement. The notes shall bear interest at a rate or rates authorized by the resolution or ordinance, and shall be redeemed either in cash or bonds for the improvement project.
b. Notes issued against assessments shall be claims against the assessments that are prior and superior to a right, lien or claim of a surety on the bond given to the municipality to secure the performance of its contract for a local improvement project, or to secure the payment of persons who have performed work or furnished materials under the contract.
c. The municipal treasurer may accept notes against special assessments on conditions prescribed by the Council in payment of:
1. Assessments against which the notes were issued in order of priority;
2. Judgements rendered against property owners who have become delinquent in the payment of assessments; and
3. Certificates of purchase when property has been sold under execution or at tax sale for failure to pay the assessments.
17.04.130
Special assessment bonds. a. The City Council may by ordinance authorize
the issuance and sale of special assessment bonds to pay all or part of the
cost of an improvement in a special assessment district. The principal and
interest of bonds issued shall be payable solely from the levy of special
assessments against the property to be benefittedbenefited. The assessment shall
constitute a sinking fund for the payment of principal and interest on the
bonds. The benefittedbenefited property may be pledged by the governing body to
secure a payment.
b. On default in a payment due on a special assessment bond, a bondholder may enforce payment of principal, interest, and costs of collection in a civil action in the same manner and with the same effect as actions for the foreclosure of mortgages on real property. Foreclosure shall be against all property on which assessments are in default. The period for redemption is the same as for a mortgage foreclosure on real property.
c. Before the Council may issue special assessment bonds, it shall establish a guarantee fund and appropriate to the fund annually a sum adequate to cover a deficiency in meeting payments of principal and interest on bonds if the reason for the deficiency is nonpayment of assessments when due. Money received from actions taken against property for nonpayment of assessments shall be credited to the guarantee fund.
17.04.140 Time limitations for improvement districts. a. In the event that an improvement district is unable to proceed to the construction phase within a period of five years from the date the City Council passes the resolution creating the local improvement district (LID), the LID shall be considered void, unless Council extends the effective period by resolution for not more than five additional years.
b. The City Clerk shall notify the property owners listed on the preliminary assessment roll that the LID is void or of an extension. Notification of the assessment district and any changes shall also be sent to any new property owner of record within the proposed district since the application for the improvement district was initiated.
17.04.150 Connection required. Owners of property within an approved water and/or sewer local improvement district that contains an occupied building shall connect to the utility within one year from the date of final approval of the assessment roll by City Council.
17.04.160 Agreement for deferred or corner lot assessment double frontage property. a. Through lots in an road reconstruction and/or paving improvement District, having a frontage on two parallel streets, or flag lots having a frontage on two perpendicular streets can be exempt from a double front foot assessment, when only one lot access exists. Corner lots are exempt from a double front footage assessment and the total assessment shall not exceed the longest side of the lot. Previous reconstruction assessments apply to reconstruction assessments and previous paving assessments apply to paving assessments. The owner(s) of property shall file a "Deferred Assessment Agreement" with the City, prior to the end of the filing period for objections to the district noted in Section 17.04.050 of this chapter. The agreement shall contain a statement that the lot in question fronts two streets; however, the property owner has only one access onto the lot and shall pay the assessment on which the access is located. At such time as another access is made then the property owner agrees to pay the assessed front footage on which the new access has been made. The agreement shall be recorded with the Homer District Recorder's office.
17.04.165 Alternative methods of payment--Deferred payments. A property owner meeting certain requirements as hereinafter set forth, may defer payment of assessments, including principal and interest under the following conditions:
a. Criteria for Eligibility. The property owner must:
1. Be at least sixty-two years of age within twelve months from the date of adoption of the assessment roll.
2. Have an annual family income that would qualify under the United States Department of Housing and Urban Development designation of lower income families adjusted for Alaska and the Kenai-Cook Inlet Region.
3. Actually reside within the boundaries of the property assessed on which is located only his permanent abode which is a single-family residence.
4. Own or have a life tenancy in the assessed real estate.
5. No real property may be exempted which the City determines, after notice and hearing to the parties concerned, has been conveyed to the applicant primarily for the purpose of obtaining the exemption.
b. Availability of Funds. Deferred assessments shall be funded by specific appropriations made by the City Council from available City funds. To determine availability of funds, the Director of Finance shall provide the City Council a financial report as to the availability of funds for appropriation in accordance with criteria outlined in this subsection. This report will accompany the application for deferment:
1. Water and sewer deferred assessments shall be funded by the appropriate utility operating fund.
2.
Road improvement deferred assessments shall be funded from the Accelerate Accelerated
Roads Program funds.
3. In the event that funds are not available in the appropriate utility or program funds, the City Council may elect to loan either the utility or program funds from the General fund to cover the applicable deferred assessments.
c. Application for Deferment. A person seeking a deferment of assessment shall file an application with the Director of Finance on or before the first payment is due and furnish suitable proof that the applicant meets the criteria set forth in subsection (a) of this section. Based upon the availability of funds, the City Council shall approve or disapprove the application at a regular Council meeting. A claimant receiving the exemption must file with the City by April 15th of each subsequent year a separate application proving eligibility as of January 1st in order to retain the exemption. Within the same year the City for good cause shown may waive the claimant's failure to make timely application and approve the application as if timely filed.
d. Security Required. Every property owner who qualifies and obtains a deferment of assessment under this section shall execute a mortgage, deed of trust or other appropriate security agreement in favor of the City, together with a promissory note payable on demand, to secure the eventual payment of an assessment deferred hereby.
e. Immediate Payment in case of sale or other transfer. If any property or interest therein, given as security under subsection d. of this section is sold, leased or otherwise transferred or conveyed, then the balance of any deferred assessment including principal and interest shall become due and payable within thirty days from the date of such sale lease or transfer.
f. Probate Proceedings. Upon the decease of any person whose assessment has been deferred, the deferral will remain in effect in the event that there is a surviving spouse. Otherwise, the entire balance of any assessment including principal and interest shall immediately become due and payable from the decedent's estate. This preference shall exist whether or not probate or intestacy proceedings are opened.
g. Preemption by State Law. If at some future date legislation is passed by the state to exempt persons meeting some or all of the criteria set forth in subsection a of this section, from assessments for water and/or sewer improvements and the state agrees therein to reimburse municipalities for such assessments, then any mortgage or other security agreement required under subsection d of this section shall become null and void and of no further effect.
17.04.170 "In lieu of assessments"--determination of amount--terms. a. "In lieu of assessments" will be required if any property requires additional service(s) within or beyond an assessed area.
b. "In lieu of assessments" shall be computed on the actual cost of service(s).
c. Terms of payment for such "in lieu of assessments" shall be levied in accordance with sections 17.04.090 and 17.04.095.
17.04.175 "In lieu of assessments", not to prevent inclusion of property in future district. Any property receiving a water and/or sewer service and/or "in lieu of assessment" in accordance with section 17.04.170 may be included in an water and/or sewer improvement district at a future date and may be assessed for that district at that time. Any amount paid "in lieu of" shall be a credit toward such assessment. If, however, the assessment levied in the future shall be less than the "in lieu of assessment" no refund shall be allowed..
17.04.180 Subdivided property connection fee. a. If a landowner subdivides a parcel of land (including without limitation lots and tracts of any size) originally assessed as one parcel in a local improvement district where assessments were set as a fixed and equal amount per parcel without regard to the characteristics of the parcel, i.e., without regard to the parcel size or dimensions, then prior to connecting any new parcel, lot or tract created by such subdivision to the improvement, the property owner shall pay a subdivided property connection fee. However, the lot that contains the original connection to the improvement for which the original assessment was paid is exempt from the subdivided property connection fee.
b. The amount of the connection fee for each new lot created by the subdivision shall equal the amount of the original per parcel assessment, adjusted up or down by a percentage equal to the change in the Consumer Price Index, All Urban Consumers (CPI-U) for Anchorage, Alaska from the end of the calendar year preceding the original assessment date to the end of the calendar year preceding the date the subdivided property is connected to the improvement.
c. If the owner of such subdivided property refuses to pay the subdivided property connection fee, the subdivided property shall be denied the benefit of the improvement.
d. The City Manager is authorized to negotiate and execute a written payment plan with the property owner on payment terms that are substantially the same as those authorized for the local improvement district by the City Council resolution adopted pursuant to subsection 17.04.090, subject to the following:
(i) The City Manager will refuse to enter into such a payment plan if the City Manager determines there is insufficient equity in the property to adequately collateralize payment of the amounts due.
(ii) The property owner must execute a written agreement and a recorded deed of trust or other instrument creating a lien on the property for the payment of all sums due or to become due.
(iii) The
City Manager may adjust the interest rate on the payment plan up or down to
reflect any change in interest rates from the date of the original assessment
to the date of entering into the payment plan.
The interest rate on the payment plan will be a fixed rate unless the
interest rate on the original assessment set under section 17.04.090 was a
variable interest rate.
e. The subdivided
property connection fee paid pursuant to this section, shall, after collection
by the City, be disbursed by the City to the owners of the property originally
assessed and the City in proportion to the amounts paid by each toward the cost
of the improvement. Such disbursements
must be paid by the City to the current owner of record of the property at the
time the disbursements are made without regard to the identity of the property
owner or the payer at the time the original assessments were levied or paid.
Section 2. This ordinance is of a permanent and general character and shall be included in the City code.
ENACTED BY THE CITY COUNCIL OF THE CITY OF HOMER, ALASKA, this __________ day of ______________________, 2003.
CITY OF HOMER
_______________________________
Jack Cushing, Mayor
ATTEST:
___________________________
Mary L. Calhoun, City Clerk
AYES:
NOES:
ABSTAIN:
ABSENT:
First Reading:
Public Hearing:
Second Reading:
Effective Date:
Reviewed and approved as to form:
_____________________________ ___________________________
Ronald Wm. Drathman Gordon J Tans
City Manager City Attorney