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