CHAPTER 6
REIMBURSEMENT FOR PUBLIC IMPROVEMENTS BENEFIT DISTRICTS AND PUBLIC IMPROVEMENT REIMBURSEMENT AGREEMENTS
6.6.002 Purpose.
As a condition of approval of the grant of a land use entitlement for the development of property, a developer may be required to install public improvements that provide a benefit to the general public and to other specific properties in the vicinity of the improvements. This situation may occur when one developer elects to seek approval and begin development sooner than another. The purpose of this section is to establish a mechanism whereby a property owner who benefits by but does not contribute to certain public improvements will, at the time the benefited property owner develops property, reimburse the developer who has installed improvements.
6.6.004 Definitions.
a. "Benefit district" shall mean the geographical area that benefits by a privately financed public improvement;
b. "Benefited property" shall mean a property within a benefit district for which no contribution to the cost of the public improvement was made at the time of its construction. Benefited property includes property owned by a public agency;
c. "Financing party" shall mean a property owner or developer who installs or pays for the installation of public improvements within a benefit district;
d. "Land use entitlement" shall mean the filing of a final subdivision or parcel map or issuance of a building permit.
(Sec. 1, Ordinance No. 09-19, adopted August 13, 2019)
6.6.006 Public Improvement Reimbursement Agreement: Procedure.
a. General. If a property owner is required to construct public improvements as a condition of approval of a proposed development and the required public improvements have the capacity and capability of serving and are designed to serve additional properties not within the proposed development and to directly benefit other properties in the vicinity, the property owner may apply to the City for a reimbursement agreement as provided in this section.
b. Application. A person requesting a reimbursement agreement shall submit an application on a form provided by the City and shall provide information as required by the City Engineer, including the area of the proposed benefit district.
c. Notice and Hearing. The City Council shall hold a public hearing on the application. At least ten (10) days before the hearing the City shall notify each affected property owner in writing, advising of the hearing and providing a copy of the proposed reimbursement agreement and staff report that will be submitted to the Council. In this subsection, "affected property owner" means (1) the record owner (as shown on the latest County Assessor’s secured real property assessment roll) of each property within the proposed benefit district and (2) the financing party.
1) An affected property owner may file written or oral comments or objections to the application before or at the hearing.
2) No property may be added to a benefit district unless the notice is sent to the affected property owner. Failure to receive the notice required by this section shall not invalidate the reimbursement agreement.
d. City Council Action – Findings. After the public hearing, the City Council may by resolution grant, grant with modification or deny approval of a reimbursement agreement. Before granting approval, the City Council shall make each of these findings:
1) The improvement for which reimbursement is sought is a public improvement which will, upon completion, be accepted by the City, if constructed to the applicable standards, as determined by the City Engineer;
2) The public improvement has the capacity and capability of serving and is designed to serve additional properties not within the proposed development due to the supplemental size, capacity, number or length of the improvement;
3) The proposed benefit district represents a geographical area of property which will benefit directly and substantially by the public improvement; and
4) The method of determining reimbursement and the amount of reimbursement is fair and reasonable to both the financing party and the benefited property owner and fairly distributes the charge among all subject parcels in proportion to the estimated benefit each will receive from the proposed improvement.
e. Amount of Reimbursement.
1) If the improvements for which reimbursement is sought have been constructed and accepted by the City prior to the financing party requesting a reimbursement agreement, the amount eligible for reimbursement shall not exceed the lesser of actual construction cost or acquisition value of the improvement as determined by the City Engineer.
2) If the improvements for which reimbursement is sought have not been accepted by the City prior to the financing party requesting a reimbursement agreement, the amount eligible for reimbursement shall be based on improvement plans and construction cost estimates as approved by the City Engineer. The amount eligible for reimbursement shall be subsequently modified after the improvements have been constructed and accepted by the City and shall not exceed the following:
a) The eligible amount for reimbursement approved with the original reimbursement agreement; and
b) The lesser of actual construction cost or acquisition value of the improvement as determined by the City Engineer.
f. Recordation. The City shall have an approved public improvement reimbursement agreement, including a list of the benefited properties, recorded in the Office of the County Recorder.
(Sec. 1, Ordinance No. 09-19, adopted August 13, 2019)
6.6.008 Public Improvement Reimbursement Agreement: Contents.
A public improvement reimbursement agreement shall include, but is not limited to, the following provisions:
a. A statement of the total construction cost, the applicant’s equitable share of the cost, and the amount of the total cost eligible for reimbursement;
b. A map approved by the City Engineer showing each property included within the benefit district and a list of each property by County Assessor parcel number;
c. The method of spreading the eligible reimbursement cost to be charged under the agreement to properties within the benefit district and the rate of interest or appreciation to be added to initial charges during the period of the agreement, which shall be the average prime rate for the year immediately preceding each anniversary date the reimbursement charge was in effect as determined by Bank of America, N.A.;
d. A provision indicating who the financing party is for the purpose of receiving reimbursement, i.e., whether the developer or the property owner of record at the time the reimbursement is made;
e. The date on which the reimbursement agreement takes effect and benefited property owners pay the reimbursement charge;
f. A statement that no reimbursement charges collected by the City may be distributed to a financing party until the public improvement is completed and accepted by the City;
g. A list of the administrative costs, if any, to be charged by the City to administer the agreement. These costs may be shown as a percentage of the charges collected by the City;
h. A provision that reimbursement to the financing party shall be paid only from charges collected by the City under the agreement from the benefited properties listed in the agreement as such properties receive a land use entitlement. Reimbursement to the financing party shall be paid only from such charges collected within twenty (20) years from the date improvements are accepted by the City, unless a different time period is approved by the City Council; and
i. A provision that the City is not liable to the financing party for failure of the City to collect a reimbursement charge due from a property or because of legal inability of the City to collect the charge from a property.
(Sec. 1, Ordinance No. 09-19, adopted August 13, 2019)
6.6.010 Payment By Benefited Property Owner.
a. A benefited property owner shall pay to the City the applicable reimbursement charge set forth in the agreement whenever that person obtains a land use entitlement. The charge is payable at the time the entitlement is granted.
b. The reimbursement charge applies only (1) after the reimbursement agreement is recorded; (2) during the period a reimbursement agreement is in effect; and (3) if the City Engineer determines that the land use entitlement involves the scope and type of development contemplated by the agreement. Payment of the reimbursement charge is not required as a condition of issuing a land use entitlement for the alteration or enlargement of an existing building or structure (or the erection of an accessory building or structure) if the work meets the following criteria as determined by the City Engineer:
1) Is on the same parcel of land; and
2) Does not create an additional dwelling unit; and
3) Will not change the potential for traffic generation; and
4) Will not exceed one-half the value of all existing improvements on that parcel of land.
c. No property may be charged a double fee under this section.
d. A benefited property owner has no obligation to pay a reimbursement charge if the owner does not develop the property during the period a reimbursement agreement is in effect.
(Sec. 1, Ordinance No. 09-19, adopted August 13, 2019)
6.6.012 Implementation By City Council.
The City Council may adopt rules and regulations it considers necessary to implement this chapter.