Chapter 12.50
UTILITY REIMBURSEMENT POLICY
Sections:
12.50.010 Statement of policy.
12.50.030 Utility extension specifications.
12.50.040 Reimbursement agreements.
12.50.010 Statement of policy.
A. The general policy of the city of Gunnison is that development shall pay its own way and that the owners of undeveloped property benefited by installation of utilities and other public improvements shall contribute financially to the cost of such improvements upon the development of their properties. This policy is designed to achieve fairness in the division of costs of installation of utilities and other public improvements and to protect the taxpayers of the city.
B. The city council has determined that reimbursement agreements, where agreed to by the developer and the city, are an equitable and efficient means of promoting private installation of minor public improvements, particularly for infill of areas in a utility service area that requires utility line extensions. This policy does not apply to special improvement districts or utilities and other public improvements constructed within new developments, be they new subdivisions or PUDs, as defined in Gunnison LDC.
C. The decision whether to enter into a reimbursement agreement between the city and a developer is wholly discretionary on the part of the city and a developer, dependent upon the individual circumstances of each development. In any specific development proposal where the city deems it inappropriate to do so, the city may decline to enter into a reimbursement agreement pursuant to this policy or may vary the terms of any reimbursement agreement in a manner that the city deems appropriate to the circumstances. The adoption of this policy does not create an obligation upon the city to enter into a reimbursement agreement with any particular developer, nor require any specific terms thereof. The adoption of this policy is not to be interpreted as creating or giving rise to an expectation that a reimbursement agreement will be entered into between the city and a developer, nor once such an agreement is entered into, that any sums will be collected by the city for reimbursement to the developer except pursuant to the terms of the written reimbursement agreement. (Ord. 4-2021 § 1 (Exh. A), 2021).
12.50.020 Reserved.
(Ord. 4-2021 § 1 (Exh. A), 2021).
12.50.030 Utility extension specifications.
In order to be eligible for reimbursement as set forth herein, all utility extensions shall meet the following requirements:
A. Utility extension will be engineered by the developer.
B. All utility extensions shall conform to and be in accordance with the city of Gunnison construction standards.
C. All plans for the utility extension will be approved in advance by the city.
D. Prior to acceptance by the city, all utility extensions will be inspected and approved by the city.
E. All utility extensions for which reimbursement is sought, upon their inspection and approval by the city, shall be dedicated by the developer to the city and shall be the sole property of the city. (Ord. 4-2021 § 1 (Exh. A), 2021).
12.50.040 Reimbursement agreements.
A. A developer who extends utilities through undeveloped areas of the city to extend utility services to the developer’s property, and in making such extension, provides capacity therein to serve the undeveloped property and who has paid the entire cost of such construction will be eligible for reimbursement pursuant to a reimbursement agreement as provided herein.
B. A developer who extends utilities as set forth in subsection (A) of this section may enter into a reimbursement agreement with the city, the terms of which are fully described in such agreement, and which agreement is mutually reached between the developer and the city. The agreement shall specify, at the minimum, the following terms and conditions:
1. Total reimbursable costs.
2. Method of determining reimbursement obligation (formula using lineal or square footage or other method).
3. Properties subject to reimbursement obligations.
4. Estimated reimbursement obligations of each affected property.
5. Service charge per connection is specified on the city of Gunnison fee table.
6. Nonliability clause for failure to collect or the impossibility of collection by the city.
In the event such an agreement is entered into, the city is hereby authorized to assess a charge against each subsequent developer whose property is specially benefited by the utility extension for the proportional cost of the utility extension at the time connection to the utility is granted.
C. In the event a reimbursement agreement is entered into and reimbursement is collected from a subsequent developer, the city shall reimburse the developer to the extent of such collection, after deducting the service charge per connection. All construction costs of the utility extension must be fully paid by the developer before the developer shall be entitled to any reimbursement. Reimbursement of the developer is absolutely contingent upon actual collection from the subsequent developer by the city.
D. The amount of reimbursement which the city shall assess upon subsequent developers shall be based upon the city’s determination of the reasonable cost of construction, not to exceed the original actual construction costs.
E. In order to obtain approval of a reimbursement agreement by the city, the developer shall first request such an agreement be considered during the pre-application conference or site plan review of the development, and provide to the city’s community development department, within 120 days of completion of the utility extension, six copies of the following material:
1. Completed bid forms from qualified contractors indicating which contractor was awarded the project, and evidence of a bidding process. All bid forms must contain the description, estimated quantity, and unit price for each utility included in the project.
2. Satisfactory evidence that all costs in connection with the utility extension have been paid, as detailed in a sworn affidavit of the developer, and supported by evidence of payment.
3. A map which shall include the following information:
a. Location of the utility extensions.
b. Names and addresses of the owners of each property specially benefited by the utility extensions and the amount of those benefits.
c. Legal descriptions of the properties specially benefited by the utility extensions.
d. Such additional information which the city’s department of community development or public works may deem necessary.
F. During the preparation of the reimbursement agreement, the books and records of the developer relating to the construction costs of the utility extensions for which the developer seeks reimbursement shall be open to the city for purposes of auditing and verifying the developer’s cost.
G. In the event the information required in subsection (E) of this section is not submitted by the developer within 120 days of the date of completion of the improvements, there shall be no reimbursement agreement. In the event the information is submitted within the time allowed, the city will review such information and prepare an appropriate reimbursement agreement to be executed between the developer and the city. The reimbursement agreement shall be recorded in the office of the Gunnison County clerk and recorder at the developer’s cost. Reimbursement payments shall be made to the city by the subsequent developer for distribution to the developer, less the city’s service charge. The developer shall have 90 days, from and after the date of mailing of written notification by the city to the developer sent by certified mail, return receipt requested, at the address provided to the city by the developer, in which to claim the proceeds of reimbursement payments. After such time, the city shall have no further obligation to the developer with regard to reimbursement payments referred to in the notice, and such amounts shall become the sole property of the city.
H. An appropriate reimbursement agreement, to be executed between the developer and the city, shall be recorded in the office of the Gunnison County clerk and recorder at the developer’s cost. Reimbursement payments shall be made to the city by the subsequent developer for distribution to the developer, less the city’s service charge. The developer shall have 90 days, from and after the date of mailing of written notification by the city to the developer sent by certified mail, return receipt requested, at the address provided to the city by the developer, in which to claim the proceeds of reimbursement payments. After such time, the city shall have no further obligation to the developer with regard to reimbursement payments referred to in the notice, and such amounts shall become the sole property of the city.
I. Upon request of the developer, which request shall not occur more than once every 12 months, the city shall provide an accounting of each reimbursement payment collected during the preceding 12 months, the name and address of the remitter of such reimbursement payment, the property address for which the reimbursement was paid, and the current balance of the actual reimbursable costs incurred by the developer remaining unreimbursed.
J. The term of a reimbursement agreement shall not exceed a period of 15 years from the date of its execution and, unless earlier terminated, shall expire when all reimbursable costs, less service charges, have been reimbursed to the developer. The city shall not be liable for any portion of the uncollected balance of reimbursable costs. There shall be no collection of reimbursement payments by the city on or after the expiration of the term of the reimbursement agreement. Subsequent developers shall similarly have no obligation to make reimbursement payments after the expiration of the term of the reimbursement agreement.
K. The right to receive reimbursement pursuant to the reimbursement agreement is personal to the developer who executes the reimbursement agreement. Any assignment of such right shall be by written assignment signed and acknowledged by the developer, its successor or assign, and physically delivered to the city. (Ord. 4-2021 § 1 (Exh. A), 2021).