Chapter 3.15
REIMBURSEMENT DISTRICTS
Sections:
3.15.040 City administrator’s report.
3.15.050 Establishing the reimbursement district.
3.15.060 Reimbursement charge.
3.15.080 Imposition of reimbursement charge.
3.15.010 Purpose.
The purpose of this chapter is to provide a method to reimburse a person who finances the construction of a public improvement that has the capacity to serve development other than that for which it is built. The person financing the development must be deemed to pay a whole or disproportionately large part of the improvement. This chapter is intended to mitigate the cost of financing such public improvements by distributing some of its costs to other development that benefits from such public improvements when the benefited development makes use of the improvements.
The charge paid by the benefited property should be proportional to the use the benefited property makes of the public improvement. This chapter provides developers with a mechanism that may be used solely to finance capital construction needs of the city. [Ord. 714 § 1, 2001].
3.15.020 Definitions.
“Administrative fee,” as used in this chapter, means the amount of money charged by the city for the costs of administering this chapter, including, but not limited to, producing the city administrator’s report, public meeting support, other personnel costs, mailing fees, legal fees and the costs to account, track and assess reimbursement charges to future development.
“Development” occurs when a structure or other use of land connects to or otherwise makes use of a sewer, water, stormwater or street improvement. As used in this chapter, “makes use of a stormwater improvement” means activities sufficient to trigger the requirements of MCMC 18.155.050. As used in this chapter, “makes use of a street improvement” means the construction or installation of an improvement or a change in the use of a property that increases traffic or congestion on the street improvement for which the reimbursement district is formed.
“Finance” (the/an improvement) includes, without limitation, being assessed in a local improvement district. A reimbursement district may be established hereunder concurrently with formation of a local improvement district pertaining to the same public improvement, which local improvement district may contain properties near the reimbursement district.
“LGIP” means local government investment pool.
“Reimbursement district” means an area of properties set forth in a reimbursement resolution and subject to reimbursement charges as set forth herein, which charges may without limitation be for the purpose of reimbursing other property owners within a local improvement district containing properties near the reimbursement district.
As used herein the singular includes the plural and vice versa. [Ord. 714 § 2, 2001].
3.15.030 Initiation.
(1) Any person may choose or may be required as a condition of a land use decision approval to construct a public street, water, sewer or stormwater improvement that costs in excess of the current threshold amount. If this person finances the improvement, in whole or disproportionately large part, and the improvement will or could provide service to development other than the development owned by that person, that person may apply to the city to form a reimbursement district for the benefit of him/herself as well as other persons similarly situated.
(2) An application or reapplication to establish a reimbursement district shall be in writing, shall be filed with the city administrator, and shall be accompanied by a processing fee sufficient to cover the administrative review and notice costs of processing the application or reapplication, as established by resolution of the city council.
(3) The application shall include the following:
(a) A description of the location, type and capacity of the public improvement proposed to be the basis for the reimbursement district;
(b) A narrative statement explaining why the person financing the public improvement believes all or part of the cost of the public improvement is eligible for reimbursement pursuant to this chapter. This statement shall clearly indicate that only the costs of improvements not benefiting the person’s property are subject to reimbursement;
(c) A map showing the area proposed to be included in the proposed reimbursement district as well as any other area, if any, proposed to be reimbursed by the reimbursement charges and indicating the following information:
(i) The comprehensive plan designation, and zoning for each property in the proposed reimbursement district;
(ii) The frontage length and square footage of each property within the proposed reimbursement district, or other similar data necessary for calculating the apportionment of the costs; and
(iii) Identification of the properties owned by the person applying for the reimbursement district and others similarly situated;
(d) Mailing labels for notice to all parties entitled under MCMC 3.15.050 to receive mailed notice of the application. The person applying for the reimbursement district shall use the names and addresses of property owners within the notice area indicated on the most recent property tax roll. This may require the person applying for the reimbursement district to resubmit additional labels depending on the final city administrator report recommendations;
(e) A proposed methodology for calculating costs to future development in the reimbursement district. The city administrator may be able to provide possible methodologies to the person applying for the reimbursement district; however, use of a methodology suggested by the city administrator shall not guarantee approval of either the methodology or the reimbursement district;
(f) The estimated cost of the public improvement to be reimbursed as evidenced by bids, projections of the cost of labor and materials, or other evidence satisfactory to the city administrator; and
(g) The date the public improvement is estimated to be complete.
(4) The initial application for formation of a reimbursement district shall be made before city approval of specific reimbursement district portions of construction plans and authorization to proceed with the construction of the portions of street, water, sewer or stormwater improvements. The person applying for the reimbursement district may proceed at their own risk with the construction of the public improvements prior to the city council authorizing the reimbursement district. The city staff or city council may abandon the proceedings per MCMC 3.15.050 or the city council may not authorize or authorize in full the reimbursement district. In these cases, the person applying for the reimbursement district shall be responsible for the full cost of the subject public improvement or for such cost differential not provided for in such authorization.
(5) If the person applying for the reimbursement district desires to reapply after the reimbursement district proceedings are abandoned under MCMC 3.15.050, that person shall submit a reapplication and processing fee as established by resolution of the city council. [Ord. 714 § 3, 2001].
3.15.040 City administrator’s report.
The city administrator or his designee shall review the application for the establishment of a reimbursement district and recommend whether a district should be established. The city administrator may request the submittal of other relevant information from the person applying for the reimbursement district in order to assist in the evaluation.
The city administrator or his designee shall prepare a written report for the city council that:
(1) Recommends whether or not the reimbursement district should be formed;
(2) Explains whether the person applying for the reimbursement district proposes to finance some or all of the cost of a street, water, sewer, or stormwater improvement to make service available to property, other than property owned by the person applying for the reimbursement district;
(3) Recommends the area that should be included in the reimbursement district as well as any other area, if any, to be reimbursed by the reimbursement charges;
(4) States the estimated cost of the street, water, sewer or stormwater improvement to be included in the proposed reimbursement district and the portion of the cost for which the person applying for the reimbursement district should be reimbursed. Unless special circumstances exist, the cost to be reimbursed to the person applying for the reimbursement district shall not include the following:
(a) Costs for that portion of the improvement that specially benefits the person’s property;
(b) Costs of improvements that will not be dedicated to and accepted by the city as a public improvement;
(c) Costs for a public improvement that is required as a condition of development approval, except in cases where the nature and degree of the public improvement is disproportionate to the impacts of the development, or where the city requires an oversized or additional improvement beyond that which is roughly proportional to the impacts of the development;
(d) Costs for relocation of electrical, telephone, cable television, natural gas or other utility relocation across the person’s subject frontage;
(e) Costs for extra work or materials required to correct construction deficiencies to bring an otherwise noneligible improvement up to city standards;
(f) Costs for sewer, water, stormwater or street improvements that are the city standards to serve the person’s property;
(g) Costs for street realignment, except for the cost of right-of-way acquisition beyond the limits of the development frontage along the improved street; and
(h) Costs for administering the reimbursement agreement between the city and the person applying for the reimbursement district;
(5) States the estimated administrative fee and includes a recommendation on whether the city council should alter late fees on reimbursement charges that are not paid within 30 calendar days of the date the reimbursement charge is imposed;
(6) Recommends a just and reasonable methodology for allocating the cost of the public improvement to future development in the reimbursement district. The methodology shall consider, as relevant, the cost of the public improvement, contributions by property owners, the value of the unused capacity, the benefit the unused capacity will have to future development, rate-making principles employed to finance public improvements and any other factors deemed relevant by the city administrator; and
(7) Recommends the amount to be charged by the city for administration of the agreement between the city and the person applying for the reimbursement district. The administrative fee shall be fixed by the city council and shall be included in the resolution approving and forming the reimbursement district. [Ord. 714 § 4, 2001].
3.15.050 Establishing the reimbursement district.
(1) The city council shall hold a public hearing on the proposed reimbursement district, at which time any person may comment on the proposal.
(2) If, prior to or during the public hearing, written objections are received from persons who own a majority of the area proposed to be included in the reimbursement district, then the proceedings to create a reimbursement district shall be abandoned. If reimbursement district proceedings are abandoned, the property within the area proposed to be included in the reimbursement district shall not be subject to a reapplication for a reimbursement district for at least six months. The six-month period shall begin on the date the city receives the final written objection totaling a majority of the ownership of the proposed reimbursement district. Abandonment of a reimbursement district shall not preclude persons from submitting applications requesting formation of other reimbursement districts for other public improvements.
(3) Following the public hearing, if the city does not receive sufficient objections as described in subsection (2) of this section, the city council shall have the sole discretion to decide whether a resolution approving and forming the reimbursement district shall be adopted.
(4) The city shall provide mailed notice of the public hearing on the proposal to the person applying for the reimbursement district and all owners of property within the proposed district as recommended by the city administrator’s report. Notice shall be deemed effective on the date of mailing. Failure of any person to receive the notice shall not invalidate or otherwise affect the public hearing or the formation of the reimbursement district. Notice of the hearing shall be mailed by regular mail at least 14 calendar days before the date of the hearing. The notice shall:
(a) State that a reimbursement district under this chapter has been proposed and that the proposed district includes the property or residence of the person receiving notice;
(b) Briefly describe the reimbursement district, the street, water, sewer or stormwater improvement to be reimbursed, the estimated amount of the reimbursement charges and the circumstances under which the charges will be imposed;
(c) Include a copy of the city administrator’s report;
(d) State the time, date and place of the public hearing;
(e) Explain the procedure for filing written comments before the public hearing; and
(f) Explain the process for submitting written comments at the public hearing.
Notice shall also be published in like manner as for a local improvement district.
(5) After the public hearing is held, the city council shall approve, reject or modify the recommendations contained in the city administrator’s report. If a reimbursement district is established, the city council shall pass a resolution establishing the area included in the reimbursement district, the estimated cost of the public improvements, the methodology for allocating the costs to future development, and the administrative fee charged by the city. If areas not proposed by the city administrator to be included in the district are added by the city council, the hearing shall be continued. Residents and property owners of the additional area added by the city council shall be entitled to mailed notice of a continued hearing at least 14 calendar days prior to such continued hearing. No additional notice is required if the city council excludes a property from a proposed reimbursement district; however, the hearing shall be continued.
(6) The resolution shall instruct the city administrator to enter into an agreement with the person applying for the reimbursement district pertaining to the public improvements authorized by the reimbursement district resolution. Unless otherwise ordered by the city council, the agreement, at a minimum, shall contain the following provisions:
(a) The public improvements shall meet all applicable city standards;
(b) The amount of estimated potential reimbursement to the person applying for the reimbursement district and others similarly situated;
(c) The person applying for the reimbursement district shall provide a maintenance guarantee, approved by the city attorney, on the public improvements for a period of 24 months after the date the city accepts the public improvements for ownership and operation;
(d) The person applying for the reimbursement district shall defend, indemnify and hold harmless the city from any and all losses, claims, damage, judgments or other costs or expenses arising as a result of or related to the city’s establishment and administration of the reimbursement district;
(e) The person applying for the reimbursement district shall acknowledge that the city is not obligated to collect the reimbursement fee from affected developers, and that the right to reimbursement shall be derived solely under the provisions of this chapter; and
(f) The person applying for the reimbursement district shall agree to abide by all other city, state and federal laws including, but not limited to, public contracting laws. [Ord. 714 § 5, 2001].
3.15.060 Reimbursement charge.
(1) After the project is completed, the person responsible for constructing the improvement shall submit to the city administrator the final costs of the public improvement and such supporting material as deemed necessary by the city administrator to evaluate compliance with this chapter. The city administrator shall then prepare a proposed final reimbursement resolution that identifies:
(a) The actual reimbursement charge for future development in the reimbursement district;
(b) The late fees, if different from that imposed by this chapter, that shall be imposed and collected if the reimbursement charge is not paid within 30 calendar days of the date the reimbursement charge is imposed; and
(c) The proposed apportionment and disbursement or use of reimbursement charges collected.
(2) The city shall provide mailed notice of the proposed final reimbursement resolution to the person applying for the reimbursement district and all residents and owners of property within the reimbursement district. Notice shall be deemed effective on the date of mailing. Notice shall be mailed by regular mail at least 14 calendar days before the date of the city council’s action on the reimbursement resolution. The notice shall set forth:
(a) The time, date, and place of the city council’s action;
(b) The amount of the final reimbursement charges for future development; and
(c) The interest rate for future installment payments as described in MCMC 3.15.080(3).
Notice shall also be published in like manner as for a local improvement district.
(3) The city administrator shall submit the final costs and the proposed final reimbursement resolution to the city council for approval. The city council may approve the proposed final reimbursement resolution or adjust the reimbursement charges, costs and late fees, if they are not deemed just and reasonable, and adopt a final reimbursement resolution accordingly. If the final reimbursement resolution or any action necessary for the adoption of such a resolution is adjudged invalid, in whole or in part, by an agency or court of competent jurisdiction, the city may take such action as is necessary to provide for the imposition and collection of the costs of the administration of the reimbursement district, including the city’s costs in defending the same, from the person applying for the reimbursement district.
(4) The city shall notify all residents and property owners within the reimbursement district and the person applying for the reimbursement district of the adoption of a final reimbursement resolution. The notice shall be mailed by regular mail and shall be effective on the day of mailing. The notice shall include a copy of the reimbursement resolution, the date it was adopted, and a short explanation of when a developer is obligated to pay a reimbursement charge and the amount of the charge, including late fees, if applicable.
(5) The city recorder shall record the final reimbursement resolution in the office of the county recorder within 30 calendar days of the date the resolution is adopted so as to provide notice to potential developers of property within the reimbursement district. The recording shall not create a lien. Failure to make such a recording shall not affect the lawfulness of the reimbursement resolution or obligation to pay the reimbursement charge. [Ord. 714 § 6, 2001].
3.15.070 Challenges to resolution establishing reimbursement district or to final reimbursement resolution.
Any legal action intended to contest the formation of the reimbursement district or the reimbursement charge, including the amount of the charges for future development, shall be filed pursuant to ORS 34.010 to 34.100 (writ of review) within 60 calendar days following adoption of the resolution being challenged. The writ of review shall be the sole and exclusive remedy for any challenge to proceedings under this chapter. [Ord. 714 § 7, 2001].
3.15.080 Imposition of reimbursement charge.
(1) No reimbursement charge shall be imposed, and there shall be no obligation to pay any reimbursement charge identified in a final reimbursement resolution and reimbursement agreement, unless and until development occurs that connects to, or otherwise makes use of, the public improvement that was the subject of the reimbursement district.
(a) The reimbursement charge will be imposed when a development within the reimbursement district connects to, or otherwise makes use of, the sewer, water, stormwater or street improvement.
(i) As used in this subsection, “makes use of the stormwater improvement” means activity sufficient to trigger the requirements of MCMC 18.155.050 at the time of, or following construction of, the stormwater improvement for which the reimbursement district is formed.
(ii) As used in this subsection, “makes use of the street improvement” means the construction or installation of an improvement or a change in the use of the property at the time of or following construction of the street improvement that increases traffic or congestion on the street improvement for which the reimbursement district is formed.
(2) The reimbursement charge is imposed and becomes due and payable as a precondition of receiving the first city permit applicable to the development activity undertaken or, in the case of a connection to a line, as a precondition of receiving the connection permit.
(3) The reimbursement charge may be paid in annual installments over a period of 10 years unless extended by process described in MCMC 3.15.100. If a person chooses to pay the reimbursement charge installments, the installments will bear interest from the time the reimbursement charge is imposed. The interest rate will be calculated using the local government investment pool rate in effect at the time the charge is imposed plus one and one-quarter percent for administration.
(4) If the reimbursement charge is paid in installments, a late fee of one and one-half percent of the overdue payment per month may be assessed for any late payments. The amount of the late fees may be altered by city council resolution. [Ord. 714 § 8, 2001].
3.15.090 Petition for relief.
A person subject to a reimbursement charge may petition the city council for relief from the payment of the charge. Such relief may be granted by the city council only in extraordinary circumstances when payment of the reimbursement charge would be inequitable or otherwise unlawful. A petition under this section is a mandatory administrative step required before any party may seek redress through the court system. A petition for relief must be filed within 30 days of the date the charge is imposed and must explain how the charge is inequitable or otherwise unlawful and it must set forth with particularity the grounds for relief. In response to a properly filed petition for relief, the city council may hold an evidentiary hearing and shall issue a decision in writing, which shall be final when signed by the mayor. The city shall withhold the issuance of building permits and all other permits for the development on which a petition for relief has been filed until the petition is conclusively resolved, including any judicial review. [Ord. 714 § 9, 2001].
3.15.100 Administration.
(1) A right to reimbursement shall terminate 10 years after the reimbursement district is created unless the person who is eligible for reimbursement renews their eligibility for reimbursement. Eligibility for reimbursement may be renewed for two additional five-year periods. In order to renew eligibility for reimbursement, the person who is eligible for reimbursement must file a written declaration of renewal with the city administrator within 90 calendar days of the date the eligibility for reimbursement would otherwise terminate. Failure to file a timely declaration shall result in the termination of any eligibility for reimbursement. In no event may the eligibility for reimbursement exceed 20 years.
(2) Eligibility for reimbursement does not obligate the city to seek or pay the reimbursement charge.
(3) The right of reimbursement is assignable and transferable after the person who is eligible for reimbursement delivers written notice to the city, advising the city where to send future payments received by the city on behalf of the person or the person’s assignee.
(4) The city shall establish separate accounts for each reimbursement district. Upon receipt of a reimbursement charge, the city shall cause a record to be made of the payment and remit or apply the charge as provided in the reimbursement resolution or agreement after deduction of administrative fees. The person eligible for reimbursement or that person’s assignee shall notify the city within 30 calendar days of any mailing address change. [Ord. 714 § 10, 2001].