Chapter 3.44
DEFERRAL OF COLLECTION OF ASSESSMENTS
Sections
3.44.030 Eligibility criteria.
3.44.050 Terms and conditions for a phase one deferral.
3.44.060 Terms and conditions for a phase two deferral.
3.44.070 Procedure for granting deferral.
3.44.080 Funding of deferral payments.
3.44.010 Authorized.
The collection of an assessment upon property assessed by a local improvement district, or any installment thereof, may be deferred upon application of the person responsible for the payment of the assessment, who is economically disadvantaged and/or will incur a substantial hardship that may result in the loss of the real property. Unless otherwise provided in such ordinance, or in the ordinance confirming an assessment roll for such district, the terms and conditions of this chapter shall establish the terms and conditions for the deferral of collection of such assessments, and the persons eligible therefor, the rate of interest, the duties of respective city officials and the obligations of the local improvement guaranty fund and general revenue with respect thereto. [Ord. 1144 § 63(16), 1995; Ord. 479 § 1, 1979. Formerly 3.36.010.]
3.44.020 Definitions.
(1) Use of Words and Phrases. As used in this chapter, unless the context or subject matter clearly requires otherwise, the words or phrases defined in this section shall have the indicated meanings.
(2) The phrase “person responsible for payment of an assessment” means the owner of the property to be assessed (including life tenants) and other persons, who under the terms of a recorded contract of purchase, recorded mortgage, recorded deed of trust transaction, or recorded lease is responsible under penalty of forfeiture, foreclosure, or default as between vendor/vendee, mortgagor/mortgagee, grantor and trustor/trustee and grantee, and beneficiary and lender, or lessor and lessee for the payment of the local improvement district assessment.
(3) The phrase “substantial hardship that may result in the loss of the property” means that the person responsible for payment of an assessment has exercised the four installment deferrals as an economically disadvantaged person and in the opinion of the city there is a substantial risk that the person may lose the property on which the assessment is made if the assessment is enforced. [Ord. 1144 § 63(16), 1995; Ord. 1033 § 1, 1993: Ord. 479 § 3, 1979. Formerly 3.36.020.]
3.44.030 Eligibility criteria.
A person responsible for payment of an assessment may qualify as “economically disadvantaged” when:
(1) Except as provided in DMMC 3.44.030(2), the person’s current income does not exceed the income eligibility criteria scaled by family size prepared annually by the finance director from data supplied by the United States of America, Department of Labor, to indicate an income necessary for such a person (and family) to live frugally, but adequately within the city; except such computations do not include:
(a) Alimony or maintenance payments;
(b) Child support;
(c) Earnings of full-time students;
(d) Earnings of persons under the age of 18 years;
(e) Educational loans and grants that preclude their use for current living costs; and
(f) Medical expenditures that qualify as deductions under the Internal Revenue Code as presently constituted or as may be subsequently amended; or
(2) A person is considered economically disadvantaged when the person’s income (or the total marital income) is derived solely from payments received under the Social Security system of the United States of America; and
(3) The person’s net personal assets do not exceed $15,000; provided such computations do not include:
(a) Cash and marketable securities up to $10,000 in total;
(b) Cash surrender value of all insurance policies and annuity programs up to $20,000 in total;
(c) Equipment necessary for maintaining life, health, or movement of infirm or disabled persons;
(d) Home;
(e) Net personal assets that are used to generate the income referred to in DMMC 3.44.030(1);
(f) Reasonable appliances, fixtures, and furniture; and
(4) Joint or community owners may qualify when their aggregate income does not exceed the income eligibility criteria for a family with the same number of persons and the net personal assets of each owner individually, as defined in DMMC 3.44.030(3), do not exceed $15,000; and
(5) The person claiming an economically disadvantaged status must live and reside on the property within the local improvement district on which the assessments have been made and for which the installments are due. [Ord. 1144 § 63(16), 1995; Ord. 1033 § 2, 1993. Formerly 3.36.025.]
3.44.040 Two phase system.
The deferral system shall consist of two phases. Phase number one shall permit a deferral of installment payments for up to four years for economically disadvantaged persons. Phase number two shall permit deferral of additional installments for persons who are economically disadvantaged and who will incur a substantial hardship that may result in the loss of the real property if the installment payments are enforced. Under phase number two installment payments may be deferred up to and including all installment payments required under the ordinance creating the local improvement district. [Ord. 1144 § 63(16), 1995; Ord. 479 § 2, 1979. Formerly 3.36.030.]
3.44.050 Terms and conditions for a phase one deferral.
The following terms and conditions shall apply to a phase one deferral:
(1) The amount of the assessment or installment thereof, the collection of which has been deferred, shall be paid out of the local improvement guaranty fund.
(2) The local improvement guaranty fund shall have a lien on the benefited property in an amount equal to the amounts paid by such fund, plus interest at the rate of eight percent per year computed from the date the payment is made.
(3) The collection of any particular installment shall not be deferred longer than four installment periods.
(4) Local improvement assessment obligations, the payment of which have been deferred, shall become due and payable upon the earliest of the following dates:
(a) Upon the date and pursuant to the conditions established by the agreement for deferral of collection;
(b) Upon the sale of property that has a deferred assessment lien upon it, from the purchase price; or
(c) Upon the death of the person to whom the deferral was granted from the value of his estate; except, a surviving spouse shall be allowed to continue the deferral of collection, which shall be payable by the spouse as provided by the terms and conditions of the deferral in accordance with this chapter.
(5) The time during which collection is deferred shall not be part of the time limit for commencement of an action to collect the amount deferred or to enforce the local improvement assessment lien.
(6) The collection of an assessment shall in no event be deferred beyond the time of the dissolution of the local improvement district.
(7) The party granted the deferment of collection of an assessment or installment thereof shall provide assurance of property security acceptable in form and substance to the city for the payment of such assessment or installment thereof. [Ord. 1144 § 63(16), 1995; Ord. 479 § 4, 1979. Formerly 3.36.040.]
3.44.060 Terms and conditions for a phase two deferral.
The following terms and conditions shall apply to a phase two deferral:
(1) The amount of the assessment or installment thereof, the collection of which has been deferred, shall be paid by the city out of general revenue.
(2) The city shall have a lien on the benefited property in an amount equal to the amounts paid by the city plus interest at the rate of eight percent per year computed from the date the payment is made.
(3) Local improvement assessment obligations, the payments of which have been deferred, shall become due and payable upon the earliest of the following dates:
(a) Upon the date and pursuant to the conditions established by the agreement for deferral of collection;
(b) Upon the sale of the property which has a deferred assessment lien upon it, from the purchase price; or
(c) Upon the death of the person to whom the deferral was granted from the value of his estate; except, a surviving spouse shall be allowed to continue the deferral of collection, which shall be payable by the spouse as provided by the terms and conditions of the deferral in accordance with this chapter.
(4) The time during which collection is deferred shall not be part of the time limit for commencement of an action to collect the amount deferred or to enforce the local improvement assessment lien.
(5) The collection of an assessment shall in no event be deferred beyond the time of the dissolution of the local improvement district.
(6) The party granted the deferment of collection of an assessment or installment thereof shall provide assurance of property security acceptable in form and substance to the city for payment of such assessment or installment thereof. [Ord. 1144 § 63(16), 1995; Ord. 479 § 5, 1979. Formerly 3.36.050.]
3.44.070 Procedure for granting deferral.
Applications for either a phase one or phase two deferral shall be made to the City Clerk on forms provided by the City. The decision as to whether an applicant qualifies for either a phase one or phase two deferral shall be made by the City Manager or the City Manager’s designee. Any person aggrieved by such decision may file an appeal in writing to the City Council within 10 days after receipt of the administration’s decision. The decision of the City Manager or the City Manager’s designee shall be final and binding unless such appeal is timely filed with the City Clerk. Thereafter, the City Clerk shall timely place the matter on the agenda of the City Council and notify the applicant of the time and date in writing. The applicant shall have an opportunity to be heard before the City Council at a public meeting. The decision of the City Council shall be final and binding on the parties. The application for either a phase one or phase two deferral shall be made on a yearly basis; that is, the granting of either type of deferral shall be limited to one year, and the burden is upon the applicant to establish to the satisfaction of the City that they qualify for a deferral on a yearly basis. The City shall have the authority to require the applicant to justify their deferral status at any time during a deferral period if the City has reasonable cause to believe that the financial condition of the applicant is such that their deferral status is no longer justified. All deferrals shall require an agreement setting forth the terms and conditions of the deferral and the applicant shall execute any necessary instrument to perfect any lien. [Ord. 1799 § 2, 2024; Ord. 1144 § 63(16), 1995; Ord. 479 § 6, 1979. Formerly 3.36.060.]
3.44.080 Funding of deferral payments.
The city finance director shall draw such warrants upon the local improvement guaranty fund as necessary and appropriate to make payments to the local improvement district fund for assessments, the collection of which have been deferred and shall report annually to the city council the amount of such payments. With respect to phase two deferrals, the city finance director shall establish a fund entitled local improvement districts, phase two deferral fund and place in such fund such amount of revenue as is annually appropriated by the city council. Thereafter, the city finance director shall draw warrants upon such fund as necessary and appropriate to make requisite phase two payments and shall report annually to the city council the amount of such payments. The city manager shall annually recommend to the city council the amount to be appropriated for such fund. Should the city council decline to appropriate sufficient funds for the city finance director to make the phase two deferral payments, such phase two deferrals shall lapse and the person responsible for making such payment shall thereafter make payments to the local improvement district fund as if the phase two deferral had not been granted. [Ord. 1144 § 63(16), 1995; Ord. 479 § 7, 1979. Formerly 3.36.070.]