Chapter 19.13
COMMUNITY FACILITIES DISTRICT PROVISIONS
Sections:
19.13.020 Formation of a community facilities district.
19.13.025 Board of supervisors.
19.13.030 Special assessments.
19.13.010 Purpose.
A community facilities district (CFD) is a special purpose district created to finance and potentially construct local and subregional improvements/infrastructure needed to support growth. RCW 36.145.090 designates a CFD as “an independently governed, special purpose district.” A CFD provides tax exempt financing which may lower infrastructure costs. [Ord. 1020 § 1 (Att. A), 2022.]
19.13.015 Requirements.
(A) Requirements for a CFD are as follows:
(1) Inclusion in the CFD district is 100 percent voluntary.
(2) CFD property owners pay 100 percent of formation and operations costs associated with the district.
(3) A petition must be accompanied by an “obligation” signed by at least two petitioners who agree to pay the costs of the formation process.
(4) A CFD must be governed by a board of supervisors appointed by each applicable legislative authority within 60 days of formation of the district.
(5) Residents and businesses located outside the CFD boundaries are not subject to assessments.
(6) CFD bonds are secured only by land inside the district.
(7) Improvements must increase property value at least as much as the assessments and assessments must be fairly distributed.
(8) CFD improvements may be financed by the district prior to, during or after completion of improvements.
(9) All improvements must be permitted and approved by the city.
(10) A CFD does not burden municipal finances or debt capacity and is not backed by the credit of the state or city. [Ord. 1020 § 1 (Att. A), 2022.]
19.13.020 Formation of a community facilities district.
(A) In order to form a community facilities district:
(1) A petition executed by 100 percent of the property owners within the proposed district including a request to subject their property to the assessments up to the amount included in the petition is filed with the auditor. The petition must be accompanied by an “obligation” signed by at least two petitioners who agree to pay the costs of the formation process.
(2) Petition to form a CFD must include a preliminary assessment roll showing the special assessment proposed to be imposed on each lot, tract, parcel or other property and the proposed method or combination of methods for computing special assessments, determining the benefit to assessed property or use from facilities or improvements funded directly or indirectly by special assessments.
(3) The lead auditor has 30 days to confirm that the petition has been validly executed by 100 percent of all owners of the property located within the proposed district.
(4) The auditor must transmit the petition, together with a certificate of sufficiency, to each city petitioned for formation of the district within 10 days of the lead auditor’s finding that the petition is complete.
(5) The city gives notice of a public hearing and the community has an opportunity to participate in the public hearing process. The public hearing is held not less than 30 days but not more than 60 days from the date the lead auditor issues the certificate of sufficiency.
(6) The city must find the CFD is “in the best interests of” the city to approve the CFD. A decision must be issued within 30 days of the public hearing.
(7) The CFD is final only after the appeal period expires. An appeal must be filed within 30 days of the resolution approving formation of the district.
(8) The CFD is governed by a five-member board of supervisors. The petition nominates two members of the CFD board of supervisors. The city appoints three members of the CFD board of supervisors (either elected officials or qualified representatives). [Ord. 1020 § 1 (Att. A), 2022.]
19.13.025 Board of supervisors.
(A) A CFD must be governed by a board of supervisors appointed by each applicable legislative authority within 60 days of formation of the district.
(1) All members of the board must be natural persons.
(2) All members must serve without compensation but are entitled to expenses, including travel.
(3) The board must designate a chair.
(4) If the proposed district is located entirely within a single jurisdiction, then the board of supervisors consists of three members of the legislative authority of the jurisdiction and two members appointed from among the list of eligible supervisors included in the petition.
(5) If the proposed district is located within unincorporated land that is entirely surrounded by an incorporated city or town, then the board of supervisors consists of two members appointed from county legislative authority, two members appointed from city legislative authority and one member appointed from among the list of eligible supervisors included in the petition.
(6) The legislative members must be chosen only from among the members of its own governing body.
(7) Legislative authorities may appoint qualified professionals with expertise in municipal finance in lieu of one or more appointments. A jurisdiction’s appointments to the board may consist of a combination of qualified professionals; however, a legislative authority is not authorized to exceed the maximum number of appointments.
(8) A vacancy on the board must be filled by the legislative authority. Vacancies must be filled by a person in the same position vacating the board, which for initial petitioner members or nominees includes successor owners of property located within the boundaries of the district.
(9) If an approved district was originally located entirely on unincorporated land and the land has been annexed into a city then, as of the effective date of the annexation, the city is deemed the exclusive legislative authority and the composition of the board must be structured accordingly. [Ord. 1020 § 1 (Att. A), 2022.]
19.13.030 Special assessments.
(A) Special Assessment Requirements for a CFD.
(1) The term of the special assessment is limited to the lesser of 28 years or two years less than the term of any bonds issued by or on behalf of the district to which the assessments or other revenue of the district is specifically dedicated, pledged, or obligated.
(2) The CFD board must set a date, time, and place for hearing any objections to the assessment roll which must occur no later than 120 days from final approval of formation of the CFD.
(3) At the hearing on the assessment roll or within 30 days of the hearing the board may adopt a resolution approving the assessment roll or may correct, revise, raise, lower, change or modify the assessment roll and provide the petitioner with a detailed explanation of the changes made by the board.
(4) If the assessment roll is revised by the board in any way, then, within 30 days of the board’s decision, the petitioner must unanimously rescind the petition or accept the changes. Upon acceptance the board must adopt a resolution approving the assessment roll as modified by the board.
(5) Assessments may not be increased without the approval of 100 percent of the property owners subject to the proposed increase, except as provided under Chapter 35.44 RCW.
(6) The computation of special assessments may provide for the reduction or waiver of special assessments for low-income households as that term is defined is RCW 13.130.010.
(7) All assessments imposed within the boundaries of the approved district are a lien upon the property from the date of final approval and are paramount and superior to any other lien or encumbrance, except a lien for general taxes.
(8) Special assessments must be collected by the district treasurer. The district treasurer must establish a CFD fund, into which all district revenues must be paid, and must pay assessment bonds, revenue bonds and the accrued interest thereon in accordance with their terms when interest or principal payments become due. [Ord. 1020 § 1 (Att. A), 2022.]