Chapter 14.02
LATECOMER AGREEMENTS – STREET AND UTILITY

Sections:

14.02.010    Purpose.

14.02.020    Definitions.

14.02.030    Applicability.

14.02.040    Application for latecomer agreement.

14.02.050    Application – Review.

14.02.060    Preliminary determinations.

14.02.070    Preliminary determination notice.

14.02.080    Latecomer agreement.

14.02.090    Recording.

14.02.100    Construction – Final costs – Conveyance.

14.02.110    Defective work.

14.02.120    Payment of latecomer assessments – Remittance to developer.

14.02.130    Segregation.

14.02.140    Term of developer reimbursement agreements.

14.02.150    Removal of unauthorized connections or taps.

14.02.160    Interest on assessment.

14.02.170    City fees.

14.02.180    Appeal.

14.02.190    Enforcement of latecomer obligations.

14.02.200    Alternative financing methods.

14.02.210    Limitation of liability.

14.02.010 Purpose.

Pursuant to the authority conferred in Chapters 35.72 and 35.91 RCW, the purpose of this chapter is to encourage private and public construction of municipal street and utility system improvements by providing means for the recovery of the costs of installation through a charge to later users of the improvements who did not contribute to the costs thereof. [Ord. 2016-09-034 § 1; Ord. 2014-06-033; Ord. 2004-01-003 § 1; Ord. 10906 § 2, 1997].

14.02.020 Definitions.

“Adjacent” means abutting on public roads, streets, right-of-way or easements in which street system improvements are installed or directly connecting to street system improvements through an interest in real property such as an easement or license.

“Assessment” means an equitable pro rata charge to be paid by an owner of property within the assessment reimbursement area for the cost of private construction of public street and/or utility system improvements made pursuant to a public facilities construction agreement.

“Assessment reimbursement area” means that area which includes all parcels of real property adjacent to street system improvements or likely to require connection to or service by utility system improvements constructed by a developer.

“Construction interest” means the sum of money to be added to the direct construction cost and reimbursed to the developer for the use of the developer’s monies during the construction term. The interest rate shall be one percent above the Federal Reserve Bank prime loan rate published most recently before the date of the public facilities construction agreement. Interest accrual begins on the date of execution of the public facilities construction agreement and will continue throughout the construction term.

Construction interest shall be computed utilizing the two-thirds rule; i.e., direct cost of construction x construction interest rate divided by 365 x the construction term expressed in days x 0.67 = construction interest.

“Construction term” means that period of time between the date of execution of the public facilities construction agreement and the date of acceptance of the project by the city or the construction completion date as set forth in the public facilities construction agreement, whichever occurs first.

“Cost of construction” is the sum of the direct construction costs incurred to construct the street and/or utility system improvements plus indirect costs which are limited to the city’s latecomer administrative fees (BMC 14.02.170), construction interest, and developer administrative costs. “Direct construction costs” include but are not limited to all related design services, engineering, surveying, legal services, bonding costs, environment mitigation, relocation and/or new construction of private utilities as required by the city (i.e., power, telephone, cable and gas), relocation and/or installation of street lights, relocation and/or installation of signage, acquisition of right-of-way and/or easements, government agency fees, testing services, inspection, plan review and approval, labor, materials, equipment rental, and contractor and/or subcontractor fees or charges.

“Developer” means the individual or entity that contracts with the city for the construction of street and/or utility system improvements, where such improvements are a prerequisite for further development of real property owned by such entity or individual.

“Developer administrative costs” means all indirect costs incurred by the developer in the creation and execution of a public facilities construction agreement and managing the project; such as office supplies, mailings, clerical services, telephone expenses, accounting expenses, project oversight, and the like. Administrative costs shall not exceed three percent of all direct construction costs.

“Direct connection” means a service connection, to be owned and maintained by the property owner and not the city, from existing or new utility improvements based on the following criteria:

A. Water system direct connections are single and dual water service taps as defined in “Water Distribution System,” Bellingham Development Guidelines and Improvement Standards, as currently enacted or as may be hereafter modified;

B. Sewer system direct connections include side sewer (service) connections as defined in “Sanitary Sewer System,” Section 5, Bellingham Development Guidelines and Improvement Standards, as currently enacted or as may be hereafter modified;

C. Storm sewer system direct connections are hereby defined as, but not limited to, tight line, down spout, and roof leader service connections to storm sewer mains for the conveyance of site-specific storm sewer.

“Latecomer agreement” means a written contract between the city and one or more developers providing partial reimbursement of the cost of construction of street and/or utility system improvements to the developer by owners of property who connect to or use the improvements but who did not contribute to the original cost of construction.

“Public facilities construction agreement” means any agreement entered into by an individual or entity with the city for the purpose of constructing public improvements that are required by the city to be constructed as a prerequisite to the development of real property.

“Street system improvements” means public street and alley improvements made in existing or subsequently dedicated or granted rights-of-way or easements and any improvements associated therewith including but not limited to such things as acquisition of right-of-way and/or easements, design, engineering, surveying, inspection, grading, paving, installation of curbs, gutters, storm drainage, pedestrian facilities, street lighting, bike lanes, and traffic control devices, relocation and/or construction of private utilities as required by the city (i.e., power, telephone, cable and gas), relocation and/or construction of street lights, traffic control devices, signage, and other similar improvements.

“Utility system improvements” means public water, sewer and storm drainage system improvements including but not limited to the acquisition of right-of-way and/or easements, design, engineering, surveying, inspection, testing, connection fees, and installation of improvements as required by the city and includes but is not limited to the following:

A. Water system improvements including but not limited to such things as treatment facilities, reservoirs, wells, mains, valves, fire hydrants, telemetry systems, pumping stations, and pressure reducing stations;

B. Sewer system improvements including but not limited to such things as treatment plants, gravity mains, lift stations, force mains, and telemetry systems;

C. Storm sewer system improvements including but not limited to such things as water quality structures and systems, detention and retention facilities, and stormwater collection and conveyance facilities. [Ord. 2014-06-033; Ord. 2004-01-003 § 2; Ord. 10906 § 2, 1997].

14.02.030 Applicability.

This chapter is intended to apply to all street system improvements and all utility system improvements where the construction of such improvements is the result of city ordinances that require such improvements as a prerequisite to property development. Street system improvements constructed in order to comply with the city of Bellingham subdivision code, zoning code, comprehensive plan and Chapter 13.08 BMC, are hereby declared to be prerequisites to further property development for the purpose of this chapter. [Ord. 2014-06-033; Ord. 10906 § 2, 1997].

14.02.040 Application for latecomer agreement.

A. Any developer using private funds to construct street system improvements and/or utility system improvements in the city may apply to the city for a latecomer agreement in order to recover a pro rata share of the costs of construction from other property owners that will later connect to or use the street and/or utility system improvements made by developer.

B. In addition to the latecomer application, the applicant must apply for and obtain a public facilities construction permit and agreement and must meet all of the design standards and requirements applicable to street and utility improvements contained in the city’s ordinances.

C. The application for a latecomer agreement shall be made before the street and/or utility system improvements proposed for construction are approved by the city through the issuance of a public facilities construction permit; provided, that for improvements approved under a public facilities construction permit issued prior to July 9, 2014, the application for a latecomer agreement may be made within 30 days after the date that such completed improvements have been accepted by the city. Acceptance by the city shall mean, for purposes of this section, the date the public facilities are conveyed to the city by a deed of conveyance or other equivalent written document. Application shall be made on forms prepared by the public works department and shall be accompanied by the city application fee set forth in BMC 14.02.170. The application shall contain the following information, which shall be approved by a state of Washington licensed engineer:

1. A legal description of the developer’s property.

2. A legal description of the properties within the developer’s proposed assessment reimbursement area together with the name and address of the owners of each property as shown in the records of the assessor’s office of Whatcom County.

3. Vicinity maps, stamped by a state of Washington licensed civil engineer or surveyor, depicting the developer’s property, the proposed improvements, and the proposed assessment reimbursement area.

4. Statement from a state of Washington licensed contractor or civil engineer containing an itemized estimate of the total projected cost of construction.

5. The developer’s proposed allocation of the cost of construction to the individual properties within the proposed assessment reimbursement area and the method used for such allocation.

D. Within 30 days of the public works department receiving the application for a latecomer agreement, the public works department will provide the applicant written notice of whether the application is complete and, if incomplete, what must be done for the application to be considered complete. The applicant will have no more than 30 days from the date of the written notice to respond and provide the information required to complete the application or, if the applicant cannot submit the required information within the 30-day period, the applicant shall provide the city a written explanation of why they cannot provide the information within the designated time period and a date that the requested information will be submitted. In its discretion, the public works department may grant the applicant an extension of not more than 60 days to submit the required information. If the applicant fails to meet the foregoing time frame, the public works department may, in its discretion, reject the application as untimely.

E. The public works director may establish policies and procedures for processing applications and complying with the requirements of this chapter. [Ord. 2014-06-033; Ord. 2004-01-003 § 3; Ord. 10906 § 2, 1997].

14.02.050 Application – Review.

A. The public works director or his designee shall review all applications and shall approve the application if following criteria are met:

1. The application is timely, complete and the application fee has been paid; and

2. The city’s ordinances require the proposed improvements to be constructed as a prerequisite to further property development; and

3. The proposed improvements fall within the definition of street and/or utility system improvements as those terms are defined in this chapter; and

4. The proposed improvements are consistent with the city’s design standards, development regulations, comprehensive plan, utility plan, and/or transportation plan.

B. In the event any of the above criteria are not met, the public works director or his designee shall either condition approval as necessary in order for the application to conform to such criteria or deny the application. The final determination of the public works director or his designee shall be in writing. [Ord. 2014-06-033].

14.02.060 Preliminary determinations.

Upon approval of a latecomer application, the public works department shall formulate a preliminary assessment reimbursement area and preliminary assessment amount for each real property included in the preliminary assessment reimbursement area as follows:

A. For street system improvements, the assessment reimbursement area shall be formulated based upon a determination of which parcels adjacent to the street improvements would require similar street improvements upon development or redevelopment.

B. For utility system improvements, the assessment reimbursement area shall be formulated based upon a determination of which parcels in the proposed area would require similar utility system improvements upon development or redevelopment, or would be allowed to connect to or use the utility system improvements.

C. A pro rata share of the cost of the improvements shall be allocated to each property included in the assessment reimbursement area based upon the benefit to the property owner. The method or methods used to calculate the allocation of the assessment may be either front footage, number of units, square footage, zone and termini method, or other equitable method, as determined by the city. [Ord. 2016-09-034 § 1; Ord. 2014-06-033; Ord. 2004-01-003 § 4; Ord. 10906 § 2, 1997. Formerly 14.02.050].

14.02.070 Preliminary determination notice.

A. The preliminary assessment reimbursement area and the preliminary assessment amounts formulated by the public works department shall be sent by certified mail to the developer and the property owners of record within the preliminary assessment reimbursement area.

B. The developer or any property owner within the preliminary assessment reimbursement area may, in writing within 20 days of mailing the notice, request a hearing to be held before the hearing examiner pursuant to BMC 2.56.050(C) to contest the preliminary assessment reimbursement area and/or preliminary assessment amounts. Notice of such hearing shall be given to the developer and all property owners within the preliminary assessment reimbursement area and the hearing before the hearing examiner shall be conducted as soon as is reasonably practical. The procedure contained in Chapter 2.56 BMC shall govern the hearing. After the hearing, the hearing examiner shall develop a report with findings of fact, conclusions of law and recommendations to the city council regarding establishing the assessment reimbursement area and the assessment for each property within the assessment reimbursement area. The city council shall consider the record developed before the hearing examiner and the hearing examiner’s report. City council shall allow public comment on the hearing examiner’s report and, if a majority of the council finds the record insufficient, may add to the record. After considering the record, the hearing examiner’s report and public comment thereon, if any, city council may adopt or reject the hearing examiner’s recommendations in whole or in part or it may render its own findings and conclusions. City council is the final authority to establish the assessment reimbursement area and the assessment for each property within the assessment reimbursement area. The city council’s determination of the assessment reimbursement area and the assessment shall be as provided by BMC 1.26.040 and 1.26.050 and shall be determinative and final.

C. In the event no written request for a hearing is received within the allotted time, the determination of the public works department shall be final. [Ord. 2016-09-034 § 1; Ord. 2014-06-033; Ord. 2004-01-003 § 5; Ord. 2002-10-069 § 31; Ord. 10906 § 2, 1997. Formerly 14.02.060].

14.02.080 Latecomer agreement.

Based upon the preliminary assessment reimbursement area and the preliminary assessment, if no hearing is requested, or based upon the city council’s determination of the assessment reimbursement area and assessment if a hearing is requested, the public works department shall prepare and give to the applicant a latecomer agreement. The developer shall execute the latecomer agreement and return it to the public works department for city signatures. A separate latecomer agreement shall be executed for each of the following categories of improvement, as applicable: water system, sewer system, stormwater system, and street system. [Ord. 2014-06-033; Ord. 10906 § 2, 1997. Formerly 14.02.070].

14.02.090 Recording.

The provisions of the latecomer agreement shall not become effective as to any owner of real estate not a party thereto until it is recorded with the Whatcom County auditor, with notice to title of each property within the assessment reimbursement area. The city shall record the latecomer agreement with the Whatcom County auditor within 30 days of final execution of the latecomer agreement; provided, that the developer shall have an independent duty to review the auditor’s records to confirm that the latecomer agreement has been properly and timely recorded. [Ord. 2014-06-033; Ord. 2004-01-003 § 6; Ord. 10906 § 2, 1997. Formerly 14.02.080].

14.02.100 Construction – Final costs – Conveyance.

A. After the latecomer agreement has been signed by all parties and all necessary permits and approvals, including a public facilities construction permit, have been obtained, the applicant shall construct the improvements and, upon completion, request final inspection and acceptance of the improvements by the city, subject to any required obligation to repair defects. All construction, inspection and testing shall conform to the city’s design and construction standards.

B. Within 120 days of completion of construction, the developer shall provide the city with documentation of the actual costs of the improvements and a certification by the applicant that all of such costs have been paid. The final cost of the improvements shall be reviewed against the preliminary assessments established by the city. Upon a showing of good cause, the agreement shall be modified to include cost overruns up to a maximum of 10 percent. In the event that actual costs are less than the public works director’s estimate by 10 percent or more, the public works director shall recalculate the charges, reducing them accordingly. For any revisions under this section, the public works director shall cause a revised list of charges to be recorded with the Whatcom County auditor, with a notice to title on each property within the assessment reimbursement area.

C. After the requirements of subsections (A) and (B) of this section have been satisfied, the developer shall provide the city with an appropriate deed of conveyance or other equivalent written document transferring ownership of the improvements to the city, together with any easements needed to ensure the city’s right of access for maintenance of the improvements. Title to the improvements shall be conveyed to the city clear of all encumbrances.

D. No connection to, or other use of, the improvements will be allowed or permitted until the city has officially accepted the construction and title to the improvements has been conveyed to the city. [Ord. 2014-06-033].

14.02.110 Defective work.

The developer shall be responsible for all work found to be defective within one year after the date of acceptance of the improvements by the city. Chapters 13.08, 15.08, and 15.12 BMC contain provisions for the public works director to require a performance bond for the improvements. [Ord. 2014-06-033].

14.02.120 Payment of latecomer assessments – Remittance to developer.

A. Upon recording, the latecomer agreement and assessment shall be binding upon all properties located within the assessment reimbursement area. Assessments shall be paid to the city in one lump sum, including interest through the date of payment, as follows:

1. Assessments for street improvements shall be paid prior to the development or redevelopment of property if at the time of development or redevelopment the property owner is not required to construct similar street improvements because they were already constructed by the developer.

2. Assessments for utility system improvements shall be paid prior to connection to or use of the utility system improvements.

B. The city will pay over to the developer the amounts due within 60 days of receipt.

C. When the assessment for any property has been paid in full, the public works director or his designee shall record a certification of payment that will release the property from the latecomer agreement.

D. The latecomer charge shall be in addition to the usual and ordinary charges, including connection charges, system development charges, and any other fees or charges which must be paid by persons applying for city services. [Ord. 2016-09-034 § 1; Ord. 2014-06-033].

14.02.130 Segregation.

The public works department shall, upon the request of any property owner within the assessment reimbursement area, segregate the assessment. The segregation shall be based upon the same factors applied when the assessments were originally established. The property owner seeking segregation of the assessment shall pay an administrative fee to the city of Bellingham based upon a segregation fee schedule to be established by the public works department. [Ord. 2014-06-033; Ord. 10906 § 2, 1997. Formerly 14.02.090].

14.02.140 Term of developer reimbursement agreements.

A. For street system improvements, each latecomer agreement shall be valid for a period of 15 years from the date of its recording, unless earlier terminated as provided in subsection (C) of this section.

B. For utility system improvements, each latecomer agreement shall be valid for a period of 20 years from the date of its recording, unless earlier terminated as provided in subsection (C) of this section.

C. The city may terminate a latecomer agreement if the developer fails to commence or complete construction within the time and manner required in the public facilities construction agreement for the improvements. In the event of termination, the city shall record a release of latecomer agreement in the county auditor’s office. [Ord. 2016-09-034 § 1; Ord. 2014-06-033; Ord. 10906 § 2, 1997. Formerly 14.02.100].

14.02.150 Removal of unauthorized connections or taps.

Whenever any tap or connection is made into any utility improvement without payment of the assessment being made as required by this chapter, the public works department is authorized to remove and disconnect, or cause to be removed and disconnected, such unauthorized tap or connection including all connecting tile or pipe located in the right-of-way and to dispose of such unauthorized material without liability. The owner of the property where the unauthorized connection is located shall be liable for all costs and expenses of any type incurred to remove, disconnect, and dispose of the unauthorized tap or connection. [Ord. 2014-06-033; Ord. 2004-01-003 § 7; Ord. 10906 § 2, 1997. Formerly 14.02.110].

14.02.160 Interest on assessment.

Each assessment established under this chapter shall bear interest from the date of recording of the latecomer agreement or notice of assessment at an interest rate fixed at the federal reserve rate for a two-year treasury note, as determined on the date of recording the latecomer agreement or notice of assessment. [Ord. 2016-09-034 § 1; Ord. 2014-06-033; Ord. 2002-01-001; Ord. 10906 § 2, 1997. Formerly 14.02.120].

14.02.170 City fees.

The developer shall pay the following fees:

A. Application Fee. The city shall charge an application fee of $800.00 for each latecomer agreement.

B. Administrative Fee. In addition, the city shall charge a fee for administering the latecomer process equal to one percent of the estimated cost of construction.

C. Recording Fee. Further, for every separate parcel of property within the applicant’s proposed assessment reimbursement area, the city shall charge a recording fee of $250.00 per parcel.

D. The application fee and the recording fee shall be adjusted annually to reflect inflationary costs. The adjusted fees shall be calculated by adjusting upwards or downwards in accordance with the change in the Consumer Price Index for All Urban Consumers, Seattle-Tacoma-Bremerton, Washington, based on the report released prior to January 1st of each year. The fees established by this formula shall be rounded up or down to the next $10.00.

E. The application fee shall be paid upon application for a latecomer agreement with all remaining fees paid prior to, and as a condition of, the city’s mailing of the preliminary determination notices. [Ord. 2014-06-033; Ord. 2004-01-003 § 8; Ord. 10906 § 2, 1997. Formerly 14.02.130].

14.02.180 Appeal.

With the exception of the determination of the preliminary assessment reimbursement area and preliminary assessment as provided by BMC 14.02.070, a developer or owner of record of property located within the assessment reimbursement area may appeal the interpretation, implementation, and/or decisions of the public works department concerning any aspect of this chapter to the hearing examiner as provided by BMC 2.56.050(B)(7). The appeal must be filed within 20 days of the date of the action or decision being appealed. [Ord. 2016-09-034 § 1; Ord. 2014-06-033; Ord. 2004-01-003 § 9; Ord. 2002-10-069 § 31; Ord. 10906 § 2, 1997. Formerly 14.02.150].

14.02.190 Enforcement of latecomer obligations.

A. In processing and imposing obligations in this chapter for reimbursement of developers, the city in no way guarantees payment of assessments by latecomers, or enforceability of assessments, or enforceability of the latecomer agreement, or the amount(s) thereof against such persons or property. Nor will the offices or finances of the city be used for enforcement or collection of latecomer obligations beyond those duties specifically undertaken by the city herein. The city shall not be responsible for locating any beneficiary or survivor entitled to any benefits by or through a developer reimbursement agreement.

B. Every two years from the date the latecomer agreement is executed, a developer entitled to reimbursement under this chapter shall provide the public works department with information regarding the current contact name, address, and telephone number of the person, company, or partnership that originally entered into the latecomer agreement. If the developer fails to comply with the notification requirements of this subsection within 60 days of the specified time, then the city may collect any reimbursement funds owed to the developer under the latecomer agreement. Such funds must be deposited in the capital fund of the city. [Ord. 2014-06-033; Ord. 2004-01-003 § 10; Ord. 10906 § 2, 1997. Formerly 14.02.160].

14.02.200 Alternative financing methods.

A. As an alternative to financing street and/or utility improvements under this chapter solely by developers, the city may join in the financing of the improvements and may be reimbursed in the same manner as developers who participate in funding the improvements. If the city elects to join in the financing of street or utility system improvements under this chapter, it shall have the same rights to reimbursement as developers who make contributions as authorized under this chapter and shall be entitled to a pro rata share of the reimbursement based on the respective contribution of the developer and the city.

B. As an alternative to financing street and/or utility system improvements under this chapter in whole or in part by developers, the city may create an assessment reimbursement area on its own initiative, without the participation of a private developer, finance all of the costs of the street and/or utility system improvements, and become the sole beneficiary of the reimbursements that are contributed. The city may establish an assessment reimbursement area under this subsection only in locations where the city’s ordinances require utility or street improvements to be constructed as a prerequisite to further property development or redevelopment. The process shall be as follows:

1. The public works department shall formulate the boundaries of a preliminary assessment reimbursement area and determine the amount of the preliminary assessment applicable to each parcel located within the preliminary assessment reimbursement area in accordance with BMC 14.02.060, subject to the following limitations:

a. The assessment for water and sewer improvements shall be no greater than a property’s pro rata share of costs associated with construction of the water or sewer facilities required to meet water and sewer service and fire suppression standards. No city costs for any portion of the utility system improvements that only benefit property outside of the assessment reimbursement area may be reimbursed.

b. The city may be reimbursed only for the costs of street improvements that benefit that portion of the public who will use the developments within the assessment reimbursement area. No city costs for improvements that benefit the general public may be reimbursed.

2. The public works department shall provide notice of its preliminary determination to all owners of record of property located within the preliminary assessment reimbursement area in accordance with BMC 14.02.070.

3. Owners of record of property located within the preliminary assessment reimbursement area may contest the public works department’s preliminary determinations in accordance with BMC 14.02.070.

4. Based upon staff’s preliminary determination, if no hearing is requested, or based upon city council’s determination, if a hearing is requested, the public works department shall prepare and record a notice of assessment against each property in the county auditor’s office. Upon recording of the notice, the assessment shall be binding upon the property and shall run with the land in perpetuity until paid. The term limits contained in BMC 14.02.140 shall not apply to latecomer assessments established under this subsection.

5. Assessments shall be paid to the city as follows:

a. Assessments for street improvements shall be paid prior to the development or redevelopment of property if at the time of development or redevelopment the owner is not required to install similar street improvements because they were already installed by the city.

b. Assessments for utility system improvements shall be paid prior to connection to or use of the utility system improvements.

6. Upon receipt of payment in full, the city shall record a notice of release of assessments in the county auditor’s office. Recording costs shall be paid in advance by the property owner.

7. Assessments may be determined and recorded at any time prior to or after completion of construction of the improvements. If the recorded assessment amounts were determined prior to completion of construction based upon estimated costs, the city shall subsequently prepare revised notices of assessment based upon actual costs following completion of construction; provided, that assessments shall not be increased by more than 10 percent. The revised notices shall be sent by certified mail to each owner of record of property within the assessment reimbursement area and recorded in the county auditor’s office. [Ord. 2016-09-034 § 1; Ord. 2014-06-033; Ord. 2004-01-003 § 11. Formerly 14.02.170].

14.02.210 Limitation of liability.

Nothing in this chapter is intended to create a private right of action for damages against the city for failing to comply with the requirements of this chapter. The city may not be held liable for failure to collect a latecomer assessment unless the failure was willful or intentional. [Ord. 2014-06-033].