Chapter 3.15
LOCAL IMPROVEMENT DISTRICTS
Sections:
3.15.030 Plans and specifications.
3.15.060 Notices to property owners.
3.15.070 Public hearing and remonstrances.
3.15.080 Ordinance creating local improvement district.
3.15.100 Assessment ordinance procedures.
3.15.110 Lien recording – Payments over time or by cash.
3.15.120 Errors in assessment calculations.
3.15.130 Authority of city to make reassessment.
3.15.140 Consent or waiving requirement of notice.
3.15.150 Assessment of public property benefited by improvements.
3.15.160 Abandonment of proceedings.
3.15.010 Title.
This chapter shall be known as the local improvement district ordinance. [Ord. 2444, 6-3-96. Code 2001 § 36.40.]
3.15.020 Definitions.
For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning:
“Actual cost” means all direct or indirect costs incurred by the city in order to undertake and complete a capital construction project. “Actual cost” includes, but is not limited to, the costs of labor, materials, supplies, equipment rental, property acquisition, permits, engineering, financing (bond issuance costs), reasonable program delinquencies, return on investment, required fees, insurance, administration, accounting, depreciation, amortization, operation, maintenance, repair or replacement and debt service, including debt service payments or payments into reserve accounts for debt service and payment of amounts necessary to meet debt service coverage requirements.
“Assessment for local improvement” means any fee, charge, or assessment that does not exceed the actual cost of a local improvement incurred by the city.
“Bonded indebtedness” means any formally executed written agreement representing a promise by the city to pay to another specified sum of money, at a specified date(s) at least one year in the future.
“Capital construction” means the construction, modification, replacement, repair, remodeling or renovation of a structure, or addition to a structure, which is expected to have a useful life of more than one year, and includes, but is not limited to:
1. Acquisition of land, or a legal interest in land, in conjunction with a capital construction of a structure.
2. Acquisition, installation of machinery or equipment, furnishings or materials which will become an integral part of a structure.
3. Activities related to the capital construction, such as planning design, acquisition of interim or permanent financing, research, land use and environmental impact studies, acquisition of permits or licenses or services connected with the construction.
4. Acquisition of existing structures, or legal interests in structures, in conjunction with the capital construction.
“Capital improvement” means land, structures, or facilities, as that term is defined in the Oregon Revised Statutes, machinery, equipment or furnishings having a useful life longer than one year.
“City engineer” means the duly appointed official or, if such official does not exist, a designated engineer or firm of engineers, charged with engineering responsibilities.
“Estimated assessment” means:
1. With respect to each property to be assessed in connection with a local improvement, the total assessment that, at the time of giving notice of the assessment and the right to object or remonstrate, the city estimates will be levied against the property following completion of the local improvement. The estimate shall be based on the estimated cost of the local improvement and the proposed formula for apportioning the actual cost to the property.
2. Estimated assessment shall be determined by:
a. Excluding the estimated financing costs associated with any bonds issued to accommodate the payment of the assessment in installments; and
b. Including the estimated financing costs associated with interim financing of the local improvement.
“Final assessment” means, with respect to each property to be assessed in connection with a local improvement, the total assessment levied against the property following completion of the local improvement. The total assessment shall be based on the actual cost of the local improvement and the formula for apportioning the actual cost to the property.
“Financing” means all costs necessary or attributable to acquiring and preserving interim or permanent financing of a local improvement.
1. The costs of financing may include the salaries, wages and benefits payable to employees to the extent the same are reasonably allocable to the work or services performed by the employees in connection with the financing of a local improvement or any part of a local improvement. However, as a condition to including of any salaries, wages or benefits payable to employees of the city as financing costs of a local improvement or any part of a local improvement, the city shall establish a record-keeping system to track the actual work done or services performed by each employee on or in connection with such local improvement.
2. Financing costs that are to be incurred after the levy of a final assessment may be included, whether directly in the final assessment or in the interest rate charged on installment payments, based on the city’s reasonable estimate of the financing costs if the city first documents the basis for the estimate and makes the documentation available to interested persons on request.
“Local improvement” means a capital construction project, or part of a capital construction project, undertaken by the city pursuant to the procedure to be followed in making local assessments for the benefits from a local improvement upon the lots which have been benefited by all or part of the improvement:
1. Which provides a special benefit only to specific properties or rectifies a problem caused by specific properties; and
2. The costs of which are assessed against those properties in a single assessment upon the completion of the project; and
3. For which the payment of the assessment plus appropriate interest may be spread over a period of at least 10 years by the property owner; and
4. For which the total of all assessments for the local improvement shall not exceed the actual cost incurred by the city in completing the project; and
5. For which the status of a capital construction project as a local improvement is not affected by the accrual of a general benefit to property other than the property receiving the specific benefit.
“Lot” means lot, block, or parcel of land.
“Manager” means the city manager of the City of Newberg.
“Owner” means the owner of the title to real property or the contract purchaser of real property of record as shown on the last available complete assessment roll in the office of the Yamhill County assessor.
“Property benefited” means all property specially benefited by the improvement, the relative extent of such benefit to be determined by any just and reasonable method of apportionment of the actual cost of the improvement between the properties determined to be specially benefited.
1. Real property may be described by giving the subdivision according to the United States survey when coincident with the boundaries, or by lots, blocks and additional names, or by giving the boundaries of the property by metes and bounds, or by reference to the book and page of any public record of the county where the description may be found, or by designation of a tax lot number, or in any other manner as to cause the description to be capable of being made certain.
2. If the owner of any land is unknown, the land may be assessed to “unknown owner(s).” If the property is correctly described, no final assessment shall be invalidated by a mistake in the name of the owner of the real property assessed or by the omission of the name of the owner or the entry of the name other than that of the true owner. Where the name of the true owner, or the owner of record, of any parcel of real property is given, the final assessment shall not be held invalid on account of any error or irregularity in the description if the description would be sufficient in a deed of conveyance from the owner, or is such that, in a suit to enforce a contract to convey, employing such description, a court of equity would hold it to be good and sufficient.
3. Any description of real property which conforms substantially to the requirements of this section shall be a sufficient description in all proceedings of assessment relating or leading to a final assessment for a local improvement foreclosure and sale of delinquent assessments, and in any other proceedings related to or connected with levying, collecting and enforcing final assessments for special benefits to the property.
“Remonstrance” means a written objection to the formation of a local improvement district.
“Single assessment” means the complete assessment process, including preassessment, assessment or reassessment, for any authorized local improvement which provides the procedure to be followed in making local assessments for benefits from a local improvement upon lots which have been benefited by all or part of the improvement.
“Special benefit only to specific properties” means the same meaning as “special and peculiar benefit” as that term is used in Oregon law.
“Structure” means any temporary or permanent building or improvement to real property of any kind, which is constructed on or attached to real property, whether above, on or beneath the surface. [Ord. 2444, 6-3-96. Code 2001 § 36.41.]
Cross-reference: See ORS 223.389 as found in ORS 310.140(14).
3.15.030 Plans and specifications.
Whenever the city council shall determine to proceed to make a local improvement to be paid for in full or in part by the property benefited, the city council shall, by motion, direct the city engineer to have a report prepared containing the following information:
A. A description of the local improvement.
B. Preliminary plans and outline specifications for the local improvement.
C. A description of the boundaries of the local improvement.
D. A just and reasonable method of apportioning the actual cost of the local improvement to the properties benefited.
E. A list of properties benefited by the local improvement, including the name and address of each owner; the assessed value of each property, adjusted in accordance with Oregon law; and a statement of the amount of outstanding assessments against any property proposed to be assessed by the improvements.
F. The estimated cost of the improvement, including any legal, administrative and engineering costs attributable to the project.
G. The estimated share of the estimated cost of the local improvement to be assessed to each property.
H. The estimated share of the estimated cost of the local improvement to be paid by the city, if any. [Ord. 2444, 6-3-96. Code 2001 § 36.42.]
Cross-reference: See ORS 223.389 as found in ORS 310.140(14).
3.15.040 Assessing.
The city council shall do the following in assessing the cost of the improvement:
A. Use a fair and reasonable method for determining the extent of the district boundaries.
B. Use a fair and reasonable method for apportioning the actual cost or estimated cost of the local improvement among the benefited properties.
C. Consider payment by the city of all or part of the actual cost or estimated cost of the improvement when, in the opinion of the city council, on account of topographical, physical or other characteristics of the local improvement or expected unusual or excessive use by the general public, payment by the city would be appropriate or when the city council otherwise believes it would be just and reasonable for the city to pay all or part of the cost.
D. Consider other available means of financing the improvement. In the event other means of financing are used, the city council may, subject to the constraints of the Oregon Constitution and Oregon laws, in its discretion, levy assessments to cover any part of the actual cost of the local improvement not covered by the alternative means of finance. The use of any available alternative means of financing lies solely within the discretion of the city council.
E. Not give credits for corner lots.
F. Assess unimproved property subject to a maximum depth of 200 feet. [Ord. 2444, 6-3-96. Code 2001 § 36.43.]
Cross-reference: See ORS 223.389 as found in ORS 310.140(14).
3.15.050 Resolution.
A. After the engineer’s report has been filed with the city manager, after the city council has examined the report and found the same to be satisfactory and having found the estimated costs and apportionment to be reasonable and just, and after having found the boundaries of the improvement district to be properly determined, the city council may, by resolution, propose to make the improvement, and to create a local improvement district.
B. The resolution shall state:
1. The boundaries of the local improvement district.
2. The proposed method for apportioning the estimated cost of the local improvement among the benefited properties.
3. The portion of the estimated cost, if any, which the city will pay.
4. That the portion of the estimated cost which is assessed to the properties benefited shall be a charge and lien upon those properties.
5. The time and place for a public hearing before the city council to hear objections and receive remonstrances.
6. Directions to the city engineer to provide a notice of public hearing to the owners of the properties benefited which contains the following:
a. A brief and general description of the proposed local improvement and a statement that a more detailed description is set forth in a report on file in the city engineer’s office and city manager’s office.
b. That the city council proposes to create a local improvement district and will be holding a public hearing to hear objectives and receive remonstrances to the local improvement.
c. The date, time and place of the public hearing.
d. A description of the properties to be benefited, the owners of the properties, the estimated cost of the improvement and the estimated assessment for each property benefited.
e. A statement that if, at or before the public hearing, written remonstrances against the local improvement are filed with the city engineer by the owners of at least 60 percent of the property to be assessed, action on the local improvement shall be suspended for at least six months. [Ord. 2444, 6-3-96. Code 2001 § 36.44.]
3.15.060 Notices to property owners.
A. Form of Notice. Any notice required hereunder shall be sent by registered or certified mail or by personal delivery to the owner of each property proposed to be assessed, and shall include the estimated assessment proposed for that property, the date by which time objections shall be filed with the city engineer, and that such objection shall state the grounds for the objection.
B. Delivery of Notice. Whenever a notice is required to be sent to the owner of a lot affected by a proposed assessment, the notice shall be addressed to the owner or the owner’s agent. If the address of the owner or the owner’s agent is unknown to the city, the notice shall be addressed to the owner or the owner’s agent at the city where the property is located. Any mistake, error, omission, or failure with respect to such mailing shall not be jurisdictional or invalidate the assessment proceedings, but there shall be no foreclosure or legal action to collect until notice has been given by personal service upon the property owner, or if personal service cannot be had, then by publication once a week for two successive weeks in a newspaper of general circulation in the city. [Ord. 2444, 6-3-96. Code 2001 § 36.45.]
3.15.070 Public hearing and remonstrances.
A public hearing before the city council shall be held at the scheduled date and time and the city council shall hear and consider objections and receive remonstrances to the local improvement. If those persons representing 60 percent or more of the proposed assessment within the district file with the city engineer a written objection or remonstrance against the proposed improvement, the remonstrance shall be a bar to any further proceedings in the making of such improvement for a period of six months, except for a sidewalk or improvement unanimously declared by the city council to be needed at once because of an emergency. [Ord. 2444, 6-3-96. Code 2001 § 36.46.]
3.15.080 Ordinance creating local improvement district.
A. Public Hearing. After the public hearing, the city council may create a local improvement district by ordinance. The ordinance shall describe the improvement(s) to be made, the boundary of the district, the estimated assessments against the properties benefited, and shall state that the assessment shall be charges and liens against the properties. The city may enforce collection of the assessments as provided in Oregon law.
B. Adoption Process. In creating the local improvement by ordinance, the city council shall consider the objections or remonstrances made and reasons stated for them. The city council may adopt, correct, modify or revise the proposed assessments or estimated assessments and shall determine the amount or estimated assessment to be charged against each lot within the district, according to the special and peculiar benefits accruing thereto from the improvement and shall by ordinance spread the assessments. The estimated assessment lien shall continue until the time the estimated assessment becomes a final assessment.
C. Plans. The ordinance shall also direct the city engineer to have detailed plans and specifications of the local improvement prepared and that, when appropriate, the city shall invite bids for construction of the local improvement. [Ord. 2444, 6-3-96. Code 2001 § 36.47.]
Cross-reference: See ORS 223.866.
3.15.090 Call for bids.
A. Work to Be Done. The construction work may be done in whole or in part by the city, by a contractor, or by any other governmental agency, or by any combination of the city, a contractor, or a governmental agency.
B. Low Bids. If all or part of the improvement is to be constructed by a contractor, the city shall call for bids for making the local improvement and award the bid to the lowest responsible bidder.
C. Separate Bids. In the event that more than one local improvement shall be advertised for bids at the same time, all local improvement districts shall be bid separately.
D. Aggregate Bid. The city council shall have the authority to accept the lowest responsible aggregate bid which is in the best interest of the city for all of the local improvement districts bid at the same time, and allocate the proper amount of the total cost to each district separately.
E. City Council Discretion. The city council may reject any or all bids.
F. Rebidding. If no bids are received, or if all bids are rejected, the city council may call for other bids, change the manner in which the local improvement shall be constructed, or abandon the local improvement.
G. Excessive Bids. If the lowest responsible bid exceeds the estimated cost of the local improvement, and if accepted would cause any estimated assessment to increase by more than 20 percent, and if the city council wants to proceed with the local improvement, before proceeding the city council shall revise the estimated assessments, hold another public hearing, after notice to the owners of the benefited properties of the new estimated assessment, and shall proceed as if that was the original public hearing except that new bids need not be solicited.
H. Bond Required. The city council shall require bonding of all contractors for the faithful performance of the contract. All bidders shall be required to submit a certified check or bid bond in an amount equal to five percent of their bid, and the contractor to whom the award is made shall submit a performance bond in the amount of the awarded bid at the time the contract is awarded. All bonds shall be with bonding companies doing business in Oregon and given under Oregon law. Bonds shall incorporate the term of the plans and specifications and must be approved by the city attorney as to form. [Ord. 2444, 6-3-96. Code 2001 § 36.48.]
Cross-reference: See ORS 279.380.
3.15.100 Assessment ordinance procedures.
A. Initial Assessments. If the city council determines that the local improvement district shall be created, the city council shall provide for the assessment or estimated assessment of the benefited properties, and for the apportionment of the assessment or estimated assessment to the properties benefited by ordinance by one of the following methods:
1. Actual cost of the local improvement; or
2. The estimated cost of the improvement.
B. Notice. The city engineer shall prepare the assessment or estimated assessment for the properties benefited and file it with the appropriate city office. Notice of such assessment or estimated assessment shall be given to each owner of the properties benefited. The notice shall state the amount of the assessment or estimated assessment proposed for that property and set forth the date, time and place for a public hearing before the city council to hear objections to the proposed assessments.
C. Consideration of Proposed Assessment. The city council shall consider objections to the proposed assessments and may correct, modify, or revise the proposed assessments. After determining that the assessments meet the requirements of this chapter, the city council shall by ordinance spread the assessments.
D. Actual Cost. In determining the assessment or estimated assessment for the local improvement the city council shall use the actual cost.
E. Lien. The assessment ordinance shall provide that the assessments or estimated assessments against the benefited properties shall be a lien against the assessed properties and that the city may enforce collection of such assessments as provided by Oregon law.
F. Estimated Cost. If the initial assessment has been made on the basis of estimated assessment, and upon the completion of work the actual cost is found to be greater or less than the estimated cost, the city council shall make an assessment for the actual cost. Proposed revised assessments shall be made; notice to the owners shall be sent; a public hearing for receiving and considering objections shall be held; determination of the assessment against each property benefited shall be made as in the case of the initial assessment; and the revised assessments shall be spread by ordinance. In the event that an estimated assessment which was greater than a revised assessment has been paid, the payor or the payor’s assigns or legal representative shall be refunded the difference. [Ord. 2444, 6-3-96. Code 2001 § 36.49.]
Cross-reference: See ORS 223.866.
3.15.110 Lien recording – Payments over time or by cash.
A. Docket. After the passage of the assessment ordinance, the city manager shall direct to have entered in the docket of city liens a statement of the amount assessed upon each property benefited, together with a description of the improvement, the name of the owner(s) and the date of the assessment ordinance. Upon entry in the lien docket, the amount entered shall become a lien and charge upon the respective lots, parcel of land or portions of the lots or parcels of land which have been assessed. All assessment liens of the city shall be superior and prior to all other liens or encumbrances on the property insofar as the laws of the State of Oregon permit.
B. Foreclosure. After the expiration of 30 days from the date the assessment ordinance was adopted, the city may proceed to foreclose or enforce collection of the assessment liens in any manner provided for by the laws of the State of Oregon. The city may, at its option, enter a bid for any property being offered at a foreclosure sale, which bid shall be prior to all bids except those made by persons who would be entitled under the laws of the State of Oregon to redeem the property.
C. Final Assessment. After the final assessment has been adopted by the city council, the city shall publish the final assessments once in a newspaper of general circulation within the city and also send a copy by certified mail or deliver it personally to the owners of the properties to be assessed within 10 days after the adoption of the ordinance. The notice shall identify the local improvement for which the assessment is to be made, each lot to be assessed, and the final assessment for each lot. In addition, the notice shall state that the owner shall have the right to apply to the city for payment of the final assessment in installments as provided by this chapter.
D. Time Payments. Within 10 days after notice of final assessment is mailed, the owner of any property to be assessed, at any time, may file a written application at the finance department to pay:
1. The whole of the final assessment in installments; or
2. If part of the final or estimated assessment has been paid, the unpaid balance of the final assessment in installments. Failure to apply for installment payments within 10 days will require full payment of the assessment within 30 days from the date of the entry of the lien in the city docket.
E. Filing Deadline. At the option of the city, an installment application may be filed not more than 10 days after the notice of the final assessment is first published.
F. Waiver. The installment application shall state that the applicant does thereby waive all irregularities or defects, jurisdictional or otherwise, in the proceedings, including the apportionment of the cost of the improvement.
G. Period of Payments. The application shall provide that the applicant agrees to pay the assessment in installments over a period of not less than 10 years nor more than 30 years and according to such terms as the city may provide. The city may provide that the owner of the assessed property may elect to have the final assessment payable over a period of less than 10 years and according to terms determined by the city.
H. Interest. The application shall also provide that the applicant acknowledges and agrees to pay interest at the rate provided by the city. The interest shall be set at an interim rate which shall be applied to the unpaid balance until improvement bonds are sold to finance assessment bonds. Upon sale of bonds, the finance director shall adjust the interest rate to the rate received by the city on the bond issue (expressed as true interest cost). All subsequent payments will be made at the new adjusted rate.
I. Loan Fees. To recover the costs for administering the bond assessment program, applicants will be charged a loan origination fee and billing fee as set by resolution and reviewed periodically by the finance committee of the city council. Those who initially choose to pay the assessment in full will not be charged these fees.
J. Description of Property. The application shall also contain a description, by lots or blocks, or other convenient description, of the property of the application assessed for the local improvement.
K. Payment Dates. The amount and due date of each installment shall be determined by the city and shall be set forth in the installment application. The first installment, plus accrued interest and fees, shall be due and payable on the date determined by the city and subsequent installments plus accrued interest and fees shall be due and payable on subsequent periodic dates as determined by the city.
L. Delinquent Payments. If the installment payments or the interest or any portion of the interest are not paid within one year of their due date, then the city may pass a resolution:
1. Giving the name of the owner in default;
2. Stating the sum due, both principal and interest, and any unpaid late payment penalties or charges;
3. Containing a description of the property subject to the assessment; and
4. Declaring the whole sum, both principal and interest, immediately due and payable.
M. Collection. The city may then immediately proceed to collect all unpaid amounts owing and enforce collection by any method authorized by law for the collection of delinquent municipal liens. [Ord. 2444, 6-3-96. Code 2001 § 36.50.]
Cross-reference: See ORS 311.711 for assessment and collection of liens. See also ORS Chapter 319 for tax liens in general.
3.15.120 Errors in assessment calculations.
Claimed errors in the calculation of final assessments shall be called to the attention of the city manager prior to any payments on the account. The city manager shall check the calculation and report the findings to the city council. If an error has been made, the city council shall amend the final assessment ordinance to correct the error. Upon the enactment of the amendment, the city manager shall make the necessary correction in the lien docket and shall send by registered or certified mail to the owner a corrected notice of the assessment. [Ord. 2444, 6-3-96. Code 2001 § 36.51.]
3.15.130 Authority of city to make reassessment.
Whenever all or part of any assessment for a local improvement was or is declared void or set aside for any reason or its enforcement refused by any court by reason of jurisdictional or other defects in procedure, whether directly or by virtue of any court decision or when the city council is in doubt as to the validity of all or part of any such assessment by reason of such defects in procedure, the city council may by ordinance make a new assessment or reassessment upon the lots which have been benefited by all or part of the improvement to the extent of their respective and proportionate shares of the full value of such benefit. [Ord. 2444, 6-3-96. Code 2001 § 36.52.]
3.15.140 Consent or waiving requirement of notice.
The provisions of NMC 3.15.050(B)(6), insofar as it requires notice to the owners of the properties benefited, shall not apply if the owners of all assessable property within the proposed local improvement district have consented in writing to the local improvement and have waived the requirement for notice in the initial public hearing. [Ord. 2444, 6-3-96. Code 2001 § 36.53.]
3.15.150 Assessment of public property benefited by improvements.
A. Whenever all or any part of the cost of a local improvement is to be assessed to the property benefited, benefited property owned by the city, county, school district, park district, state and any other political subdivision shall be assessed in the same manner as private property and the amounts of the assessment shall be paid by the city, school district, county, park district, or state, as the case may be.
B. In the case of property owned by the state, the amount of the assessment shall be certified by the city finance director and filed with the executive department as a claim for reference to the Legislative Assembly in the manner provided by Oregon law unless funds for the payment of the assessment have been otherwise provided by law. [Ord. 2444, 6-3-96. Code 2001 § 36.54.]
Cross-reference: See Section 1c of Article IX of the Oregon Constitution pertaining to financing for redevelopment and urban renewal projects.
3.15.160 Abandonment of proceedings.
The city council shall have full authority to abandon and rescind proceedings for a local improvement at any time prior to the final consummation of the proceedings. If liens have been assessed upon any property, they shall be cancelled, and any payments received shall be refunded to the payor, the payor’s assigns or legal representatives. [Ord. 2444, 6-3-96. Code 2001 § 36.55.]
3.15.170 Curative provision.
No local improvement assessment shall be invalid by reason of a failure to give, in any report, on the proposed assessment ordinance, in the lien docket or elsewhere in the proceedings, the name of the owner of any lot or other parcel of land, or part of any lot or other parcel of land, or the name of any person having a lien upon or interest in such property, or by reason of any error, mistake, delay, omission, irregularity, or other act, jurisdictional or otherwise, in any of the proceedings hereinabove specified, unless it appears that the assessment as made, insofar as it affects the person complaining, is unfair and unjust, and the city council shall have power and authority to remedy and correct all such matters by suitable actions and proceedings. [Ord. 2444, 6-3-96. Code 2001 § 36.56.]