Chapter 3.20
ADVANCE FINANCING OF CERTAIN PUBLIC IMPROVEMENTS

Sections:

3.20.010    Definitions.

3.20.020    Application.

3.20.030    Advance financing report.

3.20.040    Public hearing.

3.20.050    Notification.

3.20.060    Advance financing resolutions and agreements.

3.20.070    Advance financed reimbursements.

3.20.080    Disposition of advance financed reimbursements.

3.20.090    Recording.

3.20.100    Public improvements.

3.20.110    Contesting the advance financing resolution.

3.20.120    Advance financed reimbursements on public improvements funded by city.

3.20.010 Definitions.

For the purpose of this chapter and for the purposes of any advance financing agreement entered into pursuant hereto and for any actions taken as authorized pursuant to this chapter or otherwise, the following definitions shall apply unless the context clearly indicates or requires a different meaning:

Advance financing” means a developer’s payment for the installation of one or more public improvements installed pursuant to this chapter which intervening property owners may utilize upon reimbursing a proportional share of the cost of such improvement.

Advance financing reimbursement” means the payment made by an intervening property owner to the city for utilization of an advance financed public improvement.

Advance financing resolution” means a resolution passed by the city council designating a public improvement to be an advance finance public improvement and containing provisions for financial reimbursement by intervening property owners who eventually utilize the improvement, provisions for an advance financing agreement between the developer and the city, and such other provisions as determined in the best interest of the public.

Intervening property” means that real property abutting, contiguous to, benefiting from, or serviced by an advance financed public improvement but does not include the development of public rights-of-way.

Public improvement” means the following:

1. The design, construction, reconstruction or upgrading of any wastewater or stormwater system improvements;

2. The design, illumination, grading, graveling, paving or other surfacing of any street, including bicycle lanes, or opening, laying out, widening, extending, altering, or changing the grade for construction of any street;

3. The design and construction or reconstruction of curb, gutter or sidewalks;

4. The design and undergrounding of public utilities; and

5. The design and installation of traffic control devices.

Utilize” means to apply for a building or other permit which shall use or increase the use of an advance financed public improvement, to connect to an advance financed public improvement, or to otherwise increase the use of an advance financed public improvement.

Increase the use” means:

1. For wastewater or stormwater lines, to make a physical change requiring a building or development permit on the intervening property which increases the volume discharged into the line.

2. For water lines, to make a physical change requiring a building or development permit on the intervening property which increases the amount of water used.

3. For public streets, to make a physical change requiring a building or development permit on the intervening property which increases the trips on the street or creates a new entrance onto the street. [Ord. 2680 § 1, 9-17-07; Ord. 2406, 5-1-95. Code 2001 § 36.65.]

3.20.020 Application.

A. Filing and Fee. The city manager or designee shall receive application for advance financing from the developer. A fee, sufficient to cover the cost of administrative review, notification of property owners, recording costs, and any other related expenses, shall accompany the application. The fee is established in the amount of $1,000 and may be increased in individual cases to cover the expenses as indicated above. The fee may be amended by resolution at any time.

B. The City as Developer. When the city is the developer, the city council will, by motion, direct the city manager to submit the application without fee.

C. Property within City Limits. When the intervening property is within the corporate limits of the city at the time the public improvement was accepted by the city, the city manager shall not accept applications that are submitted more than six months after the public improvement is accepted by the city.

D. Property outside the City Limits. When the intervening property is outside the corporate limits of the city at the time the public improvement was accepted by the city, the city manager shall not accept any application(s) that are submitted prior to the property being annexed. The city manager shall not accept an application after the intervening property is annexed unless: (1) the cost of the public improvement was submitted to the city within six months of acceptance by the city; (2) the public improvement that was constructed was accepted by the city within the last 10 years. This 10-year period for initial application cannot be extended. The application must be filed within the first six months following the annexation of the intervening property; provided, however, that the application may be filed if conditions (1) and (2) are met when the intervening property owner(s) files for annexation. The application may be processed concurrently with the annexation application. The acceptance by the intervening property owner(s) of the reimbursement obligation may be a condition of annexation.

E. Information in Application. The city manager will develop an application form which requires any information deemed by the city manager to be necessary for the processing of the application. The application shall include:

1. Description of the location, type, size, and cost of the public improvement to be advance financed.

2. A map depicting intervening properties, both front footage and total area computation of intervening properties, the development, and a list of intervening property owners with current mailing addresses.

3. The completion date of construction and acceptance by the city for the estimated proposed reimbursement amount from each intervening property.

4. An acknowledgement by the developer that it is the developer’s duty to defend and indemnify the city from any and all losses, claims, damages, judgments, or other costs, expenses, and attorneys’ fees arising as a result or related to this application.

F. Maintenance Bond. For the purpose of this section, acceptance of a facility does not include any maintenance bond period. [Ord. 2680 § 1, 9-17-07; Ord. 2558, 12-3-01; Ord. 2406, 5-1-95. Code 2001 § 36.66.]

3.20.030 Advance financing report.

Upon receipt of the advance financing application, the city manager shall make an analysis of the advance financing proposal and shall prepare a report to be submitted to the city council for review, discussion and public hearing. Such report shall include a map showing the location and front footage of the development and intervening property. The report shall also include the city engineer’s analysis of whether or not the submitted costs, by using the “standard engineering practices” method, of the public improvement is reasonable and the estimated advance finance reimbursement due from each intervening property owner. [Ord. 2680 § 1, 9-17-07; Ord. 2406, 5-1-95. Code 2001 § 36.67.]

3.20.040 Public hearing.

Within a reasonable time after the city manager has completed the analysis, an informational public hearing shall be held in which all parties and the general public shall be given the opportunity to express their views and ask questions pertaining to the proposed advance financed public improvement. Since advance financed public improvements do not give rise to assessments, the public hearing is for informational purposes only, and is not subject to mandatory termination due to remonstrances. The city council has the sole discretion after the public hearing to decide whether or not an advance financing resolution shall be passed. [Ord. 2680 § 1, 9-17-07; Ord. 2406, 5-1-95. Code 2001 § 36.68.]

3.20.050 Notification.

Not less than 10 days nor more than 30 days prior to any public hearing being held pursuant to this chapter, the developer, all intervening property owners, and all potential intervening property owners shall be notified of such hearing and the purpose of the hearing. Such notification shall be accomplished by mail, and notice shall be made on the date that the letter of notification is posted. Failure of any owner to be so notified shall not invalidate or otherwise affect any advance financing resolution or the city council’s action to approve or not approve the same. [Ord. 2680 § 1, 9-17-07; Ord. 2406, 5-1-95. Code 2001 § 36.69.]

3.20.060 Advance financing resolutions and agreements.

A. Resolution. After the public hearing held pursuant to NMC 3.20.040, if the city council desires to proceed with advance financed public improvements, it shall pass an advance financed resolution accordingly. The resolution shall:

1. Designate the proposed public improvement as an advance financed improvement and set forth the final cost if the final cost is known;

2. Identify with full legal description the development and intervening properties;

3. Provide for the advance financed reimbursement by intervening property owners;

4. Acknowledge any payment by an intervening property owner or an agreement between the intervening property owner and the developer if known to the city;

5. If the developer is not the city, instruct the city manager to enter into an agreement between the developer and the city pertaining to the advance financed improvement, requiring such guarantee or guarantees, as the city deems best to protect the public and intervening property owner; and

6. Provide such other provisions as the city council determines necessary and proper.

B. Agreement. The agreement shall be signed by both parties. The agreement shall contain the following provisions:

1. The total advance financed reimbursements shall not exceed actual costs of the public improvements.

2. The developer shall guarantee the advance financed public improvement for a period of 18 months from the date of acceptance by the city.

3. The developer shall defend, indemnify, and hold harmless the city from any and all losses, claims, damages, judgments, or other costs and expenses associated with the advance financed resolution and agreement, including any city costs, expenses, and attorneys’ fees related to collection of the reimbursement fee should the city council decide to pursue collection of an unpaid reimbursement fee under this chapter.

4. The developer shall acknowledge that the city is not obligated to collect the advance financed reimbursement from intervening property owners.

5. Other provisions as the city council or city manager determines necessary and proper to carry out the provisions of this chapter.

C. Notice of Adoption of Resolution. The city shall notify all intervening property owners and the developer of the adoption of an advance financing resolution. The notice shall be sent by first class mail and include a copy of the resolution, the date it was adopted, and a short explanation. [Ord. 2680 § 1, 9-17-07; Ord. 2406, 5-1-95. Code 2001 § 36.70.]

3.20.070 Advance financed reimbursements.

A. Advance Financed Reimbursement Imposed. An advance financed reimbursement shall be imposed on all intervening properties at such time as an intervening property owner or agent, employee, or independent contractor of the intervening property owner utilizes the advance financed improvements.

B. Rates.

1. Amounts. The intervening property owner shall pay advance financed reimbursement calculated as follows: The total actual cost of the advance financed public improvement multiplied by a percentage of the unit of assessment being front frontage, area, or whatever other method is determined by the city council to be the most equitable method of assessment for the intervening property owner.

2. Interest Rates. Interest is added to the financed reimbursements annually using simple interest calculations. The interest rate is the current prime rate set upon the anniversary date of the execution of the agreement. The city council may set such other percentage rate from time to time by resolution as they determine is fair and reasonable.

3. Odd-Shaped Lots. Advance financing reimbursements for odd-shaped lots shall be individually established and consistent with the benefit received by the lot and the reimbursement required of other lots in the area. If inequities are created through the strict implementations of the above formulas, the city council may modify its impact on a case-by-case basis.

C. Collection.

1. The advance financed reimbursement is immediately due and payable to the city by intervening property owners upon utilization of an advance financed public improvement. If connection is made or construction commenced without required city permits, then the advance financed reimbursement is immediately due and payable upon the earliest date that any such permit was required. No city permit of any kind for the intervening property shall be issued until the advance financed reimbursement is paid in full. As an alternative to payment through the city, an intervening property owner may pay the developer directly, provided both the intervening property owner and developer report the payment to the city.

D. Public Hearing for Unpaid Advance Financed Reimbursement.

1. Whenever the full advance financed reimbursement has not been paid and collected for any reason after it is due, the city manager shall report to the city council the amount of the uncollected reimbursement, the legal description of the intervening property on which the reimbursement is due, the date upon which the reimbursement was due and the intervening property owner’s name or names.

2. The city council shall then, by motion, set a public hearing date and direct the city manager to give notice of the hearing to each of the identified intervening property owners, together with a copy of the city manager’s report concerning the unpaid advance financed reimbursement. Such notice may be either by certified mail or personal service.

3. At the public hearing the city council may accept, reject or modify the city manager’s report.

4. If the city council accepts or rejects the city manager’s report and determines that the advance financed reimbursement is due but has not been paid for whatever reason, the city may take any action including all legal or equitable means necessary to collect the unpaid amount.

5. The city council, by motion, may direct the city manager to docket the unpaid and uncollected reimbursement in the city record of liens and upon completion of the docketing, the city council shall have a lien against the described land for reimbursements, interest, and the city’s actual cost of serving notice upon the intervening or future property owners. The lien shall be enforced in the manner provided by ORS Chapter 223.

6. An unpaid advance financing reimbursement shall prohibit any issuance of permits by the city for the intervening property.

E. Interim Connections. Upon receiving a valid application for advance financing of a facility, the city shall prohibit connections to that facility until the city council takes final action on the application. As an alternative to prohibiting connections, the city may allow a connection, provided the connection applicant deposits an estimated reimbursement, determined by the city engineer, into a city trust account. The connection applicant shall also sign an agreement to pay the actual reimbursement, up to 150 percent of the estimate, when the city council determines the actual reimbursement amount. [Ord. 2680 § 1, 9-17-07; Ord. 2558, 12-3-01; Ord. 2406, 5-1-95. Code 2001 § 36.71.]

3.20.080 Disposition of advance financed reimbursements.

A. Payment to Developer. Developers who have an advance finance agreement with the city shall receive the advance financed reimbursements collected by the city pertaining to their advance financed public improvements. Such reimbursements shall be delivered to the developer for a period of 10 years from and after the date the applicable advance financing agreement has been executed. Such payments will be made by the city within 90 days of receipt of the advance financed reimbursements.

B. Extension of Payment Period for an Additional 10 Years. At the end of the 10-year period, the developer may request that the city council authorize reimbursements for an additional period of a maximum of 10 years, but in no event shall the period of reimbursement be beyond the twentieth year of the date of acceptance of the improvement by the city. The request must be made between six months and one year prior to the end of the first 10 years. The city council has the discretion to approve or deny the request. The city council shall take into consideration the condition of the improvement, the public’s interest, and the city’s interest.

C. City’s Liability. The city shall incur no liability for its failure to remit advance financed reimbursements pursuant to the requirements of this section. [Ord. 2680 § 1, 9-17-07; Ord. 2558, 12-3-01; Ord. 2406, 5-1-95. Code 2001 § 36.72.]

3.20.090 Recording.

All advance financing resolutions shall be recorded by the city in the deed records of Yamhill County, Oregon. The city may choose to record a notice of the city’s action in the deed records instead of the resolutions. The notice shall contain the full legal description of the development and intervening properties, as well as any other provisions the city deems appropriate. The notice shall be approved as to form and content by the city attorney. Failure to make such recording shall not affect the legality of an advance financing resolution or agreement. [Ord. 2680 § 1, 9-17-07; Ord. 2406, 5-1-95. Code 2001 § 36.73.]

3.20.100 Public improvements.

A. Ownership of Improvements. Public improvements installed pursuant to an advance financing agreement shall become and remain the sole property of the city pursuant to the advance financing agreement.

B. Multiple Improvements. More than one public improvement may be the subject of an advance financing agreement or resolution. [Ord. 2680 § 1, 9-17-07; Ord. 2406, 5-1-95. Code 2001 § 36.74.]

3.20.110 Contesting the advance financing resolution.

No legal action intended to contest the advance financing reimbursement, including the amount of the charge designated for each parcel, shall be filed after 60 days following the adoption of an advance financing resolution and any such legal action shall be exclusively by writ of review pursuant to ORS 34.010 through 34.102 contesting the advance financing resolution. [Ord. 2680 § 1, 9-17-07; Ord. 2406, 5-1-95. Code 2001 § 36.75.]

3.20.120 Advance financed reimbursements on public improvements funded by city.

In the event the city is the developer for the construction, at its own expense, of public improvements for which advance financed reimbursements are permissible pursuant to this chapter, the city may, pursuant to the direction of the city council, authorize advance financing agreements which include terms at variance with terms otherwise required by this chapter. The city council may authorize lower interest rates, may permit installment payments, and may extend the time period during which advance financed reimbursements may be required. [Ord. 2680 § 1, 9-17-07; Ord. 2406, 5-1-95. Code 2001 § 36.76.]