Chapter 13.40


13.40.010    Findings.

13.40.020    Program established.

13.40.030    Definitions.

13.40.040    Applications.

13.40.050    Transfer to utility account.

13.40.060    Payment of deferred amounts.

13.40.070    Security for payment.

13.40.010 Findings.

A. Chapter 4, Housing, of the 2002 Town of Friday Harbor Comprehensive Plan, adopted on August 15, 2002, by Ordinance No. 1193, establishes, as its first goal (HO-1), a commitment to “provide affordable housing choices for all incomes”; and

B. Said Chapter 4 expresses, as Policy 2 (HO-2), a commitment to “promote a variety of means for developing new affordable housing...”; and

C. Said Chapter 4 recognizes, as Policy 8 (HO-8), that “when considering affordable housing, Friday Harbor must acknowledge that its utilities ... may cost more than in mainland communities”; and

D. Said Chapter 4 states, as Policy 16 (HO-16), that “Friday Harbor’s role in providing affordable housing should be to facilitate and encourage nonprofit and for-profit housing development...”; and

E. Chapter 35.92 RCW, concerning municipal water and sewer utilities, expressly provides, in RCW 35.92.020, that cities and towns may provide assistance to aid low income persons in connection with services provided under that chapter; and

F. RCW 35.92.380 specifically authorizes cities and towns to waive or delay collection of connection charges for low income persons, so long as such waiver or delay is allowed pursuant to a program established by ordinance; and

G. The prohibition against gifts or the loaning of credit, set forth in Section 7 of Article VIII of the Constitution of the State of Washington, makes an express exception “for the necessary support of the poor and infirm”; and

H. The courts in Washington have given the term “poor and infirm” broad and liberal interpretation; and

I. As recognized in Chapter 6, Capital Facilities, of the 2002 Town of Friday Harbor Comprehensive Plan, under CFE-9, the purpose of requiring the payment of a portion of the connection charge by new users of the town’s water and sewer systems is to ensure that new development pays a fair share of the costs incurred to build the existing system; and

J. In order to avoid shifting to existing customers of the water and sewer system the financial burden of absorbing the loss of revenue inherent in waiving or deferring the payment of connection charges by new users of the system, it is necessary and appropriate to utilize revenue in the current expense fund No. 001, or, when available, revenue from funds specifically dedicated to low income housing assistance programs, in order to pay into the proper utility fund any waived or deferred connection charges; and

K. The council of the town of Friday Harbor has determined, after extensive discussion at numerous public meetings, that recently revised water and sewer connection charges have significantly increased the financial barrier to home ownership by persons and families with low and moderate incomes, contrary to the above referenced goals and policies of Chapter 4, Housing, of the 2002 Town of Friday Harbor Comprehensive Plan; and

L. The council of the town of Friday Harbor has therefore concluded that the establishment of a program to allow deferred payment of water and sewer connection charges for low and moderate income persons and families would be in the best interest of the general public and in substantial furtherance of the goals and policies of the 2002 Town of Friday Harbor Comprehensive Plan. (Ord. 1277, 2005)

13.40.020 Program established.

Pursuant to the findings set forth in FHMC 13.40.010, a program is hereby established to allow a qualified entity, as defined in FHMC 13.40.030, to defer the payment of the entire connection charge required for new connections to the town’s water system and/or to the town’s sewer system, said deferral to expire in accordance with FHMC 13.40.060. Simultaneously with the adoption of the ordinance codified in this chapter, it is the council’s intention to establish by separate ordinance a fiduciary fund to be known as the “utility connection charge deferral fund,” into which dedicated funds can be deposited for use in making the transfer required by FHMC 13.40.050. This program does not guarantee qualified entities that any connection charges will be deferred upon application, since approval of all applications is to be dependent upon funding being available at the time of application in an amount adequate to fully reimburse the affected utility, as provided in FHMC 13.40.050. (Ord. 1277 § 1, 2005)

13.40.030 Definitions.

“Limited income household” means a single person or a family whose income is at or below 115 percent of the median income for San Juan County, Washington.

“Qualified entity” means a nonprofit corporation, in good standing under the laws of the state of Washington, whose purpose is to provide home ownership to those who qualify as limited-income households through a program which, during the entire period of any connection charge deferral approved hereunder, meets the following criteria:

1. Requires that the corporation retain ownership of the land on which the residences are located; and

2. Precludes the transfer of ownership of any residence to anyone that does not, at the time of the transfer, meet the definition of a limited-income household. (Ord. 1277 § 2, 2005)

13.40.040 Applications.

A qualified entity may apply at any time for deferred payment of the town’s water connection charge, the town’s sewer connection charge, or both. No fee shall be charged for the application, which shall be submitted on a form provided by the town. The town administrator shall have responsibility for reviewing all applications and authority to approve applications, subject only to available funding under FHMC 13.40.050, and on the condition that the applicant provide the town with the security required under FHMC 13.40.070. Applications shall be processed and approved on a first-come, first-served basis. (Ord. 1277 § 3, 2005)

13.40.050 Transfer to utility account.

No application for deferral may be approved unless, at the time of approval, there are sufficient funds on hand in the utility connection charge deferral fund to transfer to the affected utility account an amount equal to the deferred connection charge. As a part of adopting the annual budget, the council may approve a transfer of moneys to the deferral fund from the current expense fund No. 001, or, if available, from other sources specifically dedicated to or authorized for use in connection with low income housing assistance programs.

Upon approval of any application and fulfillment of the requirement of FHMC 13.40.070, an amount equal to the deferred connection charge shall be transferred from the deferral fund to the affected utility. (Ord. 1277 § 4, 2005)

13.40.060 Payment of deferred amounts.

Payment to the town of all deferred connection charges shall be made by the applicant or the applicant’s successor upon the occurrence of the earlier of the following events:

A. Fifteen years from the date the application for deferral is approved; or

B. A sale of the land on which any structure connected hereunder to a town utility is located, if that sale is to a purchaser that is not a qualified entity; or

C. The qualified entity is dissolved or otherwise loses its status as a corporation in good standing under the laws of Washington; or

D. The qualified entity fails to maintain a home ownership program that meets the criteria set forth in the definition of “qualified entity.”

No interest shall accrue on any deferred payment. Payment of deferred amounts shall be deposited in the deferral fund; provided, however, that if at the time of payment the deferral fund has been closed out, payment shall be deposited in the current expense fund No. 001. (Ord. 1277 § 5, 2005)

13.40.070 Security for payment.

As a condition to final approval of any application and before any transfer of moneys from the deferral fund to an affected utility, the applicant shall provide the town with security in a form considered by the town to be adequate to assure the town of the payment required under FHMC 13.40.060. Such security may be, but is not necessarily limited to, a deed of trust, a performance bond, a locked or escrow account, or a letter of credit. (Ord. 1277 § 6, 2005)