Chapter 6.24
UTILITY REIMBURSEMENT AGREEMENTS

Sections:

6.24.010    Purpose

6.24.020    Definitions

6.24.030    Minimum Project Size

6.24.040    Application

6.24.050    Length of Reimbursement Provision

6.24.060    Public Works Director’s Determination - Review by City Council

6.24.070    Determination of Reimbursement Area Boundary and Reimbursement Fee

6.24.080    Reimbursement Agreement Must be Recorded

6.24.090    Written Agreement - Payment of City Costs in Excess of Application Fee

6.24.100    Construction and Acceptance of Improvements - Recording of Final Fees

6.24.110    Collection of Reimbursement Fees - No Liability for Failure to Collect

6.24.120    Disposition of Undeliverable Reimbursement Fees

6.24.150    Utility Reimbursement Agreement

6.24.010 Purpose.

The purpose of this chapter is to prescribe rules and regulations for exercise of the authority to enter into a Utility Reimbursement Agreement granted to the City by RCW Chapter 35.91.

6.24.020 Definitions.

As used in this chapter, the terms listed below shall be defined as follows:

Cost of construction means those costs (excluding interest charges or other financing costs) incurred for design, acquisition for right-of-way and or easements, construction, materials and installation required in order to create an improvement which complies with city standards.

Reimbursement agreement means a written contract between the city and one or more parties providing both for construction of sewer facilities and for reimbursement to the party or parties constructing the facilities for part of the costs of the facilities by owners of property benefitted by the improvements.

Sewer facilities shall have the meaning specified in RCW 35.91.020 as it now reads, or as hereafter amended.

6.24.030 Minimum Project Size.

To be eligible for a reimbursement agreement, the estimated cost of the proposed improvement must be not less than five thousand dollars. The estimated costs of the improvement shall be determined by the Public Works Director, based upon a construction contract for the project, bids, engineering or architectural estimates or other information deemed by the Public Works Director to be a reliable basis for estimating costs. The determination of the Public Works Director shall be final.

6.24.040 Application.

An application for reimbursement agreement shall be made on a form provided by the city. The application fee shall be set by council resolution and shall be submitted to the city with the written application and shall be accompanied by:

A.    Preliminary utility design drawings:

B.    Itemized estimate of construction costs prepared and signed by a licensed civil engineer or in the form of a bid submitted by a qualified contractor (if more than one bid has been obtained, all bids must be submitted to the city);

C.    A scaled vicinity drawing, stamped by a licensed civil engineer or licensed land surveyor depicting the proposed improvements, the location, the proposed benefitted area, dimensions and county assessor’s numbers for each tax parcel, size of parcels, and evaluations where necessary for determining benefits;

D.    A separate legal description for each tax parcel within the benefitted area; and

E.    Such other information as the Public Works Director determines is necessary to properly review the application.

6.24.050 Length of Reimbursement Provision.

No reimbursement agreement shall provide for reimbursement for a period of not longer than fifteen (15) years from the date of final acceptance of the improvements by the city.

6.24.060 Public Works Director’s Determination - Review by City Council.

A.    The Public Works Director shall review all applications and shall approve the application only if the following requirements are met:

1.    The project satisfies the minimum size requirement and complies with city standards; and

2.    The proposed improvements fall within the description of sewer facilities as those terms are described in RCW Chapter 35.91; and

3.    The proposed improvements are not constructed or currently under construction.

B.    In the event all of the above criteria are not satisfied, the Public Works Director may condition approval as necessary in order for the application to conform to such criteria, or shall deny the application. The final determination of the Public Works Director shall be in writing. The applicant may obtain a review of the final determination by filing a request therefor with the City Clerk no later than ten (10) days after a copy of the final determination is mailed to the applicant at the address listed on the application.

C.    I reviewing a final determination, the City Council shall apply the criteria set forth above, and shall uphold the decision of the Public Works Director unless evidence clearly demonstrates that the criteria have been satisfied.

6.24.070 Determination of Reimbursement Area Boundary and Reimbursement Fee.

The Public Works Director shall define the reimbursement area for all approved applications based upon a determination of which parcels did not contribute to the original cost of the sewer facility for which the reimbursement agreement applies and which may subsequently tap in to or use the same, including not only those which may connect directly thereto, but also those who may connect to laterals or branches connecting thereto. An estimated amount of the reimbursement fee shall be established so that each property will pay a share of the costs of the improvements, which is proportional to the benefits which accrue to the property.

6.24.080 Reimbursement Agreement must be Recorded.

A.    In order to become effective, a reimbursement agreement must be recorded with the Snohomish County Auditor within (30) thirty days of approval by the city. It shall be the sole responsibility of the applicant to record the reimbursement agreement.

B.    Within thirty (30) days after receipt of evidence that the Reimbursement Agreement has been recorded the Public Works Director shall record a notice of additional tax or correction charge with the Snohomish County Auditor’s office as required by RCW 65.08.170.

6.24.090 Written Agreement - Payment of City Costs in Excess of Application Fee.

Upon approval of the application, determination of the estimated costs of construction, the reimbursement area and estimated fees by the Public Works Director, the applicant shall sign a reimbursement agreement in the form supplied by the city. The signed agreement, the application and supporting documents, together with the Public Works Director’s estimate of cost of construction, and determination of reimbursement area and estimated fees shall be presented to the City Council with a request that the City Council authorize the Mayor to sign the reimbursement agreement on behalf of the city.

In the event costs incurred by the city for engineering or other professional consultant services required in processing the application exceed the amount of the application fee, the Public Works Director shall so advise the City Council and Council approval shall be conditioned upon receipt of payment by the applicant of an additional amount sufficient to compensate the city for its actual costs in excess of the application fee.

6.24.100 Construction and Acceptance of Improvements - Recording of Final Fees.

A.    After the reimbursement agreement has been signed by both parties, and all necessary permits and approvals 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. An appropriate bill of sale, easement and any other document needed to convey the improvements to the city and to insure right-of-access for maintenance and replacement shall be provided, along with documentation of the actual costs of the improvements and a certification by the applicant that all of such costs have been paid.

B.    In the event that actual costs are less than the Public Works Director’s estimate used in calculating the estimated fees by ten percent or more, the Public Works Director shall recalculate the fees, reducing them accordingly, and shall cause a revised list of fees to be recorded with the county auditor.

6.24.110 Collection of Reimbursement Fees - No Liability for Failure to Collect.

A.    Subsequent to the recording of a reimbursement agreement, the city shall not permit connection of any property within the reimbursement area to any sewer or water facility constructed pursuant to the reimbursement agreement, unless the share of the costs of such facilities required by the recorded agreement is first paid to the city.

B.    Upon receipt of any reimbursement fees, the city shall deduct a six percent administrative fee and remit the balance of the reimbursement fees to the party entitled to the fees pursuant to the agreement. In the event that through error, the city fails to collect a required reimbursement fee prior to approval of connection to a sewer facility, the city shall make diligent efforts to collect such fee, but shall under no circumstances be obligated to make payment to the party entitled to reimbursement, or in any other way be liable to such party, unless such reimbursement fee has actually been paid to the city.

6.24.120 Disposition of Undeliverable Reimbursement Fees.

In the event that, after reasonable effort, the party to which reimbursement fees are to be paid pursuant to a reimbursement agreement cannot be located, and upon the expiration of one hundred eighty (180) days from the date fees were collected by the city, the fees shall become the property for the city and shall be revenue to the city sewer and water utility. (Ord. 476, 1995: 463, 446, 440, 381 (Sections 2-19), 361, 291, 283, 274, 262, 250, 249, 248, 241, 240, 230, 225, 218, 204, 199, 188, 173, 143, 140, 129, 111, 95, 94, 93, 80, 50)

6.24.150 Utility Reimbursement Agreement.

Developers requests for Utility Reimbursement Agreements are subject to Public Works Directors approval. Attached as Exhibit “B” is the Utility Reimbursement Agreement example. (Ord. 679, Sec. 9, 2003)

Exhibit “B”

UTILITY REIMBURSEMENT AGREEMENT

THIS AGREEMENT, made and entered into this ______ day of ______________20____, between CITY OF LAKE STEVENS, a municipal corporation ("City") and ______________________("Owner").

RECITALS:

A.    The City is a duly organized municipality under the laws of the State of Washington, and is empowered to furnish sewer service, among other things, to property owners within and without the City in the manner provided by law; and

B.    Owner heretofore entered into a Developer Extension Agreement ("Agreement") with City for the construction and installation of sewer system extension to provide service to the area described on Attachment __ ("Developed Area") attached hereto; and Owner completed installation of the system extension in accordance with the terms of the Agreement, portions of which are a benefit to real property within (and without) the City other than the Developed Area, which consists of sewer lines of a size and location described on Attachment __ attached hereto and designated "Extension Facilities"; and Owner is entitled to reimbursement from developers and real property owners seeking connection to such facilities for the cost of such facilities in excess of Owner’s fair pro rata share therefor, which costs have been determined as set forth below; and

C.    The City will collect charges from the owners of property within the City, benefiting from the installation of the aforesaid Extension Facilities; and such charges are the sole source of funds for the City from which reimbursement to the owner can and will be made, as and when the same are collected; and

D.    The City is permitted to enter into a Reimbursement Agreement with Owner under the provisions of RCW 35.91 et seq.; and the parties desire to enter into a written agreement with reference to the foregoing matter; Now, Therefore,

IN CONSIDERATION OF THE FOLLOWING terms and conditions, the City and the owner agree as follows:

1.    Completion of Facilities. The installation of the Extension Facilities described on Attachment ____ in the developed area have been completed by Owner under an extension agreement with the City; and title thereto will be transferred to the City, and such Facilities will be a part of the City sewer system.

2.    Records/Costs. Owner has obtained and submitted to the City accurate records which have been provided to the City of the actual cost of installing such facilities in accordance with the Agreement; and the City Public Works Director has reviewed and approved the costs of such Facilities as reasonable costs and City accepts such costs as costs which are subject to reimbursement; and City agrees to reimburse Owner in the manner and on the terms and conditions set forth in this agreement, in an amount not to exceed___, less six percent as the administrative costs incurred by the City in collecting reimbursement charges. Owner agrees to reimburse the City for all administrative costs incurred by the City in collecting reimbursement charges if such costs exceed six percent of the reimbursement value. This reimbursement of collection related administrative costs and charges due from Developer to the City shall be deducted from the amount reimbursed to the Owner as provided in Paragraph 3.B.2. herein.

3.    Method of Reimbursement.

A.    Benefited Properties. The properties benefiting from the installation of the Extension Facilities as determined in the sole discretion of the City, and which did not contribute to the original cost thereof are as described on Attachment ____ attached hereto.

B.    Charges.

1.    Amount. Prior to allowing a benefited property to connect to the Extension Facilities or any lateral or branch connected thereto, the City shall collect the fair pro rata share of the cost of installing such facilities as a charge from the owners of benefited properties. The benefited properties to which this provision shall apply are set forth on Attachment ___. The amount of such reimbursement charges to be collected prior to each connection is also set forth on Attachment ____. Such charges may include, but are not limited to, pro rata share of City legal, engineering, administrative, set-up, handling and actual costs of the facility. Such reimbursement charges shall be in addition to all other City charges in effect at the time of seeking connection to such extension facilities, including without limitation, general facilities fees. Upon application by affected property owners, the City may further segregate reimbursement charges attributed to property benefited by the Extension Facilities. All costs of such segregation shall be borne by the party requesting such segregation.

2.    Payment. City shall deduct from all reimbursement charges it collects an amount equal to six percent (6 %) of each collected amount to cover its administrative collection costs, and the remaining balance shall be paid over to Owner within sixty (60) days after receipt thereof.

C.    Payment Procedure. The City shall forward reimbursement funds referenced herein to Owner at Owner’s address provided herein or to Owner’s agent as authorized by Owner to the City in writing. As a condition of receiving such reimbursement funds, Owner or Owner’s agent shall execute a receipt to the City for such reimbursement amounts so paid upon a receipt form provided by the City. Such form shall include the legal description and name of the owner of the connecting property making payment of such amount to the City.

In the event of dispute as to the rightful party to receive such funds, City may pay the same to the Owner referenced herein or interplead such funds to the court; in either event, City shall thereupon be relieved of any further obligation or of any liability hereunder as to such reimbursement funds so paid. The Owner shall indemnify the City for any costs, including attorney fees, incurred by the City in such interpleader action.

4.    City Authority; Effective Date; and Contract Duration. The City is authorized to enter into this agreement by virtue of the provisions of RCW 35.91 et seq.; and this Agreement shall remain in full force and effect for a period of fifteen (15) years, beginning from the date of final acceptance of title to the extension facilities by the City’s Commissioners. All of Owner’s rights to reimbursement shall terminate upon expiration of said fifteen (15) year term, regardless of the status of reimbursement at that time.

5.    Recording. This contract shall be recorded in the office of the Snohomish County Auditor, Snohomish County, Washington, immediately upon execution by the City and the Owner.

6.    Agreement Implementation. The City will use its best efforts to collect and distribute the funds pursuant to the process set forth in this Agreement. However, the City, its officials, employees or agents shall not be held liable or responsible for failure to implement any of the provisions of this Agreement unless such failure was willful or intentional.

7.    General. This Agreement constitutes the entire agreement between the parties. All exhibits referred to herein are by this reference made a part of this Agreement as though set forth in full. This Agreement is binding upon the heirs, executors, administrators, successors and assigns, of each of the parties hereto.

8.    Assignment. The Owner shall not assign the whole or any part of this Agreement without the prior written consent of the City, and in the event of such assignment shall notify the City of the Name and address of the assignee.

CITY OF LAKE STEVENS

By: __________________________________

Its:___________________________________

OWNER:

By: __________________________________

Its ___________________________________

Address ______________________________

_____________________________________

Telephone: ____________________________

STATE OF WASHINGTON)

) ss.

COUNTY OF SNOHOMISH)

I certify that I know or have satisfactory evidence that _______________________ signed this instrument and acknowledged it to be ______________ free and voluntary act for the uses and purposes mentioned in the instrument.

IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal this ____ day of ____________________, 20__.

_____________________________

Print Name:________________________________

NOTARY PUBLIC

My commission expires: _________________

STATE OF WASHINGTON)

) ss.

COUNTY OF SNOHOMISH)

I certify that I know or have satisfactory evidence that ____________________ and ______________________ signed this instrument, on oath stated that they were authorized to execute the instrument and acknowledged it as the ____________________and ____________________ of ______________________ to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal this _____ day of ____________, 20__.

Print

Name:________________________________

NOTARY PUBLIC

My commission expires: _________________

(Ord. 679, Sec. 9, 2003)