Chapter 12.36
COST RECOVERY CONTRACTS FOR ROAD IMPROVEMENTS Revised 3/18

Sections:

12.36.010    Cost Recovery Authorized.

12.36.020    Process.

12.36.030    Application. Revised 3/18

12.36.040    Cost Recovery Contract.

12.36.050    Costs Eligible for Reimbursement.

12.36.060    Application and Administration Costs.

12.36.070    County Funding.

12.36.080    Cost Recovery Contract Ordinance Content.

12.36.090    WSDOT Participation.

12.36.100    Reimbursement Procedures. Revised 3/18

12.36.110    Construction of Improvements.

12.36.120    Effect of Annexation.

12.36.130    Severability.

12.36.010 Cost Recovery Authorized.

In accordance with Chapter 35.72 RCW and the provisions of this Chapter, Pierce County ("the County") may create, approve and/or execute a Cost Recovery Contract for the reimbursement to the County Road Fund and/or to a Property Owner ("Owner") required or willing to construct County road improvements as a prerequisite to further property development. Cost Recovery Contract procedures in this Chapter may be initiated by an Owner or the County Engineer on his/her own initiative. (Ord. 2011-62s § 1 (part), 2012)

12.36.020 Process.

A.    When an Owner wishes to develop property, but a prerequisite of that development is the requirement that County roads are improved in accordance with requirements for traffic mitigation under County Development Regulations, the Owner may elect to construct the required County road improvements and propose to the County through an application as described in PCC 12.36.030 that a Cost Recovery Contract be created.

B.    The County may agree to a Cost Recovery Contract in accordance with PCC 12.36.040 in which the Owner can be reimbursed for a portion of the costs of the County road improvements by other affected property owners. Nothing in this Chapter requires the County to enter into a Cost Recovery Contract.

C.    The County shall determine the pro rata reimbursement share for the other affected property owners by selecting, or agreeing to, a method of cost apportionment based on the "benefit" of the County road improvements to the other affected property owners.

D.    The County shall formulate or agree to an Assessment Reimbursement Area ("Cost Recovery Area") based on a selection of parcels that will be "benefited" in that they will require similar County road improvements as those improvements required of the Owner upon development.

E.    For a parcel to be defined as a "benefited" property, it must be "zoned" such that a new development on the property would generate, at a minimum, the same number of trips as generated by a single family home, as designated by the most current edition of the Institute of Transportation Engineer's (ITE) Trip Generation Manual.

F.    After making a preliminary determination of the boundaries of those parcels, the County shall notify the affected property owners of record of those parcels, by certified mail, of the proposed Cost Recovery Area, the proposed pro rata reimbursement shares, and the property owner's rights and options, including the option of a hearing on the proposed Cost Recovery Contract before the Pierce County Council.

G.    If any affected property owner requests a hearing in writing within 20 days of mailing of the certified mail, an ordinance shall be proposed by the County Engineer and a hearing shall be held before the County Council, notice of which shall be given to all affected property owners. The County Council's ruling on the ordinance shall be determinative and final.

H.    If no affected property owner requests a public hearing within 20 days of mailing of the certified mail, the County and Owner shall finalize and execute the final Cost Recovery Contract. The Cost Recovery Contract shall provide that the Owner or Owners agree to the pro rata reimbursement shares and the Cost Recovery Area determined as provided in the Cost Recovery Contract. The Cost Recovery Contract will be approved and executed on behalf of the County by the County Executive.

I.    If a public hearing is required in conformance with PCC 12.36.020 F. and after conducting the public hearing before the County Council, the County Council, at its own discretion, may adopt an ordinance that is the final determination of the Cost Recovery Area and pro rata reimbursement shares for each affected property. The final Cost Recovery Area and pro rata reimbursement shares for each affected property shall be included in the final Cost Recovery Contract.

J.    Following the adoption of an ordinance by the Council, the County shall finalize the final Cost Recovery Contract as specified in PCC 12.36.020 G. and the County and Owner shall execute the Contract.

K.    The final Cost Recovery Contract, including the final Cost Recovery Area and pro rata reimbursement shares for each affected property, shall be recorded in the County Auditor's Office by the County against each affected property within 30 days after being executed by the County and the Owner. When the Cost Recovery Contract is so recorded, it shall then be binding on owners of record within the Cost Recovery Area who are not parties to the Contract for a period not to exceed 15 years after the Contract is recorded.

L.    The County Engineer shall mail by certified mail a copy of the final Cost Recovery Contract to each owner of record of property within the Cost Recovery Area.

M.    If an affected property owner subsequently develops his/her property within the Cost Recovery Area within the time period stated in the Cost Recovery Contract and is not required to construct similar County road improvements because the improvements were already constructed under the Cost Recovery Contract, the County can require that the property owner reimburse the Owner who initially constructed the improvements, pursuant to the pro rata reimbursement share as specified in the Cost Recovery Contract.

N.    In the event that an Owner who is party to a Cost Recovery Contract sells the property, the pro rata reimbursement shares shall be paid to said Owner and not to their successor unless the right to the pro rata reimbursement shares is assigned by said Owner or is otherwise transferred by operation of law. The County shall be notified by the owner if the pro rata reimbursement shares are to be paid to a party other than the Owner.

(Ord. 2011-62s § 1 (part), 2012)

12.36.030 Application. Revised 3/18

A.    Where County road improvements are required as a prerequisite to further property development, an Owner may apply, upon forms prescribed by the Department of Planning and Public Works ("Department"), for the establishment of a Cost Recovery Contract. An application, with requisite attachments, shall be filed with the Department. The application shall include:

1.    A detailed description of the Owner's development proposal;

2.    A detailed description of the County road improvements which will be constructed by the Owner;

3.    An estimate of the cost of the improvement(s);

4.    A map showing the preliminary Cost Recovery Area boundaries for the specific properties which the Owner believes to be "benefited" properties in that they would require similar road improvements or traffic impact mitigation as the Owner as a result of further property development;

5.    A list containing the tax account number and the names and addresses of each owner of record, contract seller and contract purchaser and mortgagee, if any, of each ownership of property as shown on the tax rolls of the County Treasurer within the proposed Cost Recovery Area boundaries;

6.    A statement of the estimated pro rata reimbursement shares to be paid by the property owner of each lot, tract or parcel within the proposed Cost Recovery Area and the method for determining apportionment of such pro rata reimbursement shares among the affected lots, tracts or parcels that are within the proposed Cost Recovery Area;

7.    A statement of the period, not to exceed 15 years, for which pro rata reimbursement share will be required; and

8.    An application fee in the amount specified in PCC 12.36.060.

B.    Upon receiving an application for establishment of a Cost Recovery Contract, the County Engineer shall determine the sufficiency of the application for establishment of a Cost Recovery Contract using the following criteria:

1.    Whether the application contains and addresses all of the elements contained in PCC 12.36.030;

2.    The level of development existing or immediately proposed in the Cost Recovery Area;

3.    The "benefit" to owners of undeveloped or underdeveloped properties within the proposed Cost Recovery Area assuming such property owners would be required to make similar improvements or provide equivalent mitigation of traffic impacts if they developed their property;

4.    The existing and projected level of service and/or adequacy of the County roads involved;

5.    The condition of the roads to be improved; and

6.    Whether or not further development can occur without roadway improvements.

(Ord. 2017-12s § 2 (part), 2017; Ord. 2015-25s § 2 (part), 2015; Ord. 2011-62s § 1 (part), 2012)

12.36.040 Cost Recovery Contract.

A.    The Cost Recovery Contract will establish a methodology for reimbursement to the Owner or the Owner's assigns for a portion of the costs of road improvements by other property owners who:

1.    Are found to be within the Cost Recovery Area pursuant to PCC 12.36.030;

2.    Are found to have a pro rata reimbursement share based upon the "benefit" to the property;

3.    Did not contribute to the original cost of the road improvements subject to the Cost Recovery Contract; and

4.    Subsequently develop their property within the proposed time period stated in the Cost Recovery Contract and at the time of their development were not required to construct similar road improvements because they were already provided for by the Cost Recovery Contract.

(Ord. 2011-62s § 1 (part), 2012)

12.36.050 Costs Eligible for Reimbursement.

A.    If a Cost Recovery Contract is developed and executed, the County will require reimbursement of the costs incurred by the Owner and/or the County as described in the Cost Recovery Contract. Eligible costs for reimbursement include the following:

1.    The cost of grading, paving, construction of curbs, gutters, sidewalks, storm drainage facilities, street lighting, traffic control devices, and/or other similar improvements as may be required by County standards;

2.    The cost of all necessary engineering and surveying;

3.    The cost of necessary rights of way, including acquisition costs if the rights of way were acquired by the County;

4.    The costs of legal services and other expenses incurred by the Owner in connection with such construction or improvement and in the financing thereof;

5.    The cost of legal services and any other expenses incurred by the County in connection with such construction or improvement and in the financing thereof, including the issuance of any bonds; and

6.    The County cost of processing the application, recording fees, and administering the Cost Recovery process.

(Ord. 2011-62s § 1 (part), 2012)

12.36.060 Application and Administration Costs.

Regardless of the County's decision to establish or not to establish the Cost Recovery Contract, the applicant shall pay to the County the actual costs and expenses incurred by the County to process the application. An initial fee deposit of $500.00 will be required for the application process and the remainder will be due to the County within 30 days of invoicing by the County. In addition, if the Cost Recovery Contract is established by the County, the Owner shall pay to the County an amount equal to 3 percent of the cost recovery amount for administration of the Cost Recovery Contract. Payment for the administration of the Cost Recovery Contract will be due and payable prior to the execution of the Cost Recovery Contract. (Ord. 2011-62s § 1 (part), 2012)

12.36.070 County Funding.

The County may participate, in whole or in part, in funding County road improvements as specified in this Chapter and in accordance with RCW 35.72.050 and RCW 36.75.255. The County Engineer will consider the general benefit, county-wide priority of the proposed road improvements, and the impacts of possible pro rata reimbursement shares upon benefited properties in considering whether or not to recommend County participation in funding improvements. In addition, the County Engineer may initiate a request to the Council for establishment of a Cost Recovery Contract in which the County would be a partial recipient or the only recipient of pro rata reimbursement shares. Whenever the County intends to seek pro rata reimbursement shares for providing funding for County road improvements, in whole or in part under this Section, the conditions of its participation shall be stated in an ordinance in accordance with PCC 12.36.020 and 12.36.080. (Ord. 2011-62s § 1 (part), 2012)

12.36.080 Cost Recovery Contract Ordinance Content.

A.    When required, the ordinance prepared by the County Engineer shall include a copy of the proposed Cost Recovery Contract which shall:

1.    Define the improvements for which reimbursements are to be made;

2.    Describe the specific boundary of the Cost Recovery Area;

3.    Define the estimated cost of the improvements and the estimated funding contribution thereto, if any, to be made by the County;

4.    Define what share of costs will be paid by each property owner using a method of cost apportionment which is based upon the "benefit" to the property owner from the improvement(s);

5.    Define when and how reimbursements are to be paid;

6.    Define the conditions of participation by, and reimbursement to, the County and Owner involved in financing the County road improvements; and

7.    Define the minimum participation threshold for all affected properties, consistent with thresholds established in PCC 12.36.020.E.

(Ord. 2011-62s § 1 (part), 2012)

12.36.090 WSDOT Participation.

The Washington State Department of Transportation ("WSDOT") may, for State highways, participate with Owners or may be the sole participant in financing of improvement projects, in the same manner and subject to the same restrictions as provided for the County. The WSDOT shall enter into an agreement whereby the County would act as an agent of WSDOT in administering this Chapter. (Ord. 2011-62s § 1 (part), 2012)

12.36.100 Reimbursement Procedures. Revised 3/18

A.    Owners who have followed all of the procedures of this Chapter and entered into a Cost Recovery Contract shall be reimbursed a share of the costs which they incurred in constructing the road improvements. Such reimbursement shall be made as provided for in the Cost Recovery Contract.

B.    Reimbursement from an affected property owner to the Owner shall occur by the affected property owner paying to the County the pro rata reimbursement share and the County then paying to the Owner the pro rata reimbursement share as received from the affected property owner. The affected property owner must make payment prior to the issuance of any permits necessary for development of the property.

C.    The Department of Planning and Public Works is hereby designated to collect and reimburse pro rata reimbursement shares to the Owner and/or the County, as appropriate, under this Chapter. Reimbursements from the Department of Planning and Public Works will occur within 60 calendar days after payment by affected property owners.

D.    A fund designated as the "Latecomers Cost Recovery Fund" is hereby created. Interest accrued within the Latecomers Cost Recovery Fund shall be transferred to the County's General Fund on an annual basis for any associated costs related to the Fund.

E.    A separate account shall be established for each Cost Recovery Contract in the Latecomers Cost Recovery Fund.

F.    If the actual costs of the improvements constructed by the Owner are less than the cost base utilized in determining pro rata reimbursement shares, the pro rata reimbursement shares shall be adjusted downward to reflect actual costs. If the costs of the improvements constructed by the Owner are more than the cost utilized in determining the pro rata reimbursement shares, the Owner shall be responsible for payment of such excess with no reimbursement to be provided for the excess.

G.    The Owner is not guaranteed that any development will occur by affected property owners during the time period of reimbursement as stated in the Cost Recovery Contract and therefore is not guaranteed that any reimbursements will actually occur.

(Ord. 2017-12s § 2 (part), 2017; Ord. 2011-62s § 1 (part), 2012)

12.36.110 Construction of Improvements.

A.    With written permission of the County Engineer, the improvements for which reimbursement is sought may be constructed prior to or following the effective date of the final Cost Recovery Contract. If the County is to be a financial participant, no construction shall be undertaken by the Owner or County until the County receives guarantees, security or assurances acceptable to the County Engineer that the Owner will contract for or otherwise provide or pay for improvements as required in the Cost Recovery Contract.

B.    The Owner shall be responsible for performance of all his obligations under the Cost Recovery Contract and completion of construction of the improvements except where undertaken by the County. All records supporting expenditures and payment therefore shall be submitted to the County Engineer for review and filing. The County Engineer may verify costs and payments as necessary to assure their accuracy.

C.    Any work constructed by the County under contract shall be accomplished by competitive bidding as provided in Pierce County Code. All work shall comply with and be constructed in accordance with Pierce County standards and all other applicable laws. No extensions of time to complete the Owner's obligations under the Contract will be granted, except as provided in said Cost Recovery Contract. If an Owner fails to complete construction, contribute its share of costs, or otherwise fails to perform any of its other obligations as provided by the Cost Recovery Contract, the County Engineer shall, after giving the Owner 30 days notice to cure such breach, declare the Cost Recovery Contract null and void and terminated. All obligations to pay pro rata reimbursement shares for any Owner costs shall thereupon cease upon contract termination by the County Engineer, and the County Engineer shall file with the County Auditor a notice that the Cost Recovery Contract has been terminated and that all pro rata reimbursement shares to reimburse the Owner are abated.

(Ord. 2011-62s § 1 (part), 2012)

12.36.120 Effect of Annexation.

Annexation to a city or town of all or a portion of a Cost Recovery Area shall not affect liability for pro rata reimbursement share charges of properties so annexed nor responsibilities of an Owner under the Cost Recovery Contract. If any property of the Owner is annexed by a city or town prior to completion of construction, all responsibility of the County with respect to portions of the property not constructed shall cease unless a supplemental contract/agreement is made with the annexing city or town assuring reimbursement of County funds expended on the construction of improvements. (Ord. 2011-62s § 1 (part), 2012)

12.36.130 Severability.

If any portion of this Chapter or its applicability to any person or circumstances is held invalid, the remainder of the act and the application of the provisions to other persons or circumstances is not affected. (Ord. 2011-62s § 1 (part), 2012)