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Latecomers Staff report no attachCity of Yelm STAFF REPORT To: Mayor Adam Rivas Yelm City Council From: Grant Beck, Director of Community Development Date: January 3, 2005 (for January 12, 2005 City Council Meeting) Subj: Street Latecomers Agreement -Yelm Community Schools Recommendation Do not declare that improvements to West Yelm Avenue are apre-requisite for other to develop. Background Yelm Community Schools has applied for an Assessment Reimbursement Contract (Latecomers Agreement) for improvements to West Yelm Avenue (SR 510) the District is completing as part of the High School expansion project. Specifically, the District is required to improve West Yelm Avenue with a center turn lane from 93rd Avenue to a point 200 feet east of the eastern entrance to the High School. In addition, the District is responsible for frontage improvements (curb, gutter, planter strip, and sidewalks) along West Yelm Avenue in front of the School property. In addition to the School improvements, the City called in a deferral issued to Twin County Credit Union for frontage improvements, and tentatively agreed to contribute to completing the frontage improvements between the School and Credit Union. Improvements west of the High School property and along the entire northern portion of the improvement area would be widening of the roadway up to 6 feet and, in some situations, drainage swales. Chapter 35.72 RCW authorizes code cities to enter into latecomers agreements for street improvements. The procedures for establishing a latecomers agreement are found in Chapter 12.24 YMC. The first step in authorizing a street latecomers agreement is for the Council to adopt an ordinance that requires the street improvements being considered for a latecomers January 3, 2005 Page 1 of 2 agreement would be required as a prerequisite to the development of property benefiting from such projects. Once an ordinance is adopted which requires the improvements for the development of the impacted properties, the applicant submits the preliminary boundaries of the assessment district and the cost apportionment method. A public hearing is held before Council on the proposed street latecomers contract. Notice of the hearing is provided to each of the impacted parcels within the proposed assessment district. The contract is then recorded and amended with actual costs upon completion of the project. Current Situation The issue before Council at this time is whether to adopt an ordinance which requires the proposed street improvements as a prerequisite for development of any of the parcels within the proposed assessment district. The main issue is one of fairness to both the developer and the property owners impacted by a street latecomers agreement. The proposed improvements to West Yelm Avenue are not full street improvements to the urban arterial section, which makes less clear the determination that the improvements would be required before development of the properties. In effect, the properties along the northern portion of West Yelm Avenue would `benefit' by up to 6 feet of asphalt (half a turn lane) which would be the extent of the School improvements along this section. The developer of the property would still be required at the time of development to construct a bike lane, curb and gutter, a planter strip and drainage swale, and a sidewalk. It is also possible that, at the time of development, the improvements made by the School District would have to be reconstructed. The Community Development Department would recommend that the Council do not proceed with the preparation of a street latecomers Ordinance, as a street latecomers agreement is inappropriate except in situations where a street is fully improved to City standards. January 3, 2005 Page 2 of 2 Chapter 35.72 RCW CONTRACTS FOR STREET, ROAD, AND HIGHWAY PROJECTS RCW SECTIONS 35.72.010 Contracts authorized for street projects. 35.72.020 Reimbursement by other property owners. 35.72.030 Reimbursement by other property owners -- Reimbursement share. 35.72.040 Assessment reimbursement contracts. 35.72.050 Alternative financing methods -- Participation in or creation of assessment reimbursement area by county, city, town, or department of transportation -- Eligibility for reimbursement. RCW 35.72.010 Contracts authorized for street projects. The legislative authority of any city, town, or county may contract with owners of real estate for the construction or improvement of street projects which the owners elect to install as a result of ordinances that require the projects as a prerequisite to further property development. [1983 c 126 § 1.] RCW 35.72.020 Reimbursement by other property owners. The contract may provide for the partial reimbursement to the owner or the owner's assigns for a period not to exceed fifteen years of a portion of the costs of the project by other property owners who: (1) Are determined to be within the assessment reimbursement area pursuant to RCW 35.72.040; (2) Are determined to have a reimbursement share based upon a benefit to the property owner pursuant to RCW 35.72.030; (3) Did not contribute to the original cost of the street project; and (4) Subsequently develop their property within the fifteen-year period and at the time of development were not required to install similar street projects because they were already provided for by the contract. Street projects subject to reimbursement may include design, grading, paving, installation of curbs, gutters, storm drainage, sidewalks, street lighting, traffic controls, and other similar improvements, as required by the street standards of the city, town, or county. [1983 c 126 § 2.] RCW 35.72.030 Reimbursement by other property owners -- Reimbursement share. The reimbursement shall be a pro rata share of construction and reimbursement of contract administration costs of the street project. A city, town, or county shall determine the reimbursement share by using a method of cost apportionment which is based on the benefit to the property owner from such project. [1983c126§3.] RCW 35.72.040 Assessment reimbursement contracts. The procedures for assessment reimbursement contracts shall be governed by the following: (1) An assessment reimbursement area shall be formulated by the city, town, or county based upon a determination by the city, town, or county of which parcels adjacent to the improvements would require similar street improvements upon development. (2) The preliminary determination of area boundaries and assessments, along with a description of the property owners' rights and options, shall be forwarded by certified mail to the property owners of record within the proposed assessment area. If any property owner requests a hearing in writing within twenty days of the mailing of the preliminary determination, a hearing shall be held before the legislative body, notice of which shall be given to all affected property owners. The legislative body's ruling is determinative and final. (3) The contract must be recorded in the appropriate county auditor's office within thirty days of the final execution of the agreement. (4) If the contract is so filed, it shall be binding on owners of record within the assessment area who are not party to the contract. [1988 c 179 § 16; 1983 c 126 § 4.] NOTES: Severability -- Prospective application -- Section captions -- 1988 c 179: See RCW 39.92.900 and 39.92.901. RCW 35.72.050 Alternative financing methods -- Participation in or creation of assessment reimbursement area by county, city, town, or department of transportation -- Eligibility for reimbursement. (1) As an alternative to financing projects under this chapter solely by owners of real estate, a county, city, or town may join in the financing of improvement projects and may be reimbursed in the same manner as the owners of real estate who participate in the projects, if the county, city, or town has specified the conditions of its participation in an ordinance. As another alternative, a county, city, or town may create an assessment reimbursement area on its own initiative, without the participation of a private property owner, finance the costs of the road or street improvements, and become the sole beneficiary of the reimbursements that are contributed. A county, city, or town may be reimbursed only for the costs of improvements that benefit that portion of the public who will use the developments within the assessment reimbursement area established pursuant to RCW 35.72.040(1). No county, city, or town costs for improvements that benefit the general public may be reimbursed. (2) The department of transportation may, for state highways, participate with the owners of real estate or may be the sole participant in the financing of improvement projects, in the same manner and subject to the same restrictions as provided for counties, cities, and towns, in subsection (1) of this section. The department shall enter into agreements whereby the appropriate county, city, or town shall act as an agent of the department in administering this chapter. [1997 c 158 § 1; 1987 c 261 § 1; 1986 c 252 § 1.] Yelm Municipal Code 12.24.040 Chapter 12.24 ASSESSMENT REIMBURSEMENT CONTRACTS (LATECOMER AGREEMENTS) Sections: 12.24.010 Authority. 12.24.020 Preliminary determination. 12.24.030 Notice and public hearing. 12.24.040 Assessment reimbursement ordinance and contract. 12.24.050 Recording. 12.24.060 Addendum. 12.24.070 Reimbursement procedure. 12.24.080 City participation. 12.24.010 Authority. A. Upon the receipt of a proposal by a property owner or owners, the city may enter into an assess- ment reimbursement contract (latecomer agree- ment) pursuant to this chapter for the construction or improvement of street projects and for the reim- bursement to the property owner by other property owners of the costs of such construction or improvement in a manner consistent with the pro- visions of Chapter 35.72 RCW. B. The contracts authorized by this section shall not be entered into unless and until the city first adopts by ordinance the requirement that such projects shall be constructed or improved as a pre- requisite to the development of property benefit- ting from such projects. C. Street projects subject to an assessment reimbursement contract may include design, grad- ing, paving, installation of curbs, gutters, storm drainage, sidewalks, street lighting, traffic con- trols, and other similar improvements, as required by the city's street standards. (Ord. 520 ~ 1, 1994). 12.24.020 Preliminary determination. Within 30 days of receipt of the property owner's or owner's proposal for an assessment reimbursement contract and ordinance, the city shall make a preliminary determination that it will either process an assessment reimbursement con- tract or that it will not as proposed. In the event that the city's preliminary determination is that it will process such a contract, the city's determination shall include the following: A. A preliminary determination of the assess- ment reimbursement area boundaries, as well as the parcels and parcel numbers within such bound- aries, based on the city's determination of the par- cels adjacent to the required projects that would require similar improvements as a condition of development thereon and which will be liable for assessment under the assessment reimbursement contract; B. The cost apportionment method for deter- mining the reimbursement share of the costs of the projects to be assessed to each parcel within the assessment reimbursement area based on the bene- fit to the owner of such parcel from the projects, including, but not limited to, such methods as front footage, square footage, traffic trip analysis, or any other method determined by the city to be a fair and reasonable method; C. The reimbursement shares of each of the par- cels within the assessment reimbursement area; D. A description of the rights and options of the owners; and E. The date, time and place for a public hearing on the proposed contract and ordinance before the city council. (Ord. 520 ~ 2, 1994). 12.24.030 Notice and public hearing. A. Upon making the preliminary determination to process an assessment reimbursement contract pursuant to YMC 12.24.020, the city shall provide notice, by certified mail, to the record owners of the parcels identified to be within the assessment reimbursement area such notice shall include: 1. The preliminary determination; 2. The assessment reimbursement area boundaries; 3. The cost apportionment method; 4. The reimbursement share of each record owner; and 5. The date, time and place of the public hearing. B. The public hearing before the city council held pursuant to this chapter shall be held no less than 20 days from the date the notice is mailed. (Ord. 520 ~ 3, 1994). 12.24.040 Assessment reimbursement ordinance and contract. A. Following the public hearing required pur- suant to this chapter, the city council may adopt an ordinance setting forth the final determination of the assessment reimbursement area, the cost appor- tionment method, and the reimbursement shares of parcels within the assessment reimbursement area. B. Upon the adoption by the city council of the assessment reimbursement ordinance pursuant to subsection A of this section, the city and the prop- erty owner shall finalize and execute the assess- 12-9 12.24.050 ment reimbursement contract setting forth the assessment reimbursement area, the cost appor- tionment method, and the reimbursement shares of parcels within the assessment reimbursement area. (Ord. 520 ~ 4, 1994). 12.24.050 Recording. A. The assessment reimbursement contract shall be recorded in the office of the Thurston County auditor within 30 days of its execution. B. Upon recording, the assessment reimburse- ment contract is binding on owners of record within the reimbursement assessment area who were not parties to the contract, their heirs, succes- sors and assigns, and the obligations created thereby run with the land. (Ord. 520 ~ 5, 1994). 12.24.060 Addendum. A. Upon completion of the projects subject to an assessment reimbursement contract, the parties to the assessment reimbursement contract shall prepare and execute an addendum to the contract that provides the following: 1. The actual costs of construction of such projects; 2. The actual costs of design and engineering of such projects; 3. The contract administration costs; and 4. The actual assessment to be imposed on each owner within the assessment reimbursement area, based on the application of the owner's reim- bursement share to the actual costs of the project. B. Such addendum shall be recorded in the same manner and with the same binding effect as provided in YMC 12.24.050. (Ord. 520 ~ 6, 1994). 12.24.070 Reimbursement procedure. A. Any property owner within the assessment reimbursement area of an assessment reimburse- ment contract who did not contribute to the original cost of the project and who was not required, at the time of development on his or her property, to install, construct or improve projects similar to those subject to such contract because they were provided for by the contract, shall pay the reim- bursement share or actual assessment provided by either the original contract or an addendum as a condition of development of their property that is proposed within 15 years of the recording of the original assessment reimbursement contract. Such payment shall be made directly to the city prior to development. B. Within 60 days of receipt of an assessment payment pursuant to subsection A of this section, the city shall distribute such payment to the parties to the assessment reimbursement contract accord- ing to the terms of the contract. Where the contract is silent as to the method of reimbursement to the parties to the contract, payments shall be made according to the parties' contribution to the costs of design, engineering, construction, installation and contract administration. C. No person, firm or corporation, other than the parties to the assessment reimbursement con- tract, shall be granted permission or authorized by the city to connect to or use the projects subject to such contract without first paying to the city their reimbursement share or actual assessment under the contract or any addendum. (Ord. 520 ~ 7, 1994). 12.24.080 City participation. The city may participate in the financing of a project subject to an assessment reimbursement contract in the same manner as the owners of prop- erty; provided, that the city has specified its condi- tions of such participation in an ordinance; provided further, that the city may only be reim- bursed for the costs of such a project to the extent such costs benefit that portion of the public who will use the developments within the assessment reimbursement area; provided further, that the city shall not be reimbursed for the costs of such projects to the extent they benefit the general pub- lic. (Ord. 520 ~ 8, 1994). 12-10