Chapter 11.28 — SPECIAL ASSESSMENT DEFERRAL PROGRAM

The city council finds and declares that its purposes in adopting this chapter are to alleviate the financial hardships, caused persons of low and lower income by special assessments which may be levied against their residential property to pay some or all of the costs and expenses of constructing and installing public improvements, and thereby to foster and encourage the renovation, construction and improvement of needed public facilities within the city of Campbell.

(Ord. 1522 § 1(part), 1984).

For the purpose of this chapter, the following words and phrases shall have the meanings respectively ascribed to them by this section:

A.

Acquisition or Improvement. "Acquisition" or "improvement," when used, shall have the meanings ascribed to them by the Municipal Improvement Act of 1913.

B.

Assessed Lot. "Assessed lot" means the entire parcel of land as shown on the assessment diagram of the assessment district within which the assessed lot is located, which parcel of land bears liability for payment of a particular amount of assessment as a result of any proceeding undertaken by the city pursuant to the provisions of this chapter.

C.

Assessment Deferral Committee. "Assessment deferral committee" means that four-member committee comprised of the city manager, or his designee, the director of public works, or his designee, the assessment deferral officer, or his designee, and the director of finance, or his designee, which committee is created for the purposes of reviewing applications for the deferral of assessments, reviewing repayment obligations of owners to whom the deferral of assessments have been approved, and considering the request of owners for extensions of due dates based on hardship.

D.

Assessment Deferral Officer. "Assessment deferral officer" means that city employee designated in writing by the city manager to administer the deferred assessment program.

E.

Deferred Assessment. "Deferred assessment" means that specific amount or sum of assessment, measured in terms of dollars, for which payment is postponed until such time as one of the events described in Section 11.28.050 of this chapter occurs.

F.

Deferred Assessment Program. "Deferred assessment program" means the procedure set forth in this chapter for postponing or deferring payment of part or all of a special assessment by a person who qualifies for such postponement or deferral pursuant to the provisions of this chapter.

G.

Deferred Assessment Revolving Fund. "Deferred assessment revolving fund" means that fund which is hereby created as a depository to house moneys which the city council of the city may from time-to-time appropriate for the purpose of carrying out the provisions of this chapter.

H.

Deferred Assistance Schedule. "Deferred assistance schedule" means that schedule adopted by the city council which establishes the percentage of assessment to be deferred for each eligible owner based upon the size of an owner's family and the amount of the owner's family's gross income.

I.

Dwelling. "Dwelling" means any building or portion thereof designed or used as the residence or sleeping place of one or more persons.

J.

Dwelling Unit. "Dwelling unit" means one room or a suite of two or more rooms, designed for and used by one family for living and sleeping purposes, and having not more than one kitchen or kitchenette.

K.

Family. "Family" means any individual, or two or more persons related by blood, adoption, or marriage, or a group of not more than five persons, excluding servants, who need not be related by blood or marriage, living together in a dwelling unit.

L.

Family Income. "Family income" means the aggregate of the total gross annual incomes of the owner and all members of the owner's family as disclosed by the most recently filed federal income tax returns of all such persons preceding the date upon which an application for deferral of assessment is filed. For the purposes of this chapter, such shall be deemed to be the income of the owner.

M.

Family Member. "Family member" means and includes all persons resident in the dwelling of an owner and related to the owner by blood, adoption or marriage. In addition, the term "family member" shall include any person who may not be related by blood, adoption, or marriage to the owner but whose principal place of residence is the owner's residential dwelling. In determining who is a member of the owner's family, the city may rely on information contained on the owner's most recently filed federal income tax return preceding the date of application for deferral of assessment.

N.

Family Size. "Family size" means the total number of persons, including the owner and the members of the owner's family, who are resident in the owner's residential dwelling.

O.

Lot. "Lot," "land," "piece," or "parcel of land," whether used singly or in combination, includes real property owned by any person.

P.

Median Family Income. "Median family income" means the H.U.D. San Jose Metropolitan Statistical Area median income.

Q.

Owner. "Owner" means any natural person or persons owning the fee, or the person or persons in whose name the legal title to the assessed lot appears, by deed duly recorded in the office of the county recorder for the county of Santa Clara.

R.

Single-family Dwelling. "Single-family dwelling" means a unit designated for or used exclusively for residence purposes by one family, a condominium unit, or a separately deeded townhouse.

S.

Special Assessment. "Special assessment" means any fixed lien special assessment levied against any assessed lot in the city by the city council as a result of proceedings undertaken pursuant to the Assessment Acts and/or the Assessment Bond Acts contained in the State of California Streets and Highways Code for the purpose of paying a portion of the cost and expenses of acquiring, constructing and installing any work or improvement on any public property, or, to the extent permitted by law, on any assessed lot. This term, however, shall not be deemed to include real property taxes, personal property taxes, any assessment levied by any other taxing agency, or any other tax, charge or assessment of any kind whatsoever.

T.

Time At Which Assessment District Formed. "Time at which assessment district formed" means that date upon which the city council, acting pursuant to the provisions of this chapter, adopts a resolution confirming assessments and ordering that the work and improvements be done.

U.

Work or Improvement. "Work" or "improvement," when used, shall have the meanings ascribed to them by the state of California Streets and Highways Code.

(Ord. 1522 § 1(part), 1984).

There is created a deferred assessment revolving fund that is made available to the assessment deferral committee to carry out the provisions of this chapter, including the city's expenses incurred in administering the deferred assessment program. Money may be appropriated to this fund from time-to-time by appropriate action of the city council. Nothing in this chapter shall be deemed to preclude the city council from approving the transfer of moneys from the deferred assessment revolving fund to any other city fund. Where available moneys in the deferred assessment revolving fund becomes insufficient to provide funding for all eligible applicants, the city shall have no obligation to transfer additional moneys into this fund from any other city fund.

(Ord. 1522 § 1(part), 1984).

The deferred assessment program, as set forth in this chapter, shall be available to any owner of an assessed lot which is located within any assessment district formed by action of the city council, on or after; provided, however, that such owner establishes his eligibility pursuant to the provisions of this chapter.

(Ord. 1522 § 1(part), 1984).

A.

The deferred assessment program shall operate as follows:

The owner of an assessed lot shall file an application with the city for the deferral of assessment.

The application shall be reviewed by the assessment deferral officer.

The application, along with the recommendation of the assessment deferral officer, shall be forwarded to the assessment deferral committee for action.

If the assessment deferral committee approves the application, the owner, as a condition of the city's approval deferring the assessment, shall do the following:

a.

Execute a promissory note agreeing to repay the amount of assessment deferred, plus interest, late charges and attorney's fees should the city be required to institute proceedings to collect the amount of assessment deferred;

b.

Execute an agreement with city which sets forth the amount of the deferred assessment, the terms and conditions of repayment, and provides that the city shall have a lien on the owner's assessed lot in a sum representing the amount of the deferred assessment.

Upon approval of an application for the deferral of assessments, the city, acting through the assessment deferral committee or the city council, shall order the withdrawal, from the deferred assessment revolving fund, of that sum of money representing the amount of assessment deferred, and place that sum, on behalf of the owner, into the construction fund for the assessment district which is being formed and within which the assessed lot of the owner is located.

The amount of the deferred assessment, including interest and late charges, shall be repaid by the owner upon the occurrence of any of the events specified in Section 11.28.130 of this chapter.

All repayments of deferred assessments, including interest and other types of charges, shall be placed by the city into the deferred assessment revolving fund for future use in accordance with the provisions of this chapter.

B.

In terms of priority as to the other liens on the assessed lot, regardless of the time of their creation, the contractual lien representing the amount of the deferred assessment shall have that priority as is established by Chapter 2 of Part 4 of Division 1, commencing with Section 2186, of the Revenue and Taxation Code of the state.

C.

The contractual lien on the owner's assessed lot established by this chapter shall not be deemed a transfer of a property interest in the owner's assessed lot but rather a form of security for repayment of the deferred assessment. If the amount of assessment deferred is not repaid by the owner upon the occurrence of any of the events specified in Section 11.28.120 of this chapter, the city shall be entitled to utilize all legal remedies given to it by the lien instrument, as well as other remedies provided by law, to ensure that the amount of assessment deferred is repaid to the city and to the deferred assessment revolving fund.

D.

Should an owner suffer either voluntary or involuntary bankruptcy at any time prior to repayment of the amount of the deferred assessment, the lien held by the city to secure the owner's promissory note to repay the same shall be entitled to that priority of payment as is provided for by federal law.

E.

The city shall also be entitled to record a notice, pursuant to Civil Code Section 2924b that it be sent a copy of any notice of default and notice of sale under any earlier recorded deed or trust or mortgage on the assessed lot.

(Ord. 1522 § 1(part), 1984).

The following requirements must be satisfied in order for an owner to be eligible for the deferral of assessment:

A.

The assessed lot must be improved by the presence of a single-family dwelling at the time the assessment district is formed.

B.

If the assessed lot is improved by the presence of a single-family dwelling, the owner must occupy said dwelling as his place of residence at the time the assessment district is formed.

C.

The amount of the owner's annual gross family income shall fall within the income ranges established and set forth on the deferred assistance schedule.

(Ord. 1522 § 1(part), 1984).

A.

The amount of assessment eligible for deferral for a particular assessed lot shall be the amount confirmed by the city council, less the following amounts to be determined by the assessment deferral committee:

Any supplemental assessments levied by the city council subsequent to the initial levy of assessment for the assessment district improvements;

Moneys paid to the owner for the acquisition of right-of-way in connection with assessment district exclusive of:

a.

That portion, if any, which is required to be applied toward the reduction of pre-existing liens on the assessed lot, and

b.

That portion, if any, necessary to restore the property remaining after the acquisition.

B.

The amount of assessment to be deferred for an eligible owner is found by utilizing the deferred assistance schedule to determine the number of members of the owner's family and then by matching the family's gross annual income with the gross family income figures set forth on the left-hand side of the schedule; said figures being expressed in terms of percentages of the median family income.

(Ord. 1522 § 1(part), 1984).

An owner of an assessed lot who meets the eligibility criteria set forth in Section 11.28.060 may apply for a deferral of assessment by executing and filing an application, on a form provided by the city, together with

the other written materials required by Section 11.28.090 with the assessment deferral officer. An application must be filed between the date the city council approves the engineer's preliminary report for the assessment district and sixty days after the council forms the assessment district by confirming the assessments and ordering that the work or improvements be made.

(Ord. 1522 § 1(part), 1984).

In addition to completing the application form, an owner wishing to defer all or part of his assessment shall also file with the assessment deferral officer the following documents:

A.

A copy of a recorded deed showing that title to the assessed lot is held in the name of the owner;

B.

Satisfactory evidence and proof that the owner is the recipient of a homeowner's exemption of the assessed lot for the year in which the assessment district is formed either by being listed on the last published Santa Clara County assessor's roll or by verification of such status on the basis of available information in the county assessor's office; or in the situation where evidence of exemption is impossible to obtain, the owner shall sign a declaration which indicates the reason or reasons why the owner failed to take advantage of the homeowner's exemption to which he was otherwise eligible to receive;

C.

A written declaration signed by the owner that the level of residential development on the assessed lot does not exceed one dwelling unit, and that said unit is used exclusively for residential purposes;

D.

A written declaration signed by the owner containing a statement of total family gross annual income for the calendar year represented by the most recently filed federal income tax return, or, if no such return was filed, by such other evidence as is acceptable to the assessment deferral officer; and

E.

A completed Internal Revenue Form No. 4506 for use by the city in obtaining a certified copy of the most recently filed federal income tax return for each of the family members with reportable income; or in the alternative, a certified copy of the most recently filed federal income tax return for each family member with reportable income.

(Ord. 1522 § 1(part), 1984).

A.

Duties of Assessment Deferral Officer. The assessment deferral officer shall review the completed application, along with the accompanying documents and declarations, for the purpose of determining the eligibility of the applicant and the amount of assessment eligible for deferral. The assessment deferral officer shall not be required to take action on any application which he deems is not complete. Within thirty days of receipt of the completed application, the assessment deferral officer shall recommend to the assessment deferral committee whether the application should be approved or disapproved. Included with his recommendation shall also be the reason or reasons of the assessment deferral officer for his recommendation.

B.

Review of Application by Assessment Deferral Committee. The assessment deferral committee, upon receiving the recommendations of the assessment deferral officer, shall act within twenty days of receipt thereof, to either approve or disapprove the application on the basis of the requirements set forth in this chapter. If the application for deferral of assessment is approved, the committee shall specify the amount of assessment to be determined and shall direct that the appropriate sum of money be withdrawn from the assessment deferral revolving fund.

C.

Denial of an Application. If the application is denied, the assessment deferral committee, within ten days of its decision, shall provide the owner with a written statement of the grounds for such action and shall advise such owner of his right to appeal the committee's action pursuant to the provisions of this section.

D.

Right of Appeal. Any owner whose application for a deferral of assessment has been denied may appeal such decision to the city council by filing a written notice of appeal with the city clerk within ten days after being notified of the committee's decision. Such appeal shall be heard by the city council within sixty days after the filing of the appeal. The city council shall not be required to hold a duly noticed public hearing, the owner shall be given at least five days prior written notice of the day and time of the hearing. At the hearing, the owner shall be allowed to present evidence on his behalf as to why he is entitled to a deferral of assessment. The city council's decision on such appeal shall be final and no further application on behalf of the applicant for a deferral of assessment pertaining to the formation of an assessment district within which the owner's assessed lot is located shall be considered by the city. In passing upon an appeal from a decision of the assessment deferral committee, the city council shall be governed by the criteria for approving or disapproving applications as set forth in Section 11.28.060 of this chapter.

(Ord. 1522 § 1(part), 1984).

Pursuant to subsections (i) and (n) of Section 6254 and Section 6255 of the Government Code of the state, all applications for a deferral of assessment, as well as all supporting information and documents which an owner submits as part of his application, shall be treated as confidential and unavailable for public review.

(Ord. 1522 § 1(part), 1984).

A.

Each owner of an assessed lot who has received a deferral of assessment pursuant to the provisions of this chapter shall immediately repay to the city the full amount of the deferred assessment, plus all interest and late charges, if any, and all reasonable costs expended by the city for collection of moneys due under the provisions of this chapter, if any, upon the occurrence of any of the following events:

Upon any change in record title to the assessed lot (including inheritance, except to surviving spouse) or portion of such assessed lot, if the owner thereof subdivides the lot;

Upon any increase in the square footage of the single-family dwelling situate on the assessed lot at the time the assessment was deferred, which increase in square footage exceeds six hundred square feet;

Upon the termination of the owner's use of the assessed lot for residential purposes;

Upon the city's determination that false or misleading information was given by the owner as part of his application for a deferral of assessment.

B.

In cases of extreme or unusual hardship, the due date for payment may be extended by the assessment deferral committee, subject to the provisions of Section 11.28.160 of this chapter.

C.

No provision of this chapter shall prevent an owner to whom a deferral of assessment has been granted, from repaying to the city, at his option, at any time prior to the due date of repayment, all or a portion of such deferred assessment along with any accrued interest.

(Ord. 1522 § 1(part), 1984).

Interest shall be charged on any unpaid balance of the deferred assessment owed to the city, at an annual rate which is two percent less than the effective average interest rate of all of the assessed lots within the assessment district in order to finance the project. Said interest rate shall be compounded annually and shall accrue on the date of sale of the bonds for said assessment district.

(Ord. 1522 § 1(part), 1984).

Upon the occurrence of any of the events specified in subsections (a)(1), (a)(2), or (a)(3) of Section 11.28.120 of this chapter, but in no event later than thirty days after occurrence thereof, any owner to whom a deferred assessment has been granted shall notify the city in writing of the occurrence of such event. As part of his written notification, the owner shall remit repayment of the amount of the deferred assessment, plus interest, to the city. If the event specified in subsection (a)(4) of Section 11.28.120 occurs, an owner shall remit repayment of the amount of the deferred assessment, plus interest, to the city, within thirty days from the date of the city's written demand for repayment. As to all other owners to whom deferred assessments have been granted, each year, within sixty days from the anniversary date of the recordation of the promissory note and contractual lien securing the same, each owner shall provide the assessment deferral officer with a written declaration reaffirming that the residential dwelling or dwellings on the assessed lot are still being exclusively used for residential purposes, and that the owner continues to maintain his record ownership in, and his occupancy of, said assessed lot.

(Ord. 1522 § 1(part), 1984).

Prior to but no later than thirty days after the occurrence of any of the conditions establishing the due date for immediate repayment of the full amount of the deferred assessment, any owner required to make said repayment may apply in writing to the assessment deferral committee for a hearing to review the owner's obligation for repayment under the provisions of this chapter, or to present reasons for the granting of an extension of the due date on the basis of hardship. Said hearing shall be held within twenty days after the application has been filed. The owner shall be given at least five days prior written notice of the date and time of the committee's hearing. At said hearing, the committee shall consider the information provided by the assessment deferral officer, and any evidence presented by the owner, in reaching a decision as to either deny the owner's request for an extension of the due date, or to approve the same. If satisfactory proof of hardship is received from the owner, the committee shall have the authority to extend the due date upon any terms and conditions as it deems to be reasonable. If the application of the owner to extend the due date is denied by the assessment deferral committee, the owner shall have the right to appeal this decision to the city council in the manner set forth under Section 11.28.110 of this chapter. The actions of the assessment deferral committee and the city council, on appeal, in considering an owner's application for an extension of the due date, shall be governed by subsections B, C and D of Section 11.28.100.

(Ord. 1522 § 1(part), 1984).

If the amount of the deferred assessment, plus interest, is not repaid to the city within thirty days of the occurrence of the due date for repayment, as specified in Section 11.28.120 of this chapter, the interest rate shall then increase to nine percent compounded annually and will be added to the amount owed to the city, together with attorney's fees and other reasonable court costs expended by the city for collection of moneys due.

(Ord. 1522 § 1(part), 1984).

Upon receipt of repayment to the city by the owner of all amounts due and payable, the assessment deferral officer shall prepare a "Notice of Release of Lien" evidencing the satisfaction of the obligation. The deferral assessment officer shall cause said notice to be recorded in the office of the recorder of the county of Santa Clara.

(Ord. 1522 § 1(part), 1984).

Any and all sums which are or may become payable on account of any approval of deferred assessment under the provisions of this chapter shall be paid into the deferred assessment revolving fund to be thereafter used for any purpose consistent with the deferred assessment program.

(Ord. 1522 § 1 (part), 1984).

The city council shall have the right at any time to terminate the deferred assessment program. If such action is taken, the deferred assessment revolving fund shall be kept in existence until such time as all of the deferred assessments have been repaid or determined by the city to be un-collectible. If the deferred assessment program is terminated, no further applications for the deferral of assessments shall be accepted.

(Ord. 1522 § 1(part), 1984).

No action taken pursuant to the provisions of this chapter shall affect any lien established by the levy of any special assessment upon the assessed lot of any owner for the construction of public improvements. The provisions of this chapter shall serve only to delay the collection of the deferred portion of the assessment. The lien established by the levy of a special assessment on the assessed lot shall be for the full amount assessed, and the sale of bonds to finance unpaid assessments shall be based on that portion or all of the assessment of each assessed lot within the district which has not been deferred or paid in cash within thirty days of the date of the city council's action forming the district.

(Ord. 1522 § 1(part), 1984).