Chula Vista Municipal Code Ch. 15.50 Reimbursement Requirements and Procedures for Construction of Public…

REIMBURSEMENT REQUIREMENTS AND PROCEDURES FOR CONSTRUCTION OF PUBLIC IMPROVEMENTS

Sections:

• 15.50.010 Purpose and intent. 15.50.020 Nature of improvements. 15.50.030 Definitions. 15.50.040 Request for reimbursement agreement. 15.50.050 Council action on request. 15.50.060 Costs of formation of reimbursement district. 15.50.070 Estimate of the Director of Public Works. 15.50.080 Notice and hearing on establishment of reimbursement district. 15.50.090 Action by City Council. 15.50.100 Limitations on reimbursement agreement. 15.50.110 Obligation of developer or subdivider to claim moneys.

In the course of development of properties, whether through the subdivision process or the development or redevelopment of previously subdivided properties, it is frequently necessary or desirable to require the developer to install certain public improvements, which improvements exceed in size, capacity or number that which is normally required to benefit the development or which are located off-site of the development and which benefit property or properties not within the subdivision or development and which improvements are dedicated to the public. It is the purpose of the Council to establish requirements and procedures for reimbursement of either the developer and/or the City by those property owners who subsequently benefit by said improvements to the extent of their benefit. It is the intent of the Council that all such property owners who subsequently benefit and who have made no contribution to the costs of said improvements, either directly or through any public improvement proceedings for which assessments are levied, shall make such reimbursements. Said requirements may be imposed either prior to, concurrent with, or subsequent to the construction of said public improvements. It is further the intent of the Council that this chapter shall be in addition to and supplemental to the reimbursement procedures as set forth in the State Subdivision Map Act, the Streets and Highways Code and other provisions of the Municipal Code. (Ord. 1764 § 1, 1977).

The State Subdivision Map Act provides in Sections 66485 and 66486 for the adoption of a local ordinance which establishes requirements and procedures for reimbursement and a requirement for entering into an agreement with the subdivider to reimburse the subdivider for that portion of the costs of such improvements equal to the difference between the amount it would have cost the subdivider to install such improvements to serve the subdivision only and the actual cost of such improvements. Such improvements include, but are not limited to, streets (access or major thoroughfare), bridges, drainage, water and sanitary sewer facilities. In regard to drainage and sanitary sewer facilities in the subdivision situation, the City must adopt a plan as designated in Section 66483 to impose a reasonable charge on property within the area benefited by such drainage or sanitary sewer facilities. In a nonsubdivision development project, the City may follow the same procedure as established for

reimbursement of subdividers who have constructed improvements of the nature set forth herein. In addition, the Director of Public Works shall define the area of benefit and establish assessments as provided herein. (Ord. 1764 § 1, 1977).

A. “Actual or total estimated cost of public improvements” means the estimated total of the construction, engineering, right-of-way and overhead costs of the public improvements to be constructed by the developer and the costs of the formation of a reimbursement district. If the scope of the project is altered during construction, the City Council may increase the estimated cost by not more than 15 percent without further notice.

B. “Benefited area” means the entire area which receives a benefit from the public improvement. The benefited area shall be that area which, in the opinion of the legislative body, upon the recommendation of the Director of Public Works, and after a public hearing, is benefited by the construction of the public facility.

C. “Developer” means the person who is responsible for constructing the public improvement and has borne all or a portion of the costs thereof.

D. “Excess costs” means the amount that is the difference between the amount it would have cost the developer to install such improvements to serve his development only and the total costs of such improvements.

E. “Public improvements” means those improvements as set forth hereinabove including, but not limited to, streets (access or major thoroughfare), bridges, drainage, water or sanitary sewer facilities and any accessory improvements necessary to the functioning of said public improvements, but shall not include any public improvements which will benefit only the development in which they are located or are installed by a public improvement proceeding for which assessments are levied or are authorized requirements for the subdivision of land. Public improvements shall also include the cost of acquisition of any necessary land or right-of-way for the construction of the improvement.

F. “Reimbursement district” means the benefited area within which either developed or undeveloped property shall be made subject to a reimbursement charge or assessment for the purpose of reimbursing the developer for the excess costs of the public improvement. (Ord. 1764 § 1, 1977).

Whenever a developer is required to install or replace such public improvements or whenever the City may have participated in the costs of such improvements which either the developer or the City feels will be of benefit to property other than his own, which properties are not subject to an assessment for such costs under a public improvement proceeding, the developer or the City may request that the City Council form a reimbursement district. The request shall be in writing and filed with the City Clerk who shall place it on the agenda of the next meeting of the City Council. (Ord. 3575 § 2, 2024; Ord. 1764 § 1, 1977).

The City Council shall consider the developer’s request and, in its sole discretion, may direct the City Manager to begin the proceedings for the formation of a reimbursement district. Such direction to the City Manager shall be conditioned upon the developer-applicant depositing with the Finance Department a sum of money sufficient to cover the City’s costs in the formation of the reimbursement district. (Ord. 1764 § 1, 1977).

The fee for formation of a reimbursement district shall be the required fee(s). (Ord. 2506 § 1, 1992; Ord. 1764 § 1, 1977).

Upon receipt of the deposit by the Director of Finance, the Director of Public Works shall prepare and file:

• A. A map describing the benefited area which identifies all parcels within the area;

• B. The total cost of the facilities including incidental expenses;

• C. An estimate of the excess costs;

• D. An estimate of the assessment and spread thereof necessary to equitably pay the excess costs.

In those situations where an excessive amount of time and labor would be involved in the preparation of such documents and estimates, the Director of Public Works may request that special engineering services be retained to expedite and facilitate the preparation of the documents and estimates. The cost of any such engineering service shall be paid by the developer. The developer seeking a reimbursement agreement, pursuant to the provisions of this chapter, must prove to the satisfaction of the Director of Public Works that the costs reflect a balanced and fair sum either through a unit cost breakdown or presentation of proof of formal bidding. The Director of Public Works may in any case require that the developer submit his project for bids. (Ord. 1764 § 1, 1977).

Upon receiving the Director of Public Works’ estimates, the City Clerk shall set a hearing before the City Council and:

A. The City Clerk shall cause a notice of the hearing, in substantially the following form, to be published once in a newspaper of general circulation in the City at least 10 days prior to such hearing:

NOTICE OF HEARING

The city council of the city of Chula Vista will hold a public hearing at _________ on _____________ at the city council chambers at city hall located at 276 Fourth Avenue, Chula Vista, California, to consider the establishment of a reimbursement district for the financing of certain _________ within the city.

All property within the described area may be subject to a fee to pay the cost of providing such facilities, to-wit: That property more particularly described by plat on file in the office of the Director of Public Works.

All persons desiring to testify with respect to: the necessity of said public improvements, the cost of said public improvements, the benefited area, or the amount of the excess costs, may appear and be heard at said hearing.

B. The City Clerk shall, at least 10 days prior to the hearing, also cause a copy of the above notice to be mailed to each owner of real property within the benefited area as shown on the last equalized assessment roll. Such notice shall be accompanied by a map of the proposed benefited area and a statement by the Director of Public Works describing:

1. The estimated cost of the public improvements; and

2. The estimated or actual excess costs necessary to pay for the public improvements; and

3. The estimated or actual costs which will be assessed against the property when the property is developed and makes use of the public improvements. (Ord. 1764 § 1, 1977).

After the public hearing, the City Council may, in its sole discretion, direct that a reimbursement agreement with the developer and/or the City be prepared containing such provisions as the Council deems to be necessary, desirable and equitable. The provisions may include the following conditions:

A. Collection from other persons including public agencies using such improvements for the benefit of real property not within the subdivision or development area of a reasonable charge for such use;

B. A requirement for a contribution to the developer and/or the City for that part of the cost of the improvements that benefit real property outside of the development area or the subdivision and levy a charge upon such real property so benefited as a reimbursement for such costs plus simple interest thereon at seven percent per year to be paid to the developer and/or the City;

C. Establish and maintain reimbursement districts for the levy and collection of such charge or costs from the property benefited.

Once the allocation of the cost has been approved by a resolution of the Council of the City, it shall constitute a statement of charges due from the owners and their successors, heirs or assigns of the various parcels of property as their share of the public improvements. The Director of Public Works shall respread the assessment after final costs have been calculated and shall cause the resolution to be appropriately modified prior to its recordation.

The City Clerk shall record a copy of the Council resolution with the county recorder. The resolution shall include the ownership of record, the legal description, and the amount of charges for each lot or parcel within the district.

The reimbursement shall be collectable by the City at either the time the property is to be subdivided or upon a request for a building permit for development of the property. (Ord. 1764 § 1, 1977).

The reimbursement agreement shall be subject to an annual seven percent interest charge as provided in CVMC 15.50.090, six percent of which shall be payable to the person who is entitled to reimbursement during the term of the agreement, and one percent shall be payable to the City during the term of the contract and placed by the City in its general fund to cover the administrative costs of the City in its expense in handling the collection of such funds. At the conclusion of the term of the reimbursement agreement, the total annual seven percent interest charge shall be payable to the City. The term of any reimbursement agreement shall be established by the City Council based upon the reasonable expectations of the development of benefited properties or the utilization of the public improvement by such benefited properties; provided, however, that the maximum term of any reimbursement agreement shall be for a period of 20 years. After termination of the term established by said agreement, the same reimbursement charges shall be imposed, but the funds collected therefrom will not be paid to the developer or its successors in interest, but shall be deposited in the general fund of the City.

If, during a 20-year period following the formation of the district, any person either files a tentative map or a tentative parcel map or applies for a building permit on a lot for which a charge for public improvements has been established in accordance with this chapter, and such person or his predecessor in interest has not paid such charges to the City, the established charge shall be paid prior to the filing of the final map or parcel map, or the issuance of the building permit; provided, however, such payment shall not be required in connection with building permits having a total improvement value of $10,000 or less; provided, however, that improvements which are a modification or addition to single-family structures shall not be subject to an assessment under a reimbursement agreement; and provided further, that the money paid shall include the principal charge plus interest in the amount of seven percent from the date of establishment of the charge. (Ord. 1764 § 1, 1977).

All moneys collected under the provisions of this chapter shall be deposited by the Director of Finance of the City into a public improvement reimbursement trust fund or a Subdivision Map Act reimbursement trust fund. The Director of Finance shall refund to the person or persons who paid for the improvements for which the charges were collected, or to their assignees, all moneys so collected; except, however, that one percent per year of all such moneys collected shall be retained by the City to defray the expenses incurred in administering the trust fund.

The City shall notify the developer or subdivider of the existence of moneys deposited in said fund. The notice shall be made to the address contained in the reimbursement agreement and no further inquiries shall be required by the City. If any such money remains on deposit with the City without being claimed by the party rightfully entitled to it within one year after notice has been made as provided herein, such money shall be forfeited to the City, and then it shall be transferred to the general fund of the City. (Ord. 1764 § 1, 1977).