Rialto Municipal Code Ch. 17.50 Reimbursement for Public Improvements

As a condition of approval of the grant of a land use entitlement for the development of property, a developer may be required to install public improvements that provide a benefit to the general public and to other specific properties in the vicinity of the improvements. This situation may occur when one developer elects to seek approval and begin development sooner than another. The purpose of this chapter is to establish a mechanism whereby a property owner who directly benefits from but does not contribute to certain public improvements will, at the time the benefited property owner develops the property, reimburse the developer who has installed the improvements. This chapter is not applicable to public facilities contemplated or covered under Chapter 3.33.

(Ord. No. 1629, § 2, 11-12-19)

Whenever in this chapter the words or phrases defined hereinafter in this section are used, they have the meanings assigned to them in the following definitions:

"Administrative cost" means expenses and services, including legal fees, provided by the city in the application, approval, and management of reimbursement agreements.

"Benefit area" means the geographic area that benefits by the privately financed public improvements and would be assessed for the cost of the public improvements.

"Benefited property" shall mean a property within a benefit area for which no contribution to the cost of the public improvement was made at the time of its construction. Benefited property may include property owned by a public agency.

"Contribution charge" shall mean the funds owed by a benefited property pursuant to a reimbursement agreement.

"Engineering report" means the report prepared by a state-licensed civil engineer outlining the public improvements, benefited area, and proposed construction charges and reimbursement payment.

"Estimated construction cost" means the estimated cost of construction as outlined in the engineering report and approved by the city engineer.

"Financing party" shall mean a property owner or developer who constructs or pays for the construction of public improvements within a benefit area.

"Land use approval" shall mean and include a permit or approval granted by the city for the development of property, including, but not limited to, a subdivision map approval, conditional development permit, precise plan of design, grading permit, building permit, and architectural or design review approval.

"Public improvements" shall mean infrastructure projects including, but not limited to, drainage, sewer and water systems, and public and private streets constructed to city standards.

"Reimbursement agreement" means an agreement to reimburse property owner(s) for development or extension of public improvements that benefit other properties.

"Reimbursement payment" means the payment to the property owner(s) who paid for the initial construction of the public improvements.

"Trust fund" means an account established for the deposit of the contribution charges to go towards the reimbursement payments during the life of the reimbursement agreement.

(Ord. No. 1629, § 2, 11-12-19)

A. General. If a property owner is required to construct public improvements as a condition of approval of a proposed development, and the required public improvements have the capacity and capability of serving and are designed to service benefited properties beyond the proposed development, the property owner may apply to the city for a reimbursement agreement as provided in this section.

B. Application. A property owner/financing party requesting a reimbursement agreement shall submit an application on a form provided by the city and shall provide information as required by the community development director or city engineer, including the area of the proposed benefit area. The city shall prepare a reimbursement agreement in conformance with the requirements of Section 17.50.040. The applicant shall also submit a deposit to cover the city's estimated administrative costs to review, process, and approve the reimbursement agreement.

C. Review. The community development director or city engineer will review and recommend that the city council either approve, approve with modification, or reject the proposed reimbursement agreement, in accordance with the procedures set forth in Section 17.50.050.

D. Timing. A property owner/financing party may not request, and the city council may not approve, a reimbursement agreement after the date construction begins on a public improvement.

E. Recordation. The city shall record the approved reimbursement agreement, which shall include a list of each benefited property within a benefit area, with the office of the county recorder.

(Ord. No. 1629, § 2, 11-12-19)

A reimbursement agreement shall include, but is not limited to, the following provisions:

A. A detailed estimate cost of the design and construction of the public improvement, the applicant's equitable share of the cost, the amount of the total cost eligible for reimbursement, and the pro rata contribution charge attributable to each benefited property within the benefit area;

B. A detailed plat drawn at an engineering scale approved by the city engineer showing each property included within the benefit area and a list of each property by county assessor parcel number, as well as the precise location of all public improvements;

C. The method of calculating the contribution charge attributable to each benefited property within the benefit area and the rate of interest or appreciation, if any, to be added to initial charges during the period of the agreement;

D. A provision indicating who the property owner/financing party is for the purpose of receiving reimbursement;

E. The date on which the reimbursement agreement takes effect and benefited property owners must begin contributions;

F. A statement that no contribution charges collected by the city may be distributed as reimbursement payments to a financing party until the public improvement is completed and accepted by the city;

G. A list of the administrative costs, if any, to be charged by the city to administer the agreement. These costs may be shown as a percentage of the charges collected by the city;

H. A provision that any reimbursement payment to the property owner/financing party shall be paid only from contribution charges collected under the reimbursement agreement from the benefited properties listed in the reimbursement agreement as such properties receive a land use approval. Reimbursement to the property owner/financing party shall be paid only from such charges within fifteen years from the date the reimbursement agreement becomes effective, unless a different time period is approved by the city council; and

I. A provision that the city is not liable to the property owner/financing party for failure of a property owner of a benefitted property to pay a contribution charge or because of legal inability of the city to collect the charge from a property owner.

(Ord. No. 1629, § 2, 11-12-19)

A. The city council shall hold a public hearing on the application. At least ten days before the hearing, the city shall notify each benefited property owner in the proposed benefit area in writing, via certified mail, return receipt requested, advising of the nature of the hearing, date, and time, and shall provide a copy of the proposed reimbursement agreement and staff report that will be submitted to the city council.

B. An affected benefited property owner may file written or oral comments or objections to the application before or at the hearing.

C. No property may be included within a benefit area unless the notice is sent to the affected property owner. The failure of any benefited property owner to receive the notice required by this section shall not invalidate the reimbursement agreement.

D. After the public hearing, the city council may, by resolution, approve, approve with modifications, or deny a reimbursement agreement. Before granting approval, the city council shall make each of these findings:

1. The improvements for which reimbursement is sought is a public improvement which will, upon completion, be dedicated to and accepted by the city, if constructed to the applicable standard set by the city engineer;

2. The public improvement is not located entirely within the boundaries of the proposed development;

3. The public improvement has the capacity and capability of serving and is designed to serve additional properties not within the proposed development due to the supplemental size, capacity, number, or length of the improvement;

4. The proposed benefit area represents a geographical area of property which will benefit directly and substantially by the public improvement; and

5. The method of determining the contribution charges and the amount of the pro rata share of contribution charges are fair and reasonable to both the property owner/financing party and the benefited property owners and fairly distributes the charges among all benefited properties, as well as the property owner/financing party, in proportion to the estimated benefit each will receive from the public improvement.

(Ord. No. 1629, § 2, 11-12-19)

A. A benefited property owner shall pay the applicable contribution charge set forth in the reimbursement agreement whenever that person obtains a land use approval. The charge is payable at the time a building permit is issued.

B. The contribution charge applies only: (1) after the reimbursement agreement is recorded; (2) during the period a reimbursement agreement is in effect; and (3) if the city engineer determines that the land use approval involves the scope and type of development contemplated by the reimbursement agreement.

C. Payment of the contribution charge is not required as a condition of issuing an approval for the alteration or enlargement of an existing building or structure (or the erection of an accessory building or structure) on a benefited property if the work:

1. Is on the same parcel of land;

2. Does not create an additional dwelling unit;

3. Will not change the potential for use of the public improvement; and

4. In any three year period will not exceed one-half the value of all existing improvements on that parcel of land.

D. No property may be charged a double fee under this section.

E. A benefited property owner has no obligation to pay a contribution charge if the owner does not develop the property during the effective period of the reimbursement agreement.

F. All contribution charges shall be held by the city or deposited into a trust fund in a local institutional depository. The right of the applicant to the reimbursement payment therefrom shall be personal to the applicant and shall not run with or be assignable with the property owned by the applicant at the time the reimbursement agreement is executed.

(Ord. No. 1629, § 2, 11-12-19)

The city council may adopt rules and regulations it considers necessary to implement this chapter.

(Ord. No. 1629, § 2, 11-12-19)