San Diego Municipal Code Div. 19 Assessment Deferrals For Low–Income Property Owners

The purpose and intent of this Division is to provide qualified low–income owners with an alternative method for payment of special assessments levied against their real property. The Council finds and declares that state special assessment laws and city procedural ordinances providing for payments of assessments and bonds in lump sums or in annual installments often results in financial hardship to low–income owners and, in the exercise of the Council’s charter power to make suitable provision for the aid and support of the poor, determines that it is in the public interest for the City to provide a method for the deferral of payment of special assessments levied against the real property of qualified low–income owners until such time as the property is transferred or refinanced. The Council further finds and declares that all expenditures and investments made pursuant to this Division are incidental to the accomplishment of the primary purpose of making suitable provision for the aid and support of the poor. (“Purpose And Intent” added 10–26–1977 by O–12196 N.S.)

This Division is adopted pursuant to the City’s charter powers to make and enforce all ordinances and regulations in respect to municipal affairs. To the extent of any inconsistencies between the provisions of this Division and those of the 1911 Act, 1913 Act, or other state law, the provisions of this Division shall control. (“Inconsistencies with State Law” added 10–26–1977 by O–12196 N.S.)

This Division is limited to qualified low–income owners residing within The City of San Diego and 1911 Act and 1913 Act proceedings providing for the issuance of bonds to represent unpaid assessments either under (a) the Improvement Act of 1911 (commencing with Section 5000 of the Streets and Highways Code) or (b) the San Diego Improvement District Procedural Ordinance of 1982. (San Diego Municipal Code section 61.230, et seq.) There are no age restrictions for qualified low–income owners. This Division applies to both pending and completed special assessment proceedings. (Amended 10–24–1983 by O–16065 N.S.)

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The meaning of the various terms, as used in this Division, shall be as follows:

(a) 1911 ACT means the Improvement Act of 1911 (commencing with Section
5000, Streets and Highways Code) and any other special assessment act or
procedural ordinance providing for an earlier hearing on the resolution of
intention and a separate and later hearing on the assessment.

(b) 1913 ACT means the Municipal Improvement Act of 1913 (commencing with
Section 10000, Streets and Highways Code) and any other special assessment
act or procedural ordinance providing for a single combined hearing upon the
resolution of intention and the assessment.

(c) APPLICANT means the person or persons filing an application for
assessment deferral or whose application has been finally approved by the
Department.

(d) ASSESSMENT BOND means an obligation to pay money at a definite time
or times, issued or to be issued, to represent an unpaid assessment pursuant to
the provisions of the Improvement Act of 1911 (commencing with section
5000 of the California Streets and Highways Code) or the San Diego
Improvement District Procedural Ordinance of 1982. (San Diego Municipal
Code section 61.2300, et seq.)

(e) ASSESSMENT DEFERRAL FUND has the meaning set forth in Section
61.1904.

(f) BOND AGREEMENT has the meaning set forth in Section 61.1911.1.

(g) CITY means The City of San Diego.

(h) CITY MANAGER means the City Manager and any officer, department, or
division of the city designated by him for the administration of this Division.

(i) COMPLETED PROCEEDING means a special assessment proceeding in
which assessment bonds have been delivered by the City to the person or
persons entitled thereto.

(j) INCOME means all income of any nature from any source derived, including,
but not limited to, salaries, wages, dividends, interest, capital gains, rents,

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income from the operation of a farm or business, income from the sale or exchange of property, gifts, inheritances, Social Security payments, other retirement benefits, welfare benefits, alimony and support payments and any other thing of economic value.

(k) LOW–INCOME OWNER means an owner (i) whose income is within the guidelines for low–income citizens and families set by the United States Department of Housing and Urban Development, Economic Marketing Analysis Division, as adjusted annually for the San Diego Metropolitan Statistical Area and (ii) whose net assets do not exceed $10,000.

(l) MORTGAGE means a mortgage deed, a deed of trust, or any other instrument
which constitutes a lien on real property.

(m) NET ASSETS means all real and personal property of any character which a
low–income owner owns or has an interest in, including stocks, bonds, and
savings accounts but excluding the real property subject to assessment
deferral.

(n) OWNER means the person or persons owning and occupying real property in
The City of San Diego which is subject to special assessment pursuant to the
1911 Act or 1913 Act and successors in interest or the legally appointed
representatives of such person or persons.

(o) PENDING PROCEEDING means a special assessment proceeding in which
the resolution of intention has been adopted but the assessment bonds have
not been delivered by the City to the person or persons entitled thereto.

(p) REFINANCING means any new indebtedness incurred by an owner after
delivery to the City of a bond agreement or a mortgage pursuant to this
Division and any extension, modifications, or additional advances made upon
any indebtedness previously incurred by an owner, where such indebtednesses
are secured by a mortgage on all or any part of the real property in which the
City has a security interest.

(q) SAN DIEGO IMPROVEMENT DISTRICT PROCEDURAL ORDINANCE
OF 1982 means any assessment bond issued pursuant to the provisions of
Chapter 6, Article 1 of Division 23, commencing with section 61.2300 of this
Code.

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(r) SECURITY or SECURITY INTEREST has the meaning set forth in section
61.1910.

(s) TRANSFER, when referring to real property, means any sale, exchange, gift, or lease of real property or any interest therein, whether made by the original owner, any successor in interest or legally appointed representative of the owner or made pursuant to the laws of inheritances and succession. (Amended 10–24–1983 by O–16065 N.S.)

An Assessment Deferral Fund is hereby established in the City Treasury. All moneys appropriated by the Council for the purpose of this Division shall be deposited to the credit of that fund. All income, losses, and expenditures resulting from the provisions of this Division shall be credited or debited, as the case may be, to that fund. (“Assessment Deferral Fund” added 10–26–1977 by O–12196 N.S.)

The resolution of intention may provide for the assessments and bonds upon the real property of qualified low–income owners to be classified into longer or shorter maturities than assessments and bonds upon other real property in the assessment district. (“Maturity of Assessments and Bonds” added 10–26–1977 by O–12196 N.S.)

A qualified low–income owner must meet the following eligibility requirements:

(a) Owner’s income must be within the guidelines for low–income citizens and
families set by the United States Department of Housing and Urban
Development, Economic Marketing Analysis Division, as adjusted annually
for the San Diego Metropolitan Statistical Area.

(b) The value of owner’s net assets cannot exceed $10,000.

(c) The real property for which assessment deferral is sought must be owner–
occupied unless otherwise excepted and approved by the City Council.
(“Qualifications of Low–Income Owners” added 10–26–1977 by O–12196 N.S.)

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Before giving final approval to any application for assessment deferral, the City Manager shall obtain security for payment of all amounts then or thereafter to become due to the City. In the discretion of the City Manager, the security may consist of either of the following:

(a) The purchase by the City of the assessment bond issued or to be issued upon
applicant’s real property and the execution of a bond agreement between the
City and the applicant pursuant to Sections 61.1911 and 61.1911.1.

(b) The payment by the City of the special assessment due or to become due upon
applicant’s real property or the redemption and prepayment by the City of any
existing assessment bond upon applicant’s property and the execution and
delivery by applicant to the City of a note and mortgage pursuant to Sections
61.1912 and 61.1912.1.
(“Security for Assessment Deferral” added 10–26–1977 by O–12196 N.S.)

Where an owner has executed a bond agreement pursuant to Section 61.1911.1 or a note pursuant to Section 61.1912.1, the owner may at any time pay the City Manager all or any part of the amounts due the City upon the bond agreement or the note. All

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payments received by the City Manager shall be deposited in the Assessment Deferral Fund.

The City Manager shall deliver to the owner a receipted statement showing the full amount of principal, interest and other amounts due the City on the date of payment, the amount of the payment made, and the balance, if any, remaining unpaid on the date of payment. Where a partial payment is made, the payment shall first be applied to reduce the interest then due the City and any remainder applied to reduce the principal and any other amounts then due the City.

Upon full payment to the City of a bond agreement or note, the City Manager shall execute and deliver to owner a notice of satisfaction of the agreement or note and, in the case of a note, a release of the mortgage. (“Owner Prepayment upon Bond Agreement or Note” added 10–26–1977 by O– 12196 N.S.)

Upon delivery of a mortgage to the City, the city shall have all of the rights and liens specified in the mortgage. A bond purchase by the City shall not constitute the redemption and prepayment of the bond by the City. Upon the purchase of a bond, the City shall become the owner of the bond and shall succeed to all of the rights and liens of the bondholder to enforce all payments upon the bond. (“Rights of City under Mortgages and Bond Purchases” added 10–26–1977 by O– 12196 N.S.)

Upon receipt from the City Manager of notice of actual or probable default upon a bond agreement or note delivered to the City, the City Attorney shall undertake such legal action as may be necessary to protect the interests of the City.

Where an assessment bond has been purchased by the City and a bond agreement
filed, the City Attorney may either make a written demand upon the City Treasurer
for the sale of the property or file and maintain an action for the judicial foreclosure
of the lien of the bond, all as provided in the Improvement Act of 1911.

Where a note and mortgage have been delivered to the City, the City Attorney shall
either cause a trustee’s sale of the property to be made or file and maintain an action
for the judicial foreclosure of the mortgage.

If, in the opinion of the City Attorney, all or part of the amounts due the City are
uncollectible or the estimated costs and expenses of collection would exceed the
amount of the probable recovery, the City Attorney shall so report to the Council,
together with his recommendations. Thereupon, the Council may instruct the City
Attorney to further prosecute enforcement of the security or authorize the City
Attorney to compromise or write–off all or any part of the amounts due.
(“Enforcement of Security by City Attorney” added 10–26–1977 by O–12196 N.S.)

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Article 1: Public Improvement and Assessment Proceedings