Chapter 14.22

DEFERRAL OF ASSESSMENTS

Sections:

• 14.22.030 Criteria for deferral.

• 14.22.040 Petition.

• 14.22.050 Deferral agreement.

• 14.22.060 Hearing.

• 14.22.070 Council action.

• 14.22.080 Repayment.

• 14.22.100 Assessment payments constitute a lien.

The purpose of this chapter is to promote and protect the public peace, health, safety, and general welfare, and in furtherance of the foregoing to do the following:

1. To provide a method which helps promote orderly development in conformance with the general plan by discouraging the premature development of certain small parcels within assessment districts created pursuant to Chapters 14.16 and 14.20.

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2. To slow down the pressure to develop certain parcels by deferring the financial burden that assessment payments might cause for the owner of such parcels; and

3. To encourage the accumulation of small parcels into larger parcels that are suitable for desired development.

• (Ord. 22352.)

No parcel shall be eligible for consideration under this chapter unless it is located in an assessment district which is also part of a redevelopment area or in a district for which the city has established a special deferral fund. (Ord. 22352.)

The owner of a parcel within an eligible assessment district may petition the city council for deferral of certain of the assessment installments upon said parcel provided that the owner can demonstrate to the satisfaction of the city council that:

• A. The developable portion of the parcel is smaller than the city wishes to encourage from the district; and

• B. It would be desirable to have the parcel eventually be aggregated with at least one other parcel; and

• C. The parcel is presently undeveloped, or, is used as the primary residence of the owner, or if the parcel is owned by a trust, is used as the primary residence of a beneficiary of the trust; and

• D. The amount of the annual assessment is such that its payment would create an undue hardship on the owner; and

• E. The parcel is in an eligible district under Section 14.18.020.

• (Ords. 22352, 26385.)

• A. All petitions for deferral of assessment payments shall be filed with the director of public

works. The form of such petition and the information and data required to be set forth thereon shall be as prescribed by the director.

• B. A separate petition shall be filed for each parcel. Each petition shall be signed by all owners of the parcel or by a person having the lawful power of attorney thereof.

• C. The agreement specified in Section 14.18.050 shall be signed by all the owners of the parcel or by a person having the lawful power of attorney thereof and shall be submitted with the petition.

• (Ord. 22352.)

• A. The property owner shall submit with the petition an executed deferral agreement. The agreement shall be in the form provided by the city and shall provide that:

  1. The city will make the annual assessment payments on behalf of the property owner;

  2. The agreement may be cancelled at the sole option of the city at least sixty days prior to the due date of the next assessment or at sale, transfer or development as specified in Section 14.18.080;

  3. The agreement may not be assigned by the owner; and

  4. The amount of the payments made by the city shall become a lien upon the parcel.

• B. No deferral agreement shall be construed to be a debt of the city.

• C. No deferral agreement shall be construed to restrict, reduce or eliminate any remedy of a bondholder secured by assessments thereunder upon an event of default under such bond or resolutions pertaining to such bonds.

• (Ord. 22352.)

• A. Upon receipt of a petition for deferral of assessment payments, the director of public works shall cause the matter to be set for a public hearing before the city council.

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• B. Notice of time, place, and purpose of such hearing shall be given to the owners and to any person having the lawful power of attorney thereof. Notice will be sent to the address designated for such purpose on the petition.

• C. Such notice of hearing by the city council shall be mailed by the city clerk, postage prepaid, at least seven calendar days before the date set for the hearing, to those persons specified in subsection B. above. The form of such notice of hearing shall be as prescribed by the city council. Upon the mailing of such notice, the city clerk shall file in the proceedings a declaration that such notice has been mailed.

• D. Nothing herein shall preclude the city from providing additional notice to other persons or in any other manner.

• E. Notwithstanding the above, the failure of the city clerk to mail any notice or the failure of any person to receive the same shall not affect, in any way whatsoever, the validity of any proceedings taken under this part, nor of any action or decision of the city council made or taken in any such proceedings, nor prevent the city council from proceeding with any hearing at the time and place set therefor.

• (Ord. 22352.)

• A. After its hearing on the petition, if the city council at its sole discretion finds that:

  1. The owner has demonstrated to the satisfaction of the council that the parcel has met all of the criteria set forth in Section 14.22.030, and

  2. Encouraging the parcel to remain undeveloped or underdeveloped will meet important economic, social, environmental, or planning goals of the city, the council may adopt a resolution authorizing the city clerk to execute the deferral agreement with the owner.

• (Ord. 22352.)

• A. The amount of any deferred assessments, including interest at a rate to be determined by

the city, shall be a lien upon the property. The amount, plus interest, shall be due and payable upon the earlier of:

1. Sale or transfer of the parcel; or

2. Development of the parcel.

• B. For purposes of this chapter, transfer shall mean every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an interest in the parcel, except that transfer shall not include the following transfers:

  1. Transfer to a surviving spouse upon death of the other spouse.

  2. Transfer of residential property to the property owner's child or children.

• (Ords. 22352, 26385.)

• A. After execution of the deferral agreement by the city clerk, a copy of the same shall be given to the director of public works, who in turn shall file a certified copy thereof with Santa Clara County.

• B. No deferral agreement shall be effective until it has been recorded with the Santa Clara County recorder's office and any recordation fees have been paid by the parcel owner.

• C. The director of finance shall file with the Santa Clara County a notice of lien increase setting forth the amount of each annual assessment payment made by the city pursuant to a deferral agreement. Failure to file this notice shall not affect the lien or the city's right to collect the entire amount advanced, plus interest.

• (Ord. 22352.)

• A. Any sums advanced by the city for payment of assessments pursuant to this chapter, together with the interest thereon, shall be a lien on the parcel. The lien shall be paramount to all other liens except for state, county and municipal taxes with which taxes it shall be on a parity.

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• B. After receipt by the city of the full amount of the lien, together with interest thereon, the director of finance shall file a release of lien with Santa Clara County recorder.

• (Ord. 22352.)

Each petition shall be accompanied by the fee as set forth in the schedule of fees established by resolution of the city council. (Ord. 22352.)