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HomeMy WebLinkAboutAgenda - 02-16-2006-3ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 16, 2006 Action Agenda Item No. _~ SUBJECT: Water and Sewer Assessment Process DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) No ATTACHMENT(S): OWASA Assessment Procedures INFORMATION CONTACT: Paul Thames, 919-245-2303 PURPOSE: To advise the BOCC as to processes of water and sewer assessments, including those specified by the NC General Statutes. BACKGROUND: In past discussions, its has been noted that Orange County faces the prospect of financing a number of utility extension projects to serve proposed schools and parks and the central Efland and Buckhorn areas. Utility assessments are one method of financing such projects in such way as to insure that those who benefit from utility extensions and have the ability to pay their share of the associated costs actually do pay their share. In general, assessment projects are initially financed by the utility owner and the assessment process is utilized to recover the utility owner's initial investment over a period of years. The basics of utility assessments (public hearing process, methods of calculations of pro rata cost assignment, etc.) are specified under the provisions of the NC General Statutes. However, each utility and its elected/governing board may approach the assessment process and assessment financed projects differently. The attached material outlining the policies, practices and procedures employed by the Orange Water and Sewer Authority represents the approach of one utility. OWASA's approach may be adopted in whole or in part by the BOCC, should the Board wish to employ an assessment process to recover all or some portion of the County's cost in the utility projects it undertakes. OWASA's Director of Operations Jahn Greene has been invited and is scheduled to be on hand to make a short presentation on OWASA's utility assessment process. FINANCIAL IMPACT: There is no direct financial impact RECOMMENDATION(S): The Manager recommends that the BOCC receive the information requested and direct staff to provide any additional information as the Board desires. a ORANGE WATER AND SEWER AUTHORITY ASSESSMENT POLICY APPLICABLE TO WATER AND SEWER EXTENSIONS TO EXISTING iTNSERVED NEIGHBORHOODS PURPOST;: The purpose of this policy is to set forth the principles and guidelines for the extension of and the allocation of cost for the water and/or sewer mains of the Orange Water and Sewer Authority (OWASA) when such facilities are extended through the assessment process. BACKGROUND: An integral part of the operation of the OWASA is the orderly extension of water and/or sewer service from its existing facilities or the construction of new facilities.. This extension of service may consist of the construction of new collectors, interceptors, mains, pump stations and other appurtenances necessary to serve a group of properties whose owners have petitioned OWASA for service and have agreed to assume the cost of the water and/or sewer extension or to serve properties without a petition from property owners that OWASA has determined are benefited by the extension, The North Carolina General Statutes and the Sale and Purchase Agreements with Town of Chapel Hill, Town of Carrboro and The University of North Carolina at Chapel Hill enable the Orange Water and Sewer Authority to make such extensions and assess to the benefited parties the costs associated with the respective extensions. POLICY: OWASA, at the discretion of the Board of Directors, may arrange for the installation of water and sewer mains to serve existing developed areas and assess the cost of the improvements to the benefited properties in accordance with the North Carolina General Statutes. Extension to new development will not be financed through the assessment process, If undeveloped land within an assessment area benefits from assessment project then such land will be assessed for the improvements, Undeveloped land through or along construction of off-site extensions may also be assessed. Assessment projects must have prior approval of the OWASA Board of Directors and may be initiated by petition of residential properly owners, County or State public health agencies, by a County or municipaliTy, or by OWASA at its discretion. OWASA's decision to undertake an assessment project shall not be subject to prior endorsement from a majority of the property owners benefiting From said project. In determining whether or not to proceed with an assessment project, OWASA will consider the needs of all property owners who are impacted by such project, Multiple assessment project requests will be prioritized for construction by OWASA. Extension of'setvice shall be made in a manner to appropriately serve individual properties and to allow for the future orderly development of the water and/or sewer system to serve other properties, Water and/or sewer main extensions and appurtenant facilities installed by OWASA through the assessment process shall be financed by the owners of the benefited properties through (1) special assessments made in accordance with the provisions of the North Carolina statutes and taws; (2) prior funding of the improvements; and/or (3) other financial arrangements satisfactory to OWASA. The cost of the assessment project, as determined by OWASA, shall be specially assessed against each of the lots or parcels determined by OWASA as benefiting from the project and set out in a Final Assessment ROIL, Such allocation of cost shall be in accordance with the provisions of North Carolina General Statutes 153A, Article 9, Special Assessments. 3 Costs recovered through assessment shall not include the engineering design and construction observation expenses in an amount up to IS% of total expenditures for a given project.. Costs recovered through assessments shall not include the legal expenses in an amount up to 5% of total expenditures for a given project. Any such engineering design and observation costs in excess of 15% and/or legal costs in excess of 5% will be included in the summation of costs to be assessed, Costs recovered through assessments shall not include off-site costs, including any easement acquisitions of intervening improvements required to connect assessment projects situated within the incorporated limits of Chapel Hill and Carrboro when the OWASA Board of Directors determines that (a) the off site improvements are assessed to intervening benefited properties; or the cost of the off site improvements aze reasonably anticipated to be recovered within the next ]0 year period through fees from service connections or extensions to the proximate intervening properties; and (b) the costs of the off-site improvements that are not assessed are in reasonable relationship to the costs of the assessment project and funding is available in the approved Capital Improvements Budget for such off-site cost, or funds are reliably available from other sources such as grants, subsidies or contributions in aid of construction from private or public parties.. The exclusion of off-site costs for assessment projects situated outside of incorporated areas but within the Urban Service Areas of Chapel Hill and Carrboro shall be determined by the OWASA Board of Directors for each such project.. Exclusion of off-site costs shall not apply to assessment projects situated outside the Urban Service Area of Chapel Hill and Carrboro. Off-site mains shall be defined as those sections of mains installed outside of the benefited area and are of a size so as to provide service to areas other than that defined by the assessment project resolution.. Upon completion of the project, property owners will be notified and a Final Assessment Roll adopted. Liens against the property will be recorded as security for the amount of [he assessment. Assessments may be paid without interest at any time before the expiration of thirty (30) days from the date that notice of confirmation of'tlre Final Assessment Roll is published. If the assessments are not paid within this time, all installments shall until paid, bear interest at a rate set by the OWASA Board in the assessment proceedings until paid. In the event one or more payments of'the assessment against a pazcel of property aze not made in accordance with the terms for such payment, OWASA will take action under the lien to collect the money due, For assessment projects, the property owner connecting within sixty (60) days of the confirmation of the Final Assessment Roll may enter into a contract with OWASA to pay service availability fees for connections to lines extended by an assessment project, but not service connection fees, under established terms and conditions by monthly installments over the same time period and at the same interest rate as established for the assessment project costs. The installation payment of service availability fees shell become a part of'the monthly billing for service and nonpayment shall be subject to the same policies and penalties that apply to delinquency in the payment of monthly charges for water and sewer provided by OWASA. The unpaid balance shall be secured by a lien against the benefited property and personal security to satisfy any outstanding balance upon sale of the property. The payment of the unpaid balance shall become due upon transfer of the property, For assessment projects, the residential property owners connecting within ninety (90) days of notice from OWASA that the construction has been completed and service is available for active service connections, the service availability fees applicable to the property will be reduced by 25% not to exceed $500 per benefited property.. If an assessed lot is subdivided at any time after adoption of'the Final Assessment Roll, the newly created lots shall be required to pay all applicable availability fees in accordance with dte Schedule of Rates and Fees in effect at the time, prior to establishing a service connection to the system(s) owned by OWASA. - OWASA Schedule of Rates and Fees - OWASA Water and Sewer Extension Policies Reviewed by General Counsel: Date General Counsel Adopted by the Board: Date Clerk to the Board 5 ORANGE WATER AND SEWER AUTHORITY ADMINISTRATIVE PROCEDURES SPECIAL ASSESSMENTS ON WATER AND SEWER LINE EXTENSIONS 1. At the request of the Board or the request of an applicant the staff will perform a preliminary review, utilizing topographic, tax and system maps, of a project area to determine the benefited properties and develop a preliminary layout and an estimated range of costs to construct the improvements necessary to provide water or sewer service to the area, 2. The preliminary information will be provided to the requesting party.. The applicant may circulate a petition among the benefited property owners or further study of the service extension may be needed. 3. Upon receipt of a formal petition from the benefited parties the Board may direct the staff to proceed with a detailed engineering study of the area. The Board may determine to proceed with an engineering study of an area without a petition for service being presented by the property owners. 4, The staff will select a consulting engineer who will obtain the field information necessary to develop construction drawings. The engineer will prepare a preliminary and final cost estimate based upon the construction drawings, 5. The staff will receive the detailed design data and determine an estimated assessment project cost based upon construction cost information from recent utility projects, 6. Should the Board find that the project can be funded within the adopted Capital Improvements Budget the staff will prepare a Preliminary Assessment Resolution for adoption in accordance with North Carolina General Statutes Article 9, 153A-190, The Preliminary Assessment Resolution will note the time, date and place for a public hearing on the proposed project. The public hearing date shall be no earlier than 3 weeks and not more than 10 weeks after adoption of the resolution. 7.. At least 10 days prior to the date set for the public hearing a notice that a Preliminary Assessment Resolution has been adopted will be published in a newspaper of general circulation in the county where the project will be undertaken noting the general nature and location of the improvements. In addition, a copy of the Preliminary Assessment Resolution will be mailed by first-class mail to each owner as shown on the county tax records of the property subject to be assessed. A certificate stating that the resolutions ~0 Procedure far Assessments Page 2 were mailed by first-class mail and the date of such mailing shall be filed with the Board.. 8. At the public hearing information will be provided on the proposed assessment project, Terms of the assessment will be discussed and comments will be received from all interested persons who appear with respect to any matter covered by the Preliminary Assessment Resolution. 9, Following the close of the public hearing the staff will prepare a Final Assessment Resolution which the Board may adopt. The resolution shall describe the project in general terms, state the basis on which the assessment will be made and give a general description of the area to be assessed. In addition the resolution shall state the percentage of the work to be assessed, the terms of payment and include conditions, if any, under which assessments are to be held in abeyance, 10. Upon adoption of the Final Assessment Resolution the staff will proceed with the permitting, acquisition of easements and bidding of the proposed project improvements, The bids will be tabulated and presented to the Board for an award of construction. 11, Upon completion of the construction work the staff will accumulate all charges for the project including engineering, inspections, construction, easement acquisition, legal, and administrative. From this information the full cost of the project will be determined. From the ftall project cost the staff will exclude engineering and inspection fees (up to 15% of the construction cast), legal and easement acquisition costs (up to 5% of the construction cost) and all administrative costs. The remaining amount will be the amount to be assessed to the benefited parties less any contribution by the Towns or County. 12. The staff will notify by mail all property owners in the assessment area that the constriction work has been completed and that service connections may be made to the system upon payment of the appropriate availability fees, Prior to connecting to the system the applicant must make arrangements with the Authority to pay these fees in a lump sum or over a period of time and at an interest rate established by the Board, 13. When the total costs have been determined a Preliminary Assessment Roll will be prepared by the staff far adoption by the Board. This roll shall contain a brief description of each lot or parcel to be assessed, the amount of the assessment against each lot or parcel (in practice, the Board will have established this in the adoption of the Final Assessment Resolution), the terms of payment, the name and address of each lot or parcel owner as indicated on the county tax records and state a time and place for a public hearing on the roll. The Preliminary Assessment Roll shall be on file in the clerk's office where it is available for public inspection. Procedure for Assessments Page 3 14. At (east 10 days prior to the public hearing a notice shall be published that the Preliminary Assessment Roll has been completed, In addition the notice shall be mailed by first-class mail to each owner of property listed in the roll. This notice shall state the time and place of the hearing, note that the roll is available for inspection in the clerk's office and state the amount as shown in the roll of the assessment against the property, A certificate stating that the mailing of the notices was completed and the date the notices were mailed shall be filed with the Board. 15. At the public hearing the Board shall hear from all interested persons who appear with respect to the Preliminary Assessment Roll. At or after the public hearing the Board shall annul, modify or confirm the assessments in whole or in part, either by confirming the preliminary assessment against any lot or parcel or by canceling, increasing, or reducing the assessments as may be proper. 16, Upon confirming the Preliminary Assessment Roll the staff will prepare a Final Assessment Roll for adoption by the Board. The clerk of the Board shall enter into the minutes of the Board the hour, minute and date of the adoption. From the time of this confirmation, each assessment is a lien on the property assessed. A copy of the Final Assessment Roll shall be delivered to the county tax office for collection in the same manner as property taxes. 17, After adoption of the Final Assessment Roll but not earlier than 20 days from the date of its adoption, a notice that the roll has been confirmed shall be published. The notice shall state that assessments may be paid without interest at any time before the expiration of 30 days from the date the notice is published and if not paid within this time, all installments shall bear interest as determined by the Board. 18. The Authority will establish accounts for all assessed properties an which annual payments shall be made by the property owners. The first installment with interest is due 60 days after the date that the assessment roll is confirmed. Future installment payments are due with interest on that same day in each successive year until the assessment is paid in full, ADMINISTRATIVE PROCESS FOR EXTENSION OF WATER AND SEWER UNDER ASSESSMENT PROJECTS 1. Citizens request information from staff on water or sewer availability and estimated cost of extensions, 2. Staff prepares preliminary water or sewer layout and develops range of extension costs. 3. Citizens circulate petition for water or sewer service among property owners and present signed petition to Board of Directors,. 4. Board directs statPto obtain detailed engineering study of project area. 5, Staff determines estimated project cost from detailed design. 6, Board reviews project information and determine availability of funds within adopted CIP. 7. Staff prepazes Preliminary Assessment Resolution for adoption by Board. Staff publishes notice of public hearing and mails copies of adopted resolution to property owners in benefited area. 8. The Board holds public hearing. At completion of public heating, staff prepares a Final Assessment Resolution and establishes the total project cost. 9. Board adopts Final Assessment Resolution, and staff proceeds with permitting, easement acquisition and bid process, 10. Board awards construction contract, and project construction begins and is completed. 11, Staff notifies property owners that construction is complete. Property owners pay availability fees and may connect to the line, 12. Staff accumulates cost data on project. 1.3. Staff prepares Preliminary Assessment Roll for adoption. Staff publishes notice of public hearing and mails notices to property owners. 14. The Board holds public hearing. At completion of public hearing, staff prepares Final Assessment Resolution for adoption. 15.. Board adopts Final Assessment Roll and publishes notice of its adoption, 16. The Authority establishes accounts for all assessed properties, and property owners make annual payments, with interest, on the assessment.. Property owners must pay first installment payment within 60 days after confirmation of the Final Assessment Rolh Contact OWASA's Engineering Deparhnent for, further detail.