A Layman's Guide for Establishing a Utility Special Assessment District (USAD)

Click here to download PDF version of this document

Click here for a printable version of the USAD Brochure

A LAYMAN'S GUIDE FOR ESTABLISHING A USAD

KPB 5.35 Special Assessments – Public Utilities

An Unofficial Guide

The Layman’s Guide addresses a few frequently asked questions, and provides a general outline of the steps (see pgs. 5-8) that need to be taken to implement a Utility Special Assessment District (USAD). This Guide does not cover all aspects of the borough code or associated ordinances.  For more in depth detail, you may research Kenai Peninsula Borough Code, Chapter 5.35, online from the Assessing Department’s “Online Services” link, or contact the Special Assessment Coordinator in Assessing.

    • KPB Assessing Dept: (907) 714-2230 or (800) 478-4441 Ext 2230 (borough only)
    • KPB Website: http://www.kpb.us   –       under “Online Services” – Research Borough Code

FREQUENTLY ASKED QUESTIONS

What is a USAD?

A Utility Special Assessment District – or USAD – is a process which may be used to finance the extension of the main lines of service of public utilities which are regulated by the Regulatory Commission of Alaska, or of city-owned utilities to areas outside the boundaries of the city.  Generally, these relate to electric, natural gas, telephone, water, and wastewater systems.  The allocated cost will be assessed (charged) to each benefited property by means of a special assessment lien.  USAD’s are not available for the construction and financing of private hookups or for service connections running from the utility’s main line to private structures or facilities on the benefited parcels.

In regards to special assessments, the following terms mean:

  • Benefited means an advantage gained from the improvement that is greater than that shared by the general public, such as increased property value and marketability, a special adaptability of the land, or a relief from some burden (for example, lower energy costs). For USADs, a benefited parcel must be directly benefited by the improvement, which means, the property may hook up a private service line to the utility’s main line without any further extension of the main line, based upon the utility’s guidelines.

  • District means an area composed of individual parcels of land (benefited parcels) that are connected to the public improvement for which the special assessment is to be levied.

Who initiates a USAD?

Any property owner wishing to bring the utility to their respective property or neighborhood can initiate the process to implement a USAD. The person (or persons) who initiate the project, referred to as the sponsor or sponsors, will coordinate the project on behalf of the property owners of the proposed district.  Being a sponsor is no easy task! The role will involve some organizational and communication skills.  Co-sponsors are permissible and even encouraged for larger districts.

How is a USAD initiated?

The best way to start defining the area of the district is for the sponsor to contact the utility company. The utility company will have the information about where the utility’s main line currently exists and the feasibility of extending the service to the respective property or area.  An engineer’s estimate will be formally requested by the borough from the utility company after the district boundary has been approved by the mayor.

To formally initiate a USAD, the sponsor must submit an application and map to the KPB Assessing Department for the formation of a special assessment district. While there is no application deadline to start a USAD project, this is a lengthy process which may take several months to obtain assembly approval prior to construction, therefore, it is recommended the sponsor submit the application and map no later than December 1 for a desired construction for the following year.  Timeline for Assembly approval to form the district and approve the improvement must meet the utility company’s timeframe for construction.

After the sponsor submits the application and map, the assessor and mayor will review the proposed district to determine all benefited parcels are properly included in the district. Once the boundary has been approved, an engineer’s estimate will be formally requested by the Assessing Department.

What is the required petition signature percentage thresholds?

Code requires the owners of record of at least (a) 60% of the total number of parcels subject to assessment within the proposed district, and, (b) 60% of the value of the property to be benefited, must agree to share in the cost of the improvements of a USAD.  For this reason, it is advisable to informally talk to your neighbors to get a feeling if the majority of owners are willing to sign a petition for the improvement.  The project will not go forward without the required signature thresholds.  As with other forms of petitions, benefited property owners signify their approval of the project by signing the approved petition form.

Who will be assessed (charged)?

All the benefited parcels within the district boundary will be charged an equal portion on a per parcel basis of the actual total costs for the improvement.  These costs include, but are not limited to, design, engineering, administration costs, financing costs and interest, and all other costs resulting from the construction of the improvement, less any prepayments.

The assembly may assess any real property, or any interest in real property, that is determined to be directly benefited by the improvement. Benefited parcels may also include property which is otherwise for any reason exempt from taxation by law, such as property owned by the State, Borough, or a non-profit organization.  Owners of properties within the boundary who oppose the project will also be assessed as their parcels will still be benefited by the improvement.

A special assessment constitutes a lien on the real property, and as such, is enforceable through a foreclosure process in the same manner as for non-payment of property taxes, and are prior and paramount to all liens except municipal tax liens. The lien will remain on the parcel until the debt has been paid in full.  Borough policy requires that special assessments be paid in full prior to the transfer of ownership.

What is provided in the special assessment?

USADs provide financing for the extension of the utility’s main line ONLY, and is not available for private hookups or service connections from the main line to private structures. Property owners must contact the utility company directly concerning any additional costs for service lines, meters, and hookups (per KPB 5.35.107(A)).  The special assessment will only cover the actual cost for the utility company to extend the main lines of services for the utility sought, plus KPB administration costs based on the most current KPB Schedule of Rates, Charges and Fees.

When do the special assessments have to be paid?

Once the project has been completed, the actual cost of the public improvement will be assessed to each benefited parcel by equal allocation and payable in the manner provided by the ordinance levying the special assessment roll. This cost can be paid in full, or in ten (10) annual installments with interest on the unpaid amount of the assessment. Annual installment payments will include principal plus accrued interest.  The interest rate charged is the prime rate plus 2% as of the date the ordinance confirming the assessment roll is enacted by the assembly.  Special assessment billings are separate from real property tax billings.

What are the restrictions to forming a USAD?

  1. Lien Limit: As the assessment constitutes a lien on the benefited real property, the estimated amount of the assessment (or lien amount) to be levied against each parcel in the district may not exceed 50% of the currant fair market value (assessed value) of the property. If a parcel’s estimated amount of the assessment lien exceeds the 50% lien limit, the estimated amount of the assessment against the parcel may be reduced by the amount of a prepayment of assessments.

For example, a project with an estimated allocated cost per parcel of $5,000 (assessment), a property with a total assessed value of $9,000 would be required to make a partial prepayment of $500, and the remaining $4,500 (max. lien amount) may then be financed:

Assessed Value x 50% Lien Limit = Maximum Lien Amount                          $9,000 x 50%  =  $4,500

Estimated Assessment – Maximum Lien Amount = Prepayment               $5,000 – $4,500  =   $500

Prepayment + Financed amount = Total Assessment for this property

  • Prepayments of assessments are refundable if the assembly does not approve the resolution to form the district and proceed with the improvement. Any required prepayments of assessments which exceed the lien limits must be received no later than close of business at least 15 days prior to the date the assembly will act on the resolution.

  1. Delinquent Property Taxes: A Special Assessment District may not be formed if parcels in the proposed district that will bear more than 10% of the cost of the estimated costs of the improvement are subject to unpaid, past-due borough property taxes.

    i  Any payments of past-due property taxes must be received no later than close of business at least 15 days prior to the date the assembly will act on the resolution.

  2. One-owner Property: A Special Assessment District may not be formed if one (1) owner owns more than 40% of the total number of parcels to be benefited.

  3. Legal description of parcels: The legal description of benefited parcels within the proposed district as of the date of the mayor’s approval of the petition report (administrative review) will be used to determine assessment. No subdivision, reversion of acreage, or lot line adjustment will be recognized for USAD assessment purposes after the mayor's approval of the petition report. Any action to replat parcels within the proposed district must be completed and recorded before the date the mayor approves the petition report.

  • Should a property owner seek to subdivide a benefited parcel after the date of the mayor’s approval of the petition report, or after costs have been assessed, the property owner will be required to pay off the remaining balance of the assessment, or prepay estimated costs if the final assessment has not been determined, prior to approval of the final plat. ● If prepayment of the estimated cost of the assessment is required, the subdividing property owner will be issued a refund: (a) for any amount in excess of the prepaid estimated cost over the final assessment; (b) if the petition or project fails for any reason; or, (c) if a final plat is not approved and the subdividing property owner requests a refund of the prepayment in writing within 30 days of denial of the final plat. If the estimated costs are less than the final assessment the subdividing property owner will be responsible for payment of the difference, due within 30 days of the final assessment

Can a property be ‘excluded’ from a USAD?

After the sponsor submits the written notice of intent to proceed, the Assessing Department will provide notice to all affected property owners of the pending administrative review of the petition report.  This notice will provide a 45-day comment period, as of the date of the notice, for owners to submit any comment, including objections to their parcel’s inclusion on the proposed district, for the mayor’s review and consideration.  The date the comment or objection is received by the Assessing Department will determine if the comment or objection was received timely.  Comments and objections may be submitted via mail, by hand delivery, email or fax.

Per KPB 5.35.105(B): the mayor may exclude any real property from a USAD district which is not directly benefited by the proposed improvement.

If an owner claims the physical characteristics of his/her property make it (a) legally impermissible, (b) physically impossible, or (c) financially infeasible to develop or improve the property in a manner that would enable the property to benefit from the proposed utility improvement, the property owner has the burden of demonstrating that the property cannot be developed or improved.

Some examples may include: ▪ the utility company's inability to provide service to the parcel via the main line extension; ▪ plat restrictions on development of the property; ▪ financially infeasible as the cost to develop the property would exceed the increase in value due to development.

Any property excluded from a USAD district will (a) not be included in the calculation of the signature thresholds, and (b) will not receive the benefit of the improvement or be subject to the assessment.

Is there a deferral for economically disadvantaged property owners?

A deferment of payment of principle only may be available to qualifying residents of property within the Special Assessment District.  If approved, the deferral is a postponement of payment of principle only – this is not a forgiveness of the debt. Property owners must submit an application for the deferment each calendar year by February 1 to certify that the qualifying conditions continue to exist.  See the KPB Finance Department for application forms, and all restrictions and requirements for the deferment of principle.

Some qualifiers/restrictions: ● Real property must be owned and occupied as the primary residence and permanent place of abode of the qualifying applicant; ● Property owner must be economically disadvantaged - annual adjusted gross income is less than 200% of the US H&HS Poverty Guidelines for Alaska; ● Interest will continue to accrue and must be paid on an annual basis; ● If the property owner no longer qualifies based on the annual renewal application due to income qualifiers, or for changes in property ownership or residency, then payments on principal will resume, starting with the next payment due.

THE USAD PROCESS

Phase I:          Application & Map

The sponsor must submit an application and map (or detailed description of the proposed geographic area) to the KPB Assessing Department to form a Special Assessment District. It is recommended that the application and map be submitted no later than December 1.  Once the sponsor submits the application and map, the assessor will review the proposed district to determine all benefited parcels are included in the district. 

Both the assessor and the mayor must approve the boundaries of the proposed district. Once approved, the assessor will consult with the utility company and obtain the utility’s approval of the extension and a written estimate of the total cost of construction for the extension.

Phase II:        Intent to proceed & filing fee – Notice to property owners

Once the utility has provided an estimate cost for construction of the improvement and the total estimated cost for the project has been calculated, the Assessing Department will provide the estimate cost to the sponsor for consideration. If the sponsor wishes to proceed with the process, he or she must provide a written notice to the Assessing Department of intent to proceed with full administrative review of the petition report and pay a non-refundable filing fee based on the KPB Schedule of Rates, Charges & Fees.

USADs involving more than 150 properties may have additional time, up to 30 days, to collect signatures at the discretion of the mayor, so long as the delay has no negative impact on the utility company's estimate and timeframe for construction. The sponsor must request the additional time when submitting the notice of intent to proceed with administrative review (KPB 5.35.107(B)).

Notice to property owners:  After the written notice of intent to proceed and filing fee are received by the Assessing Department from the sponsor, the Assessing Department will mail notices to all district property owners of the proposed USAD.  The notice will include (a) a description and map of the Special Assessment District and proposed improvement; and (b) the timeframe for the mayor to complete the administrative review of the petition report – not less than 45 days and not more than 60 days from the date of notice per KPB 5.35.105(C).  Additionally, the notices will include:

i The legal description of parcels within the proposed district as of the date the mayor approves the petition report will be used to determine assessments. Any action to replat parcels within the proposed district must be completed and recorded before the date the mayor approves the petition report;

i That parcel owners may submit comments, including objections to their parcel's inclusion in the proposed district, in writing within 45 days of the date the Assessing Department mails the notices, in order to be considered in the mayor's review of the petition report.  The date the Assessing Department receives the written comment will determine whether that comment has been timely submitted.

Phase III:       Administrative review of the petition report

After the Assessing Department mails the notices to all affected property owners of the administrative review of the petition report, the assessor or assessor’s designee will prepare a petition report for the mayor’s review. The petition report will contain all documents that will be included in the petition, such as a project information sheet, a map of the proposed district, and the estimated assessment roll (a spreadsheet that will include the name of each recorded owner, tax parcel number, assessed value and legal description of each benefited parcel, the estimated cost of the project and cost per parcel).  Additionally, all written comments timely received, including any objections from parcel owners regarding inclusion of their property in the proposed district.

Review timeframe: The mayor will consider the petition report and make a final determination to approve the report or to require additional or amended information not less than 45 days and not more than 60 days from the date the assessing department mails notices to the affected property owners. 

If the mayor determines the district boundary as proposed in the petition report is improper, the mayor may modify and resubmit the district boundaries to the utility company for further consideration. The sponsor must provide written agreement of any changes to the boundaries, cost per parcel, or other project elements prior to the project proceeding.

If the petition report is approved by the mayor, the Assessing Department will prepare a final petition to provide to the sponsor for disbursement to all property owners. It will be at this point that the sponsor may begin the process to gather signatures of those property owners who are in favor of the project.

Phase IV:       Circulation & filing of petition, signature requirements

The Assessing Department will provide at least one copy of the approved final petition to the sponsor. The final petition will contain all the information approved in the petition report, and a petition signature page.  The sponsor will be responsible for distributing the final petition to all property owners within the approved boundaries, and for collecting the signed petition signatures pages of those property owners who support the formation of the USAD.

The owner(s) of record of the benefited property must sign and date the petition signature page to signify their approval of the project. As with other forms of petitions – a signature on the petition signature page represents the owner’s vote in favor for the proposed project.  The signed petition signature pages, and all required signature authority documentation, will compose the completed petition.

Deadline for collecting signatures – 45 days: The sponsor must submit the completed petition signature page(s) to the Assessing Department within 45 days of the date on which the assessing department distributes the petition to the sponsor. For this reason, it is very important to coordinate distribution of the petitions.  For example, the sponsor may want to consider mailing the out-of-area petitions a few days before distributing the local petitions to allow for a delay in mail time. 

USADs involving more than 150 properties may have additional time, up to 30 days, to collect signatures at the discretion of the mayor, so long as the delay has no negative impact on the utility company's estimate and timeframe for construction. The sponsor must request the additional time when submitting the notice of intent to proceed with administrative review (KPB 5.35.107(B)).

Petition signature thresholds: in order to be considered by the assembly for formation, the petition must contain the signatures of:

  1. at least 60% of the total number of parcels subject to assessment within the proposed district, and

  2. at least 60% in value of the property to be benefited (district’s total assessed value).

    Signature Requirements: 󠄻( 4 indicates additional signature authority documentation is required)

  • Multiple owners. When a parcel is owned by more than one person or entity, signatures for each owner are required in order for the parcel to count towards the signature thresholds.

  • Signature by Proxy. Signatures by proxy will not be accepted by the clerk.

  • Power of Attorney. 4 The signature of a power of attorney will only be accepted by the clerk if the signature is accompanied by a copy of the Power of Attorney document providing authority for such signatures.

  • Business entities. 4

    • Corporations: For parcels which are owned by a corporation, the petition must be signed by two individuals: one of whom is the chair of the board, the president, or the vice president, and the other of whom is the secretary or treasurer; or by another person or persons who have been given authority via corporate resolution.

    • Limited liability companies: For parcels which are owned by a LLC, the petition must be signed by a member if the LLC is member-managed, or by the manager, if a manager has been designated.

    • Other business owners: For parcels which are owned by another type of business entity, only those persons who have signatory authority to bind the business entity under Alaska Statutes may sign the petition as owner.

    1. 4 If a parcel is owned by a trust, only the trustee may sign as the property owner. If there are co-trustees, a majority must sign the petition in order for the parcel to count towards the signature thresholds unless otherwise provided in the trust document. The signature of the trustee(s) will only be accepted by the clerk if it is accompanied by a copy of the trust document.

  • Kenai Peninsula Borough. For property owned by the Kenai Peninsula Borough in the proposed district, the mayor will be the designee for signing any petition. If the borough abstains (declines to vote) from participating in the petition signature process, the total number of parcels within the district, for the purpose of calculating the signature thresholds, will be reduced by the number of parcels owned by the borough within the proposed district.

Signature withdrawal: A signature on a petition may be withdrawn only by written notice from the signer submitted to the Assessing Department prior to the final filing of the completed petition by the sponsor. A withdrawal is effective only if notice of the withdrawal is submitted before the filing of the completed petition.

Certification of petition:  Once the completed petition is submitted to the Assessing Department, the Borough Clerk will determine whether the petition contains sufficient signatures.  If the petition meets the requirements of the signature thresholds, the Borough Clerk will certify the petition and submit the petition to the mayor to prepare a resolution to form the district and proceed with the improvement.

Prepayments on lien limits and/or delinquent property taxes: For the purpose of the restrictions for (1) prepayments of assessments (lien limits), and (2) unpaid, past-due borough property taxes, any required payments must be received no later than close of business at least 15 days prior to the date the assembly will act on the resolution to form the district and proceed with the improvement.  Prepayments of assessments (only) are refundable if the assembly does not approve the resolution.

Phase V:        Resolution to form the district and proceed with the improvement

                        & Ordinance of appropriation of funds

If the Borough Clerk determines that the petition has sufficient signatures, the mayor or mayor’s designee will prepare for assembly consideration a resolution to form the district and proceed with the improvement.  The Finance Department will prepare an ordinance of appropriation for the estimated funds required for the project.  A public hearing will be held the night the resolution and ordinance are to be considered.

All property owners within the district will be notified of the public hearing by certified mail not less than 35 days before the date of the hearing, and by publication in a newspaper of general circulation in the borough not less than 30 days before the hearing.

Written objections to the necessity of the formation of the district may be filed with the Borough Clerk for a period of 30 days after mailing of the notice of the public hearing. If written objections are filed by the owners of parcels bearing 50% or more of the estimated cost of the improvement, then the assembly may not proceed with the improvement.

After the public hearing, the assembly may adopt the resolution to form the district and proceed with the improvement. If adopted, the resolution will authorize the mayor to proceed with the construction of the improvement, and require the clerk to record in the District Recorder’s Office a copy of the resolution and the estimated assessment roll.

Phase VI:       Implementation of the improvements

After passage of the resolution to form the district and proceed with the improvement and a contract has been signed by the mayor, the improvement may be constructed. In the event that the borough puts the project out to bid, and the lowest, responsive, responsible, qualified bid exceeds the appropriation by more than 10 percent, then no contract will be entered without further assembly approval.  Prior to such further approval, the Borough Clerk will provide notice to all property owners when they may testify before the assembly.

Phase VII:      Ordinance levying assessment

After the project has been completed and the final costs have been calculated, the final assessment roll will be developed, and will be submitted with an ordinance confirming the final assessment roll and levying the assessments. The ordinance will set the times for payment of the assessments, the rate of interest on unpaid installments, and the penalty and rate of interest on delinquent installments.  A notice of this hearing will be sent to all property owners within the district by regular mail not less than 15 days before the hearing, and by public notice in a newspaper of general circulation.  After the public hearing on the ordinance, the assembly may confirm the assessment roll by ordinance.

Phase VIII:    Notice of assessment

Notice of Assessment statements must be mailed to the owner of record of each property assessed within 15 days after the enactment of the ordinance of assessment. For each property the statement will designate the property, the total allocated assessment, the assessment lien amount, the schedule of payments, the time of delinquency, penalties, and notice of the deferral of principal option.  The statement will include notice of the final determination of the assessment and that the property owner has 30 days from the date of the mailing of the notice to appeal the assessment to the superior court.

After enactment of the ordinance levying the special assessment, the Borough Clerk will file in the office of the district recorder an appropriate notice of assessment lien on all parcels assessed.

For further information and details, please contact:

Kenai Peninsula Borough                                                                                                                                   Dir: (907) 714-2230

Assessing Department                                                                                                       within KPB only: (800) 478-4441, #2230

Special Assessment Coordinator                                                                                                                       Fax: (907) 714-2393

144 North Binkley Street                                                                                                                               www.kpb.us/assessing

Soldotna, AK 99669                                                                                                                                              This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

A Layman's Guide for Establishing a Road Improvement Assessment District (RIAD)

Click here to download PDF version of this document

Click here for a printable version of the RIAD brochure

A LAYMAN'S GUIDE FOR ESTABLISHING A ROAD IMPROVEMENT ASSESSMENT DISTRICT (RIAD)

KPB 14.31 Special Assessments – Road Improvements

An Unofficial Guide

The Layman’s Guide addresses a few frequently asked questions, and provides a general outline of the steps (see pgs. 5-8) that need to be taken to implement a Road Improvement Assessment District (RIAD). This Guide does not cover all aspects of the borough code or associated ordinances.  For more in depth detail, you may research Kenai Peninsula Borough Code, Chapter 14.31, online from the Assessing Department’s “Online Services” link, or contact the Special Assessment Coordinator in Assessing.

    • KPB Assessing Dept: (907) 714-2230 or (800) 478-4441 Ext 2230 (borough only)
    • KPB Website: http://www.kpb.us   –       under “Online Services”       – Research Borough Code

Frequently Asked Questions

What is a RIAD?

A Road Improvement Assessment District – or RIAD – is a process where the cost of upgrading existing roads, or the construction of new roads in public rights-of-way to meet road construction standards, is equally allocated to all benefited properties.  Roadways within city limits are not eligible for the KPB RIAD program.  The allocated cost of the improvement will be assessed (charged) to each benefited parcel by means of a special assessment (lien).

In regards to special assessments, the following terms mean:

  • Benefited means an advantage gained from the improvement that is greater than that shared by the general public, such as improved road access, or increased property value and marketability. For RIADs, a benefited parcel must have direct legal access to the improvement. The real property, or interest in real property, that is benefited by a road improvement may be abutting, adjoining, adjacent, or contiguous to the improvement.

  • District means an area composed of individual parcels that are directly benefited by the public improvement for which the special assessment is to be levied.

Who initiates a RIAD?

Anyone who owns property in an area with a substandard road can initiate the process to implement a RIAD. The person (or persons) who initiate the project, referred to as the sponsor or sponsors, will coordinate the project on behalf of the property owners of the proposed district.  Being a sponsor is no easy task! The role will involve some organizational and communication skills.  Co-sponsors are permissible and even encouraged for larger districts.

How is a RIAD initiated?

Applications to initiate the RIAD process must be submitted no later than May 1 of each year, with the anticipated construction to occur in the following year.  The sponsor must submit an application and a map (or detailed description of the proposed geographic area) to the KPB Assessing department to form a RIAD and to participate in the RIAD match program.  The assessor and Road Service Area (RSA) Director will review the proposed district to determine that all benefited parcels are properly included in the district. 

Once the assessor approves the boundaries of the proposed district, the RSA board must review the application by September 1 of each year for consideration for construction in the following year (a two-year process). Pursuant to KPB 14.31.050(D), an initial staff report will be created for the RSA board to consider for approval of an order for the engineer’s estimate for the proposed project.

What is the required petition signature percentage thresholds?

Code requires the owners of record of at least (a) 60% of the total number of parcels subject to assessment within the proposed district, and, (b) 60% of the value of the property to be benefited, must agree to share in the cost of the improvements of a RIAD.  For this reason, it is advisable to informally talk to your neighbors to get a feeling if the majority of owners are willing to sign a petition for the improvement.  The project will not go forward without the required signature thresholds.  As with other forms of petitions, benefited property owners signify their approval of the project by signing the approved petition form.

Does the Borough or Road Service Area (RSA) offer a financial match?

RSA RIAD Match Fund Program:  Subject to the assembly’s annual appropriation, the RSA board may authorize up to 50% match of the costs associated for a road improvement project.  The application deadline for the match program is May 1 of each year (KPB 14.31.055(C)).  Construction of new roads do not qualify for the match program.

The match program may be considered for following projects, per KPB 14.31.055(B):

  1. Pavement projects for existing roads which have been certified for borough maintenance;

  2. Pavement or gravel projects for existing roads which do not meet borough standards in order that the road(s) be brought up to borough standards; and

  3. Pavement or gravel projects for existing substandard roads which have been certified for borough maintenance in order that the road(s) be brought up to borough standards.

    The RSA board must be able to accept the project as one that can be constructed and maintained. Per 14.31.055(D), the RSA board will consider the following factors when evaluating for the match program:

  • If it is economically feasible to improve the road to RSA certification standards;

  • The number of applications received that year and funds available in the match fund;

  • If an application for district formation had been previously filed and whether conditions have changed to make the project more feasible than in past years;

  • The number of residents and parcels served;

  • The project’s compliance with any restrictions on formation per 14.31.080 criteria; and

  • If there is alternate access to properties served by the road and the condition of that alternate access.

Who will be assessed (charged)?

All benefited parcels within the district boundary will be charged an equal portion on a per parcel basis of the actual total costs for the improvement, less the portion paid by the borough under the RSA match program.  These costs may include, without limitation, cost of land acquisition necessary for the improvement, design, engineering, administration costs, professional services, and financing costs and interest, less any prepayments.

The assembly may assess any real property or interest in real property that is determined to be directly benefited by an improvement, such as properties which are abutting, adjoining, adjacent, or contiguous to the improvement. Benefited parcels may also include property which are otherwise exempt from taxation by law, such as property owned by the state, borough, or a non-profit organization.  Owners of properties within the boundary who oppose the project will also be assessed as their parcels will still be benefited by the improvement.

A special assessment constitutes a lien on the real property, and as such, is enforceable through a foreclosure process in the same manner as for non-payment of property taxes, and are prior and paramount to all liens except municipal tax liens. The lien will remain on the parcel until the debt has been paid in full.  Borough policy requires that special assessments be paid in full prior to the transfer of ownership.

When do the special assessments have to be paid?

Once the project has been completed, the actual cost of the public improvement will be assessed to each benefited parcel and payable in the manner provided by the ordinance levying the special assessment roll. This cost can be paid in full, or, in ten (10) annual installments with interest on the unpaid amount of the assessment.  Annual installment payments will include principal plus accrued interest.  The interest rate charged is the prime rate plus 2% as of the date the ordinance confirming the assessment roll is enacted by the assembly.  Special assessment billings are separate from real property tax billings.

What are the restrictions to forming a RIAD?

  1. Lien Limit: As the assessment constitutes a lien on the benefited real property, the estimated amount of the assessment (or lien amount) to be levied against each parcel in the district may not exceed the parcel’s assessed value by more than: (a) 21% for gravel improvements, (b) 25% for paved improvements for an existing road, or (c) 40% for construction of a new road. If a parcel’s estimated amount of the assessment lien exceeds the lien limit, the estimated amount of the assessment against the parcel may be reduced by the amount of a partial prepayment of the estimated assessment.

    For example, a gravel project with a 21% lien limit, and an estimated allocated cost per parcel of $5,000 (assessment), a property with a total assessed value of $20,000, would be required to make a partial prepayment of $800, and the remaining $4,200 (max. lien amount) may then be financed:

  1. Assessed Value x 21% Lien Limit = Maximum Lien Amount$20,000 x 21% = $4,200
  2. Estimated Assessment – Maximum Lien Amount = Prepayment$5,000 – $4,200 =$800

Prepayment + Financed amount = Total Assessment for this property

i  Prepayments of assessments are refundable if the assembly does not approve the resolution to form the district and proceed with the improvement.  Any required prepayments of assessments which exceed the lien limits must be received no later than close of business at least 15 days prior to the date the assembly will act on the resolution.

  1. Delinquent Property Taxes: A special assessment district may not be formed if parcels in the proposed district that will bear more than 10% of the estimated costs of the improvement are subject to unpaid, past-due borough property taxes.

    i  Any payments of past-due property taxes must be received no later than close of business at least 15 days prior to the date the assembly will act on the resolution.

  2. Unimproved Parcel Ratio: If “unimproved parcels” (e.g., raw or bare land) represent more than 40% of the total assessed value of the real property in the district. “Improved” parcels are defined as having an operable water or wastewater disposal system, or having a structure assessed for more than $5,000.

  3. One-owner Property Ratio: For construction of new roads, a RIAD may not be formed if one (1) owner owns more than 40% of the parcels to be benefited.

  4. Legal description of parcels. Pursuant to KPB 14.31.080(B), the legal description of parcels within the proposed district as of the date the RSA board approves the resolution to approve the petition report and recommend a borough match will be used to determine assessment. Any action to replat parcels within the proposed district must be completed and recorded before the date the RSA board approves the resolution.

  • Should a property owner seek to subdivide a benefited parcel after the date of the RSA resolution or after costs are assessed under this chapter, the property owner will be required to pay off the remaining balance of the assessment, or prepay estimated costs if the final assessment has not been determined, prior to approval of the final plat. ● If prepayment of the estimated cost of the assessment is required, the subdividing property owner will be issued a refund: (a) for any amount in excess of the prepaid estimated cost over the final assessment; (b) if the petition or project fails for any reason: or, (c) if a final plat is not approved and the subdividing property owner requests a refund of the prepayment in writing within 30 days of denial of the final plat. If the estimated costs are less than the final assessment the subdividing property owner will be responsible for payment of the difference, due within 30 days of the final assessment approval.

Is there a deferral for economically disadvantaged property owners?

A deferment of payment of principle only may be available to qualifying residents of property within the Special Assessment District.  If approved, the deferral is a postponement of payment of principle only – this is not a forgiveness of the debt. Property owners must submit an application for the deferment each calendar year by February 1 to certify that the qualifying conditions continue to exist.  See the KPB Finance Department for application forms, and all restrictions and requirements for the deferment of principle.

Some qualifiers/restrictions: ● Real property must be owned and occupied as the primary residence and permanent place of abode of the qualifying applicant; ● Property owner must be economically disadvantaged - annual adjusted gross income is less than 200% of the US H&HS Poverty Guidelines for Alaska; ● Interest will continue to accrue and must be paid on an annual basis; ● If the property owner no longer qualifies based on the annual renewal application due to income qualifiers, or for changes in property ownership or residency, then payments on principal will resume, starting with the next payment due.

THE RIAD PROCESS

Phase I:          Application & Staff Report

Application & Map/Description – Due May 1

The sponsor must submit an application to form a district and to participate in the RSA match fund, along with a map or detailed description of the proposed district, with the borough assessing department no later than May 1 of each year.  The Borough Assessor will work with the RSA Director to determine the boundaries of the proposed project are proper and include all benefited parcels.

Staff Report – Approval by the RSA Board to order an engineer’s estimate

The Borough Assessor and RSA Director will prepare an initial staff report of the proposed project to the RSA board for approval regarding the application and to consider an approval to order an engineer’s estimate for the proposed project. The RSA board must review the application for petition by September 1 of each year for construction in the following year.  The RSA board will evaluate the applications on the following factors:

  1. Whether the road is currently on the maintenance system;

  2. The number of petitions for projects received that year;

  3. The funds available in the RIAD engineer’s estimate fund; and

  4. Whether an application for district formation had been previously filed, and whether conditions have changed to make the project more feasible than past application years.

Application Filing Fee (Non-Refundable) – Due prior to RSA director ordering an engineer’s estimate

If the RSA board approves an order for an engineer’s estimate, the sponsor must pay a non-refundable application filing fee consistent with the amount listed in the most current KPB Schedule of Rates, Charges and Fees (per KPB Chapter 1.26).  No additional efforts will be made by the borough until the application filing fee has been paid in full.  Currently, the amount of the application filing fee is based on the proposed district’s total assessed value, therefore, this amount can only be determined after the district’s boundaries have been approved, and all benefited properties are known.

The non-refundable application filing fee is used to offset the cost of obtaining a professional civil engineer’s estimate of the total project costs and for petition preparation. If additional funds are required to cover the cost to obtain the civil engineer’s estimate, the RSA board may provide the additional funds through the RIAD Engineer’s Estimate Fund (if funds are available), per KPB 5.20.160.  If the RSA board provides additional funds to cover any additional cost for the estimate, and if the project proceeds, the additional amount will be added to the project’s total estimated cost.

Phase II:        Intent to proceed / Notice to property owners

Intent to Proceed: Once the engineer’s estimate for construction has been received by the Assessing Department and the total estimated project cost has been calculated, the sponsor will be notified of the estimated cost for the project and whether or not the proposed district remains in compliance with the restrictions on district formation. If the sponsor wishes to proceed after receiving the engineer’s estimate, the sponsor must submit to the assessing department a written intent to proceed with the project.  Intent to Proceed forms are available through the Special Assessment Coordinator in the Assessing Department.

Notices to Owners: After receiving the sponsor’s written intent to proceed with the project, the Assessing Department will mail notices to all district property owners at least 10 days prior to the RSA board meeting of the proposed RIAD for consideration of the RSA resolution to approve the petition report and recommend a borough match.

  • The notices will include the following statement – the legal description of parcels within the proposed district, as of the date the RSA board approves the resolution will be used to determine assessments. Any action to replat parcels within the proposed district must be completed and recorded before the date the RSA board approves the resolution (KPB 14.31.050(J)(4)).

Phase III:       RSA Resolution to approve the petition report

After the sponsor submits an intent to proceed form, borough staff will prepare for the RSA board’s consideration, a resolution to approve the petition report and recommend a borough match.  The “petition report” will contain all the documents that will be included in the final petition, such as the petition information sheet, a map of the proposed district, and the estimated assessment roll (a spreadsheet that will include the name of each recorded owner, tax parcel number, assessed value and legal description of each benefited parcels, the estimated the cost of the project plus a 10% contingency calculated by the assessing department, and the allocated cost per parcel). 

If the resolution is approved by the RSA board, the Assessing Department will prepare a final petition to provide to the sponsor for disbursement to all benefited property owners.

Phase IV:       Circulation & filing of petition, signature requirements

The Assessing Department will provide at least one copy of the approved final petition to the sponsor. The final petition will contain all the information approved in the RSA resolution petition report, and a petition signature page.  The sponsor will be responsible for distributing the final petition to all property owners within the approved boundaries, and for collecting the signed petition signatures pages of those property owners who support the formation of the RIAD.

The owner(s) of record of the benefited property must sign and date the petition signature page to signify their approval of the project. As with other forms of petitions, a signature on the petition signature page represents the owner’s vote in favor for the proposed project.  The signed petition signature pages, and all required signature authority documentation, will compose the completed petition.

Deadline for collecting signatures – 45 days: The sponsor must submit the completed petition signature page(s) to the Assessing Department within 45 days of the date on which the Assessing Department distributes the petition to the sponsor. For this reason, it is very important to coordinate distribution of the petitions.  For example, the sponsor may want to consider mailing the out-of-area petitions a few days before distributing the local petitions to allow for a delay in mail time. 

Petition signature thresholds: in order to be considered by the assembly for formation, the petition must contain the signatures of:

  1. at least 60% of the total number of parcels subject to assessment within the proposed district, and

  2. at least 60% in value of the property to be benefited (district’s total assessed value).

    Signature Requirements: ( 4 indicates additional signature authority documentation is required)

  • Multiple owners. When a parcel is owned by more than one person or entity, signatures for each owner are required in order for the parcel to count towards the signature thresholds.

  • Signature by Proxy. Signatures by proxy will not be accepted by the clerk.

  • Power of Attorney. 4 The signature of a power of attorney will only be accepted by the clerk if the signature is accompanied by a copy of the Power of Attorney document providing authority for such signatures.

  • Business entities. 4

    • Corporations. For parcels which are owned by a corporation, the petition must be signed by two individuals: one of whom is the chair of the board, the president, or the vice president, and the other of whom is the secretary or treasurer; or by another person or persons who have been given authority via corporate resolution.

    • Limited liability companies. For parcels which are owned by a LLC, the petition must be signed by a member if the LLC is member-managed, or by the manager, if a manager has been designated.

    • Other business owners. For parcels which are owned by another type of business entity, only those persons who have signatory authority to bind the business entity under Alaska Statutes may sign the petition as owner.

    1. 4 If a parcel is owned by a trust, only the trustee may sign as the property owner. If there are co-trustees, a majority must sign the petition in order for the parcel to count towards the signature thresholds unless otherwise provided in the trust document. The signature of the trustee(s) will only be accepted by the clerk if it is accompanied by a copy of the trust document.

  • Kenai Peninsula Borough. For property owned by the Kenai Peninsula Borough in the proposed district, the mayor will be the designee for signing any petition. If the KPB abstains (declines to vote) from participating in the petition signature process, the total number of parcels within the district, for the purpose of calculating the signature thresholds, will be reduced by the number of parcels owned by the borough within the proposed district.

Signature Withdrawal: A signature on a petition may be withdrawn only by written notice from the signer submitted to the assessing department prior to the final filing of the completed petition by the sponsor. A withdrawal is effective only if notice of the withdrawal is submitted before the filing of the completed petition.

Certification of Petition:  Once the completed petition is submitted to the Assessing Department, the Borough Clerk will determine whether the petition contains sufficient signatures.  If the petition meets the requirements of the signature thresholds, the Borough Clerk will certify the petition and submit the petition to the mayor to prepare a resolution to form the district and proceed with the improvement.

Prepayments on lien limits and/or delinquent property taxes: For the purpose of the restrictions for (1) prepayments of assessments (lien limits), and (2) unpaid, past-due borough property taxes, any required payments must be received no later than close of business at least 15 days prior to the date the assembly will act on the resolution to form the district and proceed with the improvement. Prepayments of assessments (only) are refundable if the assembly does not approve the resolution.

Phase V:        Resolution to form the district and proceed with the improvement

                        & Ordinance of appropriation

If the Borough Clerk determines that the petition has sufficient signatures, and the assessor determines the district does not violate the restrictions to formation, the mayor will prepare for assembly consideration a resolution to form the special assessment district and proceed with the improvement. The Finance Department will prepare an ordinance of appropriation for the estimated funds required for the project.  A public hearing will be held the night the resolution and ordinance are to be considered.

All property owners within the district will be notified of the public hearing by certified mail not less than 35 days before the date of the hearing, and by publication in a newspaper of general circulation in the borough not less than 30 days before the hearing.

Written comments, including any objections as to the necessity of the formation of the district, may be filed with the Borough Clerk for a period of 30 days after mailing of the notice of the public hearing. If written objections are filed by the owners of parcels bearing 50% or more of the estimated cost of the improvement, then the assembly may not proceed with the improvement.

After the public hearing, the assembly may adopt the resolution to form the district and proceed with the improvement. If adopted, the resolution will authorize the mayor to proceed with the construction of the improvement, and require the clerk to record in the district recorder’s office a copy of the resolution and the estimated assessment roll.

Phase VI:       Implementation of the improvements

After passage of the resolution to form the district and proceed with the improvement, the construction process can begin by putting the project out to bid. Construction may begin once a bid has been awarded. In the event that the lowest, responsive, responsible, qualified bid exceeds the appropriation, then no contract will be entered without further assembly approval.  Prior to such further approval, the Borough Clerk will provide notice to all property owners when they may testify before the assembly.

Phase VII:      Ordinance levying assessments

After the project has been completed and the actual costs have been calculated, the final assessment roll will be developed and will be submitted with an ordinance confirming the final assessment roll and levying the assessments. The ordinance will set the times for payment of the assessments, the rate of interest on unpaid installments, and the penalty and rate of interest on delinquent installments.  A notice of this hearing will be sent to all property owners within the district by regular mail not less than 15 days before the date of the hearing, and by public notice in a newspaper of general circulation.  After the public hearing on the ordinance, the assembly may confirm the assessment roll by ordinance.

Phase VIII:    Notice of assessment

Notice of Assessment statements must be mailed to the owner of record of each property assessed within 15 days after the enactment of the ordinance of assessment. For each property the statement will designate the property, the total allocated assessment, the assessment lien amount, the schedule of payments, the time of delinquency, penalties, and notice of the deferral of principal option.  The statement will include notice of the final determination of the assessment and that the property owner has 30 days from the date of the mailing of the notice to appeal the assessment to the superior court.

After enactment of the ordinance levying a special assessment, the Borough Clerk will file in the office of the district recorder an appropriate notice of assessment lien on all assessed parcels.

 

For further information and details, please contact:

Kenai Peninsula Borough                                                                                                                                   Dir: (907) 714-2230

Assessing Department                                                                                                       within KPB only: (800) 478-4441, #2230

Special Assessment Coordinator                                                                                                                       Fax: (907) 714-2393

144 North Binkley Street                                                                                                                      www.kpb.us/assessing-dept

Soldotna, AK 99669                                                                                                                                              This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Exemption Application Information and Due Dates

NOTICE TO KENAI PENINSULA BOROUGH TAXPAYERS

Exemption Programs for Residents

The following exemptions are available to borough residents who own their property and occupy it as their primary residence and permanent place of abode.  The applicant must be the owner of record as of January 1st of the year applied.

Homeowner’s Exemption:  Requires a one-time filing by the owner of record and remains in effect until ownership or occupancy changes. Owners have the responsibility of notifying the Assessor if they begin to rent the property or no longer meet the borough residency or occupancy (at least 185 days) requirement.  Exempts up to $50,000 in assessed value of the property.

Volunteer Firefighter/EMS Exemption:  Requires annual filing and is available for current and active Volunteers of a recognized First Responder Service, Registered Fire Department or Ambulance Service.  Applicant must hold an EMS or Firefighting certificate approved by the State of Alaska .  The Fire or EMS Chief for each department must submit names of eligible volunteers.  Exempts up to $10,000 in assessed value of the property.  Maximum of 2 qualified applicants per parcel.

Disabled Resident Tax Credit: Requires annual filing by the owner of record.  Applicant must have been determined in writing to be totally disabled within the meaning of the Social Security Act.  Written evidence of the disability determination must be submitted each year at time of filing.  Maximum of $500 is credited toward the resulting taxes on the property.

Applications for the Homeowner, Volunteer FF/EMS or Disabled Resident Exemptions must be delivered to the Assessor’s Office, or postmarked on or before JANUARY 15  of the application year.

Senior Citizen Exemption:  Applicant must be 65 years of age or older before January 1 of the filing year (or surviving spouse age 60 or older).  Proof of age (i.e., birth certificate) must be provided at the time of initial filing. The applicant must be eligible to receive a Permanent Fund Dividend.   Exempts up to $300,000 in assessed value of the primary residence and residential land use.

Disabled Veteran Exemption: Requires a one-time filing by the owner of record and remains in effect until ownership or occupancy changes.  The applicant must have a service-connected disability rated at 50% or more by the Veterans Administration.  Verification of disability rating must be submitted annually.  Exempts the value of the primary residence and residential use of land.

Applications for the Senior Citizen or Disabled Veteran Exemptions must be delivered to the Assessor’s Office, or postmarked on or before MARCH 31 of the application year.

Applications are available at Borough Offices in Soldotna, Homer and Seward.  Application Forms are also available for printing from the borough website

For more information, please call the Assessor’s Office (907) 714-2230 – toll free within the borough 1-800-478-4441.

Kenai Peninsula Borough Calendar

 

Hot Topics

Online Services

Meetings and Public Notices