TITLE Tease text CONTINUING LEGAL EDUCATION: Local Improvement Districts Presenters: Mike Kohlhoff, Wilsonville City Attorney E. Shannon Johnson, Keizer City Attorney Andrew Aebi, City of Portland Local Improvement District Administrator May 15, 2015 – Sunriver, Oregon

What is a local improvement district? Presented by Mike Kohlhoff, Wilsonville City Attorney 2 Overview Materials for Reference Statutory definitions, ORS League of Oregon Cities’ 2013 LID Overview Oregon City LID information sheet Value that LIDs offer over private permit jobs Comprehensive in lieu of piecemeal infrastructure Assurance of performance via public project Financing mechanism for benefiting properties

Which properties may be included? Presented by Mike Kohlhoff, Wilsonville City Attorney 3 Only properties receiving special and peculiar benefit per ORS Example #1: Adjacent properties benefited by street improvements Example #2: Properties benefited in area by sanitary sewer trunk line Why is the LID financing mechanism needed? Diseconomy of scale for single property owner Local government does not have financial resources to pay for all local improvements needed

How is the LID financed & bonds repaid? Presented by Mike Kohlhoff, Wilsonville City Attorney 4 LID financing is generally through sale of bonds Authority of Charter, ordinance or resolution; or Bancroft Bonding Act (ORS ) Bonds are repaid by LID assessments on benefiting properties Assessments can be paid in full or financed over time Financing contracts incorporate interest and premium Waiver of irregularities may be condition of financing per ORS Lien against benefited property is security for repayment per ORS

What is LID assessment procedure? Presented by Mike Kohlhoff, Wilsonville City Attorney 5 ORS guidance to local government First determine if local improvement to be provided Determine LID boundary Provide estimated assessment, pending lien record Provide opportunity to object or remonstrate Build local improvements Determine actual costs Pending lien becomes an actual lien Are there rights to appeal? Writ of review under ORS follows construction of local improvements and imposition of actual lien

Shannon’s Outline Presented by E. Shannon Wilson, Keizer City Attorney 6 First item … xxx yyy zzz Second item … xxx yyy zzz

Recommendations for local government Presented by Andrew Aebi, City of Portland Local Improvement District Administrator 7 LIDs usually infrequent; identify staff to involve City Attorney City Engineer Development review staff Finance staff Create or update City Code in advance of LID State grants much flexibility to local governments ….. but ensure due process per 5th & 14th Amendments Timely notification very important Require written findings to remonstrances, objections Council must make finding of special benefit

Be flexible but be very prepared Presented by Andrew Aebi, City of Portland Local Improvement District Administrator 8 LID process should be open and transparent Don’t rush process; Council continuations are fine Avoid writ of review by making property owners feel that they have been heard Great lawyering will not substitute for project controls Project funding & assessment/funding formula Document non-LID funding sources in ordinance Proportionally apply non-LID funding to all properties Who pays extra (over budget) or saves (under budget)? Don’t allow assessments to be “shuffled” by property owners; Council makes finding of special benefit

Special considerations on LIDs Presented by Andrew Aebi, City of Portland Local Improvement District Administrator 9 Financial feasibility Individual versus global valuation to assessment ratio Portland generally uses Multnomah County RMVs Exception basis to use appraisals for low V/A ratios Inform Council of risk versus reward Possible backfilling mechanism if low ratio unavoidable Internal equity among properties in LID Not just question of special benefit exceeding LID cost! Is burden proportionately spread among properties? Consider split rate formula in unusual circumstances One size does not fit all; use discretion allowed!

Tell the LID solutions story on the record Presented by Andrew Aebi, City of Portland Local Improvement District Administrator 10 Examples of LID special benefit in Portland Stormwater management, eliminate property flooding Eliminate gravel shoulder maintenance Extend sanitary sewer Underground utilities in areas zoned high density Install traffic signal as condition of zone change Properties made “shovel ready” for development Improved firefighting response

LIDs key to economic development and neighborhood livability Presented by Andrew Aebi, City of Portland Local Improvement District Administrator block of NE Alberta Street in diverse Cully neighborhood of Portland (before)

LIDs key to economic development and neighborhood livability Presented by Andrew Aebi, City of Portland Local Improvement District Administrator block of NE Alberta Street in diverse Cully neighborhood of Portland (after)

LIDs key to economic development and neighborhood livability Presented by Andrew Aebi, City of Portland Local Improvement District Administrator 13 NE 148th Avenue LID from to Public investment: None; expiring urban renewal + Assessed value: $27.7 million (+ 539%) + Real market value: $48.7 million (+287%) + Property tax increment: $582K in NW 13th Ave. Phase II LID from to Public investment: $861K from urban renewal + Assessed value: $74.1 million (+387%) + Real market value: $178.0 million (+360%) + Property tax increment: $1,666K in