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File #: 21-430    Version: 1
Type: Ordinance First Reading Status: Second Reading
In control: City Council
On agenda: 10/11/2021 Final action:
Title: Amending Salem Revised Code Chapter 21 (General Assessment Procedures) to modify the interest charged for infrastructure assessments. Ward(s): All Wards Councilor(s): All Councilors Neighborhood(s): All Neighborhoods Result Area(s): Safe, Reliable, and Efficient Infrastructure.
Attachments: 1. Ordinance Bill 11-21, 2. Exhibit A to Ordinance Bill 11-21 SRC 21 Amendments.pdf
Related files:

TO:                      Mayor and City Council   

THROUGH:                      Steve Powers, City Manager   

FROM:                      Peter Fernandez, PE, Public Works Director  

                                          

SUBJECT:

title

 

Amending Salem Revised Code Chapter 21 (General Assessment Procedures) to modify the interest charged for infrastructure assessments. 

 

Ward(s): All Wards 

Councilor(s): All Councilors 

Neighborhood(s):  All Neighborhoods 

Result Area(s): Safe, Reliable, and Efficient Infrastructure.

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SUMMARY:

summary

 

Amend Salem Revised Code (SRC) Chapter 21 (General Assessment Procedures) to reduce the interest rate accrued on assessments levied from 9.5% to zero percent for local infrastructure improvements when those improvements are needed to supply water to customers of a private water district when that district is dissolving and the City is succeeding the district. 

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ISSUE:

 

Shall the City Council conduct first reading of Ordinance Bill No. 11-21 to adopt a zero percent interest rate on assessments of certain infrastructure projects and schedule a second reading of the ordinance? 

 

 

RECOMMENDATION:

recommendation

 

Conduct first reading of Ordinance Bill No. 11-21 to adopt a zero percent interest rate on assessments of certain infrastructure projects and schedule a second reading of the ordinance.

 

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FACTS AND FINDINGS:

 

Ordinance Bill No. 11-21 amends SRC Chapter 21 to reduce the interest rate accrued on assessments for certain local infrastructure improvements from 9.5% per annum to zero percent.

Several private water districts operate within the City’s water service area that are not connected to the City’s water system.  When a private water district dissolved, which can be for various reasons (contamination, declining well production, etc.), the existing customers of the district must connect to the City’s water system and become customers of the City.

SRC Chapter 21 requires the City charge interest at a rate of 9.5% per annum. In cases where assessments are levied to City residents to alleviate health and safety concerns from private drinking water systems, this high interest on the assessments can unduly add to the financial burden borne by the residents to convert to City-supplied drinking water.

    

BACKGROUND:

 

Salem Revised Code (SRC) Chapter 21 sets forth the procedures for the City to assess owners of property specially benefitted by local infrastructure improvements.  Upon completion of the infrastructure project each benefitted property is assessed and a lien is recorded against the property.  Per SRC Chapter 21, all assessments draw interest at the fixed rate of 9.5 percent per annum from a date 30 days after the lien is recorded in the City’s lien docket.

   

                     Robert D. Chandler, PhD, PE    

                     Assistant Public Works Director    

 

Attachments:

1.                     Ordinance Bill No. 11-21

2.                     Exhibit A to Ordinance Bill 11-21, SRC 21 Amendments