HomeMy WebLinkAboutReso 1993-16979 RESOLUTION NO. 16979
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA
VISTA ESTABLISHING A POLICY ON APPROVAL OF DEFERRAL AND
LIEN AGREEMENTS AND APPROVING THE DRAFT FORM OF CITY'S
DEFERP~AL AND LIEN AGREEMENT
WHEREAS, at its meetings of May 12 and June g of last year, Council
expressed concerns regarding requests for liens against properties in lieu of
posting cash bonds for security for deferrals; and,
WHEREAS, the concerns centered around delegating the approval of lien
agreement to staff up to a certain limit and the inclusion of a clause in those
agreements for increasing lien amounts to reflect cost escalation; and,
WHEREAS, the subject Council Policy has been drafted to address those
concerns as set forth in Exhibit "A".
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula
Vista does hereby establish a policy on approval of deferral as set forth in
Exhibit "A" attached hereto and incorporated herein by reference as if set forth
in full.
BE IT FURTHER RESOLVED that the City Council of the City of Chula Vista
does hereby approve the draft form of City's Deferral and Lien Agreement, as set
forth in Exhibit "C", a copy of which is on file in the office of the City Clerk,
and authorize the City Engineer to use same for deferrals within his or her
authority.
Presented by Approved as to form by
r of Public Works ey
......... 'T ....... I 'l
Resolution No. 16979
Page 2
EXHIBIT A
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: DEFERRAL AND LIEN AGREEMENTS POLICY EFFECTIVE
NUMBER DATE PAGE
505-03 02/23/93 1 OF 2
ADOPTED BY: Resolution No. 16979 [ DATED: 02/23/93
BACKGROUND
Whenever an owner developes his land in the City, he or she must install any missing public improvements in
accordance with current standards as required by Section 12.24.040 of the Municipal Code. In certain cases,
however, those improvements may be deferred due to the existing conditions surrounding the property. At the
time the ordinance providing such deferrals was adopted, security for the future completion of the
improvements by the owner/developer could be in the form of cash, surety bonds, pass book, or a lien against
the property in favor of the City.
The Council previously delegated authority to the City Engieer to approve deferrals and to accept liens on the
property to secure the deferral. The report recommended that security be only in the form of cash bonds or,
in the case of demonstrated hardship, the City accept a lien against the property being developed.
After this authority was shifted, the department found that it was relatively easy to make a determination of
demonstrated hardship for an owner wanting to build a single family home, remodel or add to his/her
existing single family dwelling and, on his/her authority, accept a lien in the place of the cash bond. In the
case of all other types of development (i.e., multi-family residences, industrial and commercial buildings),
since these uses are all "for-profit" ventures, it was generally much more difficult to make the necessary
determination of fmancial hardship. As a result of this, liens were, as a general rule, not allowed for these
latter uses based solely on staffs authority.
PURPOSE
It is the purpose of this policy to provide a means of streamlining the deferral process and curbing the number
of appeals appearing on the Councfl's docket.
The following Deferral and Lien Agreement Policy is hereby established:
1. Only after all other efforts have been made to acquire a cash bond and failed, will the City consider
accepting a lien on the property.
2. Staff may approve deferral and lien agreements up to an amount of $30,000 for any deferral granted by
staff, whether residential, multi-residential, industrial or commercial property.
Resolution No. 16979
Page 3
COUNCIL POLICY
CITY OF CHULA VISTA
SUBJECT: DEFERRAL AND LIEN AGREEMENTS POLICY EFFECTIVE
NUMBER DATE PAGE
505-03 02/23/93 2 OF 2
ADOPTED BY: Resolution No. 16979 [ DATED: 02/23/93
3. That the above amount of authority is to be increased or decreased annually beginning on the fwst of
January of the year following the date of adoption of this policy. The increase or decrease is to be
determined by the Construction Cost Index factor as presented in McGraw-Hill's national publication
Engineerin~l News Record. (Construction Cost Index Value - 5059.07, Dec. 1992)
4. Council is to consider deferral and lien agreements which exceed those authorized to be approved by
staff.
5. In order for the City to consider accepting a lien, the total of the lien, plus all indebtness against the
property shall not exceed: a) 75% of the value of the property in the case of commercial, industrial or
multi-family residential and; b) 80% of the value of single-family residential.
6. Before the City can agree to accept a lien, the applicant is to provide the following items:
A. A title report issued within 60 days of submittal showing all indebtedness and encumbrances
against the property.
B. An appraisal showing current value of the property.
7. Whenever a deferral and lien is approved, the standard deferral and lien agreement prepared by the City
Attorney (copy attached) shall be utilized.
8. Staff shall forward a report to Council in the month of January of every off-numbered year. Said report
is to include the total number of deferrals and the comparison of the dollar amounts of liens versus cash
bonds.
Resolution No. 16979
Page 4
EXHIBIT C
Recording requested by and
please reuarn to:
City Clerk Office
276 Fourth Avenue
Chula Vista, CA 91910 · This space for Recorder's use, only ·
AssessoPs Parcel No(s),- .........
AGR F, F, MENT FOR DEFERRAL OF THE INSTALLATION OF
CERTAIN PUBLIC IMPROVEMENTS IN THE CITY OF CHULA VISTA
AND HEN SECURING THE FLrrURE INSTALI-ATION OF SAID
IMPROVEMENTS ON THE PROPERTY OWNED BY ....
AND LOCATED AT
THIS AGREEMENT, made and entered into this day of , 19~ by and between the
CITY OF CHULA VISTA, a municipal corporation, hereinafter referred to as "City' and
hereinaRer referred to as "Propert3? Owner";
WHEREAS, the property which is the subject matter of this agreement is commonly known as __
, CHULA VISTA, CA 9192_, is identified in the County Assessor records as Parcel No. , and is
legally described as
In the City of Chula Vista, County of San Diego, State of California, more particularly described
as , recorded in the office of the Recorder of said County of San Diego on
("Property"); and,
WHEREAS, Property is owned by Property Owner; and,
WHEREAS, Property Owner is desirous of constructing a ("Building") on the Property; and,
WHEREAS, Section 12.24.040 of the Chula Vista Municipal Code provide, generally, for the installation
of certain public improvements upon any dedicated street or streets adjacent to a lot or parcel upon which
a structure or building is to be installed, erected, or moved upon; and,
WHEREAS, Property Owners are obligated, hereinafter referred to as "Improvement Duty", by the above
described authority to install certain public street improvements, hereinafter referred to as "Improvements",
on the street right of way abutting the Property to the specifications set by, and designed, surveyed, staked
and installed to the satisfaction of, the City Engineer, described as follows:
Curb, gutter & sidewalk, consisting of approximately --- linear feet to be built along the Property
frontage, a ---foot wide driveway consisting of approximately --- square feet to be built within the
street right of way, and approximately --- square feet of A.C. paving, --- feet wide by --- feet long.
WHEREAS, Property Owners have applied to the City Engineer of the City for a deferral of the
Improvement Duty; and,
Resolution No. 16979
Page 5
WHEREAS, Section 12.24.070 provides that if the City Engineer, in his discretion, feels that said
installation of Improvements would cause a defective condition to the property or it would be extremely
impractical to install or construct the same, then the City Engineer, upon finding that grounds for said
deferral of the requirements of Section 12.24.040, may grant said deferral, which may be limited to a
specified period of time; and,
WHEREAS, the City Engineer does hereby find that the grounds for said request for a deferral of the
Improvement Duty exist on the conditions set forth in this Agreement, and the granting of said deferral is
in conformance with the requirements of Section 12.24.070;
NOW, THEREFORE, IT IS MUTUALLY AGREED by and between the parties hereto as follows:
A. Grant of Deferral: City Engineer hereby grants a deferral of the Improvement Duty until 30 days
after such time in the future that the City Engineer may submit a written demand upon the Property
Owners or successor in interest to perform the Improvement Duty, but in no event for a period of
time later than three (3) years from the date of execution of this agreement.
B. Agreement to Perform Improvement Duty: Property Owners, or successor in interest, in lieu of
installing the Improvements specified herein prior to final inspection or the giving of a Certificate
of Occupancy by the City, agrees, covenants and promises that Property Owners will perform the
Improvement Duty within thirty (30) days of written notice from the City Engineer to install said
improvements, or within three (3) years from the date of execution of this agreement, whichever
occurs first.
C. AKreement Runs with the Land: The burden of this covenant is for the benefit of the land owned
by the City adjacent to the Property. The burden of this covenant touches and concerns the
Property. It is the intent of the parties, and the parties agree, that this covenant shall be binding
upon both the current Property Owners, and upon the successors, heir, transferees and assigns of
the Property Owners, and run with, the ownership of the land which it burdens.
D. Grant of Lien: For the purpose of securing the faithful performance of the promises and covenants
herein contained, Property Owners hereby grant to the City of Chula Vista a lien ('Lien') upon the
Property in an amount equal to --- Thousand and 00/100 Dollars ($---.00) based upon the current
Construction Cost Index of --- as published weekly by the McGraw-Hill weekly periodical,
En~ineerinS~ News Record ("Index") and which amount shall be increased or decreased monthly in
direct proportion to the increase or decrease in the Index between the month in which the City
forecloses upon said lien, and the month in which this agreement was entered ('Lien Amount").
1. At anytime during the period herein provided, Property Owners, maymake acash deposit with
the City in the then current Lien Amount to cover the total cost of the improvements. If said
cash deposit is made, the City shall rescind the Lien granted by this Agreement, and shall record
a notice of rescission of same. The rescission of the Lien shall not constitute a rescission of
other covenants and property interests herein granted, and shall not constitute a basis for not
recording this Agreement.
2. In the event that said Index is no longer published, the City shall have the right, upon notice
to Property Owner, to calculate the Lien Amount on the basis of any index which it reasonably
determines reflects the cost of living increases or decreases in the San Diego County area
between the date of this agreement and the date of foreclosure on the lien.
3. The Lien Amount shall operate as a maximum amount of the principal of this Lien, exclusive
of Attorneys Fees and Costs, and interest from the date of filing of the foreclosure action on the
Lien, which interest Property Owners agree to pay at the rate of ten (10%) percent per annum,
compounded annually.
!'1
Resolution No, 16979
Page 6
E. Grant of Conditional Easement: Property Owners hereby grant to City a conditional easement over
the Property to permit entry upon, design, survey, staking and construction upon, and maintenance
of, the Improvements which easement shall be conditional upon the refusal or failure of the Property
Owners, including Property Owners' successor, to perform the Improvement Duty as herein required.
F. Remedies: Nothing in this agreement shall constitute a limitation on the remedies provided at law
or equity. It is understood, agreed and acknowledged by Property Owners that, upon failure of the
Property Owners to perform the Improvement Duty at the time and in the manner specified by this
Agreement, the City may, but is not required to, do any of the following:
1. Install or construct said improvements by contract or otherwise, and permission is hereby
granted to the City or its contractors and contractor's employees to enter upon any portion or
portions of said property reasonably necessary for said construction, and the entire cost and
expense of said improvements shall be charged against said property and said cost and expense
shall be payable by Property Owners, their successors, heirs, assigns or transferees, immediately
upon completion of said improvements, and in the event the same is not paid within thirty (30)
days, the City may foreclose on said lien, as provided by law for the foreclosure of mortgages,
and Property Owners agree that the amount of said lien includes attorneys' fees which shall be
taxed as a cost in any suit or foreclosure.
2. Direct the City Engineer to estimate the cost of the work required to complete said
improvements, and foreclose said lien in said amount.
3. Foreclose said lien as a mortgage.
4. Pursue any other remedy, legal or equitable by law, for the foreclosure of a lien, and Property
Owners, their heirs and assigns, shall pay reasonable attorneys' fees and costs to be taxed as a
cost in said proceedings.
G. Covenant to Cooperate in Improvement Petition: It is further understood and agreed that Property
Owners and/or their heirs, assignees or successors in interest shall not protest any proceeding
authorized under that chapter of Streets and Highways Code, commencing at § 5000, et al. ("1911
Act Proceeding"), or that chapter of said Code, commencing at § 7000, et al. ("1913 Act Proceeding")
to provide improvements that include any of the works of improvements for which Property Owners
are obligated as an Improvement Duty under this Agreement.
H. Miscellaneous Provisions:
1. Authority of City: Property Owners further agree that, and agree not to protest the fact, that
the City is vested with the authority to require the Property Owners to perform the Improvement
Duty forthwith.
2. Notices: Unless otherwise provided in this Agreement or by law, any and all notices required
or permitted by this Agreement or by law to be served on or delivered to either party shall be
in writing and shall be deemed duly served, delivered, and received when personally delivered
to the party to whom it is directed, or in lieu thereof, when three (3) business days have elapsed
following deposit in the U.S. mail, certified or registered marl, return receipt requested, first-
class postage prepaid, addressed to the address indicated in this Agreement. A party may
change such address for the purpose of this paragraph by giving written notice of such change
to the other party. Facsimile transmission shall constitute personal delivery.
CITY OF CHULA VISTA
276 4th Ave.
Chula Vista, CA 92010
Attn: Public Works, Engineering Division
Resolution No. 16979
Page 7
PROPERTY OWNERS
(A party may change such address for the purpose of this paragraph by giving written notice
of such change to the other party in the manner provided in this paragraph. Facsimile
transmission shall constitute personal delivery).
3. Captions: Captions in this Agreement are inserted for convenience of reference and do not
define, describe or limit the scope or intent of this Agreement or any of its terms.
4. Entire A~reement: This Agreement contains the entire agreement between the parties regarding
the subject matter hereof. Any prior oral or written representations, agreements,
understandings, and/or statements shall be of no force and effect.
5. Preparation of Agreement: No inference, assumption or presumption shall be drawn from the
fact that a party or his attorney prepared and/or drafted this Agreement. It shall be conclusively
presumed that both parties participated equally in the preparation and/or drafting this
Agreement.
6. Recitals; Exhibits: Any recitals set forth above are incorporated by reference into this
Agreement.
7. Attorneys' Fees: In the event of any dispute arising as to the enforcement of an obligation
created by this Agreement, but not as to any dispute arising as to a claim or defense of the
validity of this Agreement, the prevailing party in any action shall be entitled to reasonable
attorneys' fees in addition to any other costs, damages, or remedies.
(End of Page. Next Page is Signature Page.)
1 H
Resolution No. 16979
Page 8
SIGNATURE PAGE FOR
DEFERRAL AND LIEN AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day and year
first hereinabove set forth.
CITY OF CHULA VISTA
DATED: BY:
CLIFFORD L. SWANSON, DEPUTY PUBLIC
WORKS DIRECTOR/CITY ENGINEER
Attest:
Beverly A~Authelet
CityClerk
Approved as to form:
Brace M. Boogaard
City Attorney
PROPERTY OWNER(S)
DATED:
DATED:
(Attach notary acknowledgment for all signatories.)
NOTES: a. Each owner as reflected on the preliminary title report must sign.
b.Permittee is to submit a check or money order payable to County of San Diego in the
amount of $ for recordation of this agreement.
: T B
Resolution No. 16979
Page 9
PASSED, APPROVED and ADOPTED by the City Council of the City of Chula Vista,
California, this 23rd day of February, 1993, by the following vote:
YES: Councilmembers: Horton, Moore, Rindone
NOES: Councilmembers: Fox
ABSENT: Councilmembers: Nader
ABSTAIN: Councilmembers: None
'lja~or R. Rindone
C,~i M Pro-Tempore
ATTEST:
Beverly :A. Authelet, City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO ) ss.
CITY OF CHULA VISTA )
I, Beverly A. Authelet, City Clerk of the City of Chula Vista, California, do
hereby certify that the foregoing Resolution No. 16979 was duly passed, approved,
and adopted by the City Council held on the 23rd day of February, 1993.
Executed this 23rd day of February, 1993.
Beverly ~'. Authelet, City Clerk