LID 20 SOUTH ISLAND SEWER - DECISION1
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P4610
ii Loa P. Rc Hurr-ly-
THE HEARING OFFICER FOR THE
TIVTITWIFT•
Final Assessment Roll FINDINGS OF FACT,
Local Improvement District CONCLUSIONS OF LAW
No. 20 (South Island Sewer Prooect) AND RECOMMENDATION
A hearing on the above -captioned matter was held on October 10, 2006 in
Bainbridge Island, Washington before Rodney M. Kerslake serving as the
Hearing Officer for the City of Bainbridge Island City Council.
Having considered the evidence presented and being otherwise fully
advised, the Hearing Officer enters the following -
FINDINGS OF FACT
1. This Final Assessment Roll for Local Improvement District (LID) 20
(South Island Sewer Project) is being considered pursuant to City of Bainbridge
Island ("City") Resolution No. 2006-36. Exhibit 2.
2. On August 13, 2003, the Bainbridge Island City Council ("City
Council") initiated LID No. 20 by adoption of Resolution No. 2003-38 declaring its
intention to order certain sanitary sewer improvements in four non-contiguous
neighborhoods (Emerald reights, r*1easant Beach North, Point White and
the costs of said sewer improvements to be charged against the property owners
specially benefited by the improvements. Thereafter, the City Council, by
FINDS. OF FACT, CONCS. OF LAW
AND RECOMMENDATION
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ordered the improvements.
3. Construction of all sewer and related improvements have been
707, 170 =--A
4. Pursuant to applicable laws and the direction of the City Council,
public hearing was held on October 10, 2006 to consider the Final Assessmen
Roll for LID No. 20. Notice of the Final Assessment Roll hearing was mailed tj
all owners of property within LID No. 20 on September 13, 2006. (Exhibit 3).
5. All procedures, as provided for by law, with respect to the adoption
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necessary to address failing septic systems in the areas included within LID No.
P,
20. In the case of three of the areas (Pleasant Beach North, Point White, and
Rockaway Beach), the failing systems were causing adverse effects to adjacent
shoreline areas and the waters of Puget Sound. The Kitsap County Health
District strongly supported remedying of the failing sewer system through the
creation of the subject LID. (Exhibit C-7).
7. The City received a sizeable loan from the State's Public Works
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constructed under LID No. 20. Due to the extremely low interest rate of the Trust
Fund loan (0.5%), the City was able to reduce the cost of the project assessed
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AND RECOMMENDATION
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against properties within the LID. Additionally, the City participated in the amount
of approximately $185,000 to defray some of the costs associated with the lengthy
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and the Blakely Elementary School and, additionally, participated in the amount of
$100,000 for the three beach neighborhoods due to amounts the City expected to
receive from "late -comer" fees charged to properties not initially connected to the
new sewer system. Other participation by the City has increased its total
participation to $609,051. (Exhibit 3 at 2).
8. The total cost of the sanitary sewer system improvements
constructed is $4,231,463 less the $609,051 contributed by the City with
$3,622,412 being assessed against the properties within the LID. (Exhibit 3 at 2
and 3). In addition, are connection costs assessed against those properties
connecting to the sewer system totaling $1,627,606. Id at 3. The Final
Assessment Rail levies assessments totaling $5,380,892.
9. In assessing costs of sanitary sewer improvements and related
sewer service costs and charges, the City developed a two-part assessment
(referred to in this record as Part A and Part B). The Part A assessment includes
all costs assessed that were associated with system improvements, such as City
LID administration costs, engineering and design costs, main construction, legal
fees, project management costs, surveying costs, and environmental and
permitting costs. Due to the high degree of variability of the project costs between
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AND RECOMMENDATION
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neighborhoods resulting from some areas having a gravity system and others
using a pressurized system, the City tracked the actual costs associated with each
area and included only those costs for installation of the sewer system in each
10. Part B assessments are proposed to be assessed against only those
properties initially connecting to the sewer system.2 The Part B assessments
include charges for mandatory contractual connections and charges for use of
existing sewer facilities necessary to handle sewerage generated by the new
systems. The charges include Kitsap County Sewer District No. 7 connection fee,
Lynnwood Center Lift Station fee, and a City permit fee. In the case of the sewer
District No. 7 fee, the City, as a part of the LID, purchased capacity from the district's
sewer treatment plant to handle the increased sewer flow generated from the new
system. In regard to the Lynnwood Center Lift Station that was con-structed at the
expense of a private developer, the City bought out the remaining capacity
(mandated by a late -comer's agreement) for $434,500, again, to handle anticipated
flows from the sewer system constructed under LID No. 20. Also, if a property
required the use of a "grinder" pump to convey the sewerage from that property to
the main sewer line, the charge for that pump was reflected in the Part B
assessment. Finally, for those properties whose owners elected to have the costs of
1 All administrative costs which were not affected by the type of sewer system used or the
peculiarities of each area were equally divided among the property assessments.
2 Apparently, those properties connecting to the system at a later date will be charged a late-
comer's fee equal to or greater than the Fart B assessment.
FINDS.OF CONCS. OF
AND RECOMMENDATION
LID 20 I.
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costs were included in the Part B assessment.
11. In arriving at the Final Assessment proposed for each property, the
and .040, but, rather, used the methodology described in Findings of Fact 9 and
10 above. The Hearing Officer expressly finds that, due to the high variability in
costs associated with the providing of the sanitary sewer system in the five areas
constituting LID NO. 20 and the need to identify costs for those properties
immediately connecting to the sewer system and those that do not, the
assessment approach utilized by the City more fairly and correctly reflects the
special benefits to each property within LID No. 20 flowing from the
improvements constructed than application of a purely mathematical formula,
such as the statutory "zone and termini" formula or the use of square footage
values. The methodology employed by the City allows appropriate consideration
of the actual costs of providing sanitary sewer service to each Equivalent
Residential Unit3 (ERU) assigned to each property within the LID.
ensures similarly situated properties within the LID are proportionately assessed to
r
3 Equivalent Residential Unit or ERU refers to the number of residential units existing or allowed
on each property within the LID which would be connected to the sewer system. Some sliver or
partial lots within the LID were not assessed because they could not be built on or otherwise
would not be connected to the sewer system constructed and the Blakely Elementary School was
allocated 14 ERU's by agreement between the school district and the City.
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AND RECOMMENDATION
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13. Six written protests to the proposed Final Assessment Roll were filed
with the City prior to or by the commencement of the hearing on the Final
Assessment Roll. The protests are identified below:
Assessment Parcel No. RB -71, Johnpaul Jones and
Margorie Sheldon,
Assessment Parcel No. RB -32, Leonard D. Bell and
Stella C. Ley;
Assessment Parcel No. EH -20, Robert Calvin;
Assessment Parcel No. PW -54, Mary C. Eklund;
Assessment Parcel No. RB -04, William C. Quinn; and
Assessment Parcel No. PW -26, Robert Anderson.
14. The protests filed generally raise contentions that the protestors'
properties have been damaged by such things as noise and odor from "grinder"
pumps, physical disturbance of their property by improvements constructed,
excessive costs associated with sid sewer construction, and assessment for
sewer connections to a lot that might not be built upon. See Exhibits 11 through
16. None of the protestors directly assert that their properties were not
specifically benefitted by the sewer improvements made under the LID or that
their propeties were not benefitted in the amount of their proposed assessments.
Only one of the six property owners filing protests appeared at hearing and
presented testimony. No expert appraisal testimony was presented by the
protesting owners to support their objections to their proposed assessments.
15. Appearing at hearing and testifying was Johnpaul Jones. Mr.
Jones testified that the enjoyment of his property has been negatively impacted
FINDS. .CONCS. OF LAW
AND RECOMMENDATION
LID 20
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by the noise and odors resulting from the placement of a "grinder' pump that was
located near his home and also as a result of a portion of the pump being actually
constructed on his property. In cross examination, Mr. Jones acknowledged that
he was aware that he could file a claim for damages against the City and, if
unsuccessful with that claim, could file a lawsuit against the City. He also admitted
that he had earlier filed a claim against the contractor who installed the sewer
system and had received $8,000 in compensation from the contractor and that the
City had resolved about 50% of the problems associated with the smell and noise
emanating from the nearby pump.
16. The fair cash market value of the properties specially benefited by
LID No. 20 has been increased in an amount equal to or greater than the
proposed assessments.
17. Any Conclusion of Law hereinafter set forth which may be deemed
to be a Finding of Fact is hereby adopted as such.
From these Findings of Fact come the following:
CONCLUSIONS OF LAW
1. The Hearing Officer has jurisdiction over the parties and subject
matter of these proceedings. RCW35.44.070 and City of Bainbridge Island
Resolution No. 2006-36.
2. If a city employs a method of assessment pursuant to a LID other
than the "zone and termini" method provided by statute, , a finding must be
4 See Finding 11.
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AND RECOMMENDATION
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made, supported by the record, that the alternate method more fairly reflects the
special benefit resulting from the improvement. RCW 35.44.047; See also
Bellevue Plaza v. Bellevue, 121 Wn.2d 397, 414, 851 P.2d 662 (1993). The basis
for choosing an alternate method is satisfied by slight evidence supporting the
fairness of the method chosen. Hansen v. LID, 54 Wn.Ap 257, 261-62, 773 P.2d
435(1989), Here, the Hearing Officer has entered the requisite finding based on
substantial and unchallenged evidence in the hearing record. See Findings 11 and
IPA
3. When there are separate and distinct improvements, it is proper for a
city to levy against a property the costs of only those improvements that specially
benefit such property. Bellevue Associates v. Bellevue, 108 Wn.2d 671, 676-77,
741 P.2d 993 (1987). This is precisely what the City did here by tracking the costs
associated with each of the five areas in which the new sewer system was
constructed and assessing only those costs attributable to the improvements made
4. While not challenged in these proceedings, the City may properly
assess properties under an LID for receipt of services without capital
improvements. Seattle v. Rogers Clothing, 114 Wn.2d 213, 223-224, 787 P.2d 39
(1990). To the extent that the assessments made under Part B for the sewerage
treatment plant previously constructed by District No. 7 and the Lynnwood Center
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AND RECOMMENDATION
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Lift Station constructed by a private developer could be considered as not being
capital improvements made under LID No. 20, they are facilities that provide
necessary services for operation of the sewer system constructed under LID No.
20 and are costs properly charged to property owners under the LID.
5. An improvement constructed under a LID is presumed to specially
benefit properties within the LID on an equitable basis and is presumed to have
been made fairly and legally. See, e.g., Bellevue Plaza at 403, citing Abbenhaus
v. Yakima, 89 Wn.2d 855, 860-61, 576 P.2d 888 (1978).
6. A property owner protesting a LID assessment has the burden Q
establishing, by a preponderance of expert appraisal evidence, that the method of
assessment employed by the City was founded on a "fundamentally wrong basis"
and does not property reflect the special benefits resulting from the improvements
constructed. Bellevue Plaza at 403, Abbenhaus, supra; Hansen at 262.
7. The property owners protesting their proposed assessments failed to
support their contentions, to the extent they were made, that their properties were
not specially benefited in the amount of their proposed assessments by any expert
appraisal testimony. Thus, on such basis, their protests must fail.
8. To the extent that some protests to proposed assessments are based
upon alleged damage to protestors' properties resulting from the improvements
constructed or the manner in which they were constructed, such matters are not
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AND RECOMMENDATION
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proper under the law. See Conclusions of Law 2 through 4. The proper
procedures for pursuing damage claims against the City is set forth in RCW 4.96.
Thus, the Hearing Officer declines to further address such issues presented in
protests against the proposed Final Assessment Roll.
9. Accordingly, the City Council should adopt an ordinance assessing
the properties within LID No. 20 for special benefits conferred by the improvements
constructed under said LID previously created by the City Council, and any
objections to any assessment or the Final Assessment Roll should be overruled
and the Final Assessment Roll should be approved and confirmed.
10. Any Finding of Fact hereinbefore stated which may be deemed to be
a Conclusion of Law herein is hereby adopted as such.
From these Conclusions of Law is entered the following:
RECOMMENDATION
It is the recommendation of the Hearing Officer that the objections to the
assessments on the Final Assessment Roll be overruled, and the Final
Assessment Roll for LID No. 20 be approved and confirmed.
DATED this 26'" _day of October 2006.
FINDS. OF FACT, CONICS. OF LAW
AND RECOMMENDATION
LID 20