Want your road upgraded or paved? Here is the unofficial guide to establishing a Road Improvement Assessment District (RIAD)

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So you have a road that rattles your teeth and has the groceries and kids bouncing off the ceiling. You've contacted the road maintenance department only to discover that in order to upgrade your road, you will have pay for the construction. Since your neighbors will also benefit if the road is improved, wouldn't it be nice if there were a way to share the cost?

There is a way. Kenai Peninsula Borough Code 14.31 Special Assessments - Road Improvements specifically deals with road improvements. The explicit purpose of the ordinance is to spread the cost of the improvement to all the parcels that will be benefited. This guide is designed to help you with the process of getting a cost estimate and determining if a Road Improvement Assessment District (RIAD) can be formed.

The following are some questions and answers along with some guidelines to initiating a RIAD. They are meant to highlight some of the qualifications and timelines involved with the process. This brochure is not meant to be an all-encompassing explanation of Ordinance 97-32 with regards to KPB 14.31. (The road improvement ordinance). For more in depth detail, please contact the Special Assessment Coordinator at the Kenai Peninsula Borough Assessor’s Office: 907-714-2230 or Toll Free (on borough only) 1-800-478-4441 ext 2230

· What is a RIAD?
A RIAD (Road Improvement Assessment District) is a process where the cost of upgrading a road is spread out among all the benefited properties. The allocated cost will be charged to each parcel owner by means of a special assessment.

Because a greater than 70% majority of the benefited parcel owners must agree to share in the cost of the improvements of a RIAD, it is advisable to informally talk to your neighbors to get a feeling if a majority are willing to sign a petition for the improvement. The project will not go without a majority approval.

· Who initiates a RIAD?
Anybody who owns property in an area with a substandard road can initiate the process to implement a RIAD. You don't need to hire an attorney or an engineer. The person or persons who initiate the project will be called the Petition Sponsors or Petitioners. Be advised that it will require a bit of work.

· What is the deadline to submit a petition?- JUNE 1

Petitions for a RIAD must be received no later than JUNE 1 of each year. The Roads Department will make a report and recommendation to the RSA board regarding the application. The RSA board will review of the petition by August 1 of each year – for construction for the following year. As this is a two-year process, it is important to apply in a timely manner.

· What kinds of improvements can be done with a RIAD?
The purpose of the improvement is to upgrade a substandard road to meet or exceed the local road construction standards in effect when the assessment is levied. This may include having a road paved. A RIAD may be formed only to improve existing roads in a public right of way within the Borough road service area. A road within a city limit would not be eligible. A RIAD is not intended to build a new road where one does not currently exist.

· Who will be assessed (charged)?
The Assessing Department, working with the Road Maintenance Department, will determine a boundary of benefited properties. All the benefited parcels will be charged a portion of the cost. Even those who would normally be exempt from taxes, such as the State or the Borough, or non-profit organization, will have to pay the special assessment. Those within the boundary who oppose the project will also be assessed, since their parcels will still be benefited by the improvements. The assembly may assess any real property or interest in real property that is determined to benefit directly or indirectly by an improvement. This may include properties which may be abutting, adjoining, adjacent, contiguous or noncontiguous to the improvement. The assessment is a lien on the parcel enforceable through foreclosure.

· When do the special assessments have to be paid?
Once the project has been completed, the allocated cost will be assessed to each parcel. This cost can either be paid in full when billed, or it can be paid in annual installments, due in March, over a ten-year term. If paid by the installment plan, interest will be charged at a fixed interest rate of prime plus 2. Prime will be the prime rate that is in effect at the time of the assessment.

· What are the methods of assessment?
The assembly will determine the method of allocating the cost of the improvement, which must be proportional to the benefit of the improvement to each assessed parcel. The allocation method selected may be based on: (a) the area of a parcel; (b) lineal feet of street frontage of a parcel; (c) the assessed valuation of a parcel; (d) zones within the RIAD which allow differential assessment based upon differing benefits to different geographic locations within the district; or, (e) a per lot basis so that each lot is charged an equal amount.

· What, if any, is the Borough match towards a project? – JUNE 1
An application can be made to the Road Service Area board for up to a fifty percent (50%) match of the costs associated with improving local or internal subdivision roads; and/or, a seventy percent (70%) match of the costs associated with paving or improving a paved collector road - roads that provide both land access and carry traffic from local or subdivision roads to arterial or major highway systems. The Petitioners will work with the Roads Director and the Special Assessment Coordinator to insure this application is submitted in a timely fashion. Annual deadline application for the match program is JUNE 1 of each year.

· What factors are used to determine if the project is feasible?
Some factors the RSA board will consider to determine which projects will be funded: (1) if the road is currently on the maintenance system; (2) the extent the assessed values of properties support the scope of work for the project; (3) the number of petitions for projects received that year; (4) funds available in the RIAD engineer’s estimated fund; and, (5) if an application for a district formation had been filed previously and if conditions have changed to make the project more feasible than in past years. The Road Maintenance Department must accept the project as one that can be constructed and maintained.

There are certain restrictions to forming a RIAD project. A special assessment district cannot be formed if it violates any of the following restrictions:

1) The lien against any parcel in the district cannot exceed 21% of the parcels total assessed value for gravel improvements, or 25% of the parcels total value for paving improvements. Note: while the charge to each parcel must be allocated equitably, the owners or sponsors may prepay a portion of the charge to the affected parcels that fall outside the percentages outlined above, to bring the allocation in to compliance. If the assembly does not approve the resolution to form the district and proceed with the improvement, the prepayment will be refunded.

2) A special assessment district may not be formed if parcels in the proposed district which would bear more than 10% of the cost of the improvement are delinquent in payment of borough real property taxes in the immediately preceding tax year.

3) A special assessment district may not be formed if unimproved parcels represent more than 40% of the total assessed value of the real property in the district.

· How do you initiate a RIAD?
Phase 1) Application for a Road Improvement District
The Petitioners must submit an application for a petition to form a district with the Special Assessment Coordinator in the Borough Assessing Department. The Coordinator will assist the Petitioners in determining the initial route of the improvement, and will work with the Road Maintenance Dept to determine the boundaries of the project, and if the project is feasible.

Phase 2) Initiation of Road Improvement District
§ Filing Fee
If the project is determined to be feasible, a NONREFUNDABLE FILING FEE will be required. The purpose of the fee is to partially cover the cost in hiring an engineer to determine an estimated cost of the project. The Road Service Area will provide funding to cover the remaining engineering costs. The filing fee must be based on the most current Kenai Peninsula Borough Schedule of Rates, Charges and Fees. Once an engineered cost has been estimated, the feasibility test is again applied to ensure compliance.

§ Approval by the Road Service Area Board
The Special Assessment Coordinator will prepare a petition for circulation. A report on the formation on the proposed district, along with the petition, must be submitted to the Road Service Area Board for approval.

Phase 3) Petition Process
If the petition is approved, it will be the responsibility of the Petitioners to distribute the petition. A petition packet will be prepared for each benefited property within the district, and each must contain:

· Petition information sheet that provides an overall description of the project;

· Map detailing the boundaries of the proposed RIAD;

· Engineer’s Report, including estimated cost;

· Estimated assessment roll;

· Signature page – must be signed and returned to the Petitioners signifying approval of the project.


Signature Page: Some important things to note with regards to the signing of the petition

1) All owners of record must sign the petition.

a) If one of the owners is deceased, then a copy of the death certificate must be provided.

b) If the owner is a trust or a corporation, copies of articles of the trust or corporation must be included verifying who is authorized to sign.

2) If the owner has multiple parcels, then the owner(s) must sign for each parcel.

3) Once a petition has been signed, signifying approval of the project, the approval cannot be withdrawn for six months of the date of the signature, unless is it received in writing prior to the filing of the petition with the Borough clerk.

30-Day Restriction: Some important things to note with regards to certification of the petition

The petition must be filed with the Borough Clerk within thirty (30) days of the date of the first signature on the petition. For this reason, it is very important to coordinate distribution of the petitions. For example, you may probably want to mail the out of state/town petitions a few days before you distribute the local ones to allow for delay for mail time. The 30-day clock starts as soon as the first signature is dated.

The petition has sufficient signatures only if it contains:

1) The signatures of more than seventy percent (70%) of the parcel owners within the district; AND

2) The signatures of parcel owners that will bear more than seventy percent (70%) of the cost of the project.

Phase 4) Resolution to Form the District and Proceed with the Improvement
When the borough clerk has determined that the petition bears sufficient signatures and complies with the guidelines of the Ordinance, the mayor shall prepare for assembly consideration, a resolution to form the district and to proceed with the improvement. A public hearing will be held the night the resolution is to be considered.

All participants within the district will be notified of the public hearing by certified mail. Written objections to the formation of the district may be filed in writing for a period of 30-days after mailing of the notice of public hearing. If more than 50% of the owners within the district file written objections, then the resolution cannot be heard until sufficient revisions are made to the district so that less than 50% of the parcel owners object. Any revisions would be subject to notice and public hearings.

After the public hearing, the assembly may adopt the resolution to form the district and proceed with the improvement.

Phase 5) Implementation of the Improvements
After adoption of the resolution to form the district and proceed with the improvement, the construction process can begin by putting the project out to bid. However, in the event that the lowest qualified bid exceeds the estimated cost for materials and labor by more than ten percent (10%), then construction may not begin without further assembly approval. In this event, all participants will be notified of a hearing date to consider the increased improvement costs. If more than 50% of the participants do not object to the revisions by the date of the hearing, than the assembly may approve the improvement project.

At this point, if you have cleared all the previous hurdles, you should soon be driving on a newly improved road.

The following are some housekeeping items relating to the assessment process that should be covered:

Phase 6) Ordinance Levying Assessments
After the project has been completed and the final costs have been calculated, the mayor shall submit to the assembly a final assessment roll containing the names, parcels and amounts of the assessments. The final assessment roll shall be submitted with an ordinance confirming the final assessment roll and levying the assessments. The ordinance shall fix 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 participants.

After the public hearing on the ordinance, the assembly shall correct any errors or inequities, and confirm the assessment roll by ordinance.

Phase 7) Notice of Assessment
Within fifteen days after adoption of the ordinance levying the assessment, the finance director shall mail an assessment statement to each assessed parcel. This statement shall include all the pertinent information, including the payment terms and conditions of the assessment.

Other Information
Deferral of Payments

Assessment on real property owned and occupied as the primary residence and permanent place of adobe by a resident who is economically disadvantaged – whose income is less than 200% of current U.S. Health and Human Services Poverty Guidelines for Alaska – may be deferred. The deferred assessment, including all accrued interest, becomes due and payable in full when the property ceases to be owned by the resident who qualified for the deferral; and, any remaining balance due shall be paid on the same schedule as would have been in place if no deferral had applied.

Hopefully this overview has been helpful in understanding some of the steps to

implementing a roads improvement assessment district. For further details, please contact

the Special Assessment Coordinator at (907) 714 – 2230.

Petition Sponsors Check List - RIAD
Name of RIAD:____________________________________________

Phase 1) Application for a Road Improvement District & Match Program (Due by June 1st)
· Informally talk to neighbors, owners of benefited property included in proposed boundary

- Majority support of assessment? Requires more than 70% support

· Contact Borough Assessing Office, Special Assessment Coordinator: 907-714-2230

- Submit an application for a petition to form a special assessment district by June 1st

- Initial Route of Improvement

- Feasibility of project

Phase 2) Initiation of Road Improvement District
- Filing Fee Paid, Non-Refundable (Per most current KPB Schedule of Rates, Charges & Fees)

- Engineer estimate cost for project

- Evaluation of petition application by Roads Service Area Board (by August 1st)

Phase 3) Petition Process
- Petition packet prepared by Coordinator

- Petition packet distributed by petitioner to each parcel owner within district

- Signature forms collected by petitioner – 30-day Restriction


Due to CLERK’S OFFICE by:____________

- Signature forms submitted to Coordinator:____

- Petition certified by Clerks (greater than 70% required)

Phase 4) Resolution to Form the District and Proceed with the Improvement
- Projected Public Hearing:_________________

- Notices sent to owners (35-day notice prior to hearing)

- Resolution Approved

Phase 5) Implementation of the Improvements
- Project Out to Bid

- Construction Begins:____________________ (2nd year)

- Construction Completed:_________________

Phase 6) Ordinance Levying Assessments
- Ordinance of Assessment Approved

Phase 7) Notice of Assessment
- Owners of record of the parcels notified of special assessment