COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

March 11, 2008

BOARD MEETING DATE:

March 25, 2008

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

APPROVAL OF AN ASSESSMENT PAYMENT ASSISTANCE PROGRAM IN CONNECTION WITH THE LA HONDA AREA SCENIC DRIVE LANDSLIDE ASSESSMENT DISTRICT

RECOMMENDATION:

Adopt a resolution approving an assessment payment assistance program in connection with the La Honda area Scenic Drive Landslide Assessment District.

VISION ALIGNMENT:

Commitment: Ensure basic health and safety for all.

Goal 7: Maintain and enhance the public safety of all residents and visitors.

This action furthers the above-mentioned commitment and goal by assisting La Honda residents who may have a financial hardship in paying the assessment in connection with the assessment district formed to reconstruct lower Scenic Drive and improve the stability of the area supporting that roadway.

PREVIOUS BOARD ACTION:

1.

Declared the intention to order the construction of soil stability improvements within the Scenic Drive landslide in the La Honda area and to form an assessment district to assist in the financing of that construction.

2.

Directed that a hardship program be proposed for your Board’s consideration to provide needy property owners with financial assistance in the payment of the proposed assessment.

DISCUSSION:

A financial assistance program is recommended that will include the following components:

1.

Applicants will identify the assessment unit property by the appropriate Assessor’s Parcel Number (APN) and certify that they own the assessment unit, reside at that assessment unit property, and will experience an extreme financial hardship if required to pay the assessment either in total within 30 calendar days after the formation of the assessment district, or at the fixed 15-year annual payment specified. The application must be received by the County no later than 16 calendar days after the date of formation of the assessment district.

2.

Only owner-occupied assessment unit properties will be eligible.

3.

The County will pay into the Assessment District an amount equal to the full assessment for the assessment unit, provided the applicant/owner executes the Assistance Program Documents.

4.

The Assistance Program Documents shall include a promise to pay, secured by a deed of trust, pursuant to which the applicant/owner agrees to repay to the County the full assessment amount, plus interest thereon, no later than the date of transfer of ownership of the assessment unit or any portion thereof.

5.

The interest rate shall be 3.5 percent (3.5%) of the full assessment amount, compounded annually until the entire amount is paid in full.

6.

Repayment may be made in full at any time.

7.

The County shall require proof of ownership of the property.

If your Board approves the assessment payment assistance program, an application form will be developed and ready for distribution upon the formation of the assessment district. An applicant will be required to provide a legal description of the property affected [i.e., the description contained in existing deed(s)], proof of ownership; a simple statement of the hardship, and agree to properly execute the Assistance Program Documents (which will be recorded as a lien against the property). It is not anticipated that anything beyond the statement of hardship would be required to evidence the hardship – the statement itself will be relied upon.

Based on the proposed lump sum assessment of $6,064.16 per assessment unit in Zone 1 and $12,132.68 per assessment unit in Zone 2, assessments will appear as part of the property tax bill for 15 consecutive years at the rate of $526.54 per year for Zone 1 Assessment Units, and $1,053.12 per year for Zone 2 Assessment Units. In the alternative, a property owner may opt to pay the entire assessment as a lump sum payment, provided, however, such payment must be received within
30 calendar days of the formation of the assessment district.

The implementation of the Assessment Payment Assistance Program provides another payment alternative. The full assessment for the assessment unit, plus interest thereon, will still be the obligation of the property owner until paid in full, however, the payment requirement will effectively be deferred until the ownership of the property changes. Thus, under the assistance program, while the full assessment amount plus accrued interest thereon may be paid at any time, it is anticipated that such payment will most likely be made out of the proceeds of the sale of the property (as must occur in order to extinguish the lien evidenced by the Assistance Program Documents). After 15 years, the total amounts owing (i.e., the original assessment amount plus accrued interest thereon) would be $10,157.47 for a Zone 1 assessment unit; and $20,322.24 for a Zone 2 assessment unit. If not otherwise paid, nothing changes just because 15 years has elapsed - interest still accrues at 3.5%, compounding annually, and payment of the entire original assessment amount is required no later than the date of transfer of ownership of the property, or any portion thereof.

Example of Payment Options over 15 Years

Payment Options

Zone 1

Zone 2

1.

Paying lump sum initially

$6,064.16

$12,132.68

2.

Financing through Assessment District over 15 year period

$526.54 per year

(total of $7,898.10)

$1,053.12 per year (total of $15,796.80)

3.

Total Assistance Program amount owed at the end of 15 years

$10,157.47

$20,322.24

FISCAL IMPACT:

The Assessment Payment Assistance Program will be financed through General Fund and repayments will be reimbursed to the General Fund.

The resolution has been approved as to form by County Counsel.