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RID-RMD 2003 POLICIES & PROCEDURES RECEIVED JEFFERSON COUNTY DEC 1 8 2003 Ans'd f - RURAL IMPROVEMENT DISTRICTS (RIDs) and RURAL MAINTENANCE DISTRICTS (RMDs) POLICIES AND PROCEDURES adopted by the Jefferson County Board of Commissioners June 13, 2001 JEFFERSON COUNTY RID or RMD POLICY INTRODUCTION POLICY STATEMENT A Rural Improvement District (RID) is undertaken by Jefferson County pursuant to the provisions of Title 7, Chapter 12, MCA. The purpose of a RID is to allow residents of Jefferson County in areas outside incorporated cities and towns to finance and construct needed public improvements. Once the improvements are in place, then a Rural Maintenance District (RMD) will be established to ensure the ongoing upkeep and repair of these improvements. By statute, the Board of County Commissioners of Jefferson County (the Board) is vested with the authority to authorize the creation of RIDs and RMDs_ The Board wishes to make available to the residents of Jefferson County, through RID or RMDs, the financing needed to allow the building and maintenance of public improvements, while safeguarding the County RID Revolving Fund and avoiding a burden to County taxpayers. Since the residents of the RID and RMD and the residents of Jefferson County are financially obligated, RIDs and RMDs will only be created after there has been full consideration of all factors. The Board wants the residents of the proposed RID and its maintenance District, the Board, and other county officers to receive adequate information on which to make an informed decision. To this end, the Board hereby adopts the following policies, procedures, and guidelines for the creations of RIDs and RMDs. DEFINITIONS: The following definitions and abbreviations are used throughout this policy in order to save space and to avoid the need for continued defining of common terms. RID: Is used to refer to Rural Improvements Districts created under the provision of Title 7, Chapter 12 of the Montana Code Annotated. RMD: Is used to refer to Rural Maintenance Districts created under the provision of Title 7, Chapter 12 of the Montana Code Annotated. BOARD: Shall mean the Board of County Commissioners of Jefferson County. COUNTY: Shall be used to refer to the political subdivision of the State of Montana known as Jefferson County. PETITIONER: Whenever the word petitioner is used, or similar phrases, it refers to those individuals presenting the petition and other documents for Board action. 1 INTER-CAP LOAN: A loan program from the State of Montana Board of Investments providing low cost money to Montana local governments and state agencies for a variety of purposes. PERCENTAGE: Whenever it is a requirement of this procedure document, or a statute, that a certain percentage of occurrence be obtained, it is not permissible to round up from a lower percentage. The percentage number given is the standard that must be obtained. SECTION 1. PROJECTS CONTEMPLATED UNDER RID or RMDS A. The RID or RMD procedure may be used for projects involving roads, refuse disposal, water, sewer, lighting, and television districts that have specific enabling legislation for their creation. The specific sections of the law governing the creation of these types of public works shall be followed. B. The Board will consider projects proposed under Section 7-12-2101, MCA, on an individual basis. The typical type of project anticipated by the Board involves improvements to roads, sidewalks, curbs, and gutters. The Board encourages county residents to utilize the RID method of creating public work projects, but reserves the right to approve or disapprove the use of an RID or RMD. C. All improvements contemplated under this policy must be constructed to County standards. SECTION 2. PUBLIC INTEREST OR CONVENIENCE A. Pursuant to Section 7-12-2102, MCA, the Board may create an RID or RMD whenever the public interest or convenience may dictate. The following considerations will be applied by the Board in evaluating whether the project is in the public interest or convenience: 1. The proposed project's impact on the general welfare, safety, and health of residents within the proposed District and on residents of the county at large. 2. The number of individuals directly benefitted and in what ways. 3. The financial burden on each individual land owner in the proposed District. 4. The impact on the revolving fund of Jefferson County. 5. The support within the proposed District for its creation. To determine the 2 support for the proposed District, the Board has established this policy. Nothing in this policy shall be construed as limiting the Board from initiating an RID or RMD, even if the property owners haven't previously signed a waiver of protest to the creation of a District. SECTION 3. PETITION PROCEDURE A. Property owners who are interested in establishing a RID or RMD should contact the Jefferson County Planning Department. 1. A copy of these guidelines and attachments will be provided to the property owner. 2. An informal meeting will be held with any interested property owners and County Planning staff. The guidelines and procedures for creating a RID or RMD will be reviewed at this meeting. 3. If the property owner(s) wish to proceed with an improvement project, they will be required to have a description of the proposed work with a detailed engineering cost estimate prior to the County beginning work on a petition. 4. If the property owner(s)wish to proceed with a maintenance project on an existing improvement, they will be required to have a description of the proposed work with a detailed engineering cost estimate prior to the County beginning work on a petition. 5. Once the project costs are determined, the County Planner will begin the RID or RMD petition process as described below. B. A petition shall be presented to the Board requesting that a RID or RMD be created. The petition shall contain the following information. 1. A description of the project. 2. A statement as to why the project is in the public interest or convenience. 3. A map of the proposed District shall be attached to the petition. The petition shall include a complete written description of the outside boundary of the proposed District and a written description of each lot or tract in the District. If the outside boundary can be determined from the description of the lots, the outside boundary description may be waived. 3 4. An approved engineer will be responsible for preliminary estimates and other engineering and associated work as outlined in this policy. 5. Cost estimate of the proposed project certified by the engineer of engineering firm. 6. Cost estimate of all county administration costs, including financing costs. 7. Method of assessment to be used in accordance with Section 7 of this policy. 8. Method of financing. 9. Pay-back schedule of the method of financing as specified in above. a. For the assessment method chosen, an estimate of the dollar amount for each individual property owner to pay his portion of expenses if paid in one payment. b. For the assessment method chosen, an estimate of the dollar amount for each individual owner to pay his portion over the term of the financing. 10. Number of individual lots or tracts within the District shown on the official records at the Jefferson County Assessor's Records as the date the petition is first circulated for signatures. 11. Number of individual lots or tracts within the District with occupied dwellings upon them, no more than 30 days before the date of the petition is first circulated for signatures, certified by the County. 12. Signatures of the owners of 60 percent of the parcels in the District as of the date that the owners sign the petition. For purposes of calculating the number of owners who have signed the petition, the Planning Department shall count as owners those who owned the parcel(s) specified at the time of signing the petition. 13. Each property owner's signature shall be followed by the property owner's address, date of signing the petition, and a legal description of the owner's property by reference either to the recorded plat, subdivision, deed and the geo-code number assigned to the property. 14. A clear statement that an additional yearly assessment shall be levied upon 4 the District for the maintenance of the proposed improvements as required by Montana law and this policy. 15. A clear statement that Jefferson County, by action of the Board in creating the RID or RMD, does not assume financial responsibility for the improvements financed by the District. The District is responsible for the continued support and maintenance fo the improvements, except as otherwise provided in this policy. Jefferson County will serve only to approve the necessary work and collect the assessments for the District. Jefferson County does not assume any responsibility for the continued maintenance or replacement of RID improvements at the end of the term of the financing. 16. A short statement that the petition is being circulated according to the Jefferson County RID or RMD Policy that is on file and available for inspection at the Jefferson County Board of Commissioners. 17. A clear statement that because of aggregation and subdivision of lots, the actual number of lots stated in the petition may change between the time the petition is circulated and the time the board considers the resolution of intention to create the RID or RMD, and therefore, the actual assessment per lot may be greater than or less than the amount stated in the petition and the number of lots to be assessed will be set as of the date of the resolution of intention to create the RID or RMD. C. The following procedure shall be followed for the filing of a petition under this policy: 1. The Planning Department shall review the petition to ensure that the petition is sufficient to meet all requirements as set out in this policy, such as the written description of the District and the number of lots within the proposed District. 2. Before the petition may be circulated for signatures, the County Commission will be informed by the Planning Department that the petition is ready to be circulated. SECTION 4. MAP A. The map attached to the petition shall clearly include and identify the following information: 1. The outside boundary of the RID or RMD; 5 2. All existing lots or tracts within the boundaries of the proposed District identified by appropriate boundary lines; 3. All existing road and rights-of-way shall be delineated; and 4. The location and extent of the proposed improvements. B. A map will be deemed sufficient by the County if it meets the following criteria: 1. A land owner within the proposed District can identify his particular property within the boundary of the District; and 2. A property owner can identify how and where the improvements requested will affect his property. SECTION 5. OWNERS' SIGNATURES A. If two or more persons own a parcel, one designated person who has recorded interest shall sign the petition for all property owners to qualify the parcel. If a person, or two or more persons, owns more than one parcel in the District, the designated person shall sign the petition for each parcel. B. If a parcel is owned by a bona fide partnership, corporation, or trust, one authorized representative may sign on behalf of the partnership, corporation, or trust to qualify the parcel. The representative must include his or her title or relationship to the partnership, corporation, or trust. C. A contract buyer or buyers shall be qualified to sign a petition as an owner of property within the District if a Notice of Purchaser's Interest is properly recorded in the Clerk and Recorders Office. A contract buyer or buyers shall comply with subsection A or B, whichever applies. D. Section 7-12-2110, MCA, shall govern the determination of who is considered an owner for purposes of signing the petition to create an RID or RMD and for protesting the creation of an RID or RMD. SECTION 6. REQUIREMENTS FOR RESOLUTIONS A. A resolution of intent to create a RID or RMD shall conform with the requirements of Section 7-12-2103, MCA, and shall include a complete legal description of all lots and tracts within the District. B. The resolution creating RID or RMD shall conform with the requirements of 6 Section 7-12-2113, MCA, and shall also include a complete legal description of all lots and tracts included within the District. C. Resolutions shall be prepared by the County Planning Department. SECTION 7. ASSESSMENT A. The cost for principal, interest, and yearly maintenance shall be assessed pursuant to Section 7-12-2151, MCA. The Board shall assess the entire cost of the improvements against the benefitted lots, tracts, or parcels of land in the District based upon the benefits received. The method of assessment shall be specified in the petition. B. Only one method of assessment shall be used in each RID or RMD. All assessment figures shall be determined by the engineer and included in the petition. Jefferson County will not pay any portion of a cost attributable to streets, avenues, alleys, or other public places or parks. C. All Property (Developed or Undeveloped) included in a RID will be assessed the same rate. Undeveloped property in a RMD may be assessed at 50% of the full rate. SECTION 8. ESTABLISHING BOUNDARIES OF PROPOSED DISTRICTS A. Pursuant to Section 7-12-2108, MCA, the Board may assess lots and lands not fronting on the proposed improvements if the Board declares in its resolution of intention to create the RID or RMD that such additional properties are benefitted by the proposed improvements. SECTION 9. PRESENTATION OF PETITIONS AND OTHER DOCUMENTS A. The Board will consider and act upon all decisions required to create an RID or RMD at a regularly scheduled meeting. The presentation of the petition, the passing of any resolutions, hearing of any protests, letting of any bids for bonds and construction shall be done at the regularly scheduled meeting. B. The Board reserves the right to alter its meeting date and time. It is the responsibility of those petitioning for the RID or RMD to adjust accordingly. In addition, it is the responsibility of those petitioning to be aware of any time restrictions specified by statute for creating an RID or RMD, selling the bonds, letting of construction contracts, and receive Board approval prior to the expiration of any such time limits as outlined in this policy. 7 SECTION 10. PROTEST TO THE CREATION OF AN RID or RMD A. Sections 7-12-2109, 7-12-2110, 7-12-2111, and 7-12-2112, MCA, will be followed when protests are made to the creation of an RID or RMD. SECTION 11. BID REQUIREMENTS AND CONSTRUCTION DOCUMENTS A. The provisions of Section 7-12-2131 through 2140, MCA, will apply to the construction of the project and bid requirements. When the Board passes the resolution to crate an RID or RMD, the bidding and construction of the proposed project is the responsibility of the District. B. Except for technical changes involving the engineering and design of the proposed project, no changes as to size and scope of the project may be made once the resolution is passed. C. The District engineer is responsible for preparing the necessary engineering plans, advertisement for construction bids, and inspecting the work. The engineer is responsible for the advertisement for construction bids. After the construction bid is let, the engineer shall furnish to the District's designated Financial Officer an itemized cost analysis of the RID or RMD improvements. The engineer shall report to the board as is necessary or requested concerning the completion of the work. D. The engineer, upon completion of the project, shall submit to the Jefferson County Finance Officer a final cost summary. The County Attorney is responsible for preparing the contract documents and for holding Jefferson County harmless in these matters. E. The engineer is responsible for certifying to the Board all construction work as it progresses. Claims by the contractor will not be paid unless authorized by the engineer. SECTION 12. FINANCING A. The Board may finance an RID through the sale of bonds, an INTERCAP loan from the Montana Board of Investments, or a loan from Jefferson County if the Board determines funds are available. Financing must be secured before construction begins. I. BONDS a. It will be the responsibility of the Board's Finance Officer to obtain 8 bond counsel, at the expense of the RID, for the preparation of all necessary papers in connection with the sale, including, but not limited to, the notice of sale, advertisement for sale, resolutions and the bonds themselves. b. Other than the requirements in this document, the timing and scheduling of the sale of bonds and the letting of the construction contract is determined by Jefferson County. The engineer, at his discretion, may complete whatever engineering work he deems advisable prior to the bond sale. However, the engineer will only be compensated from the proceeds of the bond sale. c. The term of the bonds shall not exceed 30 years. The Board is authorized to set the interest on the bonds and reserve the right to approve or disapprove the interest at the time of the bid opening. d. Pursuant to Section 7-12-2172(3), MCA, the Board will follow the requirements of Section 7-7-4251 through 4254, MCA, in selling the bonds. The bond shall conform with the provisions of Section 7-12-2171, MCA, and the County shall redeem the bonds pursuant to the provisions of Section 7-12-2174, MCA. e. Further, all bonds sold after the budget has been adopted will go on the tax rolls in November of the following year with the first interest payment due the following January and the first principal payment due July 1. As an example, by having a bond issue in September of 2000, the assessment will be billed in November 2001, with the first interest payment due on January 1, 2002. In the bonds sell on July 20, 2000, the assessment will be billed in November 2000, with the first interest payment due on January 1, 2001. This is necessitated because after January I of any year, the assessment for the RID cannot be included on tax notices and collected. It is the responsibility of the engineer and attorney to incorporate any additional interest accruing because of this delay in the calculation of the pay-back schedule. 2. INTERCAP LOAN a. INTERCAP financing may be utilized for the RID upon approval by the Board. b. The District's designated Finance Officer will be responsible for preparation of the INTERCAP loan application. 9 J • c. As with the sale of bonds, the costs of financing will be included in the loan. These costs include the origination fee and a 5% reserve to be deposited in the RID Revolving fund in accordance with 7- 12-2153, MCA. d. The INTERCAP interest rate is variable and can change from year to year. In order to assess sufficient proceeds, the Prime lending rate will be used to establish the assessment. In the event that the assessment is insufficient, it may be necessary to increase the assessment through the normal hearing process. Excess proceeds will be used to retire debt early in accordance with Section 15A of this document. 3. COUNTY LOAN a. If the Board determines the County has sufficient reserves, a lending fund may be utilized to finance a RID. The Board's Finance Officer will be responsible for the necessary documentation of the interfund loan. b. No origination fee will be charged. However, a 5% reserve is required to be deposited in the RID Revolving fund. c. The interest rate will be based upon the Prime-lending rate. SECTION 13. SECURITY DEPOSIT A_ If a District is less than 50% developed density (as defined below), the county may, at its option, require a security deposit of up to three (3) years of principal and interest. 1. If the Board determines that an RID is in the public interest due to its location adjacent to a developed density area, the majority property owner shall be required to provide security for that percentage of the property he owns within the RID. Individual lot owners shall provide the remaining security. 2. The security will be in the form of cash placed in the county treasury. The Board will not accept any other form of security. Any cash deposited as security with the Jefferson County Treasurer shall be invested along with other county funds and the interest earned from the date received. Upon written request, the Board may release to the party posting the security portion of the security as the percentage of developed density increases to 10 50% as established in this section or as the security exceeds the amount required to pay the total annual bond and interest assessments for the District. 3. If a District bond or warrant, interest thereon, or both, becomes due and payable and the appropriate RID fund lacks sufficient money to pay the bond, warrant, or interest, the Board may order that a portion of the security be used to pay the bond, warrant, or interest. The District's security shall be used and exhausted in this manner before the County RID Revolving Fund is utilized for the District. 4. If the insufficiency in the RID fund described in subsection (3) above is the result of a lot owner failure to pay assessments and the delinquent assessments are later recovered through the county assessment collection procedure or otherwise, the money recovered shall be returned to the revolving fund or the security, whichever was utilized to make up the insufficiency. If both the County RID Revolving Fund and the District's security were utilized to cover an insufficiency, any money later recovered shall first be deposited in the Revolving Fund until that fund has been fully repaid the amount taken to cover the insufficiency. SECTION 14. DEVELOPED DENSITY A. "Developed Density" is defined as the percentage of individual lots and parcels with dwellings or commercial establishments compared to the total number of lots or parcels within the RID. The percentage is figured by the following equation: A I B x 100 =Percentage of Developed Density A=the number of individual lots or parcels of land within the proposed RID boundary with dwellings or commercial establishments whose construction is completed. B = the total number of individual lots or parcels within the boundary of the proposed RID, as shown by the official records of the Jefferson County Clerk and Recorder. B. The Board will not create an RID that is less than 50 percent developed density unless the RID is created to improve a county road or the Board finds that special circumstances exist to warrant the creation of the RID. "Special circumstances" includes any or all of the following, as determined by the Board: 11 1. So that creation of the RID does not constitute a financial risk to Jefferson County; or 2. Jefferson County will substantially benefit from the improvements proposed for the RID. 3. Implementation of the Jefferson Comprehensive Plan. SECTION 15. PAYMENT OF PRINCIPAL AND INTEREST A. The Board will retire debt issued for an RID as rapidly as possible. In furtherance of this goal, individual property owners have the right at any time to pay off that portion of the improvement debt attributable to their property without penalty. The amount of principal and interest owing shall be calculated by the Jefferson County Treasurer. Such payment shall not relieve the property owner of further annual assessments for the maintenance of the improvement. B. Whenever it is a condition of sale of a parcel or tract of land within an RID that the balance owed issued in conjunction with an RID be paid, it is the immediate responsibility of the parties to the transaction to deposit with the Jefferson County Treasurer the amount owing. The provisions as to calculating the amount and effect on the annual assessment stated in Paragraph A of this section shall apply to the situation in this paragraph. SECTION 16. COUNTY RESPONSIBILITY FOR ROADS, STREETS, AND OTHER IMPROVEMENTS CREATED BY RID A. Any road, street, or other such improvements shall not automatically, upon approval of the RID, become part of the county maintained road system. The procedure for acceptance of a road, street, or other such improvement into the county road system is clearly outlined in the Montana Code Annotated and shall not be included in the petition for an RID or RMD. B. In addition, a clear disclaimer shall appear in the petition alerting those signing the petition that the County will assume no maintenance funding responsibility for any improvement created by the RID procedure except as otherwise provided in this policy. By not accepting the improvement into the county maintained road system at the time of creation of the RID does not foreclose its acceptance in the future. SECTION 17. MAINTENANCE COSTS A. The maintenance cost of improvements created by an RID shall be born by the District except as otherwise provided in this policy. Jefferson County, by the 12 action of the Board, assumes no responsibility for the maintenance of the project or the road, except as otherwise provided in this policy. Pursuant to the authority in Section 7-12-2161, MCA, the costs of maintaining and preserving improvements shall be determined by the Board. B. The Board shall, on a yearly basis, assess the owners within the District for the costs of undertaking necessary repair and maintenance as required by this policy. Assessment shall be made using the same assessment method as the RID. All major capital improvements must be financed through a RID. C. For a road, which at the time of the creation of the RID, is a road in the county maintained road system and which is improved through the creation of an RID an this policy. The maintenance costs that may be paid for through a RMD may include but are not limited to: overlays, seal coats, and other major improvements, snow plowing, drainage, and signage. These costs shall be included in the cost estimates prepared and presented by the engineering firm as required by Section 20. For such a road, the County may choose not to provide day-to-day routine control. SECTION 18. MAINTENANCE CHARGE SHEETS A. The County shall prepare and present at the time of the passage of the resolution of intention an estimated maintenance assessment sheet, which will include cost estimates for routine and major maintenance. The charge sheet shall show estimated annual cost and shall be evaluated no less than every three years for accuracy. SECTION 19. PROFESSIONAL ASSISTANCE A. Jefferson County will not be responsible for compensating these individuals or firms for any work performed in the creation of the RID or RMD. B. The County Attorney is responsible for approving the contents of the petition. These include, but are not limited to, the petition itself, the resolution of intention, the resolution to create an RID or RMD, preparation of contracts for the project, all notices connected with the advertisement of bid for the project, notice of bid for bonds, and the bonds themselves. C. The staffs of the Jefferson County Attorney's Office, Planning Department, and the Clerk and Recorder's Office will prepare all of the aforementioned documents. The Board will utilize the expertise of these offices in reviewing the documents. 13 SECTION 20. COUNTY ADMINISTRATIVE COSTS A. The County will charge a yearly administrative fee equal to 5% of the annual assessment not to exceed $500.00 as per 7-12-2161, MCA, on all maintenance Districts. SECTION 21. COUNTY ADMINISTRATIVE PROCEDURES A. RIDs or RMDs will be administered through the various offices of county government. To avoid confusion and clearly establish the duties of each office with respect to RID or RMD administration, the Board adopts the following directives: 1. The County Planning Department shall be responsible for certifying the signatures on the petition stating the percentage of parcels of the District which is represented by qualified signatures. The Planning Department will be responsible for causing the various notices to be posted and published, reviewing the petition to form the RID or RMD, maintaining a file on the creation of each RID or RMD, and for drafting the necessary resolutions. 2. The Assessor shall be responsible for the assessments on each District. 3. The Treasurer shall be responsible for maintaining all accounts created by RID or RMSs. The office shall also retain the bond and interest charge sheet and be responsible for the computations for individuals wishing to pay their portions of the indebtedness. The Treasurer shall pay interest on bonds and call the bonds that are due. The Treasurer through its authority to collect taxes, will also collect all assessments on RID or RMDs. 4. The County Road Department and/or Planning Department shall be responsible for insuring that all approved projects are completed as specified. The County Road Department will determine the yearly maintenance schedule for existing Districts and maintain the project files. B Before August 1 of each year, all RIDs or RMDs in the county shall be reviewed. SECTION 22. EFFECT ON EXISTING RID or RMDs A. All existing and duly created RID or RMDs shall be administered according to applicable state statutes. Any RID or RMD created prior to the adoption of this procedures document shall be subject to the provisions of state law concerning maintenance and administration. Any provision in an existing RID or RMD not in conformity with the applicable provisions of state law will be considered void and 14 the Board shall have the authority to administer the RID or RMD under the proper statutory directives. SECTION 23. RURAL REVOLVING FUND A. Pursuant to the authority in Section 7-12-2181 through 2186, MCA, the Board may establish and maintain a Rural Improvement District Revolving Fund. The fund will be maintained and administered according to the above mentioned statutes and the provisions of this policy. SECTION 24. SEVERABILITY A. If any portion of this policy is found by a court of law to be illegal or if the Board itself, for whatever reason, deletes or changes any portion of this policy, the remaining portions shall remain in affect so far as is logical and in keeping with statutory provisions. SECTION 25. COMPLIANCE A. The provisions of state statute and the requirements of this procedures and policy shall be followed. Failure to do so is grounds to deny further action for the creation of an RID or RMD. B. Exceptions to the procedures set forth in this document will only be made in instances where the provisions of the document are unable to be met because of circumstances beyond the control of the petitioner and the County. An exception in any event is limited to the situation at hand and shall not alter the procedures required in this document. C. The County Commission may, at its discretion, modify portions of this policy in October of each year. DATED this 13th day of June, 2001. JEFFERSON COUNTY BOARD OF COUNTY COMMISSIONERS C71,0„,„,0( SAM SAMSON, CH Attest: Z ��.1 / HERBY C GI L,' MMISSTONER 'i\A\/UPC Bonnie Ramey Clerk and Recorder TOM LYTHGOE, CIMMIS ONER 15 ,e6uta-Q /i (, it2 ) /w o;'ci'cs \lu4 - 13, 0/