Hassett Street improvements will revert to liens if unpaid

By Jane Stebbins, Pilot staff writer July 11, 2012 11:19 am

 

Deferred Improvement Assessments for about eight residents on Hassett Street will revert to liens, if the owners don’t – or can’t – pay the city what’s owed it.

The DIAs are due at the end of construction, slated to begin later this summer.

 

But liens aren’t all bad, city councilors agreed at a meeting Monday night. And current DIAs basically serve as liens, anyway.

DIAs are made when the city and developer agree to defer required improvements associated with the property, such as sidewalks, storm drains and street widening.

If the home is sold, the DIA – or a lien – becomes the responsibility of the new homeowner.

“Liening a property isn’t something vindictive, this black cloud hanging over you,” said Councilor Jake Pieper. “It’s really not a big deal.”

Councilor Kellly McClain agreed, saying a lien – and a DIA – are basically IOUs with the house serving as collateral in both cases.

The city made DIA agreements throughout the city from 1988 to 2001.

Public Works Director Loree Pryce said the concept behind DIAs was to defer construction of public improvements required in connection with a subdivision until a larger project that would include the improvements was undertaken.

In 2008 the city evaluated the conditions of streets, sidewalks, water and other infrastructure throughout the city to create a priority list of needed improvements.

Hassett Street was first on the list, said City Manager Gary Milliman. There are about 20 homes on the affected part of the street.

“We want to get started on a project,” McClain said. “It’s a shame to drag out that part and lose out on the (construction) season.”

DIAs owed for Hassett Street improvements range from $3,500 to $35,000 for a total of about $70,000. Costs depend on what improvements need to be made, and the length of property frontage.

Most, if not all, of the DIAs on Hassett Street have not been enforced, which could set a precedent for 196 others throughout the city, noted Public Works Director Loree Pryce.

Those 196 DIAs represent about $2 million in improvements. If homeowners were to pay the amount at which the DIAs were assessed  when they were put in place in the 1990s, the city would garner about $600,000 less. 

The difference would likely come out of the system replacement funds, which are paid by customers through their monthly water bills and designated for such work, Milliman said.

 Pryce said the city needs to make sure DIAs on the properties scattered throughout town have been properly recorded with the county so they can legally be collected when the time comes.

The council Monday debated whether to further defer the payment of those funds, set up a method by which people could pay them or continue as planned with the improvements – and thus require people to pay what they owe.

The city would forge ahead with the improvements whether the residents paid the DIAs or not, as the road is in “horrible disrepair,” they agreed.

Most of the Hassett Street homeowners involved inherited the DIAs from the person from whom they purchased their house; some claim their realtor or title company never notified them that such funds were owed.

Two citizens said they weren’t convinced improvements were needed, although Jan Sirchuk of Harbor, whose son owns a house on Hassett Street, said water pools and algae grows in some drainage spots.

Others wrote the council to say they didn’t have the money – many homes are under water since the economic turndown and have no equity from which owners can draw a loan.

Homeowner Tammi Konkel said financing for many – even herself – is impossible.

“I’m in financing, and the average person in this economy doesn’t have the money to pay the city,” she said. “(Private financing) is not going to be an option. It would be difficult even if they were not under water.”

Improvements needed on Hassett Street from Seventh Street to Pioneer Road include repaving, drainage improvements and installing sidewalks.

To cut down on costs, Pryce said street widening could be reduced from 36 to 28 feet without compromising traffic in the area.

And some improvements residents have made in the past should count toward the money they owe.

An example is drainage improvements made at one residence that, even though inadequate by today’s standards, were approved by the city at the time they were made.

Council members don’t want to see what has happened before, when one homeowner would make a required improvement and the neighbor’s frontages would pale in comparison.

“DIAs prevent ‘orphan sidewalks,’ ” Pieper said. “You have a dilapidated street minus one property that has a nice sidewalk and street. And by the time the rest of the street is developed, the other side of the street is dilapidated.

“Bad spot, nice spot,” he said. “DIAs have their place.”

City Council members agreed the current system doesn’t work well and should be revamped before more development is approved.

They seemed to favor amending the policy so developers would be required to put road and drainage improvement funds into an account that could be accessed when the project got under way.

Grants Pass has a policy under which developers pay 115 percent of estimated costs for such improvements; that money is put in an interest-bearing account, said City Manager Gary Milliman.

“This issue has been kicked around and kicked around for many, many years,” said Mayor Ron Hedenskog. “We arrived at the law we have now after much debate, and here we are looking at them again.

“Changing is not going to be easy,” he added. “DIAs have some good, some bad. We’re seeming some of the bad tonight.”