The owner of property within a water or sewer utility service area shall, if the property has not been included with any water or sewer assessment district, as a condition precedent to construction or installation of a service connection, pay or agree to pay to the city a payment in lieu of assessment.
(Ord. 440 § 2, 1975)
(a) 
The payment in lieu of assessment shall be calculated upon the square feet of area in the property to a depth of 150 feet from the improvement or dedicated public right-of-way in which the improvement is located.
(b) 
If the cost per square foot for the improvement was established in conjunction with assessments in an adjacent special improvement district, the payment in lieu of assessment shall be calculated using the same rate per square foot. If the cost of the improvement has not been so established, the average cost per square foot to the city for a similar improvement during the fiscal year preceding the request for service shall be used as the square foot rate for the assessment.
(Ord. 440 § 2, 1975)
(a) 
The required payment in lieu of assessment may be paid in 20 equal quarterly installments if the property owner executes a mortgage agreement to the city secured by the property to be served. The first quarter installment shall be payable at the time of application for utility service and remaining installments are payable at quarterly intervals on or before the dates to be established in the promissory note. The notes shall bear interest at the rate determined applied by the city to the adjacent special assessment district for the construction of the improvement or, if the improvement was not constructed in conjunction with an adjacent special assessment district, then at the rate of interest paid by the city on its most recent bond issue.
(b) 
The property owner may prepay all or any portion of the payment in lieu of assessment at any time without penalty. The mortgage agreement shall be in a form approved by the city attorney.
(Ord. 440 § 2, 1975)
A property owner who has paid an assessment or payment in lieu of assessment, and who is requesting service from the public improvement for which the owner was assessed to a portion of the property not included in the calculation of the assessment or payment in lieu of assessment, shall, as a condition for service, pay an additional payment in lieu of assessment. The additional payment shall be calculated using the rate per square foot utilized in calculating the prior assessment or payment in lieu of assessment, for the area from the boundary of the previously assessable area to a parallel line contiguous to the most distant portion of the premises to be served.
(Ord. 440 § 2, 1975)
(a) 
The owners of property lying outside of existing utility service areas may petition the city council for the installation of utility facilities and provision of utility service. If the owners of not less than 60 percent in value of the properties to be benefitted by the utility facilities to be constructed execute a mortgage agreement to secure a payment in lieu of assessment, and agree to accept utility service within two years after completion of the improvements, the city council may, if it determines the construction to be economically feasible, authorize construction of the improvements and the furnishing of the utility service. The payment in lieu of assessment shall be calculated in the same manner as provided in Chapter 13.20 KCC for special assessments.
(b) 
The mortgage agreement shall estimate the payment to be required based on the average cost incurred during the previous year for similar improvements multiplied by an appropriate inflation factor. Upon execution of the necessary mortgages, engineering work shall be completed and bids for construction accepted. The property owners shall be notified in writing of the cost per square foot of the lowest acceptable bid and they may, within 10 days after receipt of that notice, elect to terminate their mortgage agreement. Termination shall be contingent upon payment of that portion of engineering costs attributable to the property if the project is canceled because owners of less than 60 percent in value of the property continue to support the improvement.
(Ord. 440 § 2, 1975)
If a property owner becomes delinquent in any payment in lieu of assessment for utility improvements, the city may discontinue the utility service. Discontinuance of the utility service for delinquency shall not affect the city's right to collect remaining payments or installments. The water utility mortgage shall provide for the discontinuance of service for delinquency in payment or for breach of any other provision of the mortgage.
(Ord. 440 § 2, 1975)
At the city manager's discretion, the requirement of a payment in lieu of assessment may be waived if a utility extension in excess of 150 feet is necessary to serve the property and the construction of a utility main in the proximate future appears economically feasible. At such time as the utility facility is constructed, the payment in lieu of assessment shall be required.
(Ord. 440 § 2, 1975)