A. 
The "sewer connection incentive program" (SCIP) is hereby established, to be funded by the moneys presently in the sewer expansion and improvement fund. The city may add or deduct moneys into said sewer connection incentive program as necessary to accomplish the program's purposes as set forth in this chapter.
B. 
This fund is established to provide incentive to owners or residential property with existing septic sewer systems to connect to the public sewer system when it becomes available. Acceptance into this program is a privilege, not a right. The city maintains the discretion to consider all circumstances when reviewing an application, including other funds that may be available, including supplemental funding such as grants or other loans.
(Formerly 13.37.010; Ord. 1471 § 1 (part), 2012; Ord. 1622 § 1 (Exh. A (part)), 2017)
As used in this chapter, except where the context clearly indicates a different meaning:
"Applicant"
means a homeowner(s) who applies to the sewer connection incentive program (SCIP) for a loan of funds from the sewer connection incentive fund to benefit the applicant's existing single-family residence in which the applicant resides. All applicants must be residing in the family residence at the time of application and payments under the installment contract.
"Connection to public sewer"
means issuance of a sewer connection permit to physically make such connection and subsequent connection.
"Equity value"
means the amount by which the assessed value of a residence, as determined from the records of the county assessor, exceeds the total amount of any liens or other obligations against the property.
"Low income"
means a household that has 50 percent or less of the median family income as defined in guidelines for the state of Washington community development block grant program for King County.
"Ownership interest"
means a property interest in an existing single-family residence under a recorded deed or under a contract of purchase, recorded mortgage, recorded deed of trust or recorded lease by which the applicant is responsible under penalty of forfeiture, foreclosure or default for payment of real property taxes and/or local improvement district assessments. The term shall also include a share ownership in a cooperative housing association, corporation or partnership if the applicant can establish that his or her share represents the specific unit or portion of such structure in which he or she resides.
(Formerly 13.37.020; Ord. 1471 § 1 (part), 2012; Ord. 1622 § 1 (Exh. A (part)), 2017)
A. 
Authorized Expenditures. Sewer connection incentive program funds shall be used or dispersed only for the purposes set forth in this section and for the following purposes:
1. 
To finance a sewer general facility charge imposed upon an existing single-family residential property by NBMC § 13.20.080;
2. 
To finance the actual capital costs to an owner of an existing single-family residential property to connect the property to a city sewer main and to pay for the costs of abandonment of the septic system for the property as documented by an invoice from a licensed contractor; and
3. 
To finance latecomer fees.
B. 
Eligibility for SCIP. Payments as set forth in subsection A of this section shall be made subject to the following eligibility criteria:
1. 
In order to qualify for the SCIP, the applicant must be low income as shown in the current guidelines set by the state of Washington community development block grant program for King County.
2. 
The property is an existing single-family residential property. New construction is not eligible for an installment contract.
3. 
The property is on a septic or other on-site sewage disposal system and is not connected to sewer.
4. 
The property has sewer available whether constructed by the city or by a developer, or through other approved methods; provided, that "available" as used in this section means that the sewer abuts the property or said property is within 150 feet of the sewer main and the public works director has determined that a sewer main extension across said property is not feasible.
5. 
The applicant for an installment contract is the owner of record of the property.
6. 
The applicant pays all application and permit fees as required by city code and meets all current code requirements for connections.
7. 
The applicant must enter into loan and security agreements with the city providing for repayment and financing of the SCIP funds expended for the property.
C. 
Application Process.
1. 
Application for SCIP funds shall be made on the form provided by the city.
2. 
Each application for SCIP shall be accompanied by an application fee in the amount set forth in the taxes, rates and fees schedule.
3. 
Completed applications shall be delivered to the public works department.
4. 
The public works department, with assistance of the city attorney, shall adopt appropriate forms for administration of the deferral program consistent with this chapter.
D. 
Loan Terms and Conditions.
1. 
The terms of the loan shall be as follows:
a. 
The loan will be structured as a promissory note or similar security instrument to be prepared by the city attorney, who is authorized to add provisions in addition to these mandatory provisions.
b. 
A down payment of 10 percent of the total general facilities charge and special connection charges and costs of abandonment, if applicable, payable prior to execution of the contract. This payment must be made in addition to any credit available to certain property owners under the NBMC.
c. 
The term of the note shall not exceed six years, commencing at the time the property is connected to the sewer.
d. 
The note will bear interest at the annual rate of two percent above the city's current investment yield at the time of the loan or interest at the same rate as the effective annual interest of the most recent North Bend local improvement district bond issue or sewer utility revenue bond issue, whichever is most recent, computed monthly on unpaid balances.
e. 
The note will be secured by an interest in the property and shall be recorded prior to connection. The property interest may take the form of a lien, a deed of trust, or such other instrument as may be acceptable to the city.
f. 
The note shall provide for acceleration of the payment of principal upon default of any payment. In the event of default, the city shall have all available remedies, including, but not limited to, foreclosure of its interest in the property, notification to credit bureaus, use of collection agencies, and terminating service.
g. 
Loan principal and interest charges will be billed by the city and be due monthly with the sewer utility bill.
h. 
There shall be no penalty for prepayment of principal.
i. 
Administrative fees may be imposed for late payments.
j. 
The note will contain a due on sale clause that provides for payment in full of all outstanding principal and interest upon sale, transfer, or redevelopment of the property.
2. 
Any and all funds disbursed shall be paid directly to the sewer service installer after receipt and approval of an invoice. Payment will only be made after the city has inspected the installation of the new sewer service and the abandonment of the septic system.
3. 
The number and amount of installment contracts or loans shall be limited by available funds. The amount of available funds shall be at the discretion of the city council and shall be determined periodically by city council motion, resolution, or ordinance.
4. 
Security Provisions. The city shall not approve a loan unless the applicant and his or her spouse, if any, have signed a contract with the city providing that:
a. 
The city shall have a secured interest in the form of a lien, deed of trust or other document, on the benefited property in an amount equal to the amount of the loan, plus interest at the same rate of interest as set forth in the payment agreement, computed to the date the payment is made.
b. 
The applicant shall have and keep in force fire and casualty insurance on the benefited property in sufficient amount to protect the interest of the city in the property. Proof of insurance shall be provided to the city on an annual basis.
c. 
The obligations, pursuant to this section, shall become due and payable in full, as set forth in the note, including principal and accrued interest or upon the earliest of the following dates:
i. 
Upon the sale of property which is the subject of the loan;
ii. 
Upon the death of the applicant, except that a surviving family member who is qualified under this chapter may elect to continue the loan, provided they are residing on the property;
iii. 
Upon the condemnation of property by a public or private body exercising eminent domain power, except as otherwise provided in RCW 84.60.070 for properties subject to a lien for taxes;
iv. 
Expiration of the loan agreement.
d. 
Each contract executed pursuant to this section shall be recorded by the city with the county auditor.
5. 
The general facilities charge and special connection charge, if applicable, must be paid in full or the installment contract must be executed and recorded, as a condition precedent to the issuance of a permit for connection to the city sewer system.
E. 
Prioritization Criteria. The city may develop administrative criteria for prioritizing selection of projects and applications for assistance under SCIP taking into consideration the following:
1. 
Near proximity to groundwater supply.
2. 
Viability of existing septic systems in an area or particular property. For example, applicants in an area with failing systems may take priority over applicants in other areas.
3. 
Total cost of connection.
4. 
Other available funding resources for sewer construction and connections.
5. 
The availability of loan funds.
6. 
Other ongoing or proposed city projects.
F. 
Unpaid Charges.
1. 
Delinquent payments of general facilities charges and/or special collection charges under such installment contract, or otherwise unpaid general facilities charges and/or special collection charges, are a lien upon the described property as provided in RCW 35.67.220, enforceable in accordance with RCW 35.67.220 through 35.67.280.
2. 
Upon full payment of the charges due, the city administrator on behalf of the city executes and delivers to the property owner a release of such lien. The property owner is responsible for recording the release at the property owner's expense.
(Formerly 13.37.030; Ord. 1471 § 1 (part), 2012; Ord. 1622 § 1 (Exh. A (part)), 2017)