Latecomers Agreements for Cities, Towns and Counties (Only until July 1, 2014)
2013 Legislative Changes
In 2013, the Legislature passed ESHB 1717, which, among other things, modified chapter 35.91 RCW in several key areas for sewer and water facility latecomer agreements in cities, towns, counties, and drainage districts. These changes to chapter 35.91 RCW do not become effective until July 1, 2014, so this webpage is effective only until then. After July 1, 2014, go to the new Latecomers Agreements for Cities, Towns and Counties (After July 1, 2014) webpage that incorporates the 2013 legislative changes.
What Are They?
Latecomer agreements, also referred to as recovery contracts or reimbursement agreements, allow a property owner who has installed street or utility improvements to recover a portion of the costs of those improvements from other property owners who later develop property in the vicinity and use the improvements. Two different statutes, Ch. 35.72 RCW for streets, and Ch. 35.91 RCW for utilities, govern these. Both chapters now allow a municipality to be considered as a property owner that can be reimbursed under a latecomer agreement, per a 2009 change in Ch. 35.91 RCW [EHB 1513, 2009].
What They Are Not
Latecomer agreement charges are not to be confused with local improvement district (LID) assessments. While the computation of charges to be recovered under a latecomer agreement can be very similar to that of an LID assessment, the procedures are very different, and under an LID the money goes to the municipality rather than to the property owner. In addition, LID assessments apply to all properties within the reimbursement area, whether or not the property is developed. Latecomer assessments, however, are triggered only if a property owner submits an application for a development that would have required similar improvements.
Latecomer agreement charges are also not to be confused with connection fees, also known as facilities charges or system development charges, for utilities under Ch. 35.92 RCW. These fees or charges are a property owner's equitable share of the cost of the entire utility system and not just for improvements that serve his/her property.
Street Latecomer Agreements Q&A
Street Latecomer Agreements are regulated under Ch. 35.72 RCW.
- Who can contract? Any city or county.
- With who? Owners of real estate.
- For what? Construction or improvement of street projects which the owners elect to install as a result of ordinances that require the projects as a prerequisite to further property development.
- What's included? Street projects subject to reimbursement may include design, grading, paving, installation of curbs, gutters, storm drainage, sidewalks, street lighting, traffic controls, and other similar improvements, as required by the street standards of a city or county.
- Where? Inside the municipal corporate boundaries.
- Why? To provide for reimbursement, for a period not to exceed 15 years, of a portion of the costs of the project by other property owners who: 1) are determined to be within an assessment reimbursement area; 2) are determined to have a reimbursement share; 3) did not contribute to the original cost of the street project; and 4) subsequently develop their property within the 15-year period and at the time of development are not required to install similar street projects because they were already provided by the original developer.
- Reimbursement amount? The reimbursement is to be a pro rata share of design, construction, and contract administration costs of the street project, determined by a method of cost apportionment based on the benefit to the property owner from the project.
- What are the required procedures? In addition to the procedures set out in RCW 35.72.040, summarized below, the courts have held that a prerequisite to the latecomer agreement process is having in place an ordinance that requires the particular street improvements as a condition of property development. Woodcreek Partnerships. v. City of Puyallup, 69 Wn. App. 1, 847 P.2d 501 (1993). With such an ordinance in place, the following statutory procedures must be followed:
(1) the city or county formulates an assessment reimbursement area based upon a determination of which parcels adjacent to the improvements would require similar street improvements upon development.
(2) the city or county sends, by certified mail, a preliminary determination of area boundaries and assessments, along with a description of the property owners' rights and options, to property owners within the proposed assessment area. If any property owner requests a hearing in writing within 20 days of the mailing of the preliminary determination, the city or county legislative body must hold a hearing, with notice to all affected property owners. The legislative body's ruling is final.
(3) the contract must be recorded in the appropriate county auditor's office within 30 days of its final execution.
(4) the filed contract is binding on property owners within the assessment area who are not party to the contract.
- Can a city or county participate in or create a street latecomer agreement, and can it be the sole beneficiary of the reimbursements? Yes. RCW 35.72.050 authorizes a city or county to join in the financing of street improvement projects and to be reimbursed in the same manner as the property owners of real estate who participate in the projects, if the city or county has specified the conditions of its participation in an ordinance. Or, a city or county may create an assessment reimbursement area on its own initiative, without the participation of a private property owner, finance the costs of the street improvements, and become the sole beneficiary of the reimbursements that are contributed. A city or county may be reimbursed only for the costs that benefit that portion of the public who will use the improvements within the assessment reimbursement area. A city or county may not be reimbursed for improvements that benefit the general public.
- Can WSDOT participate in or create a street latecomer agreement, and can it be the sole beneficiary of the reimbursements? Yes. RCW 35.72.050 authorizes WSDOT participation in the same manner and subject to the same restrictions as cities or counties. However, the appropriate city or county is to act as a WSDOT's agent through an interlocal agreement.
Utility Latecomer Agreements Q&A
Utility Latecomer Agreements are regulated under Ch. 35.91 RCW.
- Who can contract? Any city, town, county, water-sewer district, or drainage district.
- With who? Owners of real estate.
- For what? Construction of water and sewer facilities (storm, sanitary, or combination sewers, pumping stations, and disposal plants, water mains, hydrants, reservoirs, or appurtenances).
- Where? Both inside and within 10 miles of the corporate boundaries.
- Why? To provide for a period not to exceed 20 years for reimbursement of a fair pro rata share of the cost of water or sewer facility construction to property owners by other by other property owners who did not contribute to the original cost of the facilities and who subsequently tap into or use them.
- Subject to? Reasonable rules and regulations established by the municipality.
- What's the catch? A latecomers agreement is not binding on any property owner not included in the contract unless the contract has been recorded with the county prior to the time that owner connects to the water or sewer facilities.
- What about the boundary review board? Extension of water or sewer facilities outside of the boundaries of a city or town are subject to potential review by a boundary review board under Ch. 36.93 RCW.
- How about approval and acceptance? Upon completion of the facilities, the governing body must approve their construction and accept them as facilities of the municipality.
- What about operation and maintenance costs? If the water or sewer facilities are approved and accepted, the city or county is responsible for all further maintenance and operation costs.
- Can the city participate in a utility latecomer agreement? Yes, subject to RCW 35.91.020 (1)(b):
- (b) If authorized by ordinance or contract, a municipality may participate in financing the development of water or sewer facilities development projects authorized by, and in accordance with, (a) of this subsection. Unless otherwise provided by ordinance or contract:
(i) Municipalities that contribute to the financing of water or sewer facilities projects under this section have the same rights to reimbursement as owners of real estate who make contributions as authorized under this section; and
(ii) If the projects are jointly financed by a combination of municipal funding and private funding by real estate owners, the amount of reimbursement received by each participant in the financing must be a pro rata share.
(c) A municipality seeking reimbursement from an owner of real estate under this section is limited to the dollar amount authorized under this Ch. and may not collect any additional reimbursement, assessment, charge, or fee for the infrastructure or facilities that were constructed under the applicable ordinance, contract, or agreement. This does not prevent the collection of amounts for services or infrastructure that are additional expenditures not subject to such ordinance, contract, or agreement.
- How is the original property owner reimbursed? RCW 35.91.040 states that nobody can connect to water or sewer facilities under a latecomer agreement during the life of the agreement without first paying to the city or county the amount required by the agreement. Moneys received under a latecomers agreement are to be paid out under the terms of the agreement within 60 days. If connection is made into a contracted water or sewer facility without payment having been made, the city or county may remove the unauthorized connection and all connecting tile or pipe located in the facility right-of-way and dispose of unauthorized material without any liability.
- How are the costs due under a utility latecomer agreement determined? This is to be determined by an engineer's estimate, which must include the fair pro rata share due from property owners. RCW 35.91.050.
- Does a latecomers agreement need to be recorded? Yes. The agreement must be recorded with the county auditor. RCW 35.91.020. In addition, a "notice of additional tap or connection charges," that includes a legal description or a map of the affected property, must also be filed with the county auditor. RCW 65.08.170.
Combined Street and Utility Latecomers Agreements
Several cities have combined street and utility latecomer agreements into a single ordinance or set of master code sections. Since there are differences in required procedures between each set of statutes, any master code must meet the most stringent requirements of each set of statutes. For example, the street latecomer statutes require a public hearing at the request of an aggrieved property owner, while the utility statutes do not have a specific requirement. Similarly, the recording requirement for a street latecomer agreement is more explicitly stated than for utility agreements. In addition, a street latecomers agreement can extend for only 15 years, while a utility latecomers agreement can extend to 20 years.
A combined set of code sections should contain uniform application and processing procedures, uniform (but flexible) requirements for establishing the pro rata share to be reimbursed, uniform hearing requirements, and uniform recording requirements. All these should be based on the more restrictive language in either set of statutes.
Latecomer Code Provisions
Combined Street and Utility Latecomer Agreement Code Provisions
- Bellingham Municipal Code Ch. 14.02 - Street, Drainage, Water And Sewer Improvements--Assessment Reimbursement Contracts
- Everett Municipal Code Ch. 14.36 - Latecomer Agreements
- Lynnwood Municipal Code Ch. 3.30 - Reimbursement Agreements
- Renton Municipal Code Ch. 9.5 - Latecomer's Agreements
Combined Street and Utility Latecomer Agreements
Street Latecomer Agreement Code Provisions
- Cheney Municipal Code Ch. 12.22 - Street Improvements-Assessment Reimbursement Area
- Clark County Code Ch. 12.36 - Road Improvement Reimbursement
- Des Moines Municipal Code Ch. 12.44 - Latecomers Agreements
- Maple Valley
- Puyallup Municipal Code Ch. 11.24 - Latecomer Charges - Contracts for Street Projects
- Vancouver Municipal Code Ch. 11.97 - Street Assessment Reimbursement Agreements
Street Latecomer Agreements
Utility Latecomer Agreement Code Provisions
- Lake Stevens Municipal Code Ch. 6.24 - Utility Reimbursement Agreements
- Oak Harbor Municipal Code Ch. 18.35 - Water and Sewer Facilities Reimbursement Agreements
- Port Angeles Municipal Code Ch. 13.68 - Developer Reimbursement
- Port Townsend Municipal Code Ch. 13.04 - Latecomer Agreements
- Redmond Municipal Code Ch. 13.12 - Reimbursement Agreements for Utility Improvements
- Ridgefield Ordinance No. 918 () - Covers water system, sanitary sewer systems, storm water drainage
systems and street improvements including signalization and lighting, file also includes procedures and application
Utility Latecomer Agreements