HomeMy WebLinkAbout1991-037-03/05/1991-WATER SERVICE LINE REPLACEMENT ZERO INTEREST LOAN PROGRAM RESOLUTION 91-37
OF THE COUNCIL OF THE CITY OF FORT COLLINS
APPROVING A ZERO INTEREST LOAN PROGRAM
FOR WATER SERVICE LINE REPLACEMENT
WHEREAS, by Resolution 90-147, the Council of the City of Fort Collins
directed City staff to investigate the feasibility of a zero interest loan
program for those customers with an inferior or corroded water service line that
should be replaced at the time of the installation of a water meter pit; and
WHEREAS, the staff has investigated such a zero interest loan program and
has presented said program to the City Council in the form of a Procedures
Information Memorandum for approval ; and
WHEREAS, the Council has determined that said zero interest loan program
is in the best interests of the citizens of the City and serves a valid and
valuable public purpose.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS
as follows:
Section 1 . That the zero interest loan program for service line
replacement as established by the Procedures Information Memorandum attached
hereto, is hereby approved and adopted by the Council of the City of Fort
Collins; and the City Manager is hereby directed to administer said program in
accordance with its terms. The City Manager may amend the Program Guidelines
and Processing Procedures from time to time to meet current needs.
Section 2. That the Council hereby finds that provision of zero interest
loans for service line replacement will benefit the City by conserving the raw
water resources and the water treatment facilities of the City; by reducing water ,
leakage from inferior or corroded water service lines into the wastewater system
of the City; by potentially lengthening the life of the City's transportation
infrastructure; and by better enabling the City to meet the requirements of House
Bill 90-1106, known as the "Water Metering Act" of the State of Colorado.
Section 3. This zero interest loan program is contingent upon the
appropriation by the City Council of sufficient funds to support the same.
Passed and adopted at a regular meeting of the Council of the City of Fort
Collins held this 5th day of March, A.D. 1991 .
Ma or
AI S �
City Clerk
Util Services _
Water & Wastewater
City of Fort Collins
PROCEDURES MEMORANDUM
DATE: February 22, 1991
TO: Mike Smith, Water and Wastewater Utility Director
Linda Burger, Support Services Manager
FROM: Webb Jones, Utility Analyst
RE: Procedures for Obtaining Loan for Service Line Replacement
PURPOSE:
The purpose of this memorandum is to document the process a customer follows to obtain a loan
from the Utility to pay for replacement of their water service line.
Resolution 90-147, approved by City Council on November 20, 1990, directed Utility staff "to
investigate the feasibility of a zero interest loan program for customers with an inferior or
corroded water service line that should be replaced at the time of the installation of the meter
pit." Loans are intended to be made available to customers who, during the installation of a
meter pit or curb stop resulting from a meter installation, learn that their water service must be
replaced before contractors are able to install a meter.
PROGRAM GUIDELINES:
1. Funds for loans are included in the Minor Capital budget of the
Transmission and Distribution Division (Water Meter Installation -
account no. 502-044006-529210). Requisitions for payments for service
line replacement should be charged to this account. No loans shall be
made unless sufficient funds have been appropriated therefor by the City
Council.
2. Customers are eligible for a loan if the following criteria are met: (1)
the customer owns a non-metered single family home or duplex and
receives both water and sewer service from the City of Fort Collins, (2)
the inferior or corroded service line is discovered by Water Utility
representatives during installation of a meter pit, or repair of a curb stop
to turn off water for installation of an interior meter setting, and (3) the
customer has no delinquent charges due on any utility service provided
by the City of Fort Collins. Customers who can have a meter setting
installed inside their home without repair to the curb stop or service line
are not eligible for a loan from the Utility.
1'.0. llos W • Furl Collins, CO 8012241580 • (303) 221-0081
3. Only costs associated with replacing the water service between the curb
stop and structure can be included in the loan amount. Loans can not be
used to fund the cost of replacing plumbing inside the structure. The
Utility will pay for replacing the service line between the curb stop and
main if it also needs to be replaced.
4. Loan amounts and maximum pay-off periods are as follows:
LOAN AMOUNT MAXIMUM PAY-OFF MAXIMUM
PERCENTAGE PERIOD MONTHLY
ELIGIBLE PAYMENT
less than $750 100% 24 months $31.25
$750 - $1,500 100% 48 months $31.25
up to $2,500 100% 60 months $41.67
5. Upon implementation of the new Customer Information System (CIS),
loan payments will be added as installment charges on the customer's
monthly utility bill. The charge will be shown separately and be labeled
as "Loan Payment." Until CIS becomes operational, loan payment
coupons will be provided to the customer.
6. The outstanding balance of the loan will be due upon sale of the
property.
7. A $25 fee will be collected with the first loan payment to recover
administrative costs associated with processing the loan.
8. Failure to remit payment when due may result in termination of water
service until payment is made.
PROCESSING PROCEDURE:
1. When, during installation of a meter pit or repair of a curbstop to allow
installation of an interior meter setting, it is determined by a Water
Utility representative that a customer's water service line must be
replaced, the homeowner will be instructed to contact plumbing
contractors to solicit bids for replacement of his/her service line. If the
bid provided by the plumbing contractor installing the meter pit is
acceptable to the homeowner, the contractor may repair the service line
at the same time as the meter pit is being installed.
Service Line Replacement
February 22, 1991
Page 3
2. After accepting a bid from a plumbing contractor, the customer may
apply for a loan from the Water Utility by completing a loan application
(Attachment A). Customers do not have to obtain a loan from the
Utility. They may choose to pay the contractor directly.
3. The customer retains a copy of the loan application and returns the
remaining copies to the Water Utility. A copy of the contractor's bid for
replacing the service line must be included with the application. If the
application is complete, the customer may authorize the contractor to
proceed.
4. The Utility will verify the legal description and ownership at the County
Assessor's office, and the status of delinquent utility charges with the
City Utility Billing office. The Utility will also prepare a lien agreement
and promissory note (Attachment B and Q. The promissory note shall
include the date of the first payment and provide that all other payments
are due on the first of each following month (if coupons are issued), or
with each month's utility bill (if installment charges are added to the CIS
bill). The pay-off date shall also be indicated.
5. The Utility assigns a loan number to the application and prepares a
payment summary and coupon book if necessary (Attachment D).
6. The Utility assists the customer in signing and notarizing the lien
agreement and promissory note. Copies of each are provided to the
customer. The payment summary and coupon book are given to the
customer at this time.
7. The Utility prepares a payment authorization for the amount of the
contractor's bid. Payment will be issued to the contractor. If paid
receipts and a waiver of mechanic lien signed by the contractor
(Attachment E) are presented, payment will be issued to the homeowner.
The customer or contractor must provide a signed copy of the permit
issued by the Building Inspection department before payment will be
processed. Payment authorizations are charged to account#502-044006-
529210.
8. The Utility sends a transmittal memorandum (Attachment F) with the
original lien agreement and promissory note to the City Clerk. The cost
of filing the lien agreement with the County is charged to account #502-
044006-529210.
Service Line Replacement
February 22, 1991
Page 4
9. The Utility sends a transmittal form (Attachment G) and copies of the
lien agreement, promissory note and loan application to the Finance
Department. Finance will initiate an installment charge on the
customer's account or a customer account in the miscellaneous billing
system.
10. When the customer makes the final payment on the loan, the Finance
department will initiate a release of lien (Attachment H). This form is
sent to the City Clerk's office for processing. When the release is
returned to the City, the Utility will keep a copy and return the original
to the customer.
Attachinent A
LOAN APPLICATION FOR WATER SERVICE LINE REPLACEMENT
RESULTING FROM INSTALLATION OF A WATER METER
Name of Owner:
Property Address:
Owner Address:
Telephone: Home Work
Legal Description:
Water Account No.
I (we) certify that I (we) own the above property and do hereby apply for a loan from the City
of Fort Collins Water Utility in the amount of$ ** to finance the replacement of
the water service line for the above referenced property. I (we) certify that funds provided by
the City shall be used solely to pay for replacing that portion of the water service line between
the curbstop and structure and not for any other costs of replacement or repair of internal piping
or plumbing fixtures.
Homeowner's Signature Date Homeowner's Signature Date
** A copy of the bid from the licensed plumbing contractor chosen to perform the work must
be attached. The amount of the loan can not exceed the amount of the contractor's bid.
This loan program is contingent upon appropriation of funds sufficient to support the same by
the City Council.
Loan number:
Attachment a
LIEN AGREEMENT
WHEREAS, the undersigned
hereinafter referred to as the "Owner", is the owner of the following described real property
situated in the City of Fort Collins, County of Larimer, State of Colorado to-wit:
also known as
said property being hereinafter referred to as the "Property"; and
WHEREAS, pursuant to Resolution , approved by the City Council of the City of
Fort Collins, Colorado (hereinafter referred to as the "City"), the City has created a zero interest
loan program to provide funds for the replacement and repair of inferior or corroded water
service lines that should be replaced at the time of the installation of a water meter; and
WHEREAS, pursuant to the above referenced program, it is the responsibility of the
Owner to reimburse the City for the funds so loaned; and
WHEREAS, the Owner has accordingly executed his promissory note payable to the City,
a true and correct copy of which is attached hereto and incorporated herein by this reference.
NOW, THEREFORE, in consideration of the premises and the terms of this Agreement,
it is agreed as follows:
1. The Owner acknowledges that the sum of $ is owed to the City
pursuant to the attached promissory note and such amount shall be payable in installments as set
forth in said promissory note.
2. The Owner hereby grants unto the City a lien against the property described above
securing the payment of the amount owing to the City as set forth in said promissory note. The
lien herein granted shall remain a lien against the property until the full amount owing to the
City is paid.
3. In the event of the default of the Owner in the payments required pursuant to said
promissory note, this lien may be enforced by the City either by foreclosure of this lien in the
manner provided by law for foreclosure of mortgages or by certification to the County Treasurer
of Larimer County for collection as in the case of other assessments.
4. The following events shall be referred to herein as a "Transfer":
(i) a transfer or conveyance of title (or any portion thereof, legal or equitable) of the
Property (or any part thereof or interest therein);
(ii) the execution of a contract or agreement creating a right to title (or any portion
thereof, legal or equitable) in the Property (or any part thereof or interest therein);
(iii) or an agreement granting a possessory right in the Property (or any portion
thereof), in excess of three (3) years;
(iv) a sale or transfer of, or the execution of a contract or agreement creating a right
to acquire or receive, more than fifty percent (50%) of the controlling interest or more
than fifty percent (50%) of the beneficial interest in the Owner.
Not to be included as a Transfer are:
(i) the creation of a lien or encumbrance subordinate to this Lien Agreement;
(ii) the creation of a purchase money security interest for household appliances; or
(iii) a transfer by devise, descent or by operation of the law upon the death of a joint
tenant.
At the election of the City, in the event of each and every Transfer:
(a) All sums secured by this Lien Agreement shall become immediately due and
payable (Acceleration).
(b) If a Transfer occurs and should City not exercise City's option pursuant to this
paragraph 4 to Accelerate, Transferee shall be deemed to have assumed all of the
obligations of Owner under this Lien Agreement, including all sums secured hereby,
whether or not the instrument evidencing such conveyance, contract or grant expressly
so provides. This covenant shall run with the Property and remain in full force and effect
until said sums are paid in full. The City may, without notice to the Owner, deal with
Transferee in the same manner as with the Owner with reference to said sums, including
the payment or credit to Transferee of undisbursed reserve Funds on payment in full of
said sums, without in any way altering or discharging the Owner's liability hereunder for
the obligations hereby secured.
(c) Should City not elect to Accelerate upon the occurrence of such Transfer then,
subject to (b) above, the mere fact of a lapse of time or the acceptance of payment
subsequent to any of such events, whether or not City had actual or constructive notice
of such Transfer, shall not be deemed a wavier of City's right to make such election nor
shall City be estopped therefrom by virtue thereof. The issuance on behalf of the City
of a routine statement showing the status of the loan, whether or not City had actual or
constructive notice of such Transfer, shall not be a waiver or estoppel of City's said
rights.
DATED at Fort Collins Colorado, this day of , 19_
Owner
Owner
State of Colorado )
County of Larimer )
Subscribed and sworn to before me this day of 19_, by
and by
Witness my hand and official seal.
Notary Public
My commission expires:
ATTACHMENT C
PROMISSORY NOTE
FOR VALUE RECEIVED, I, we, or either of us, promise to pay to the order of the City
of Fort Collins Water Utility, P. O. Box 580, Fort Collins, CO 80522, the sum of
dollars ($ 1, at the rate of 0 percent per annum from date, until due. Said
principal shall be payable as follows:
First payment in the amount of$ due 19_ and
successive payments each in the amount of$ due ***(the first
day of each month)***(on the due date of each month's utility bill) thereafter with all remaining
principal to be fully due and payable 19
Non-payment of any installment, when due, shall cause the entire indebtedness to become
due and payable at once, at the option of the holder, notice of which option is hereby expressly
waived.
Borrower is hereby advised and agrees that the non-payment of any installment, when
due, shall make borrower's water service subject to termination as provided in Article XII of the
Code of the City of Fort Collins. In accordance with said Article, nonpayment may result in
termination of water service, charges for turn-off, turn-on and service restoration fee. For
purposes of termination of service, the billing date, as stated in said Article, shall be the due date
for any payment provided for in this promissory note.
Makers and endorsers hereon waive demand, protest, and notice of dishonor and all
defenses on the grounds of any extension of the time of its payment that may be given by the
holder or holders.
All principal and accrued interest shall become immediately due and payable upon transfer
of the property securing this note in accordance with paragraph 4 of the lien agreement of even
date herewith.
Dated at Fort Collins, Colorado, this day of , 19
Owner Owner
State of Colorado )
County of Larimer )
Subscribed and sworn to before me this day of , 19
by Witness my hand and official seal.
My Commission Expires:
Notary Public
*** Strike when not applicable.
Attachment E
LIEN WAIVER RELEASE
(Contractor)
TO:
FROM:
PROJECT:
ADDRESS:
1. The undersigned does hereby release all claims, Mechanic's Liens Rights, Stop Notice,
Equitable Liens and Labor and Material Bond Rights resulting from labor and/or
materials, subcontract work, equipment or other work, rents, services or supplies
heretofore furnished in and for the construction, design, improvement, alteration,
additions to or repair of the above described project.
2. This release is given for and in consideration of the sum of$ and other
good and valuable consideration.
3. The undersigned agrees to defend and hold harmless the Owner and lender from any
claim or claims hereinafter made by the undersigned or its Suppliers, Subcontractors or
employees, servants, agents or assigns of such persons against the Project. The
undersigned agrees to indemnify or reimburse all persons so relying upon this release for
any and all sums, including attorney's fees and costs, which may be incurred as the result
of any such claims.
4. It is acknowledged that the designation of the above Project and Address constitutes an
adequate description of the property and improvements for which the undersigned has
received consideration for this release.
5. It is further warranted and represented that all such claims against the undersigned or the
undersigned's Subcontractors or Suppliers have been paid or that arrangements,
satisfactory to the Owner, have been made for such payments.
6. It is acknowledged that this release is for the benefit of and may be relied upon by the
Owner, and lender on any labor and material bond for the Project.
7. In addition to the foregoing, this instrument shall constitute a full, final and complete
release of all rights, claims and demands of the undersigned against the Contractor
arising out of or pertaining to the above referenced Project.
Dated this day of 19
FIRM
Name of firm or person giving release
BY
TITLE
STATE OF )
) ss.
COUNTY OF )
The foregoing release was subscribed and sworn to before me this day of
19 by
(as of ).
NOTARY PUBLIC
My commission expires: