Agenda - Planning Commission - 04/06/2017

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Heavy rains in zolo revealed flaws in the maintenance of this levee protecting the Mission Lakes subdivision in Desert Hot Springs, California. Without strong and stable associa- tion management, what had once been a "guarantee" between the developer and the municipality risks becoming an unsustainable burden for owners. RECOMMENDATIONS FOR CODE REFORM Require a maintenance plan for any subdivi- sion proposal that includes flood control or stormwater management facilities that would be managed and maintained by owners. This plan must identify what expertise will be nec, essary, where it can be obtained, what main- tenance will be required, and the annual cost likely to be incurred by the owners of the sub- division to carry out those obligations. Cost estimates and work scope should be based on an evaluation by an estimator independent of the developer just as if the city itself were taking ownership. If the funding proposed for maintenance and repair of critical infrastructure relies on assessments levied only on homes within that subdivision, the proponent must demonstrate not just adequate funding for construction, but at least a 3o-year funding plan that in- cludes allowances for inflation, delinquent assessments, expert assistance, a disaster contingency, and a realistic reserve for long- term maintenance and replacement. The city or county should have the authority to step in and levy additional assessments to pay for inspections, maintenance, or repair, and the authority to make emergency repairs. Ad- equate funding may mean owner assessments must be set higher than the proponent wants to qualify enough buyers. Assessment under - funding to attract sales is a popular tool, but that can leave the subdivision unable to ad- dress long-term maintenance of critical facili- ties and force the city or county to advance its own funds to do it. If a critical improvement's projected cost to repair or rebuild is greater than, say, 15 percent of the market value of all of the lots in the subdivision and if there isn't adequate insurance or government assistance, the owners may not voluntarily raise the funds to rebuild it, and there won't be sufficient equity to support a special assessment secured by a lien. Cities and counties should not count on the equity in the homes for reimbursement for emergency repairs. There is always an upper limit on emergency funds that any community association can raise by assessing its owners, and the equity in the homes may be illusory. Lenders usually have priority to whatever equity there is, and equity does not always in- crease with time —especially where the project has been damaged by a natural disaster. Public officials not experienced with the long-term management of a community asso- itT ciation may ask why ordinances or provisions in an association's governing documents can't be used to enforce compliance with a commu- nity's obligation to properly maintain critical infrastructure. They can be, but someone has to know that enforcement is necessary. A ju- risdiction that rarely inspects private facilities may not know of the condition until the facility fails. When that happens, years of neglect will cost much more to remedy than if the city or county itself had conducted regular inspec- tions and performed necessary maintenance. The local municipality can reserve for itself, by ordinance or conditions of approval, the right of reimbursement from the owners in the subdivision for any funds it has to spend to maintain or repair critical facilities. But even if that right exists, it may not be useful. To realize cash would require foreclo- sure and a dispute with tenders with superior rights. In some states, associations enjoy prior- ity lien status over lenders, but they are in the minority. Usually lenders' rights come first, and there may well be nothing left after that. If it should come to that, the municipality should instead take ownership of the infrastructure in the beginning and use its expertise and taxing authority to maintain it, rather than wait to see if the lay owners will do the job properly. There is definitely a "tipping point" where a critical piece of infrastructure is too expensive or too sophisticated to be maintained by lay home owners. The trick is recognizing that in the be- ginning and convincing the municipality it is a better candidate to own it. TOWARD 'BETTER' PRACTICES The examples below discuss steps three specif- ic jurisdictions have taken`to minimize the risks associated with delegating maintenance re- sponsibilities to community associations. While these approaches do not address every poten- tial problem, they do show how some cities and counties are going beyond the status quo. Lake County, Illinois: Requiring Maintenance Plans Effective management of flood mitigation infrastructure requires regular inspections, specialized upkeep, and dedicated funding. A community association that is unfamil- iar with or unwilling to dedicate the time, funds, or expertise to proper maintenance of critical disaster mitigation infrastructure is likely to suffer significant impacts in the event of a flood. ZONINGPRACTICE 3.17 AMERICAN PLANNING ASSOCIATION Ipage5