Learning about road improvement districts

By Phil Ronnerud

Road Districts come in several flavors. One district is strictly for maintenance, another is for improving roads; sometimes a County needs to annex a road into their system.
All districts are created by residents to improve the infrastructure and all are locally funded through a portion of their property tax.

Improved roads increase property value, decrease dust, control drainage and resulting erosion. The cost is a burden to property owners and traffic speeds will increase as roads are improved.
Prior to Statehood the same questions about roads were debated as they are today. Who should pay for roads, the maintenance, and how to equitably distribute limited funds? The needs continue to be far greater than the money available.

Voters approve HURF

To illustrate the interest in roads, Highway User Revenue Funds (HURF) were placed in Arizona’s constitution by the voters! The use of these funds has been discussed and cussed ever since.
The Legislature has chosen to spend some of HURF on the Department of Public Safety (DPS) so funds previously used for DPS could be used elsewhere.

Most County’s rely exclusively on HURF funds for road maintenance. In short, less funding,results in poorer roads.
But what about people who split and sell parcels? They are not required to make road improvements. The buyer is not burdened with the cost of improvement initially. Generally, any improvements wanted are the responsibility of the property owner.

Larger counties will often create bonding districts to deal with improvements to roads and associated facilities of regional significance. In the large Counties, road districts are used more often than the less populated areas.

County maintenance

Currently, the County can maintain or build roads requested by the residents and approved by the Board of Supervisors. The conditions are established by law.

Maintenance can be performed on roads not owned by the County, built prior to 1990, and have been continuously maintained. Again, the Board would need to decide to add a road to the maintenance list.

Locally, the four different roads district types allow neighborhoods to improve roads and self-fund improvements and/or maintenance. The districts have not achieved a high level of popularity. Strong, local leadership is needed to create and operate the districts. While not difficult, persistent is needed to establish a Road District.

What is improvement district?

For County residents looking for ways to minimize the effects of dust from dirt roads, maintain access to their property in bad weather, or simply improve the appearance of their community, a County Road Improvement District may be the answer.

The State of Arizona authorizes the creation of improvement districts in unincorporated areas (areas located outside city limits) for the purposes of making local improvements such as paving, re-paving, grading, re-grading, or to improve all, or any portion of, one or more streets in a proposed district.

The State Statute (ARS Title 48, Chapter 6) also provides a means to pay for the improvements by assessing property owners for the construction, operation and maintenance of improvements and streets within the district.

Authority to create an improvement district is given to the County Board of Supervisors, who also serves in an official capacity as the District Board of Directors. However, it is the citizens’ responsibility to take the necessary steps to begin the process and gain consensus in their neighborhood.

The difference between a road improvement district and a road maintenance district.

Roadways that are improved through the Road Improvement District (ARS 48-902) process are improved with the goal of adding the roadway to the County road system.

Roadways improved through this process must be deeded to the County and located within public rights-of-way.
These roadways must meet minimum County road standards, which require building to a minimum County standard. Once this process is completed, the roads will be eligible for acceptance into the County road system.
It is important to note that dedication of right-of-way to the public by itself does not constitute public ownership or County responsibility to maintain the roadway. The County Board of Supervisors must formally accept the offer of dedication in order to bring the roadway into the County system for maintenance.

Improvement districts for the purpose of maintenance, also known as Road Maintenance Districts or Road Improvement and Maintenance Districts (ARS 48-1081), provide a mechanism for County residents to make improvements to their roadway, guarantee a minimum level of maintenance on their road (without the expense of building the roads to County improvement standards), and establish full financial participation among neighbors.

Pavement is not required for roads improved and maintained through the Road Improvement and Maintenance District process. It is also possible to form a Road Maintenance District for dust control on unpaved roadways. It is important to note that, in a Road Improvement and Maintenance District, residents are required to pay an annual maintenance fee.

Formation of a district

A road improvement district may only be formed if a petition is first submitted to the Greenlee County Clerk of the Board of Supervisors. The petition must contain signatures based on one of the following criteria:

More than one-half of the property owners (51% or more);

Owners of more than one-half of the property fronting the proposed road(s);

Owners of one-half of the property by total area within the proposed project boundaries;

To improve roadways that do not have public easements, citizens are required to gain right of ways before the district is formed.

Petitions

All petitions must include:

The name of the proposed improvement district;

justification of the need for the improvement;

justification that the public convenience, necessity or welfare will be promoted by the establishment of the district and that the property to be included in the district will benefit from the district;

The boundaries of the proposed district;

A general outline of the proposed improvement;

A map identifying the approximate area and boundaries of the district.

Petitioners must also file a bond sufficient to pay the expenses connected with the proceedings. This bond must be filed before publication of the notice of the hearing on the petition.

General Requirements

Improvement districts finance road improvement projects by assessing the properties that benefit from the improvement. The required assessment is a lien against the property. The assessment may be paid based on one of the following:

Assessments may be paid in full at the time the assessment is recorded;

Assessments may be financed as bonds over a ten (10) year period;

Assessment methodology generally determines the payment method for assessing property in the district. There are various ways in determining what method is fair, including using a unit assessment that may be based on lot size. Unit assessment may also include adjustments for distance, which means that properties at the end of a road may be
assessed more than properties at the beginning of a road. Other methods that may be used include frontage footage and area assessments based on square foot or per acre.

Assessments should be based on benefit.

Scope of Work and Cost

The estimated cost of a project depends on the scope of work for the improvement. Factors that influence the scope of work include the existing conditions of roads being considered for improvement, the needs and desires of the district, and County design standards.

Citizens interested in the formation of a road improvement district are advised to obtain preliminary construction estimates on proposed improvements from a private engineering consultant before starting the petition process.
Generally speaking, if the estimated improvement costs total more than one-third the value of all real property in the proposed district, the project is not considered feasible.

Next Steps

After completed petitions are submitted to the Greenlee County Clerk of the Board, a public hearing will be set, a notice will be published in the newspaper, and notices will be posted. After all comments and objections are duly considered and the Board of Supervisors determines that the public convenience, necessity or welfare will be promoted, the district boundaries are finalized and engineering and financing arrangements can begin.

Important Factors to Consider

Once the district is formed, each property owner is committed to the project . A majority of the property owners is required to create, modify or stop an improvement district.

Property owners will be assessed for the total project costs. The required assessment is a lien against the property. All roads improved through the improvement district process must be deeded to the County and located within public easements or rights-of-way.

Property owners are encouraged to talk with their neighbors to determine the level of support for a proposed road district. Important questions to ask are:

“Does the neighborhood want to improve the road to the minimum County standard so the roadway can be taken over by the County, OR do they want to improve the road to a lesser standard?”

“Is the neighborhood willing to deed the required right-of-way to the County?”

Other Options

Several neighborhoods have formed Road Associations which collect money from property owners on a voluntary basis and then use the funds to obtain private road grading services or to otherwise improve the road. This method may work well in areas where there is a strong sense of community and a willingness among property owners to work together for the benefit of all. Where a strong sense of community is lacking, an Improvement District may be the most appropriate method to use for road improvements.

Please note, this is a citizen initiated process and it is recommended that all participants refer to the Arizona State Statues during the Improvement District formation. County employees cannot advise and will not assist during the District formation.

Interested County residents are invited to contact Greenlee County Engineering Department or call (928) 865-4762 to obtain copies of petitions. Information is also available on the Greenlee County website at: http://www.co.greenlee.az.us/

This document is for informational purposes only and is based on County staffs’ understanding of the Arizona States Statutes as is relates to County Improvement Districts. Users of this information should review the Arizona State Statutes for complete information and be aware that such statues may be interpreted differently by other counties or members of the legal community. Furthermore, Statutes change periodically so become aware of the most recent published documents.

Posted in Government.