April 9, 2024
4:00 p.m.
In Chambers
Council Chambers
99 E. Ramsey Street
Banning, CA 92220
1. CALL TO ORDER
2. PUBLIC COMMENTS - Agenda Items Only
3. WORKSHOP ITEMS
3.1 Workshop for the City of Banning’s Landscape Maintenance District No. 1
4. ADJOURNMENT
AGENDA
SPECIAL CITY COUNCIL MEETING (WORKSHOP) OF THE BANNING CITY COUNCIL
CITY OF BANNING, CALIFORNIA
The following information comprises the agenda for the regular meeting of the Banning City Council, a joint meeting of the City Council and Banning Utility Authority, and the Banning City Council sitting in its capacity as the Banning Successor Agency Board.
Per City Council Resolution 2016-44, matters taken up by the Council before 10 p.m. may be concluded, but no new matters shall be taken up except upon a unanimous vote of the council members present and voting. Such an extension shall only be valid for one hour and each hour thereafter shall require a renewed action for the meeting to continue.
Recommendation: Discuss the background, operation and maintenance, and budget of Landscape Maintenance District No. 1 (“LMD No. 1” or “District”).
AFFIDAVIT • DECLARACIÓN JURADA
IT IS HEREBY CERTIFIED under the laws of the State of California that the above agenda was posted on the City's website (www.banningca.gov) as well as the Bulletin Board at Banning City Hall, located at 99 E Ramsey Street, Banning, CA 92220, at least 24 hours in advance of the meeting.
__________________________
Caroline Patton, Administrative City Clerk
Secretario adjunto de la ciudad
Special City Council Meeting (Workshop) Agenda
April 9, 2024
1 PUBLIC NOTICE • NOTICIA PÚBLICA
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Public Comment
Agenda Items
Any member of the public may address this meeting of the City Council on any item appearing on the agenda. A five-minute limitation shall apply to each member of the public and no member of the public shall be permitted to share their time with any other person.
Non-Agenda Items
Any member of the public may address this meeting of the Council on any item which does not appear on the regular meeting agenda but is of interest to the general public and is an item upon which the Council may act. A three-minute limitation shall apply to each member of the public and no member shall be permitted to share their time with any other person. No action shall be taken, nor discussion held by the Council, on any item which does not appear on the agenda, unless the action is otherwise authorized in accordance with the provisions of subdivision (b) of §54954.2 of the Government Code.
Special Assistance/Accessibility Requests
In compliance with the Americans with Disabilities Act, any member of the public may request that the agenda and agenda packet be mailed to them. If you need special assistance to participate in this meeting (such as translation services), please contact the City Clerk's Office. Advanced notification of at least 48 hours prior to the meeting will allow the city to make arrangements to ensure your accessibility.
¿Necesita servicios de traducción para participar? Contacto Oficina del Secretario de la Ciudad.
CONTACT • CONTACTO
City Clerk's Office | 951-922-3102 | [email protected] 99 East Ramsey Street, Banning, California 92220
Special City Council Meeting (Workshop) Agenda
April 9, 2024
2 CITY OF BANNING
STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Ann Marie Loconte, Associate Engineer
Art Vela, Director of Public Works
MEETING DATE: April 9, 2024
SUBJECT: Workshop for the City of Banning’s Landscape Maintenance District No. 1 RECOMMENDATION:
Discuss the background, operation and maintenance, and budget of Landscape Maintenance District No. 1 (“LMD No. 1” or “District”).
BACKGROUND:
LMD No. 1 in the City of Banning was established through the adoption of Resolution 1990-59 on August 14, 1990 (9 tracts), with another, Tract No. 22913, being annexed into the District in 1992. An additional five tracts and three tentative tracts were annexed into LMD No. 1 (Annexation No. 1) when the City Council approved Resolution 2005-36 on May 10, 2005. Annexation No. 2, adding Tract No. 32370, occurred on November 14, 2023 when the City Council approved Resolution No. 2023-177. There are currently eleven (11) Zones and 1,034 assessment units (i.e. properties) in LMD No. 1. A map displaying the District and its’ Zones is shown as Attachment 2.
LMD No. 1 provides a mechanism for the operation and maintenance of landscape medians and parkways, perimeter strips, landscaped hillsides with high visibility, side slopes adjacent to sidewalks and retention basins annexed into it. LMD No. 1 funds expenses (e.g. utility costs, landscape maintenance contractor, etc.) by revenues collected from the special benefit assessments paid for by each property owner within LMD No. 1. The District, by special benefit assessments, provides funding for the operation and maintenance of certain landscape areas within the City of Banning, all of which were constructed as part of private development projects and many of which are located in the public right-of-way. The 1972 Act requires that assessments are to be levied according to benefit rather than according to assessed value.
Every year, Engineering Division staff prepare three staff reports as part of the levy and assessment process required by the Streets and Highways Code. After the initiation staff report, an Engineer’s Report is prepared in house and the intention to levy assessments and approval of the Engineer’s Report is bought before the City Council. Lastly, a Public Hearing confirming the assessment for the next FY is held.
Budget Shortfalls
Zones 1-5 of LMD No. 1 did not include a price increase or escalator to the yearly amounts paid by each homeowner. A maximum 5% escalator was introduced for Zones 6-11. This has left most of those tracts operating in a deficit each year as revenues do not pay for rising costs in utilities and the landscape contractor services.
3 The annual assessments may be increased without further notice or public hearing by a percentage equal to the increase in the Consumer Price Increase (CPI) for all Urban Consumers in the RiversideSan Bernardino-Ontario, CA area, published by the United States Department of Labor, Bureau of Labor Statistics during the preceding calendar year, provided however, that any such increase shall not exceed five percent (5%) per fiscal year.
2024 Projects
For zones with revenue surpluses, Public Works Dept. staff evaluated the fiscal condition and requested proposals from landscape contractors to perform improvements. These projects include: Zone 2, palm tree removals and replacement at the entrances; Zone 6, install new plants, replace broken sprinkler heads, consider the removal of turf and plant mulch and plants; Zone 7, trim overhung trees and thin them out, improve ground cover, and install mulch; Zone 9, continued repair of vinyl fencing, install new shrubs and ground cover; and Zone 10, thin out trees along Mountain Ave., consider removing turf and install plants and mulch.
Previous Proposition 218 Attempt
In 2019, due to the revenue shortfall and the lack of funding for replacement projects, the Public Works Department hired Webb Municipal Finance, LLC (Webb) to analyze the existing LMD No. 1 structure, prepare a financial analysis in the form of a Financial Report, and determine the proper zones and assessment amounts for each tract in order to assure the LMD No.1 is operated with a balanced budget.
The consultant prepared a detailed analysis and budget for all the existing tracts within LMD No. 1 and recommended that it be rezoned in a manner that allows each tract to pay only for benefits that it is receiving. Thus, ten (10) new Zones were developed to better reflect each tract’s unique expenses and revenues and benefits bestowed to its’ property owners residing within the Zone, as shown in Attachment 2, the LMD No.1 map. Zone No. 11 was annexed into the LMD No. 1 on November 14, 2023, and is comprised of Tract No. 32370, known as Canterbury.
Additionally, the Financial Report prepared by Webb analyzed the LMD No. 1 budget and recommended changes including some increases to the Assessment Units to ensure revenues were sufficient to support the rising expenditures. A Prop 218 hearing was recommended in the Financial Report to change the Assessments needed to balance the budget. Webb then prepared a “Proposition 218” Engineer’s Report that presented the new escalated Assessment Unit rates for each Zone reflected on the Proposition 218 notice and ballot for each Zone. A Prop 218 public hearing was held on December 8, 2020 with the results tabulated showing a “No” vote for each of the ten Zones. Thus, the base Assessment Unit rate remained unchanged, with no increases despite rising costs. The exceptions were Zones six through ten, whose tracts were annexed into LMD No.1 in 2005, at which time, those property owners authorized the annual CPI adjustment.
LMD Remedies/Revisions
Service Reductions
Since the Prop 218 public hearing held on December 8, 2020, certain operational adjustments (i.e. maintenance contract scope reduction for mowing, trash pickup, and shrub maintenance and reduction in watering) have been made to reduce costs. This has helped to reduce deficits in Zones 1,3,4,5, 8 and 9 this past year. Zones that have enough funds to support their budget have funds to install improvements such as mulch, irrigation upgrades, and plants. Unfortunately, this past year, vandalism of sprinkler heads and stolen irrigation valves have cost about $8,500 to replace.
For FY 24/25, in the Zones that have a balanced budget, mowing will occur weekly, and shrubs maintained biweekly in the summer months. In the Zones with deficits, mowing will occur biweekly, and shrubs maintained quarterly.
De-annexation/Dissolution of a Zone
4 If the City Council wanted to de-annex a Zone from the District, Engineering Division staff would need to follow the same process that was used to form the District. Therefore, each property owner needs to be sent a ballot to vote on the dissolution of the Zone/District. During the Public Hearing, the ballots received will need to be tabulated to determine if the dissolution passes or not by a majority vote.
In order to have a HOA take over the operation and maintenance of the LMD, the City would need to enter into an agreement with the HOA and provide them with an encroachment permit allowing them to access public property for maintenance. Additional items that should be included in the agreement are insurance requirements and indemnification provisions. There would be a cost to the homeowners within a Zone for the formation of the HOA and for the HOA expenses including maintaining the areas within the LMD.
Additional Remedies
Other possibilities include holding another Proposition 218 Hearing and asking residents within LMD No. 1 to vote on increasing the base assessment and add an annual CPI escalator within their Zone or consider utilizing General funds if it is legally viable.
JUSTIFICATION:
The City Council approved the formation of LMD No. 1 by adopting Resolution No. 1990-59 on August 14, 1990. Assessments collected from the property owners located within LMD No. 1 provide for the funding required to maintain landscape areas located within the public right-of-way directly benefiting said property owners.
FISCAL IMPACT:
Any work within the LMD must be fully funded from each LMD Zone, and funds cannot be transferred across zones for work. There is no general fund fiscal impact. Funds will not be expended to fully deplete reserve balances, or expended in zones with structural deficits. This workshop item is updating the City Council only.
ALTERNATIVES:
This workshop item is updating the City Council only.
ATTACHMENTS:
1. LMD Presentation.pdf
2. LMD No.1 Map.pdf
5 CITY OF BANNING
LANDSCAPE MAINTENANCE
DISTRICT NO. 1
Budget and Project Updates
6 Regulatory Environment • LMD is a Special District (Article 4, Chapter 1, Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the Streets and Highways Code of the State of California) • Benefits are pre-defined regions/homeowners/neighborhoods, not City as a whole, • This District, by special benefit assessments, provides funding for the servicing and maintenance of certain landscaped areas within the City of Banning, many of which are located in public right-of-ways in the City of Banning • Subject to Prop 218
• Statutory requirements to maintain Water Quality Devices (MS4 Permit No. R7-2013-0011) 7 Landscape Maintenance District
Number 1
• Currently has 11 distinct zones
• Initially created in 1990, with Tract 22913 annexed in 1992, within Zones 1-5, with a base fee and NO annual inflation adjustment
• Expanded to 11 zones in later years with base fee AND annual inflation adjustment up to 5% per year for zones 6-11
• Some zones contain fund surpluses, while others run a structural deficit.
8 LMD No. 1 Map (11 Zones)
9 Zone 1 Zone 1 includes the following
areas:
• Richard Sanchez Park and
trail
• Stormwater Basin
• Mountain Ave Roadway
Frontages
• Wilson Street Roadway
Frontages
LMD No. 1 – Zone 1
10 Current State
LMD No. 1 – Zone 1
11 Financial Analysis
• No CPI Escalator in Zone 1
• Zone is in a structural deficit, anticipated
to have negative fund balance in FY
27/28
• No projects proposed in this zone to
minimize expenses
• Retention Basins require regular
maintenance to remain effective at
mitigating runoff for Stormwater
Ordinance requirements.
LMD No. 1 – Zone 1
12 Zone 2 includes the following
areas:
• Highland Home Road
median
• Highland Home Road
Roadway Frontages
• Wilson Street Roadway
Frontages
LMD No. 1 – Zone 2
13 Current State
LMD No. 1 – Zone 2
14 Financial Analysis
• No CPI Escalator in Zone 2
• Zone has a surplus of funds each year
• Recently mulch was applied to the area
using some of these funds
•Additional projects are proposed in this
zone
• Palm Tree Removals at entrances, replanting trees with non-palms
• Future grant funded projects in
consideration for turf conversion
LMD No. 1 – Zone 2
15 Zone 3 includes the following
areas:
• Wilson Street Roadway
Frontages
• Omar Street Roadway
Frontages
LMD No. 1 – Zone 3
16 Current State
LMD No. 1 – Zone 3
17 Financial Analysis
• No CPI Escalator in Zone 3
• Zone is in a structural deficit, anticipated
to have negative fund balance in FY
26/27
•Anticipate shutdown of all turf irrigation.
LMD No. 1 – Zone 3
18 Zone 4 includes the following
areas:
• Wilson Street Roadway
Frontages
• Alder Court Roadway
Frontages
LMD No. 1 – Zone 4
19 Current State
LMD No. 1 – Zone 4
20 Financial Analysis
• No CPI Escalator in Zone 4
• Zone is in a small structural deficit
• No projects proposed in this zone to
minimize expenses
LMD No. 1 – Zone 4
21 Zone 5 includes the following
areas:
• Wilson Street Roadway
Frontages
• Sunrise Avenue Roadway
Frontages
• Stargaze Way Roadway
Frontages
• Moonbeam Drive Roadway
Frontages
LMD No. 1 – Zone 5
22 Current State
LMD No. 1 – Zone 5
23 Financial Analysis
• No CPI Escalator in Zone 5
• Zone is in a structural deficit, anticipated
to have negative fund balance in FY
28/29
• No projects proposed in this zone to
minimize expenses.
LMD No. 1 – Zone 5
24 Zone 6 includes the following
areas:
• Hathaway Street Roadway
Frontages
• Hathaway Street
Stormwater Basin
LMD No. 1 – Zone 6
25 Current State
LMD No. 1 – Zone 6
26 Financial Analysis
• CPI Escalator in Zone 6
• Zone has a surplus of funds each year
•Additional projects are proposed in this
zone
• Install new plants in the Hathaway St. planter area and replace broken sprinkler heads
• Remove turf and install plants and mulch
• Retention Basins require regular
maintenance to remain effective at
mitigating runoff for Stormwater
Ordinance requirements.
LMD No. 1 – Zone 6
27 Zone 7 includes the following
areas:
• Wilson Street Roadway
Frontages
• Hoffer Street Roadway
Frontages
LMD No. 1 – Zone 7
28 Current State
LMD No. 1 – Zone 7
29 Financial Analysis
• CPI Escalator in Zone 7
• Zone has a surplus of funds each year
•Additional projects are proposed in this
zone.
• Trim the overhung trees and thin them out
• Improve ground cover, Install mulch
LMD No. 1 – Zone 7
30 Zone 8 includes the following
areas:
• Charles Street Roadway
Frontages
LMD No. 1 – Zone 8
31 Current State
LMD No. 1 – Zone 8
32 Financial Analysis
• CPI Escalator in Zone 8
• Zone has a small structural deficit
• No projects proposed in this zone to
minimize expenses.
• Consideration of turf removal along
Charles Street, would require additional
funding sources
LMD No. 1 – Zone 8
33 Zone 9 includes the following
areas:
• Hargrave Street Roadway
Frontages
• Victory Avenue Roadway
Frontages
• Charles Street Roadway
Frontages
LMD No. 1 – Zone 9
34 Current State
LMD No. 1 – Zone 9
35 Financial Analysis
• Re-occuring vandalism of horse vinyl
fence
• CPI Escalator in Zone 9
• Zone has a surplus of funds each year
•Additional projects are proposed in this
zone
• Continued repair of vinyl fencing
• Install new shrubs and ground cover
LMD No. 1 – Zone 9
36 Zone 10 includes the
following areas:
• Mountain Avenue Roadway
Frontages
• Retention/WQ Basin
(shared with Zone 11)
• Oak Lane Roadway
Frontages
LMD No. 1 – Zone 10
37 Current State
LMD No. 1 – Zone 10
38 Financial Analysis
• CPI Escalator in Zone 10
• Zone has a surplus of funds each year
• Additional projects are proposed in this
zone
• Thin out the trees along Mt. Ave.
• Remove turf and install plants and mulch
• State obligation to maintain the stormwater
basin as top priority.
• Consideration of turf removal along
Mountain Ave, with additional funding
sources
LMD No. 1 – Zone 10
39 Zone 11 includes the
following areas:
• Mountain Avenue Roadway
Frontages
• Retention Basin (shared
with Zone 10)
LMD No. 1 – Zone 11
40 Current State
LMD No. 1 – Zone 11
41 Financial Analysis
• CPI Escalator in Zone 11
• Zone has a surplus of funds this year
•State obligation to maintain the
stormwater basin as top priority.
• Developer is responsible to turn over
facilities to the City in acceptable
condition at completion of construction
LMD No. 1 – Zone 11
42 Graph of Revenues/Deficits
LMD No. 1
$53,376.15
$26,230.07
$4,822.10
$4,687.76
$13,411.88
$6,622.21
$7,824.13
$9,225.28
$6,991.04
$16,499.74
$5,337.75
$34,739.10
$30,820.32
$2,379.51
$4,305.78
$9,594.27
$18,193.70
$11,176.13
$9,096.85
$8,577.03
$22,612.17
$7,675.05
($18,637.05)
$4,590.25
($2,442.59)
($381.98)
($3,817.61)
$11,571.49
$3,352.00
($128.43)
$1,585.99
$6,112.43
$2,337.30
ZONE 1 ZONE 2 ZONE 3 ZONE 4 ZONE 5 ZONE 6 ZONE 7 ZONE 8 ZONE 9 ZONE 10 ZONE 11 FY 24/25 LMD ZONE FUNDS
24/25 Total Cost 24/25 Total Revenue 24/25 Rev - Exp
43 Potential Remedies
• Reduction of Services
• What are mandatory vs. prudent
• Prop 218 Increases
• Last effort in December of 2020 was rejected by majority protest, not implemented • De-annexation
• General Fund Transfers
• May be considered ‘Gift of Public Funds’ and not permitted LMD No. 1 – Zone 11
44 Questions?
Contact Information
Nate Smith, P.E.
Deputy Director of Public of Works/City Engineer
[email protected]
45 TR 32370
TR 21882
TR 30222 TR 30906
TR 28252
TR 30186
TR 23446
TR 23598
TR 31835
TR 23446
TR 30793
TR 32109
TR 31834
TR 22810
TR 22811
TR 31833
TR 29721
TR 22913
LEGEND
City Boundary
Tracts
Existing Zone
1 2
3 4
5 6
7 8
9 10
LMD No. 1 Zones
2024-2025
11 46