City of Corona
Staff Report
400 S. Vicentia Ave.
Corona, CA 92882
File #: 22-0541
REQUEST FOR CITY COUNCIL ACTION
DATE: 07/06/2022
TO: Honorable Mayor and City Council Members
FROM: Finance Department
SUBJECT:
Public Hearing confirming the diagram and assessment for Lighting Maintenance District No. 84-1 for Fiscal Year 2023 and to detach certain territory from the District.
EXECUTIVE SUMMARY:
Adoption of the recommended resolution is the last step of the annual proceedings for the levy and collection of the special assessment for Lighting Maintenance District No. 84-1 (“LMD 84-1” or “District”) for Fiscal Year 2023 and to detach certain territory from the District. The City Council will conduct a public hearing to afford all interested parties an opportunity to make verbal or written comments on the proposed annual assessment.
At the conclusion of the hearing, it is recommended that the City Council adopt the said resolution confirming the diagram and assessments for the District for Fiscal Year 2023, which will constitute the levy of the assessment for the maintenance and servicing of public lighting facilities within the District, in accordance with the Streets and Highways Code.
RECOMMENDED ACTION:
That the City Council adopt Resolution No. 2022-066, confirming the diagram and assessment for Lighting Maintenance District No. 84-1 for Fiscal Year 2023 and to detach certain territory from the District.
BACKGROUND & HISTORY:
LMD 84-1 was established in 1984 in accordance with the provisions of the Landscaping and Lighting Act of 1972 (the "1972 Act"). The purpose of the District is to provide lighting, maintenance and operating services for the streetlights, traffic signals, and related appurtenances within the District's boundaries.
The annual assessments proposed to be levied within the District will pay for the maintenance services during Fiscal Year 2023. The services provided include all necessary operations, City of Corona Page 1 of 3 Printed on 6/30/2022
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File #: 22-0541
services during Fiscal Year 2023. The services provided include all necessary operations, administration, capital replacements, and maintenance required to keep the above-mentioned improvements in a healthy and satisfactory working condition.
ANALYSIS:
The State of California Street and Highways Code Section 22500 requires an annual review of the assessments levied by the assessment districts formed under the 1972 Act. In order to levy and collect special assessments within such districts, an Engineer's Report must be prepared, which provides details on the improvements that are maintained and the estimated budgets for each district.
On April 6, 2022, the City Council adopted Resolution No. 2022-027, to initiate the proceedings to levy and collect assessments for the District for Fiscal Year 2023, appointed Spicer Consulting Group, LLC as the engineer of record, and ordered the preparation of an Engineer's Report for the District.
On June 1, 2022, the City Council adopted Resolution No. 2022-048, to declare the City’s intention to levy and collect assessments within the District for Fiscal Year 2023 and to detach certain territory from the District, to approve the preliminary Engineer’s Report (the “Preliminary Report”), and to provide a notice of public hearing to consider the proposed assessments. A notice of public hearing was published in the local newspaper on June 22, 2022.
Attached is the final Engineer’s Report (the “Report”) for the District, which is consistent with the Preliminary Report. The Report includes a detailed description of the existing improvements within the District, the estimated maintenance costs, the method of assessment apportionment for each lot or parcel within the District boundaries, and a diagram showing the boundaries of the District. The Report also provides an analysis of the District’s financial status.
FINANCIAL IMPACT:
The cost of construction, installation, operation, servicing, and maintenance of the District will be funded by the assessments levied and collected within the District. For Fiscal Year 2023, it is projected that the assessment revenue will be insufficient to cover the operating costs during the same fiscal period, resulting in an estimated operating deficit of $477,347. The estimated deficit is due to the rising costs of maintenance services, and the District does not have a built-in escalator for the annual levy to keep up with expenditures. The City has made several improvements to address this shortfall over the years, including replacing the older High-Pressure Sodium streetlights with LED lights, and installing a lighting control system to provide energy savings and proactively respond to service issues. However, with inflation, operating costs continue to increase.
The estimated deficit in Fiscal Year 2023 will be covered by a one-time contribution from the District’s operating reserves. The current estimated operating reserve balance is $656,919 as of June 30, 2022. Based on the Fiscal Year 2023 expenditure budget, the operating reserve balance could be exhausted by Fiscal Year 2024 if ongoing contributions are needed to balance the District’s expenditure budget. During Fiscal Year 2023, further discussions will occur with the City Council on different options for addressing the deficit within the City’s special assessment districts.
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File #: 22-0541
Below is an overview of the District’s estimated assessment revenues and proposed expenditures for Fiscal Year 2023. Detailed information can be found in the attached Report.
Estimated
Costs
Estimated
Assessment
Revenue
General Benefit
Contribution(1)
Estimated
Excess/(Deficit)
Actual
Assessment
YOY % Change
$ 2,613,934 $ 2,028,919 $ 107,667 $ (477,347) 0.00%
1) Benefit received by non-residents of the District for the major/arterial streetlights, traffic signals, traffic control devices and landscape improvements.
This amount is contributed by the City’s General Fund.
ENVIRONMENTAL ANALYSIS:
This action is exempt pursuant to Section 15061(b)(3) of the Guidelines for the California Environmental Quality Act (CEQA), which states that a project is exempt from CEQA if the activity is covered by the common sense exemption that CEQA applies only to projects that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. This action merely declares the City's intent to levy and collect assessments within the District for Fiscal Year 2023, and there is no possibility that adopting the resolution will have a significant effect on the environment. Therefore, no environmental analysis is required.
PREPARED BY: LIEN-CHI CANTUBA, ACCOUNTING SUPERVISOR
REVIEWED BY: KIM SITTON, FINANCE DIRECTOR
Attachments:
1. Exhibit 1 - FY 2023 LMD 84-1 Engineer’s Report
2. Exhibit 2 - Resolution No. 2022-066
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