City of Corona
Staff Report
400 S. Vicentia Ave.
Corona, CA 92882
File #: 22-0545
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 within Zones 1, 2, 4, 7, 10, 14, 15, 17, 18, and 20 of Landscape Maintenance District No. 84-2 for Fiscal Year 2023.
EXECUTIVE SUMMARY:
Adoption of the recommended resolution is the last step of the annual proceedings for the levy and collection of the special assessment within Zones 1, 2, 4, 7, 10, 14, 15, 17, 18, and 20 of Landscape Maintenance District No. 84-2 (“LMD 84-2” or “District”) for Fiscal Year 2023. 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 landscaping and appurtenant facilities within the District, in accordance with the Streets and Highways Code.
RECOMMENDED ACTION:
That the City Council adopt Resolution No. 2022-070, confirming the diagram and assessment within Zones 1, 2, 4, 7, 10, 14, 15, 17, 18, and 20 of Landscape Maintenance District No. 84-2 for Fiscal Year 2023.
BACKGROUND & HISTORY:
Zones 1, 2, 4, 7, 10, 14, 15, 17, 18, and 20 of LMD 84-2 were established in 1986 in accordance with the provisions of the Landscaping and Lighting Act of 1972 (the "1972 Act"). The purpose of the District is to provide landscape maintenance and operating services for the public landscaping and appurtenant facilities within the District's boundaries.
Each zone imposes a different assessment levy based on the benefit areas associated with that zone.
The annual assessments proposed to be levied within the District will pay for the maintenance City of Corona Page 1 of 4 Printed on 6/30/2022
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File #: 22-0545
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, 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 provide details on the improvements that are maintained and the estimated budgets for each district.
On April 6, 2022, the City Council adopted Resolution No. 2022-031, 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. 2022-052, to declare the City’s intention to levy and collect assessments within the District for Fiscal Year 2023, approve the preliminary Engineer’s Report (the “Preliminary Report”), and 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”) as it pertains to 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 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 revenues will be sufficient to cover the operating costs for Zones 1, 4, 7, 10, 14, 15, and 20 within the District during the same fiscal period.
The estimated surplus in these zones will be added to the capital reserve for future capital improvement within the District.
It is also projected that the assessment revenues will be insufficient to cover the operating costs for Zones 2, 17, and 18 during the same fiscal period. These zones do not have a built-in escalator for the annual levy. The estimated deficits are due to rising costs over the years and the levy not keeping up with the expenditures.
In the Fiscal Year 2023, the estimated operating deficit in Zone 2 is $9,189, which will be covered by a one-time contribution from the capital reserve in the same zone. The current estimated reserve balance in Zone 2 is $97,104 as of June 30, 2022. Based on the Fiscal Year 2023 expenditure City of Corona Page 2 of 4 Printed on 6/30/2022
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balance in Zone 2 is $97,104 as of June 30, 2022. Based on the Fiscal Year 2023 expenditure budget, the reserve balance will be exhausted in approximately ten years.
In Fiscal Year 2023, the estimated operating deficit in Zone 17 is $11,416, which will be partially covered by a one-time contribution from the operating reserve in the same zone. The current estimated reserve balance in Zone 17 is $11,245 as of June 30, 2022. Staff will review this issue and report on potential solutions at the 2022 Fall Workshop. Based on the direction from the Fall Workshop, staff will re-evaluate the expenditure budget for Zone 17 and return to the City Council for budget adjustments if needed.
In the Fiscal Year 2023, the estimated operating deficit in Zone 18 is $28,355, which will be covered by a one-time contribution from the capital and operating reserves in the same zone. The current estimated reserve balance in Zone 18 is $52,454 as of June 30, 2022. Based on the Fiscal Year 2023 expenditure budget, the reserve balance will be exhausted in Fiscal Year 2024.
Staff is currently assessing options to ensure the financial sustainability of zones within the District with funding shortages and will return to the City Council at the 2022 Fall Workshop with updated information.
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.
District
Estimated
Costs
Estimated
Assessment
Revenue
General
Benefit
Contribution(1)
Estimated
Excess/(Deficit)
Actual
Assessment
YOY % Change
Zone 1 2,565 4,147 - 1,582 0.00%
Zone 2 90,482 81,084 209 (9,189) 0.00%
Zone 4 81,057 93,610 - 12,552 0.00%
Zone 7 73,419 78,793 - 5,374 0.00%
Zone 10 1,494,471 2,139,263 - 644,792 0.00%
Zone 14 401,651 588,663 767 187,779 0.00%
Zone 15 26,170 27,556 - 1,385 0.00%
Zone 17 33,526 22,110 - (11,416) 0.00%
Zone 18 64,718 35,980 383 (28,355) 0.00%
Zone 20 797,559 1,068,698 - 271,139 0.00%
1) Benefit received by non-residents of the District for the 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 City of Corona Page 3 of 4 Printed on 6/30/2022
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File #: 22-0545
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 84-2 Engineer’s Report, as it pertains to the District.
2. Exhibit 2 - Resolution No. 2022-070
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