Cotati City Council
Agenda Staff Report
Item type: PUBLIC HEARINGS (ACTION)
To: City Council
Subject: RESOLUTION TO APPROVE THE ENGINEER'S REPORT,
CONFIRM THE ASSESSMENT DIAGRAM AND ANNUAL
ASSESSMENT AMOUNTS, AND LEVYING AND
COLLECTION OF THE ANNUAL ASSESSMENTS FOR THE
COTATI LANDSCAPING AND LIGHTING ASSESSMENT
DISTRICT FOR FISCAL YEAR 2024-25.
Date: July 9, 2024
Written by: Henry Babits, Engineering Technician
Recommendation
It is recommended the City Council of the City of Cotati adopt a resolution approving the Annual Engineer's Report, confirming the assessment diagram and annual assessment amounts, and authorizing the levying and collection of assessments for Fiscal Year 2024-25 for the Cotati Landscaping and Lighting Assessment District for Zones 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10 (Pursuant to the Landscaping and Lighting Act of 1972).
Background
Ten separate Cotati Landscaping and Lighting Assessment Districts (“Districts”) were initially formed by the City from 1989 to 2003 in accordance with the Landscaping and Lighting Act of 1972 (“Landscaping and Lighting Act”) to pay for costs associated with maintaining landscaping and streetlights within developments. The FY17/18 annual assessment process consolidated the ten Districts into one District to simplify the process and reduce administration costs. This item is the third of the three anticipated Council meetings for this year’s assessment process.
Analysis/Discussion
The Landscaping and Lighting Act requires that the City undertake certain proceedings for any fiscal year in which assessments are to be levied and collected. On January 9, 2024, the City Council began the required annual proceedings for the 2024-25 Fiscal Year by appointing the City Engineer as Engineer of Work and directing the preparation of the Engineer’s Report. The Draft Engineer’s Report was prepared and filed in accordance with the Landscaping and Lighting Act and was presented to the City Council for their consideration on May 28, 2024. At that time, the City Council preliminarily approved the Engineer’s Report, adopted a Resolution of Intent to levy and collect the annual assessments and set the date of the public protest hearing.
The requisite hearing notice has been given pursuant to Streets and Highways Code Section 22626. This is the third of three City Council meetings for the Fiscal Year 2024-25 assessments.
The Council is to conduct a public hearing and may then authorize the levy and collection of assessments for Fiscal Year 2024-25. The assessments cannot be increased above those stated in the Resolution of Intent adopted May 28, 2024.
Preliminary Engineer’s Report
The Preliminary Engineer’s Report begins with a background and summary of the proposed assessments for FY 24-25 and is followed by separate sections describing each Zone, what services are included for each Zone, including capital projects (i.e. major repairs, re-plantings, or other improvements), the estimated costs for FY 24-25, the allocation of the assessment to the lots, and an estimate of each Zone’s fund reserve balance. Following these sections, the report has attachments: Attachment A describing the method of apportionment of the assessments, Attachment B with a description of which properties are within each zone and the zone diagrams, and Attachment C presenting plans for any capital improvements planned for any of the Zones.
Annual assessments are at a fixed maximum amount for all the zones except zones 7, 8, 9, and
10. These zones have an annual inflation factor, equal to the Construction Cost Index (CCI) for the City of San Francisco and is applied to each Zone to calculate their respective maximum assessment. The annual assessment can be adjusted up to the maximum assessment without a majority protest being held. The CCI adjustment for FY 24-25 is 0.2 percent. To offset declining reserves and support increasing expenses, proposed assessments are 10 percent for Zones 7, 8, and 9, and 15 percent for Zone 9.
Zones 2, 4 and 5 have annual per lot assessments of $40.00, $32.00 and $36.74, respectively, which are very low and generally cover utilities, minimal labor and administrative cost with the exception of Zone 2 (Quail Hollow) which does not have adequate revenues to support routine expenses or utilities. These zones continue to be a challenge financially as the City cannot increase the annual assessment without a majority approval of residents within the zone.
However, without a significant improvement in the service, which is not possible, it is very unlikely that the residents would vote for an increase. Therefore, staff will inform the residents of the project completed by the city and the negative operating costs for their districts, but unless there is an unexpected groundswell of support for raising the assessment, staff considers these areas city-maintained streetscapes with a partial offset of costs by an assessment. While not ideal, it’s better than no cost offset. The accounting for the Quail Hollow (Zone 2) was adjusted to show an annual General Fund Subsidy instead of carrying forward a General Fund Loan balance
Financial Considerations
All costs associated with these annual proceedings and the annual operation, maintenance and administration of the Landscaping and Lighting Maintenance Assessment District are intended to be recovered from the annual assessments levied on the properties within the District. It may be necessary to have a loan from the City’s General Fund if improvements or repairs become necessary, but it is the intent that these borrowed funds be paid back through zone revenue over time.
The administrative costs this year are higher than last year as labor rates have increased reflecting cost of living salary adjustments for City staff and time was used to create a more streamlined report process to reduce future labor costs. Utility and contractor costs are projected to increase by 5 percent in FY24/25.
Annual assessments are to remain at previous year’s levels for Zones 1, 2, 3, 4, 5, and 6 ($158.00, $40.00, $290.00 ($435.00 for triplex), $32.00, $36.74, and $133.50, respectively). The Zone 7 assessment is proposed to increase from $253.04 to $278.30. The Zone 8 assessment is proposed to increase from $505.82 to $556.40. The Zone 9 assessment is proposed to increase from $205.58 to $236.40. The Zone 10 assessment is proposed to increase from $415.50 to $455.96.
The maximum assessments for zones 7, 8, 9 and 10 were increased by the ratio of the January 2024 Construction Cost Index for San Francisco to the CCI for the closest month to when those Zones were formed (consistent with provisions in the resolutions forming those respective Zones) and multiplied by the original assessment.
Environmental Issues
The actions to approve the Engineer’s Report, approve the action to levy and collect annual assessment for FY 24/25, confirm the assessment diagrams and annual assessment amounts, and approve the increase of the maximum potential assessments in accordance with the CCI for San Francisco for Zones 7, 8, 9, and 10 for the Landscaping and Lighting Maintenance District does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required.