Agenda Item No: N.5
AGENDA REPORT
DATE: March 4, 2025
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2025-34 PW Budget Adjustment for LLMD Nos. 2023-1 (Gateway) and 2023-11 (Paradise Valley)
Authorizing an Update to the Fiscal Year 2024-2025 Budget for Landscaping and Lighting Maintenance District Nos. 2023-1 (Gateway) and 2023-11 (Paradise Valley)
Funding Source: $49,135; General Fund
Contact: Chris Lewis, (707) 428-7089
RECOMMENDED ACTION
Adopt resolution.
STATEMENT OF ISSUE
The City and property owners in Landscaping and Lighting Maintenance District (LLMD) Nos. 2023-1 (Gateway) and 2023 -11 (Paradise Valley) share the districts’ direct operating costs. A recent update to the distribution of Public Works Operations staff costs resulted in the need for a total additional General Fund Contribution of $49,135 ($9,603 to LLMD No. 2023-1 and $39,532 to LLMD No. 2023-11) in fiscal year (FY) 2024-2025.
DISCUSSION
LLMD Nos. 2023 -1 (Gateway) and 2023 -11 (Paradise Valley) were formed in June 2023 in accordance with the 1972 Landscaping and Lighting Act (1972 Act) and Article XIII D of the California Constitution, also known as Proposition 2 18, to fund landscaping and lighting maintenance services in each respective community. The Public Works Engineering Division provides district administration services and the Public Works Operations Division provides operations management services to both LLMDs.
The 1972 Act and Proposition 218 require that the City develop an annual engineer’s report , which is the district’s governing document prepared by a professional engineer that describes the district’s boundaries and improvements, outlines legal re quirements, identifies
administrative and operational costs, and provides justification and support for assessments levied upon district properties.
Assessments are paid by property owners to finance all administrative costs and all special benefits, which are defined as the portion of direct operating costs attributable to improvements that confer a special benefit upon individual properties. The City is responsible for making annual financial contributions to each district, known as General Benefit Cont ributions, to finance the portion of direct operating costs attributable to improvements that confer a general benefit to the public at-large.
The methodology used to classify City staff costs in the FY 2023 -2024 and FY 2024-2025 engineer’s reports for L LMD Nos. 2023 -1 (Gateway) and 2023-11 (Paradise Valley) aggregated both Public Works Engineering staff and Public Works Operations staff under the administrative costs category of expenses. However, staff identified a more suitable apportionment methodology in which Public Works Operations staff costs are classified under the direct operating costs category of expenses since those staff manage, oversee, and implement the district’s core functions, like landscape maintenance and special projects.
This reclassification of Public Works Operations staff results in an increase in the direct operating costs budget and an increase in the required General Benefit Contribution. This modification redistributes a greater financial burden to the City. As such, property owner assessments will not be increased.
Since property owners bear all administration costs, the inclusion of Public Works Operations staff in administration costs in the FY 2023 -2024 and FY 2024 -2025 engineer’s reports disproportionately burdened them.
The attached resolution authorizes a budget adjustment to the FY 2024 -2025 LLMD No. 2023-1 budget (Fund 187) and increases the General Fund contributions by a total of $9,603, which includes a retroactive adjustment to the FY 2023-2024 General Fund Contribution by $4,015 and an adjustment to the FY 2024-2025 General Fund Contribution by $5,588.
The resolution also authorizes a budget adjustment to the FY 2024 -2025 LLMD No. 2023 -11 budget (Fund 188) and increases the General Fund contributions by a total of $39,532, which includes a retroactive adjustment to the FY 2023 -2024 General Fund Contribution by $13,063 and an adjustment to the FY 2024-2025 General Fund Contribution by $26,469.
Since each district's administrative and operational expenses budgeted for FY 2024-2025 will be covered using the existing approved FY 2024-2025 assessments and General Fund Contributions, the additional General Fund Contributions authorized by this resolution will be added to each district’s reserves.
The additional General Benefit Contributions for FY 2023-2024 will be reflected in FY 2024-2025, as the books for FY 2023-2024 are closed.
All future engineer’s reports for LLMD Nos. 2023-1 (Gateway) and 2023-11 (Paradise Valley) will reflect the updated methodology in which Public Works Operations staff costs are classified under the direct costs category of expenses.
Staff presented this information to the Landscape Oversight Committee at the December 10, 2024, meeting. A copy of the Committee staff report is in Attachment 3.
FINANCIAL IMPACT
Total authorization for a one -time budget adjustment from the General Fund (Fund 101) to the FY 2024-2025 LLMD No. 2023-1 operating budget (Fund 187) is $9,603 ($4,015 for a retroactive adjustment to the FY 2023-2024 General Fund Contribution and $5,588 for an adjustment to the FY 2024-2025 General Fund Contribution).
Total authorization for a one -time budget adjustment from the General Fund (Fund 101) to the FY 2024 -2025 LLMD No. 2023 -11 operating budget ( Fund 188 ) is $39,532 ($13,063 for a retroactive adjustment to the FY 2023 -2024 General Fund Contribution and $26,469 for an adjustment to the FY 2024-2025 General Fund Contribution).
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
Staff presented the information in this report to the Landscape Oversight Committee at the December 10, 2024, meeting. A copy of the Committee staff report is in Attachment 3.
ALTERNATIVE ACTION
The council may choose not to approve the attached resolution and request that staff return with additional information.
COORDINATED WITH
City Manager’s Office
STAFF CONTACT
Chris Lewis, Sr. Management Analyst
(707) 428-7089
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution
Attachment 3: Memo to the Landscape Oversight Committee