DATE: June 6, 2023
TO: Mayor and City Council
FROM: Maintenance Services Director
SUBJECT: Adopt a Resolution of Intention to Preliminarily Approve the Engineer’s Report and Assessments for Fiscal Year 2024; and Set June 27, 2023, as the Public Hearing Date for Such Actions for Consolidated Landscaping and Lighting District No. 96-1, Zones 1 through 18
RECOMMENDATION
That Council adopts a resolution of intention (Attachment II) to preliminarily approve the Engineer’s report (Attachment III) and assessments for Landscaping and Lighting District No. 96-1 for FY 2024 and sets June 27th as the public hearing date.
SUMMARY
The Landscaping and Lighting Act of 1972 requires an annual review and update of the Engineer’s Report to set annual assessment rates for each benefit zone. Assessment rate recommendations are made based on annual expenses, required cash flow, and capital replacement requirements. Recommended annual assessment rates cannot exceed the Maximum Base Assessment (MBA) Rate established when a zone was originally formed. The annual engineer’s report is included as Attachment III and includes a detailed summary for each of the eighteen benefit zones.
BACKGROUND
The Landscaping and Lighting Act of 1972 (Streets and Highways Code §22500) is a flexible tool used by local government agencies to form Landscaping and Lighting Assessment Districts to finance the cost and expense of operating, maintaining, and servicing landscaping (including parks), and lighting improvements in public areas. In 1996, six separate Landscaping and Lighting Districts, Benefit Zones 1-6, were consolidated into one district, Consolidated Landscaping and Lighting Assessment District No. 96-1, “the District,” by the adoption of Resolution No. 96-63. In subsequent years, zones 7-18 were individually created and annexed into the District. This staff report and attached engineer’s report provide assessment, benefit, and budget details for each of the established eighteen zones. Table 1 on the following page provides a summary of the benefit zones, including the year in which each zone was formed and the number of assessable parcels within each zone.
DISCUSSION
Recommended changes to a zone’s annual assessment rate are based on annual expenses, required cash flow, and capital replacement requirements. When determining the annual assessment rate, staff looks at two things:
Maximum Base Assessment (MBA) – The MBA is the maximum assessment rate that a parcel can be charged annually. This amount is established during the original formation of the zone. The annual MBA can only be increased if an inflation factor was included in the original formation document.
Assessment Revenue – The assessment revenue is the annual amount of revenue collected by charging each parcel an assessment rate. The assessment rate recommendation depends on review of the following three items:
Annual Expenses – Annual operating and maintenance expenses are estimated based on past years’ experience and future years’ estimates. Expenses include staff administration, noticing, and annual reporting.
Cash Flow – This is the amount of “cash” needed to pay monthly invoices when revenue is not received monthly (assessment rates are received through property tax revenues collected by Alameda County, which are transmitted to the City three times a year (January, May, and June).
Capital Replacement – This is the “savings account” where funds are collected and reserved each year to fund future capital replacement items. Future capital expenses are estimated based on an inventory of capital items, their useful life, and future replacement cost.
Table 2 on the following page summarizes assessment information by zone. The table provides assessment details for each zone by describing the number of parcels, if there is an annual inflation adjustment included in the MBA rate, the FY 2024 assessment rate, and the change between last year’s adopted assessment and this year’s recommended assessment.
For FY 2024, staff recommends no change to four zones (Zones: 6, 14, 15 and 18) and fourteen increases (Zones: 1, 2, 3, 4, 5, 7, 8, 9, 10, 11, 12, 13, 16, and 17), based on annual expenses, required cash flow, and future capital replacement.
Proposition 218 Compliance
For FY 2024, all assessments are proposed to be levied in compliance with Proposition 218 and do not require the noticing and balloting of property owners to obtain their approval. Any future increases in the assessment amounts that would exceed the MBA amount would require noticing and balloting of property owners.
FISCAL AND ECONOMIC IMPACT
There is no fiscal impact to the City’s General Fund from this recommendation; all expenditures are paid by assessment rates in each respective zone. All zones have adequate cash balances for annual expenses, cash flow, and capital replacement at this time.
STRATEGIC ROADMAP
This agenda item is not directly related to the Council’s Strategic Roadmap.
PUBLIC CONTACT
City staff: 1) mailed a postcard to all affected property owners to provide details of their recommended FY 2024 assessment rate and to alert them to two Council meetings where they could provide input (June 6 and June 27); 2) held a virtual meeting on May 31 via Zoom; and 3) will publish a printed legal notice in the East Bay Times on or before June 17, 2023.
NEXT STEPS
Following this Council meeting, the City is proposing to hold a public hearing on June 27, 2023, to provide an opportunity for any interested person to be heard. After the public hearing, the Council may adopt a resolution setting the annual assessment amounts as originally proposed or as modified. Following the adoption of this resolution, the final assessor’s roll will be prepared and filed with the County Auditor’s office to be included on the FY 2024 tax roll. Payment of the assessment for each parcel will be made in the same manner and at the same time as payments are made for property taxes. All funds collected through the assessment must be placed in a special fund and can only be used for the purposes stated within this report.
If Council adopts the attached resolution of intention, a noticed public hearing on June 27, 2023, to consider approving the Engineer’s Report and ordering the levy of assessments for FY 2024 will be scheduled.
Prepared by: Manny Grewal, Management Analyst
Recommended by: Todd Rullman, Maintenance Services Director Approved by:
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Kelly McAdoo, City Manager