STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of May 10, 2022
TO: Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Mike Roberts, Public Works Director/City Engineer Edwin Gato, Finance Director
SUBJECT: Landscaping and Lighting Assessment Districts - Approval of Preliminary Engineer’s Reports and Declaring the City Council’s Intention to Levy and Collect Assessments for Fiscal Year 2022/23 RECOMMENDED ACTIONS:
Adopt the following resolutions:
A resolution for the preliminary approval of the Engineer’s Report and declaring the City Council’s intention to levy and collect assessments for Fiscal Year (FY) 2022/23 within the City of Hercules for Citywide Landscaping and Lighting Assessment District No. 83-2, which is comprised of Benefit Zone Nos. 1, 2, 3&4, 5A, 5B, 5C, 6, 7, 8, 9, and 10, and setting a public hearing for June 28, 2022; A resolution for the preliminary approval of the Preliminary Engineer’s Report and declaring the City Council’s intention to levy and collect assessments for Fiscal Year (FY) 2022/23 within the City of Hercules Victoria by the Bay Landscaping and Lighting Assessment District No. 2002-1 and setting a public hearing for June 28, 2022; A resolution for the preliminary approval of the Preliminary Engineer’s Report and declaring the City Council’s intention to levy and collect assessments for Fiscal Year (FY) 2022/23 within the City of Hercules for Hercules Village Landscaping and Lighting Assessment District No. 2002-2 and setting a public hearing for June 28, 2022; A resolution for the preliminary approval of the Preliminary Engineer’s Report and declaring the City Council’s intention to levy and collect assessments for Fiscal Year (FY) 2022/23 within the City of Hercules for Baywood Landscaping and Lighting Assessment District No. 2004-1 and setting a public hearing for June 28, 2022; and A resolution for the preliminary approval of the Preliminary Engineer’s Report and declaring the City Council’s intention to levy and collect assessments for Fiscal Year (FY) 2022/23 within the City of Hercules for Bayside Landscaping and Lighting Assessment District No. 2005-1 and setting a public hearing for June 28, 2022.
FISCAL IMPACT OF RECOMMENDATION:
If assessments are not levied as proposed, a deficit balance could result and there would be a loss of revenue of approximately $3.07 million for FY 2022/23. Recent drought years, which have necessitated increased irrigation, coupled with water rate increases have significantly raised water costs. Additionally, trees in the newer developments north of I-80 have matured and are now requiring pruning by a tree trimming company, which is new work outside the scope of the landscaping contract. Staff is therefore recommending assessments in all Districts be increased by the full CPI amount of 5.19% and additional analysis be performed for Victoria by the Bay Landscaping and Lighting Assessment District No. 2002-1, which has been pushed into a deficit, and the findings be brought back to Council for discussion in the future.
DISCUSSION:
Hercules Lighting and Landscaping Assessment Districts Overview and Annual Levying Process The City of Hercules annually levies and collects special assessments to maintain certain improvements within the City’s five established Landscaping and Lighting Assessment Districts (LLADs). Each LLAD provides and ensures continued maintenance, servicing, administration and operations of various landscape and lighting improvements and other facilities benefitting parcels within each LLAD. Each property is assessed only for the cost of the improvements from which benefit is received.
The five established Landscaping and Lighting Assessment Districts in Hercules provide for well-maintained, attractive landscaping and serviceable streetlighting along public streets as well as fire breaks adjacent to open space. They also provide for the upkeep of playgrounds, fields, park furniture, tennis courts, graffiti abatement, lighting, landscaping, water features, and trails in City parks. The expenses associated with the maintenance of these LLADs includes labor, material, equipment, utilities, repairs and administration. In accordance with the Lighting and Landscaping Act of 1972, the City Council has followed a multi-step Council meeting process each year to levy the parcel assessments that fund this maintenance.
The Council completed the first step on April 26, 2022 by adopting a resolution ordering the LLAD Engineer to prepare the Preliminary Engineer’s Report for each LLAD. The second step in levying the annual parcel assessments for each LLAD, which consists of approving the Preliminary Engineer’s Reports and scheduling a public hearing, is the subject of this Council Agenda item.
The remaining schedule to levy the LLAD assessments for FY 2022/23 includes the following:
Adopt Resolution of Intention/Approval of Preliminary Engineer’s Report – May 10, 2022 Conduct Public Hearing/Approval of Final Engineer’s Report – June 28, 2022 FY 2022/23 LLAD assessments are submitted to the County – August 10, 2022 For FY 2022/23, Baywood LLAD No. 2004-1 will make an installment payment to repay a 10-year loan borrowed for a tree replacement project. Also, Benefit Zone Nos. 1 (Hercules by the Bay), 3 & 4 (Gems/Birds), 6 (Village Parkway) and 7 (Heights) associated with LLAD No. 83-2 will continue to repay their respective 10-year loans borrowed to replace failing wooden streetlight poles with new energy-efficient LED streetlights on metal poles.
Extreme drought conditions over the last several years have required a significant increase in irrigation watering to keep the landscaping alive and healthy. Additionally, there have been large increases in East Bay Municipal Utility District (EBMUD) water rates. From FY 2017/18 to date, EBMUD’s water rates increased 40% as compared to an allowable LLAD assessment rate increase of 16%. As a consequence, water costs have increased dramatically in the LLADs, especially for Benefit Zones and Districts that have large amounts of turf, which has a very high water demand.
Additionally, trees in the new urbanist developments north of I-80 have matured, both in height and width, such that they now need to be pruned regularly by a contract tree trimming company. This is new, additional work beyond the scope of the current landscaping contract and is an additional LLAD cost.
Victoria By The Bay LLAD No. 2002-1 has been most impacted by these increases in cost and is now in a deficit. Staff will be further evaluating how these emerging costs are impacting all of the Zones and Districts and intend to bring this item back to Council for an in-depth discussion, including recommendations for FY 2023/24, early next fiscal year. At that time the year-end costs for FY 2021/22 will be known and evaluated.
Property Owner Benefits & Services
The five Lighting and Landscaping Assessment Districts covering the entire City are of special benefit to the various parcels of land within the LLAD and essential to help maintain property values.
The benefits can be categorized broadly into two types, lighting and landscaping. Adequately lit streets maintain safe neighborhoods and improves the appearance of property frontage at night. Streetlighting keeps our streets safe for drivers and pedestrians alike, benefitting those using or occupying the neighboring parcels. At night or in bad weather, drivers and pedestrians can better see one another, traffic signs, and bicyclists. Properly functioning streetlighting allows our first responders to more easily locate a Hercules resident’s home in an emergency. Adequate lighting also allows for safe access to one’s home and property.
The landscaping benefits provide for healthy and well-maintained neighborhood and City parks, recreation facilities, open space and landscaping improvements. Routine landscape maintenance to City medians, parks, and open spaces such as mowing, weed abatement, trash and debris pick-up keep our neighborhoods properly maintained while increasing safety and plant health during years of drought. Landscaping is routinely pruned at medians and other areas, so drivers have good sight vision at City intersections. These efforts also provide for litter and graffiti removal.
Preliminary Engineers’ Reports Summary
The Preliminary Engineer’s Reports (Attachment 6) provide that the maximum annual assessment per parcel may be increased each fiscal year by the prior year’s increase in the Consumer Price Index for San Francisco-Oakland-San Jose Area - All Urban Consumers (CPI). The prior year’s increase in the CPI was 5.19%. All LLADs/Zones are proposed to be assessed at their current maximum assessment rates in FY 2022/23, except for the Baywood District (LLAD No. 2004-1), where the neighborhood assessment rate proposed to cover expenses and continue to build capital reserves is $1,946/parcel. The current and proposed rates per Equivalent Residential Unit (ERU) for each LLAD and Zone are set forth in the table below:
*The rates shown above are for single-family homes which equal one Equivalent Residential Unit. Condominiums and Apartment Units are assessed at 75% and 64% the amount of a single-family home respectively.
Lighting and Landscaping Assessment District No. 83-2
Landscaping and Lighting Assessment District No. 83-2 (hereinafter “LLAD 83-2”) is the largest and oldest LLAD in the City and currently consists of 11 Zones. The LLAD was originally formed in 1984 and consisted of four residential areas or Zones: Zone 1 (Hercules by the Bay), Zone 2 (Foxboro and Willow Glen Apartments), Zone 3 (Valley Oaks and Tiffany Ridge) and Zone 4 (Falcon Heights). Later in 1984 Zones 3 and 4 were combined when connected by the Marsten Ranch development annexation, Zone 5 (commercial and undeveloped properties) was annexed to LLAD 83-2, Zone 6 (Village Parkway), a residential area, was separated from Zone 5 upon development, and Zone 7 (Heights) was annexed to LLAD 83-2. In 1991, the existing neighborhoods known as Zone 8 (Trees and Flowers), Zone 9 (Birds and Country Run), and Zone 10 (Citywide park and recreation facilities) were annexed to LLAD 83-2 following a mailed assessment ballot proceeding.
Baywood Landscaping and Lighting Assessment District No. 2004-1 Baywood consists of 64 single family residential parcels, 14 townhomes, and a City-owned open space parcel. The Baywood neighborhood assessments are proposed to be levied at $1,850.00 per single family parcel. Baywood’s assessments remain higher than other LLADs because the landscaping maintenance for Baywood includes the front and back yards of homes outside the fence-line areas, which are maintained by property owners or homeowner associations in other LLADs. For FY 2022/23 there is additional funding included for tree trimming and replacement.
Victoria By the Bay Lighting and Landscaping Assessment District No. 2002-1 Victoria by the Bay consists of 791 single-family detached parcels, 132 multi-family units, a City open space parcel, and 2 neighborhood parks (Victoria Park and Arbor Park).
Hercules Village Lighting and Landscaping Assessment District No. 2002-2 Hercules Village consists of 218 single family residential units, 3 privately owned parcels which can be developed into multi-family units and/or residential/commercial flex sites and 3 City open space parcels.
Bayside Lighting and Landscaping Assessment District No. 2005-1 Bayside currently consists of 479 single-family residential units, including the recently constructed Muir Pointe development, three neighborhood parks (Bayside Park, Shasta Park, and Sierra Park), and one mixed-use parcel consisting of 147 multi-family units and 12,777 sq. ft. of commercial space.
ATTACHMENTS:
Citywide Resolution
Victoria by the Bay Resolution
Hercules Village Resolution
Baywood Resolution
Bayside Resolution
Preliminary Engineer’s Reports