STAFF REPORT TO THE CITY COUNCIL
DATE: Regular Meeting of April 9, 2024
TO: Mayor and Members of the City Council
VIA: Dante Hall, City Manager
SUBMITTED BY: Michael Roberts, Public Works Director/City Engineer SUBJECT: Initiation of FY 2024/25 Landscape and Lighting Assessment District Proceedings RECOMMENDATION ACTION:
It is recommended by City staff that City Council adopt a resolution directing the filing of the Annual Engineer’s Reports for the City of Hercules Landscaping and Lighting Assessment District No. 83-2, Victoria by the Bay Landscaping and Lighting Assessment District No. 2002-1, Hercules Village Landscaping and Lighting Assessment District No. 2002-2, Baywood Landscaping and Lighting Assessment District No. 2004-1, and Bayside Landscaping and Lighting Assessment District No. 2005-1 pursuant to the Landscaping and Lighting Act of 1972; and directing staff to begin the process of holding a Proposition 218 election for the Victoria by the Bay Landscaping and Lighting Assessment District No. 2002-1 to ask the property owners of the district to consider an assessment increase.
EXECUTIVE SUMMARY:
As required by the Landscaping and Lighting Act of 1972 (hereinafter “the Act”), the first step in the annual process to levy and collect assessments through the City’s five (5) Landscaping and Lighting Assessment Districts (LLADs) is the preparation of an annual Engineer’s Report for each LLAD. The Act requires the City adopt a resolution ordering the filing of the Engineer’s Report and that the Engineer’s Report identify the following:
The fiscal year for which the report applies.
Any proposed new improvements or any substantial changes in existing improvements.
Plans and specifications for the improvements.
An estimate of the cost of the improvements, including:
The total cost for improvements to be made that year, being the total cost of constructing or installing all proposed improvements and of maintaining and servicing all existing and proposed improvements, including all incidental expenses. This may include a reserve which shall not exceed the estimated cost of maintenance and servicing through December 31st of the fiscal year, or whenever the City expects to receive its first installment of special assessments and tax collections from the County, whichever is later.
The amount of any surplus or deficit in the improvement fund to be carried over from a previous fiscal year.
The amount of any contributions to be made from sources other than assessments.
The net amount to be assessed upon assessable lands within the LLAD.
A diagram for the LLAD.
An assessment of the estimated cost of the improvements, which will do the following:
State the net amount to be assessed upon assessable lands within the LLAD.
Describe each assessable lot or parcel of land within the LLAD.
Assess the net amount upon all assessable lots or parcels of land within the LLAD by apportioning that amount among the several lots or parcels in proportion to the estimated benefits to be received by each lot or parcel from the improvements.
The Victoria by the Bay LLAD is currently experiencing an operating and cumulative deficit. The financial status of the Victoria by the Bay LLAD was discussed in detail at the February 27, 2024 City Council meeting. City Council directed City staff to bring the item back for further discussion outlining the different viable options for the Victoria by the Bay LLAD. At the March 26, 2024 City Council meeting, Council directed City staff to proceed with Proposition 218 proceedings to obtain property owner approval to increase assessment within the Victoria by the Bay LLAD commencing with FY 2024/25. If the assessment increase is not approved by Victoria by the Bay LLAD, cost cutting measures associated with the in-tract residential parkway strips will be implemented in FY 2024/25 upon City Council direction. Also, the job description for a Lighting and Landscaping Program Supervisor will be reviewed on April 23 but if the position were approved it would be cost neutral for Victoria.
The adoption of the recommended resolution directs the preparation of the Engineer’s Report for each LLAD which will be brought to City Council for preliminary approval at the April 23, 2024 City Council meeting and authorize Proposition 218 proceedings to notice and ballot property owners within the Victoria by the Bay Landscaping and Lighting Assessment District No. 2002-1 (Victoria by the Bay LLAD) to approve a two-step fixed assessment increase to be implemented in FY 2024/25 and FY 2025/26. The Victoria by the Bay LLAD maximum annual assessment for each single-family home would increase by $150 for FY 2024/25 and would increase again by $150 for FY 2025/26.
BACKGROUND:
Landscaping and Lighting Assessment District No. 83-2
Landscaping and Lighting Assessment District No. 83-2 (hereinafter “LLAD No. 83-2”) was formed on January 5, 1984 by Resolution No. 84-7. LLAD No. 83-2 originally consisted of four residential areas or zones: Zone 1 (Olympian Hills, Citation Homes West of San Pablo and Historic Homes), 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 No. 83-2, Zone 6 (Village Parkway) a residential area was separated from Zone 5 upon development, and Zone 7 (Hanna Ranch) was annexed to the LLAD No. 83-2.
In 1991, the existing neighborhoods known as Zone 8 (Trees and Flowers) and Zone 9 (Birds and Country Run) and Zone 10 (Citywide park and recreation facilities) were annexed to LLAD No. 83-2 following a mailed assessment ballot proceeding.
In 1997 the assessment methodology was revised to conform to the requirements of Article XIII D of the California Constitution (enacted by Proposition 218). An assessment ballot proceeding in June of 1997 confirmed LLAD No. 83-2. The June 1997 assessment ballot authorized the City to levy and collect assessments through FY 2002/03. The 1997 assessment ballot proceeding also authorized the City to increase assessments annually by the prior year’s change in the Consumer Price Index (CPI) each fiscal year through FY 2002/03.
In FY 2003/04 the property owners approved an assessment increase commencing FY 2003/04 and approved the continuation of LLAD No. 83-2 through FY 2012/13. The 2003 assessment ballot proceeding also authorized the City to annually increase assessments by the prior year’s change in the Consumer Price Index (CPI) each fiscal year through FY 2012/13.
In May of 2010, the property owners approved three (3) major changes to LLAD No. 83-2 commencing in FY 2010/11:
The removal of the assessment levy sunset date of FY 2012/13 and allowing LLAD No. 83-2 to continue in perpetuity.
Continuation of the authorization to increase assessments annually by the prior year’s change in the Consumer Price Index (CPI).
Changes to the assessment methodology to recognize changes to developing areas to provide consistency throughout LLAD No. 83-2.
In FY 2016/17 the City conducted a Proposition 218 election to increase assessments in LLAD No. 83-2 Benefit Zones 1, 3&4, 5C, 6, and 7 for FY 2017/18. The assessment increase was approved by property owners in Benefit Zone 5C for FY 2017/18. In FY 2017/18 the City conducted a Proposition 218 election to increase assessments in LLAD No. 83-2 Benefit Zones 1, 3&4, 6, 7 and 9 for FY 2018/19. The assessment increase was approved by property owners in Benefit Zone 9 for FY 2018/19. In FY 2018/19 the City conducted a Proposition 218 election to increase assessments in LLAD No. 83-2 Benefit Zone 1 and the areas of Benefit Zone 7 excluding Bay Pointe, Bravo, and Caprice for FY 2019/20. The assessment increase was approved by property owners in Benefit Zone 1 and the areas of Benefit Zone 7 excluding Bay Pointe, Bravo, and Caprice within LLAD No. 83-2 for FY 2019/20.
Victoria by the Bay Landscaping and Lighting Assessment District No. 2002-1 The Victoria by the Bay development was required to install approximately 24 acres of landscaped medians, frontages and parks and 211 streetlights as a condition of approval of the development. The area was formerly part of Zone 5C in LLAD No. 83-2. The improvements in the Victoria by the Bay development were determined to be distinct from other improvements within existing LLAD No. 83-2 and to require a higher level of maintenance. Therefore, the development was detached from LLAD No. 83-2 and the Victoria by the Bay LLAD was formed on May 14, 2002 by Resolution No. 02-050 of the City Council pursuant to the Landscaping and Lighting Act of 1972.
In the fall of 2023, the City conducted Proposition 218 proceedings to increase assessments in the Victoria by the Bay LLAD. The Victoria by the Bay LLAD property owners did not approve the proposed increase 77% to 23%.
Hercules Village Landscaping and Lighting Assessment District No. 2002-2 The Hercules Village development was required to extend Railroad Avenue, install approximately 50 acres of landscaped improvements, which include parkway strips, paseos, an enhanced pond and detention basins, 122 streetlights and provide slope and retaining wall maintenance adjacent to the City’s existing pedestrian pathway as a condition for approval of the development. The area was formerly part of Zone 5C in LLAD No. 83-2. The improvements in the Hercules Village development were determined to be distinct from other improvements within existing LLAD No. 83-2 and would require a higher level of maintenance. Therefore, the development was detached from LLAD No. 83-2 and Hercules Village Landscaping and Lighting Assessment District No. 2002-2 was formed on May 14, 2002 by Resolution No. 02-049 of the City Council pursuant to the Landscaping and Lighting Act of 1972.
Baywood Landscaping and Lighting Assessment District No. 2004-1 The Baywood development was required to extend Sycamore Avenue 60 feet, install approximately 4.5 acres of landscaped improvements, which include tree-lined streets, alleyways, and natural open spaces, and construct 37 streetlights as a condition for approval of the development. The area was formerly part of Zone 5C in LLAD No. 83-2. The improvements in the Baywood development were determined to be distinct from other improvements within existing LLAD No. 83-2 and would require a higher level of maintenance. Therefore, the development was detached from LLAD No. 83-2 and Baywood Landscaping and Lighting Assessment District No. 2004-1 was formed on April 13, 2004 by Resolution No. 04-034 of the City Council pursuant to the Landscaping and Lighting Act of 1972.
Bayside Landscaping and Street Lighting Assessment District No. 2005-1 The Bayside development was required to install a 0.67 acre neighborhood park and public street lights as a condition of approval of the development. The area was formerly part of Zone 5C in LLAD No. 83-2. The improvements in the Bayside development were determined to be distinct from other improvements within existing LLAD No. 83-2 and would require a higher level of maintenance. Therefore, the development was detached from LLAD No. 83-2 and Bayside Landscaping and Lighting Assessment District No. 2005-1 was formed on May 10, 2005 by Resolution No. 05-060 of the City Council pursuant to the Landscaping and Lighting Act of 1972.
ANALYSIS:
The City is proposing that Victoria by the Bay property owners approve a two-step fixed assessment increase to be implemented in FY 2024/25 and FY 2025/26. The Victoria by the Bay LLAD maximum annual assessment for each single-family home would increase by $150 for FY 2024/25 and would increase again by $150 for FY 2025/26.
The schedule for the Victoria by the Bay LLAD Proposition 218 proceedings will be run concurrently with the annual approval process for all five of the City’s LLADs. The remaining schedule is as follows:
April 9, 2024: City Council adopts Resolution of Initiation for all LLADs.
April 23, 2024: City Council preliminarily approves the Engineer’s Reports for all LLADs and adopts the Resolutions of Intention.
No Later than May 10, 2024: Mail required Proposition 218 notices and ballots to Victoria by the Bay LLAD property owners (must occur a minimum of 45 days prior to public hearing).
June 25, 2024: City Council conducts public hearing for all LLADs, closes balloting period and conducts ballot tabulation for the Victoria by the Bay LLAD, declares results of the ballot tabulation for the Victoria by the Bay LLAD, and approves the Final Engineer’s Reports and FY 2024/25 assessments for all LLADs.
FISCAL IMPACT:
If assessments for the LLADs are not levied, there would be an estimated revenue loss of $3.3 million for FY 2024-25 to fund the maintenance and operations associated with the City’s public parks, landscaping, streetlighting, and open space areas.
ATTACHMENTS:
Attachment 1 Resolution initiating FY 2024/25 LLAD proceedings and directing the filing of the Engineer’s Reports