CITY COUNCIL STAFF REPORT
Meeting Date: June 27, 2022
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: PUBLIC HEARING AND ADOPT RESOLUTION NO. ___-22 APPROVING THE ENGINEER’S REPORT, CONFIRMING DIAGRAM
AND ASSESSMENT AND ORDERING LEVY OF ASSESSMENTS FOR
FISCAL YEAR 2022-2023 IN ASSESSMENT DISTRICT NO. 20
(COMMERCIAL LANDSCAPING AND LIGHTING)
SYNOPSIS
An Assessment District is a financial mechanism that allows for the levy an assessment on a specific geographic area or parcels of real estate, which have been identified as receiving a special “benefit” from a public service or improvement. Assessment District No. 20 (“AD 20”), Commercial Landscaping and Lighting District, enables the City to provide landscape maintenance and street lighting at an enhanced level along commercial streets. The properties within the AD 20 boundaries directly benefit from these landscaping and lighting improvements.
The annual assessments paid by property owners within AD 20 and contributions by the City fund the maintenance and services provided.
In order for the City to continue to levy and collect assessments within AD 20 for the 2022/2023 fiscal year, an annual report must be prepared and the City must hold a public hearing. Staff requests the City Council hold the public hearing and adopt the Resolution approving the Engineer’s Report, confirming the diagram and assessment, and ordering the levy of assessments for Fiscal Year 2022/2023 for AD 20.
DISCUSSION
Background
AD 20 was formed in 1988 pursuant to the provisions of the Landscaping and Lighting Act of 1972 and the California Streets and Highways Code. AD 20 was amended in 1999 by creating a new zone (Zone 6) that includes the Downtown area.
In order for the City to continue to levy and collect assessments within AD 20 for Fiscal Year 2022/2023 (“FY 22/23”), a report on the proposed maintenance program must be prepared and a public hearing conducted on the budget and proposed assessments. The Engineer of Work, Harris & Associates, has completed and filed the annual report (“Engineer’s Report”) for FY 22/23 with the City Clerk. The Engineer’s Report (Exhibit 1 to the Resolution) includes descriptions of the improvements to be maintained during the fiscal year, an estimate of costs, a map of the District and Zone boundaries, and the levy of assessments upon the benefiting properties.
Construction of phase I of the Downtown tree replacement project along Crescent Drive is proposed for FY 22/23 in Zone 6. There are no new services or substantial changes in existing services proposed for FY 22/23 in the other five zones.
There are 485 properties in AD 20 that are located within Pleasant Hill. An additional 17 properties within the AD 20 boundaries are located in Concord. Eight are located east of Contra Costa Boulevard and south of Sun Valley Boulevard. Six are contained within the Sun Valley Mall Shopping Center. The remaining three properties are located east of Contra Costa Boulevard and south of Concord Avenue at the on-ramp to Interstate Freeway 680. The City of Concord has granted the City of Pleasant Hill authority to levy assessments on these properties annually since the District was established. Concord City Council Resolution No. 22-19, adopted April 12, 2022, grants consent to levy assessments on these 17 properties for FY 22/23.
Analysis
On February 7, 2022, the City Council adopted Resolution 9-22 directing the preparation and filing of the Engineer’s Report for Assessment District No. 20.
On May 16, 2022, the City Council preliminarily approved the Engineer’s Report for AD 20 and adopted a Resolution of Intention (“ROI”) to levy and collect assessments. In addition, the ROI provided notice of the date, time and place for a public hearing by the City Council on the levy of the assessments within AD 20.
The collection of assessments from properties within the boundaries of AD 20, together with the funds provided by the City, will ensure the continued maintenance of the lighting and landscape improvements within the boundaries of AD 20. Maintenance staff provides for the maintenance of improvements, including weekly mowing and edging of turf; maintaining and repairing irrigation systems; pruning; removing debris and graffiti; repairing street lights; and weeding, as well as, paying for utility charges for water and electricity.
If AD 20 assessments are confirmed for FY 22/23, staff will continue to provide maintenance services for the District. The AD revenues include $423,891 in assessments collected from property owners within AD 20, a $97,946 contribution from the General Fund, and estimated interest of $14,836 for a total of $536,673.
Assessments are made upon the various properties within AD 20 in proportion to the estimated special benefits received. As part of establishing special benefit, properties within the District are divided into six zones of improvement with different assessments based on the amount of special benefit conferred. The City tracks the cost of maintaining the improvements, including incidental expenses, within each zone. Contributions from the City’s General Fund are made by the City in Zones 1, 2, 3, 5, and 6 to offset benefits shared with the general public. In Zone 4, in lieu of a contribution, the City pays for the cost to maintain a portion of the Canal Trail median at Gregory Lane. Assessment rates have been established in each zone based upon acreage, street frontage, and benefit received. These rates are listed in the attached Engineer’s Report.
Zone 2 is currently projected to have a reserve balance this fiscal year. City staff began working with the Engineer of Work in early 2020 to identify ways to reduce expenses and increase assessments in an effort to address the growing deficit in Zone 2. Because the City Council approved a maximum rate for Zone 2 of $744.00 in FY 88/89, Zone 2 was assessed at that maximum allowable rate again beginning in FY 21/22 to eliminate the deficit within a period of approximately five years. Dues to staff efforts to identify ways to lower expense, and water conservation efforts during the drought, the deficit has been eliminated as of the end of this fiscal year. The properties will continue to be assessed at the approved rate, however, to rebuild the reserve for future improvements.
In Zone 6, the conceptual design of the Downtown tree replacement project was completed and presented to the Downtown property managers in FY 21/22. The Downtown owners committed to funding $100,000 of the project; construction of the first phased of the tree replacement project is scheduled for FY 22/23. The Assessment District contribution is budgeted at $90,000; additional funding must be identified to complete the project. The reserve fund for Zone 6 will be depleted by the end of FY 22/23. Assessments for the Zone are proposed to be increased by the allowable CPI (3.21%). Increasing the assessments, however, will not be sufficient to meet the estimated expenses over the next few years. As a result, it may be necessary to conduct a property owner assessment ballot process within Zone 6 so that assessment rates can be increased above the current allowable maximum.
FISCAL IMPACT
The City of Pleasant Hill will contribute approximately $97,946 from the General Fund toward the landscape and lighting costs. This contribution is intended to offset the portion of the landscape and lighting improvements that provide shared benefit to both the general public and in particular, those properties that are not in the District and are in front of or lie adjacent to District improvements within the City’s right of way. Should the Assessment District not be renewed for FY 22/23, there would be a loss of $423,891 in assessment revenues to fund maintenance activities within AD 20.
PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center, and at the Pleasant Hill Police Department.
The agenda and staff report are posted on the City’s web page. The Resolution of Intention was also published in the Contra Costa Times on June 6, 2022.
RECOMMENDED CITY COUNCIL ACTION
Open, conduct, and close the Public Hearing and adopt the Resolution Approving the Engineer’s Report, Confirming the Diagram and Assessment, and Ordering the Levy of Assessments for FY 22/23
ALTERNATIVES TO RECOMMENDED ACTION
Should the Assessment District not be renewed for FY 22/23, there would be a loss of $423,891 in assessment revenues to fund maintenance activities within AD 20. The City would need to fund these maintenance activities or services would need to be suspended or substantially reduced.
ATTACHMENT(S):
Proposed Resolution
Exhibit 1 - Engineer’s Report
Prepared by: Danielle K. Habr, Principal Management Analyst/City Clerk Reviewed by: Ananthan Kanagasundaram, City Engineer
Ethan Bindernagel, Community Development Director/Assistant City Manager Approved by: June Catalano, City Manager