CITY COUNCIL STAFF REPORT
Meeting Date: June 03, 2024
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___- 24 DECLARING THE INTENTION TO
LEVY AND COLLECT ANNUAL ASSESSMENTS IN ASSESSMENT
DISTRICT NO. 22 FOR THE 2024/2025 FISCAL YEAR AND SETTING
THE TIME AND PLACE FOR A PUBLIC HEARING
SYNOPSIS
The purpose of this item is for the City Council to adopt a Resolution of Intention to levy and collect the annual assessments for Assessment District 22 (“AD 22” or “District”) and set a public hearing for August 5, 2024 at 7 p.m. to consider adopting assessment rate increases and inflationary adjustments for AD 22.
It is necessary to increase rates to address increases in operating costs and to fund needed maintenance along Gallery Walk and Grayson Woods.
BACKGROUND
An assessment district is a financial mechanism that allows for the levy of an assessment on a specific geographic area or parcels of real estate, which have been identified as receiving a direct and special "benefit" from a public improvement or service. AD 22 enables the City to provide landscape maintenance and street lighting at an enhanced level within the scenic easements in the Grayson Woods and Gallery Walk subdivisions. These landscape and lighting improvements are considered to be of direct benefit to the properties within AD 22’s boundaries. The funding for the maintenance and services is provided through annual assessments paid by the benefiting property owners of parcels located within AD 22.
AD 22 consists of two subdivisions: Grayson Woods, which was formed in 1997, and Gallery Walk, which was annexed into the District in 2002. AD 22 pays for the ongoing maintenance and servicing of landscaping and lighting improvements along public streets and easements within the District.
Maintenance activities include weekly mowing and edging of turf; maintenance and repair of irrigation systems; pruning; debris removal; graffiti removal; streetlight repair, weeding, as well as utility charges for water and electricity. The funding for the maintenance and services is provided through annual assessments paid by benefiting property owners within the AD 22. Over the past several years the annual maintenance and servicing costs have increased while the assessment rates for AD 22 have remained relatively unchanged.
When the District was formed, a range of assessments was established for both Grayson Woods and Gallery Walk. For Grayson Woods, that range of assessment was $289.00 to $359.00. For Gallery Walk it was $148.88 to $234.36. The range of assessment established at that time did not allow for assessments to be increased over the high end of the range, $359.00 and $234.36, respectively.
The Grayson Woods subdivision reserves were significantly reduced by a slope stabilization project in FY 23/24. This has left very little room for future inflation or repairs. As a result, staff is recommending that the maximum assessment for Grayson Woods, currently $359.00, be increased to $425.00 for FY 24/25, and include an annual inflationary adjustment to that rate tied to the annual change in the Consumer Price Index - San Francisco-Oakland-Hayward Area All Urban Consumers (“CPI”). This will allow the maximum assessment for Grayson Woods to increase annually, keeping up with future inflation and will allow for the replenishment of the reserve fund.
The Gallery Walk subdivision reserves are healthy and there is no need for an assessment rate increase at this time. As mentioned above, however, the established maximum assessment rate for Gallery Walk is $234.36, with no provision for an increase above that amount. To prepare and account for future inflation or unforeseen repairs, staff is recommending that an annual inflationary adjustment to that rate, tied to CPI, be added to the Gallery Walk assessment methodology. This will allow the maximum assessment for Gallery Walk to increase annually, keeping up with future inflation.
Harris and Associates has been the City’s Engineer of Work since 2019, helping the City to confirm there are secure funding sources for the ongoing maintenance within AD 22. In order for the City to increase assessments or install an annual inflationary adjustment, the City Council adopted a resolution directing the Engineer of Work to prepare an Engineer’s Report. On February 26, 2024, the City Council approved Resolution No. 20-24 authorizing Harris and Associates to perform Assessment Engineering Services for a Proposed Rate Increase for AD 22.
The Engineer’s Report includes a detailed description on the proposed assessment increases.
Harris and Associates’ Engineer’s Report is now complete and attached.
On May 21, 2024 the Budget Committee reviewed the proposed recommended rate increases and recommended the City Council conduct a public hearing to review the proposed assessment rate increases to Assessment District 22.
If the City Council approves the Resolution of Intention, the City will commence the Proposition 218 proceedings by sending a notice of public hearing and assessment ballot to all property owners within AD 22. The notice and ballots must be mailed to the property owners at least 45 days prior to the scheduled public hearing.
FISCAL IMPACT
There is no direct fiscal impact on the General Fund associated with adopting the Resolution of Intention. However, if the proposed assessment rate increases and inflationary adjustments are not approved by the property owners of AD 22, the existing assessment rates will continue and the District will eventually realize financial distress.
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 Proposition 218 notice and assessment ballots that will be mailed to property owners will inform owners of the August 5, 2024 public hearing to consider increases to the assessment rates for AD 22 and how they can vote on the proposed increases.
RECOMMENDED CITY COUNCIL ACTION
Adopt the Resolution of Intention and set the public hearing for August 5, 2024, on the proposed assessment rate increases for AD 22.
ATTACHMENTS:
Engineer’s Report for AD 22
Proposed Resolution of Intention
Sample Proposition 218 Public Hearing Notice
Sample Assessment Ballot
Prepared by: Janet Coleson, City Attorney
Reviewed by: Ann James, Interim Public Works Director
Approved by: Ethan Bindernagel, City Manager