CITY COUNCIL STAFF REPORT
Meeting Date: August 05, 2024
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___- 24 ORDERING THE INCREASE, LEVY, AND ASSESSMENT FOR ASSESSMENT DISTRICT NO. 22 (AD 22)
SYNOPSIS
There are two zones within Assessment District No. 22 (AD 22) Grayson Woods subdivision, and Gallery Walk subdivision. AD 22 pays for the ongoing maintenance and servicing of landscaping and lighting improvements along public streets and easements within the district.
Assessment increases are proposed for both the Grayson Woods and Gallery Walk subdivisions in order to maintain the current level of landscaping and lighting services. Assessment increases are proposed for both the Grayson Woods and Gallery Walk subdivisions in order to maintain the current level of landscaping and lighting services.
Notice of the August 5, 2024 public hearings for each of the zones within AD 22 and the assessment ballots were mailed to property owners on June 21, 2024, at least 45 days before the public hearings in accordance with Section 4 of Article XIII D of the California Constitution.
The City Council will conduct a public hearing for the proposed increased assessment for each of the zones for AD 22 and order ballots to be opened and counted by the City Clerk. Two public hearings will be conducted; a public hearing will be conducted for both Grayson Woods and Galley Walk subdivisions. If a majority protest does not exist for any of the zones within AD 22, the City Council will consider upholding the results of the ballot measure and approve a resolution ordering the levy of the new assessments. If the dollar amount of the ballots submitted in support of the levy of the assessments is more than the dollar amount of the ballots submitted in opposition to the levy of the assessments, there is no majority protest.
If a majority protest does exist for any of the zones within AD 22, the City Council will consider approving a revised Engineer’s Report and amend the resolution ordering the assessments to omit the proposed assessment increases for said zones and approve the assessments for those zones previously authorized pursuant to Section 4 of Article XIII D of the California Constitution.
DISCUSSION
Background
AD 22 is governed by the Landscape and Lighting Act of 1972 (Streets and Highway Code section 22500 et seq.). There are two zones within Assessment District No. 22 (AD 22) Grayson Woods subdivision, which was formed in 1997, and Gallery Walk subdivision, which was annexed into AD 22. The maintenance activities for AD 22 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.
Annually, the City Council must initiate proceedings to renew the levy and collection of special assessments for AD 22. An assessment district creates an authority to levy an assessment on a specific geographic area or parcels of land which have been identified as receiving a direct “special benefit” from a public improvement. AD 22 enables the City to provide enhanced levels of landscape maintenance and street lighting along public streets. These landscape and lighting improvements are considered to be of special benefit to the properties within the AD 22 boundaries. The funding for the maintenance and services is provided through annual assessments paid by the benefiting property owners within AD 22 and contributions by the City.
Over the past years the annual maintenance and servicing costs have increased while the assessment rates for AD 22 have remained relatively unchanged.
Analysis
Assessments can only be increased in accordance with Proposition 218 (Prop. 218), which amended the California Constitution by adding Article XIII D, which limits the ability of local government to generate revenue using special assessments, local taxes, fees and charges without taxpayer or property owner approval.
Prop. 218 stipulates that prior to levying a new, increased assessment not approved by a previous Prop. 218 proceeding, an agency shall give notice by mail at least 45 days prior to the date of the public hearing. In addition, assessments may only be levied for special benefits, and requires that all assessments be supported by a detailed Engineer’s Report prepared by a Registered Professional Engineer certified by the State of California. Harris and Associates prepared the Engineer’s Report.
When AD 22 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 2023-24. 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 2024-25, 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.
The Engineer’s Report includes a detailed description on the proposed assessment increases and inflationary adjustments for each zone or subdivision (Attachment 1).
FISCAL IMPACT
There is no direct fiscal impact on the General Fund associated with approving the Resolution.
However, if the proposed assessment rate increases and inflationary adjustments are not approved by the property owners, the existing assessment rates will continue but the zones will eventually need further action to remain financially healthy.
PUBLIC CONTACT
The Proposition 218 notice and assessment ballots were mailed to property owners to 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. In addition, 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.
RECOMMENDED CITY COUNCIL ACTION
1. For each of the zones within AD 22, conduct a public hearing, receive public testimony, and request the City Clerk to report on the ballots received during the 45-day notice period up to the public hearing.
2. For each of the zones within AD 22, close the public hearing and direct the City Clerk to tabulate and report the results of the ballot measure. Any member of the public will be permitted to view the tabulation if requested. The ballots are weighted by the amount assessed to determine the passing or failing of the proposed assessment.
3. For each of the zones within AD 22, adopt a resolution, entitled: A RESOLUTION OF THE
CITY COUNCIL OF THE CITY OF PLEASANT HILL, CALIFORNIA, DECLARING THE
RESULTS OF THE PROPERTY OWNER PROTEST BALLOT PROCEEDING CONDUCTED
FOR THE LEVY OF INCREASED ASSESSMENTS WITHIN THE (GRAYSON WOODS/GALLERY WALK) SUBDIVISION OF ASSESSMENT DISTRICT NO. 22, AND APPROVING CERTAIN RELATED ACTIONS (Attachment 2).
If a majority protest does not exist for any of the zones within AD 22, adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLEASANT HILL,
CALIFORNIA, DECLARING THE RESULTS OF PUBLIC HEARINGS, APPROVING ASSESSMENTS FOR ASSESSMENT DISTRICT NO. 22, CONFIRMING THE ENGINEER’S
REPORT, THE ASSESSMENT DIAGRAM AND ASSESSMENTS RELATED THERETO,
AND APPROVING THE LEVY AND COLLECTION OF ASSESSMENTS COMMENCING IN FISCAL YEAR 2024-25 (Attachment 3)
ALTERNATIVES TO RECOMMENDED ACTION
If a majority protest does exist, for certain zones within AD 22, amend the resolution described immediately above to omit the proposed assessment increases for said zones and approve the assessments for those zones previously authorized pursuant to Section 4 of Article XIII D of the California Constitution, as described in the annual Engineer’s Report, without the proposed increased assessments ordered by the City Council (Attachment 4).
ATTACHMENT(S):
1. Engineer’s Report for AD 22 (for proposed increased assessments)
2. Sample Resolution Declaring Ballot Results
3. Resolution Approving Assessments for AD 22
4. Annual Engineer’s Report for AD 22 (without proposed increased assessments) Prepared by: Janet Coleson, City Attorney
Reviewed by: Ann James, Public Works Director
Approved by: Ethan Bindernagel, City Manager