City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: MAY 21, 2024 FROM: FINANCE DEPARTMENT WARDS: ALL
SUBJECT: RESOLUTION DECLARING INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2024/25 IN THE STREET LIGHTING ASSESSMENT DISTRICT NO. 1; APPROVING PRELIMINARY ENGINEER’S REPORT; AND SETTING A PUBLIC HEARING ON PROPOSED ASSESSMENT FOR JUNE 18, 2024, AT 3:00 P.M.
ISSUE:
Adopt a resolution declaring the City’s intention to levy and collect assessments for Fiscal Year (FY) 2024/25 in the Street Lighting Assessment District No. 1, approving the Preliminary Engineer’s Report, and setting a Public Hearing for final approval of the levy of special assessments within the District for June 18, 2024, at 3:00 p.m.
RECOMMENDATIONS:
That the City Council:
Adopt a resolution declaring the City’s intention to levy and collect assessments for FY 2024/25 within Street Lighting District No. 1, approving the Preliminary Engineer’s Report; and Set a Public Hearing for final approval of the levy of special assessments within the District for June 18, 2024, at 3:00 p.m.
BACKGROUND:
On February 27th, 2024, the City Council adopted Resolution No. 24087, ordering the preparation of the attached Preliminary Annual Engineer’s Report for the City of Riverside Street Lighting District No. 1 (District). The attached report outlines the estimated cost of maintaining the landscaping and administration of the District for FY 2024/25 as well as the method of apportioning those costs to the property owners within the District. The City assesses all parcels within the District annually, regardless of development status.
The Street Lighting Assessment District No. 1 was formed in July 1988 under the provisions of the Landscaping and Lighting Act of 1972. Passed by the voters in June 1997, Measure EE approved the continuation of the assessments at the same rates as originally established. The Engineer’s Report apportions a portion of the annual cost of maintaining and operating City Street Lights to the parcels within the various lighting zones (including residential, rural, and non-residential zones) through annual assessments.
The Street Lighting Assessment District uses a unit of benefit formula to determine streetlight assessments for individual properties. The first unit of benefit is the first 199 feet of street frontage. An additional unit of benefit is added for each additional 100 feet of street frontage. Residential properties on corner parcels are assessed based on street frontage along one side. Non-residential properties on corner parcels are assessed based on all street frontages.
DISCUSSION:
The following table outlines the proposed FY 2024/25 Street Lighting Assessment District No. 1 assessments per unit of benefit. *Source: Preliminary Engineer’s Report
In Rural zones, the District set a cap of 3 units of benefit per parcel. For FY 2024/25 this will result in a General Fund subsidy of approximately $13,454.68. In addition, because there was no adjustment based on CPI set at formation, the proposed level of assessments will currently recover approximately 64% of the estimated streetlight operation cost, with the General Fund subsidizing the shortfall. For FY 2024/25, the General Fund subsidy for this is estimated to be approximately $1,972,627.38. Increasing assessments to account for increased operations and maintenance cost will require a majority vote of all property owners and renters paying assessments within the District in accordance with Proposition 218.
To pay for costs associated with providing services in newly developed areas of the City, including increased street lighting, the City Council approved a services component with the formation of two new Community Facilities Districts (CFD). City Staff will continue to recommend the inclusion of services components in future new developments to ensure full cost recovery related to new development costs. The streetlights maintained within such a CFD will be excluded from Street Lighting District No. 1, and property owners will pay the cost of their street light maintenance through a Special Tax, which is not capped at the same rate as originally established in the District. The first such CFD formed with a streetlight maintenance component is Community Facilities District No. 2021-3 (Bridle Ridge).
Street Lighting Assessment District No. 1 procedures require the adoption of a Resolution approving the 2024/2025 Preliminary Engineer's Report and the proposed assessments. Due to the size of the proposed assessment roll referred to in the Engineer's Report, it is listed under a separate cover and is on file with the City Clerk. The Resolution also sets the required public hearing for the final approval of the levy of special assessments within the District for June 18th, 2024, at 3:00 p.m.
STRATEGIC PLAN ALIGNMENT:
This item contributes to Strategic Priority 5 – High Performing Government and Goal 5.3 – Enhance communication and collaboration with community members, to improve transparency, build public trust, and encourage shared decision-making.
This item aligns with each of the five Cross-Cutting Threads as follows:
Community Trust – The preparation of an annual engineer’s report and levy process complies with the Landscaping and Lighting Act of 1972, under which the Street Lighting Assessment District No. 1 was formed. This process provides transparency for community members upon whom the assessments are levied each year.
Equity – In order to maintain the improvements within the Street Lighting Assessment District, the annual maintenance cost is funded through an annual levy calculated based on the special benefit shared by each parcel within the district.
Fiscal Responsibility – Assessments are levied annually to pay the costs associated with maintaining enhanced improvements within the district. This ensures the additional cost of maintaining enhanced landscape improvements is borne primarily by the property owners that benefit from them.
Innovation – Utilizing Landscape Maintenance Districts is an innovative way to offset the cost of maintaining certain improvements within a specified area of the City and which benefit a select group of property owners.
Sustainability & Resiliency – The formation of a Street Lighting Maintenance District provides a transparent and equitable way to fund and report on maintenance improvements that provide a special benefit to a select group of property owners. The annual engineer’s report and levy process helps to ensure transparent reporting to members of the community, and within the district.
FISCAL IMPACT:
The total fiscal impact of this action is $5,581,985. The FY 2024/25 Street Lighting Maintenance District assessment levy will collect approximately $3,595,903, which will cover approximately 64% of the estimated streetlight maintenance and operations costs. The General Fund subsidy for FY 2024/25 is estimated to be $1,986,082.
The FY 2024/25 proposed budget was developed concurrently with this process and includes a General Fund subsidy amount of $1,581,380. Based on prior year estimates versus actuals, this amount is anticipated to be sufficient to cover a potential shortfall; however, staff will monitor actual expenditures throughout the fiscal year and recommend a budget adjustment if necessary.
Prepared by: Meline Carranza, Debt and Treasury Manager Approved by: Kristie Thomas, Finance Director/Assistant Chief Financial Officer Certified as to
availability of funds: Kristie Thomas, Finance Director/Assistant Chief Financial Officer Approved by: Edward Enriquez, Assistant City Manager/Chief Financial Officer/City Treasurer
Approved as to form: Phaedra A. Norton, City Attorney
Attachments:
Resolution
Preliminary 2024-2025 Street Light Assessment District No. 1 Engineer’s Report Preliminary 2024-2025 Street Light Assessment District No. 1 Assessment Roll Preliminary 2024-2025 Street Light Assessment District No. 1 Engineer’s Diagrams Street Lighting Assessment District Round 2 ● Page 2