DATE: JUNE 21, 2022
DEPARTMENT: PUBLIC WORKS DEPARTMENT
FROM: DAVID JACOBS, PUBLIC WORKS DIRECTOR
BY: ADRIANA ROBLES, CITY ENGINEER
HILDA GARCIA, PW ADMIN SUPERVISOR
TITLE: SETTING PUBLIC HEARING DATES FOR LEVYING ANNUAL
ASSESSMENTS FOR THE LANDSCAPE AND MAINTENANCE
ASSESSMENT DISTRICTS
RECOMMENDED MOTION:
A motion to approve Resolutions by the Salinas City Council initiating the proceedings for the annual levy of assessments; declaring its intention to levy and collect an assessment; and preliminarily approving the Engineer’s Reports for the landscape maintenance districts.
RECOMMENDATION:
It is recommended that the City Council approve Resolutions:
initiating the preparation of Engineer’s Reports for the Airport Business Center Landscape Maintenance District, and the North/East Area, Harden Ranch, Vista Nueva, Mira Monte and Monte Bella Maintenance Districts; and declaring its intention to levy and collect an assessment and set a public hearing date for August 9, 2022; and preliminarily approving the Engineer’s Reports for each District.
EXECUTIVE SUMMARY:
There are six landscape maintenance assessment districts (LMAD) within the City of Salinas that were created under the Landscaping and Lighting Act of 1972 (the Act), adopted locally in Article II, Chapter 21C of the Salinas City Code. The Act allows property owners to assess themselves within a specific area, or “district” in order to generate funds for various improvements within the district. Assessments are renewed annually, but prior to levying, an Engineer’s Report must be prepared and presented at a public hearing. Based on the maintenance district formulas, the rates expected to be assessed in FY 22-23 are expected to remain the same in all but one district.
BACKGROUND:
There are six landscape maintenance assessment districts (LMAD) within the City of Salinas: the Airport Business Center Landscape Maintenance District, the North/East Area Maintenance District, the Harden Ranch Maintenance District, the Vista Nueva Maintenance District, the Mira Monte Maintenance District and the Monte Bella Maintenance District. These Districts were created under the Landscaping and Lighting Act of 1972, which allows property owners to assess themselves within a specified area, or “district” in order to generate funds for installing, maintaining and servicing public lighting, landscaping, and improvements in their neighborhood. The assessments are renewed annually. Prior to renewal, an Engineer’s Report must be ordered, prepared and presented at a public hearing.
Staff is not recommending any changes to the formula on how assessments are levied in any of the maintenance districts, therefore, the mailing of ballots is not required. Pursuant to current assessment procedures, direct notices are also not required. However, notices of the public hearings are required and will be published in local newspaper of general circulation, following Council’s approval of the proposed scheduled public hearings.
Airport Business Center District
At the time of formation of the District, assessment rates were set so that assessment revenues were sufficient to fund the maintenance services required for the maintenance of the improvements within the District that provide a special benefit to parcels within the District. However, since 2003 when a provision for adjusting the assessment rates annually for inflation was not approved by property owners, the frequency and level of maintenance services which the District has been able to provide has gradually been reduced. While the cost of labor, materials, utilities, and other services have continued to increase annually, the assessment revenues have not increased. Currently, the assessment revenue funding provides less than 32% of the level that was being provided in 2003.
In 2019 Staff met with District’s property owners to gain an understanding of the most desired approach to obtaining and maintaining fiscal responsibility. The property owners in attendance concluded that they were interested in including the city-owned parcels along Moffett Street and changing to a different method of spreading assessments. The current formula is based entirely on lot acreage and exempts government-owned parcels. An on-call consultant was hired earlier this year and will be working towards developing a revised assessment methodology that will consider the frontage of parcels deriving benefits from the District instead of lot acreage. Once a revised preliminary methodology is available, Staff will meet again with property owners to survey the level of support before moving forward with a balloting process.
North/ East Area District
In 1999 it was determined that the assessment rate would not be adequate for future years to maintain desired levels of maintenance service due to the increasing age of improvements. Therefore, the City conducted a property owner assessment ballot in accordance with Prop 218 to increase rates and add an annual escalator. A majority of property owners approved the rate change and addition of an inflation factor, which is tied to the average Engineer’s News Record (ENR) cost index increase for the prior year. The average of the ENR index for construction increased 8.86% from April 2021 to April 2022. The assessments rates will be increased accordingly.
Mira Monte District
The Mira Monte District also included an inflationary factor tied to the ENR cost index. Staff does not recommend an increase for the Mira Monte District at this time since enough reserves are available to cover the cost of ongoing maintenance.
Harden Ranch Maintenance District
At the time of formation, in 1991, the Harden Ranch District’s assessment formula did not include an inflationary factor. Assessments were set at $66.72 per year for Single Family Residential Units, a level that would cover maintenance costs, at the 1991 prices. Overall maintenance labor/material prices have continued to increase while assessments have remained the same. In 1999, in an effort to bring assessments in line with cost, the District underwent a ballot proceeding to include an annual escalator based on the Consumer Price Index (“CPI”). However, most of property owners voted against the increase. Subsequently, due to inflation, the level of maintenance services that the District can provide from assessment revenue funding only, is estimated to be approximately 24% of the level that could be provided in 1999.
If needed, further reductions in maintenance levels will occur to balance expenditures with assessment revenue. This will include reduction in the frequency of tree trimming and other maintenance activities. Since the District is required to maintain drainage and water quality basins under the City's NPDES permit, the reduction in maintenance service levels will occur in other areas and are expected to impact the appearance of landscaping, and other improvements within the District in coming years.
Vista Nueva Maintenance District
At the time the Vista Nueva District was created, a flat $12 increase per year (not to exceed a maximum total assessment of $600 per year) was incorporated in the assessment formula. The maximum assessment of $600 per year was reached nine years ago when the rate increased from $592 to $600 per year. Therefore, the assessment rate will not increase this year as the annual assessment has reached its cap.
Monte Bella Maintenance District
The Monte Bella Maintenance District assessment formula calls for an inflationary factor to increase the assessments annually by the greater of three percent (3%) or the percentage increase in the CPI (5% from April 2021 to April 2022).
A decrease (10%) was approved 10 years ago because of the slow build-out. Since then, home construction has restarted. Phases 5A, 5B and 6 were approved in 2017, 2018 and 2019 respectively. Phases 5A and 5B have been completed and accepted by the City into the Assessment District. Phase 6 is anticipated to be accepted later this year. The assessment is recommended to remain the same as last year due to the available reserves for long-term capital improvements.
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.
STRATEGIC PLAN INITIATIVE:
This item relates to the Council’s Strategic Goal of Infrastructure and Environmental Sustainability. The Strategic Plan can be viewed here [link].
DEPARTMENTAL COORDINATION:
The Public Works Department’s Administration Division and Maintenance Divisions contribute staff time and resources to the day-to-day maintenance and administration of the Districts. Every year in August, Finance and Public Works Departments work cooperatively to prepare and submit the levy to the County for bi-annual collections.
FISCAL AND SUSTAINABILITY IMPACT:
Adopting the proposed resolutions has no fiscal impact to the General Fund as each district is entirely self-supporting with no subsidies from the General Fund. Staff continues to diligently seek out cost saving measures to sustain low maintenance costs. Based on Districts’ formulas, the rates expected to be assessed in FY 22-23 are as follows:
District
Actual FY 21/22 Rates
Proposed 22/23 Rates
Increase/
(Decrease)
Airport Business Center
$217.49
per acre
$217.49
per acre
-0-
North/East
$212.90
$127.74
$85.16
/Low Density unit
/ Med. Density unit
/ High Density unit
$231.76
$139.05
$92.70
/Low Density unit
/ Med. Density unit
/ High Density unit
8.86%
Harden Ranch
$66.72
$353.66
per unit
per acre
$66.72
$353.66
per unit
per acre
-0-
Vista Nueva
$600.00
per parcel
$600.00
per parcel
-0-
Mira Monte
$594.74
per parcel
$594.74
per parcel
-0-
Monte Bella
$802.20
per parcel
$802.20
per parcel
-0-
ATTACHMENTS:
Resolutions
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CITY OF SALINASCOUNCIL STAFF REPORTCITY OF SALINASCOUNCIL STAFF REPORT
CITY OF SALINAS
COUNCIL STAFF REPORT
CITY OF SALINAS
COUNCIL STAFF REPORT