CITY OF SIGNAL HILL
STAFF REPORT
2175 Cherry Avenue • Signal
Hill, California 90755-3799
4/26/2022
AGENDA ITEM
TO:
HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM:
THOMAS BEKELE
PUBLIC WORKS DIRECTOR
SUBJECT:
RESOLUTIONS ORDERING THE PREPARATION AND APPROVAL OF AN ENGINEER’S REPORT FOR THE LEVY AND COLLECTION OF ASSESSMENTS IN LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1 FOR FISCAL YEAR 2022-23
Summary:
Landscape and Lighting Maintenance District No. 1 (LLMD) was formed in 1992 to pay for the maintenance of common landscaped areas within the California Crown tract. Annually, the City Council must initiate proceedings to renew the levy and collection of special assessments for the LLMD. The proposed resolutions declare the Council's intention to levy and collect assessments, approve the Engineer’s Report, and set the Public Hearing for June 14, 2022.
Recommendations:
1. Adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA, ORDERING THE PREPARATION OF AN ENGINEER’S REPORT FOR THE LEVY AND
COLLECTION OF ASSESSMENTS IN LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1 FOR FISCAL YEAR 2022-23
2. Adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA,
DECLARING ITS INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1 FOR FISCAL YEAR 2022-23 AND APPROVING THE ENGINEER’S REPORT
3. Set the Public Hearing for June 14, 2022.
4. Authorize the City Manager to execute all documents necessary to enter into a Property Maintenance Agreement with Signal Hill Petroleum (SHP), including any subsequent CITY OF SIGNAL HILL Page 1 of 6 Printed on 4/21/2022
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Maintenance Agreement with Signal Hill Petroleum (SHP), including any subsequent amendments, allowing SHP to maintain their own lots using their own resources.
Fiscal Impact:
The LLMD operating budget is funded through assessments collected from property owners within the LLMD. The total proposed assessment for Fiscal Year (FY) 2022-23 is $84,682. The increase in assessment fees for FY 2022-23 is shown below, which includes the additional assessment of $19.62 per month for both Basic and Landscape Easement lots to fund the dedicated reserve. The proposed assessments for future years are as follows: a 10% increase in FY 2023-24, a 10% increase in FY 2024-25, a 4% increase in FY 2025-26, and a Consumer Price Index (CPI) increase every year thereafter. FY 2023-24 through FY 2025-26 will also include a not-to-exceed 3% CPI increase in addition to the base increase pursuant to the 2022 Engineer’s Report (Attachment A).
FY 2022-23 Revenue and Reserve Forecast
Proposed Revenues (FY 2022-23 Assessment) $84,682
FY 2021-22 Revenue $65,886
FY 2021-22 Reserve (projected ending balance) $29,323
FY 2022-23 Reserve (projected ending balance) $27,495
Strategic Plan Objectives:
Goal No. 1: Ensure long term fiscal stability.
Goal No. 5: Ensure an enhanced qualify of life for residents of the City.
Background:
The LLMD was formed in 1992 to provide a source of funds for the installation, repair, and operation of specific landscaped areas that benefit all properties within the California Crown neighborhood. In addition, the founding documents allowed for the creation of an Architectural Control Committee (ACC), consisting of LLMD property owners, to prioritize the goals of the LLMD.
The LLMD assessment area as shown on Exhibit A of the 1992 Engineer’s Report (Attachment C) is bounded by Tract 48512 and contains 95 individual lots as follows:
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· 73 basic residential lots;
· 17 residential lots with landscape easements; and
· 5 oil lots.
Annually, the City Council must initiate proceedings to renew the levy and collection of special assessments for the LLMD. 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. The increase in property desirability and value due to the upkeep of adjacent or surrounding trees, landscape, trail, hardscape and appurtenant facilities is considered or defined as a special benefit. The Engineer’s Report provides a detailed analysis of the improvements, operations, and maintenance expenses to be funded to demonstrate that the properties being assessed the tax receive a special benefit over and above the benefits conferred on the general public.
In order to levy assessments, Prop. 218 requires a mailed ballot to all property owners, and a majority vote of returned ballots in favor of the proposed assessment compared to those opposed to it, weighted by the amount of assessment to be collected from each property.
The last Prop. 218 hearing proposing an increased assessment occurred on July 14, 2020. The 2020 Engineer’s Report (Attachment B) proposed an increase to address increased costs of lawncare services and a reduced reserve. The hearing resulted in a majority protest, meaning a majority of the residents voted not to increase the assessment. As a result, the assessment continued in accordance with an Engineer’s Report prepared in 1992 (Attachment C) which allows CPI-only increases. This limited the ACC’s ability to address aging landscape, deteriorating walls, drainage issues, and desired lawn care services.
Analysis:
In March 2021, the ACC hosted multiple site meetings with City staff to discuss the condition of the existing landscape, utility costs, and long-term expectations for the upkeep of the district. The ACC emphasized the need to create a dedicated reserve account to address aging infrastructure and required repairs, including retaining walls, fences, plants, sprinklers, and drainage. Based on the desired maintenance activities, the ACC proposed approximately $105,400 of reserve revenue to be collected over a five-year term (Table 2).
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Proposed Engineer’s Report/Assessment
An Engineer’s Report was prepared to support the increased assessment. The 2022 Report builds upon the 1992 Report with the following key modifications:
· Reclassification of lots 4, 5, 6, 7, 8, 22, 23, 24, 25, 26, and 27 from Basic to Landscape Easement lots to properly allocate those receiving special benefits. Lots 62 and 53 were reclassified from Landscape Easement to Basic lots due to the absence of special benefit received.
· SHP’s oil lots were excluded from the assessment as SHP does not receive any special benefit as a result of enhanced landscape care within the surrounding area. SHP has agreed to enter into a Property Maintenance Agreement (Attachment D) to maintain their own landscape to current or better conditions.
· The 2022 Report identified a specific assessment roll for each parcel. The report reflects the planned increase to the annual property tax bill for FY 2022-23 for both Basic and Landscape Easement lots of $19.62 per month. Future assessments are as follows: a 10% increase in FY 2023-24, a 10% increase in FY 2024-25, a 4% increase in FY 2025-2026, and a CPI increase every year thereafter. FY 2023-24 through FY 2025-26 will also include a not-to-exceed 3% CPI increase in addition to the base increase. The proposed increase will fund a dedicated reserve in the amount of $27,495 in Year 1 and $105,400 over a five-year term.
Community Outreach
Two community meetings were held to inform residents about the upcoming Prop. 218 proceeding and assessment increase. The first community meeting, organized by staff, took place virtually on March 23, 2022. Twenty-four residents attended and were presented with the data from Table 3 (following) showing the difference between the FY 2021-22 budget and the proposed FY 2022-23 assessment. Residents had the opportunity to ask questions of staff, and the majority voiced support for the need to maintain the aging infrastructure and landscape throughout the district as well as the increased assessment.
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The second meeting, organized by the ACC, was held in person on April 25, 2022 at Discovery Well Park. The meeting was intended to increase community participation in the Prop. 218 process.
Property Maintenance Agreement between the City and SHP SHP owns five parcels within the LLMD. During the evaluation process by the Assessment Engineer, it was determined that SHP’s lots do not receive any special benefits from being part of the district.
Enhanced landscape maintenance at areas surrounding the oil lots will not increase the desirability nor value of the oil lots.
Two of the five lots owned by SHP are currently used by the community as improved open space.
Three of the five lots are fenced with no access to the public due to safety reasons. The proposed Property Maintenance Agreement requires SHP to maintain all SHP lots and frontage to minimum levels of landscape care pursuant to Exhibit C of the Agreement.
Public Hearing and Ballots
A Notice of Public Hearing and Assessment Ballot Proceeding, and accompanying Assessment Ballot will be distributed beginning April 27, 2022. A ballot may be completed by the owner of record or a legally authorized representative. Property owners can support or oppose the proposed increase to the assessment to be levied on the identified parcel. Specific instructions will be provided on the ballot allowing voters to vote “YES” or “NO”. All ballots must be received prior to the conclusion of the Public Hearing on June 14, 2022. The City Clerk will open and tabulate the ballots following the CITY OF SIGNAL HILL Page 5 of 6 Printed on 4/21/2022
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conclusion of the Public Hearing at the June 14 Council meeting.
Potential Assessment Outcome
If there is no majority protest, the Council may approve the proposed increase pursuant to the Engineer’s Report, creating a dedicated reserve of $27,495 in FY 2022-23 and $105,400 over a fiveyear term. Table 4 shows the projected monthly assessment for each lot, excluding the CPI increase.
Table 4
If there is a majority protest, a second Public Hearing will be scheduled for June 28, 2022, to adopt a revised Engineer’s Report with a methodology similar to the 1992 report. Property owners will see a decrease in their assessment fee due to the exclusion of SHP from the assessment. The current reserve balance will not be supplemented, and the district-wide improvements listed in Table 2 will be postponed indefinitely until additional funds are available. Landscape maintenance will continue at the current level of service.
Reviewed:
_________________________
Sharon del Rosario
Approved:
_________________________
Hannah Shin-Heydorn
Attachments
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