CITY OF SIGNAL HILL
STAFF REPORT
2175 Cherry Avenue • Signal
Hill, California 90755-3799
6/14/2022
AGENDA ITEM
TO:
HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM:
THOMAS BEKELE
PUBLIC WORKS DIRECTOR
SUBJECT:
PUBLIC HEARING - RESOLUTION ORDERING THE INCREASE, LEVY AND
ASSESSMENT FOR THE LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO.1 (LLMD); AND IF THE INCREASE FAILS, ADOPT RESOLUTION OF INTENT TO INCREASE LAST YEAR’S LEVY BY CPI AND SET A DATE FOR A NEW PUBLIC
HEARING
Summary:
Form of Notice: Notices and ballots were delivered to LLMD residents by mail on April 27, 2022; notice was published in the Signal Tribune newspaper per Government Code Section 65091 (a)(4) on June 3, 2022; and notice was posted in accordance with Signal Hill Municipal Code Section 1.08.010 on June 3, 2022.
The City Council will conduct a public hearing for the proposed increased assessment for the LLMD and order ballots to be opened and counted by the City Clerk. If a majority protest does not exist, the City Council will consider upholding the results of the ballot measure and approve a resolution ordering the levy of the new assessment.
If a majority protest does exist, the City Council will direct staff to initiate a new 10-day public hearing to occur on June 28, 2022, and will consider approving a revised Engineer’s Report.
Recommendations:
1. Open the 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. 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 and a simple majority will determine the passing or failing of the proposed assessment.
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3. Adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA,
DECLARING THE RESULTS OF THE PROPERTY OWNER PROTEST BALLOT PROCEEDING
CONDUCTED FOR THE LEVY OF INCREASED ASSESSMENTS WITHIN LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1, AND APPROVING CERTAIN RELATED ACTIONS
4. If a majority protest does not exist, adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA,
DECLARING THE RESULTS OF A PUBLIC HEARING, APPROVING INCREASED ASSESSMENTS FOR THE LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1, CONFIRMING THE ENGINEER’S REPORT, THE ASSESSMENT DIAGRAM AND
ASSESSMENTS RELATED THERETO, OVERRULING ALL PROTESTS CONCERNING THE
ASSESSMENTS, AND APPROVING THE LEVY AND COLLECTION OF ASSESSMENTS COMMENCING IN FISCAL YEAR 2022-23
5. If a majority protest does exist, adopt the following resolutions, 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
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
6. If a majority protest does exist, set the public hearing for June 28, 2022.
Fiscal Impact:
The LLMD operating budget is funded through assessments collected from property owners within the LLMD.
Provisions if a Majority Protest Does Not Exist
If a majority protest does not exist, meaning the weighted vote is “YES”, the total proposed assessment for FY 2022-23 is $84,682. The increase in assessment fees for FY 2022-23 includes the additional assessment of $19.62 per month for both Basic and Landscape Easement lots to fund a dedicated reserve. Table 1 below shows the proposed assessment property owners will see as part of their property tax in FY 2022-23.
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The proposed assessments for future years are as follows pursuant to the 2022 Engineer’s Report (Attachment A):
· FY 2023-24: 10% increase + a not-to-exceed 3% Consumer Price Index (CPI) · FY 2024-25: 10% increase + a not-to-exceed 3% CPI
· FY 2025-26: 4% increase + a not-to-exceed 3% CPI
· FY 2026-27 and on: CPI increase
Based on the proposed assessments, the revenue and reserve forecasts are as follows:
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) $27,945
Provisions if a Majority Protest Does Exist
In the event of a majority protest, meaning the weighted vote is “NO”, the operating budget for FY 2022-23 will be reduced to $58,677. This budget option does not include a dedicated reserve for the maintenance items listed in Table 4 below. The assessment will continue with the same methodology adopted in the 1992 Engineer’s Report which allows for a CPI-only increase. The proposed Engineer’s Report (Attachment E) also removes the oil lots from the assessment. Table 2 below shows the proposed assessment property owners will see as part of their property tax in FY 2022-23.
Distribution of the budget is shown on Table 3.
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Table 3 below shows the distribution of budget in the event of majority protest.
Table 3
Based on the proposed assessments, the revenue and reserve forecasts are as follows:
FY 2022-23 Revenue and Reserve Forecast
Proposed Revenues (FY 2022-23 Assessment) $66,217
FY 2021-22 Revenue $65,886
FY 2021-22 Reserve (projected ending balance) $29,323
FY 2022-23 Reserve (projected ending balance) $7,540
Strategic Plan Objectives:
Goal No. 1: Ensure long term fiscal stability.
Goal No. 5: Ensure an enhanced quality 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 as administered by City staff. 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 CITY OF SIGNAL HILL Page 4 of 8 Printed on 6/9/2022
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bounded by Tract 48512 and contains 95 individual lots as follows:
· 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 ballot be mailed 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 lawn care services. 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 expressed interest in creating 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 4).
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Proposed Engineer’s Report and 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. Therefore, the new total number of Basic lots is 26 and Landscape Easement lots is
64. · Signal Hill Petroleum’s (SHP) 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.
The proposed assessments for future years are as follows pursuant to the 2022 Engineer’s Report:
o FY 2023-24: 10% increase + a not-to-exceed 3% CPI
o FY 2024-25: 10% increase + a not-to-exceed 3% CPI
o FY 2025-26: 4% increase + a not-to-exceed 3% CPI
o FY 2026-27 and on: CPI increase
The proposed increase will fund a dedicated reserve in the amount of $27,945 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 5 showing the difference between the FY 2021-22 budget and the proposed FY 2022-23 assessment.
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showing the difference between the FY 2021-22 budget and the proposed FY 2022-23 assessment.
Residents had the opportunity to ask staff questions, and the majority voiced support for the need to maintain the aging infrastructure and landscape throughout the district as well as the increased assessment.
Table 5
The second meeting, organized by the ACC, was held in person on April 25, 2022 at Discovery Well Park. The meeting was intended to maximize 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 neither increase the desirability nor the value of the oil lots.
Two of the five lots owned by SHP are currently accessible to the public as improved open space.
Three of the five lots are fenced with no public access for 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.
If SHP chooses to develop any of the current oil lots, staff will prepare a separate Engineer’s Report in accordance with the Prop. 218 regulations at the time of the change in land use and present the applicable options for Council review.
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Public Hearing and Ballots
A Notice of Public Hearing and Assessment Ballot Proceeding, and accompanying Assessment Ballot were distributed beginning April 27, 2022, and completed at least 45 days prior to the public hearing.
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 were 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 conclusion of the Public Hearing at the June 14, 2022 Council meeting.
Reviewed:
_________________________
Sharon del Rosario
Approved:
_________________________
Hannah Shin-Heydorn
Attachments
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