Item Number: 25
City Council / Board of Directors
Written Communications
Meeting of: December 17, 2024
Submitted By:
Jenele Davidson, Deputy City Manager
Scott Webb, Deputy City Manager
Subject:
Underfunded Landscape Maintenance Assessment Districts (LMADs) 1-4, Consultant Contract Award
Recommendation:
That the Honorable City Council:
(1) Adopt Resolution No. 24-090, amending the Fiscal Year 2024/2025 budget, approving an additional appropriation of $45,800 of General Fund funds and suspending Council Policy No. CP-97-3; and
(2) Award a contract to Willdan Financial Services in an amount not to exceed $45,800 for Assessment Engineering Services.
Fiscal Impact:
Should the Council move forward with staff’s recommendation, an additional appropriation of General Fund (Fund 100) dollars in the amount of $45,800 will be added to the Fiscal Year (FY) 2024/2025 budget for a contract with Willdan Financial Services (Willdan) to provide Assessment Engineering Services for LMADs 1-4.
These funds will be appropriated to 1004500-52300 (Engineering Department-Contract Services). If the Prop. 218 ballot measures are successful in LMADs 1-3, staff will move these expenses into the respective assessment district account. However, LMAD 4 does not have sufficient reserves to cover its proportional expenses of the proposed contract.
Therefore, should the ballot measure be successful, those expenses would remain in the General Fund.
Strategic Plan Goal:
Goal A: Financial Sustainability; Strategy 6. Evaluate underfunded Landscape Maintenance Assessment Districts to improve ability to finance desired City beautification projects.
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Background:
On June 6, 2023, the City Council requested an item to be brought back to the City Council to determine whether a position should be taken on a citywide landscaping beautification and upkeep effort, regardless of respective LMAD funding deficiencies.
Staff researched the matter surrounding the status of the City’s Landscape Maintenance and Assessment Districts (LMADs). LMADs 1-4 were formed without the legal authority to annually apply an inflator to keep up with yearly inflationary costs of goods and services associated with the maintenance and upkeep of the City’s LMADs. LMADs 1-4, which include various citywide properties, Eagle Ranch, Brentwood, and Old Town, are the four areas within the city that have experienced a reduction in services since costs have outpaced the revenue generated from those districts.
Staff have been successful in obtaining Community Development Block Grant (CDBG) funding to beautify a section of LMAD 1 on Nisqualli Road, east of 1st Avenue, and for the beautification of the paseo area located across from Brentwood Park. However, these two areas represent only a small part of the total landscaped area within the City’s landscape assessment districts in need of attention.
At the April 2, 2024 City Council meeting, the City Council provided direction for staff to move forward working toward long-term sustainability for the underfunded LMADs, without the utilization of Measure P funds.
Discussion:
Staff began discussions with Willdan regarding steps required to navigate the Prop 218 ballot process for LMADs 1-4 for increasing yearly revenues, as assessment districts are Willdan’s area of expertise. Willdan is currently the City’s consultant to provide annual administration assistance for all City assessment districts and has unique knowledge of the current financial state of LMADs 1-4, as well as strategies to navigate the Prop 218 balloting process and provide outreach to property owners.
Part of Willdan’s scope under the proposed contract will be reviewing the current financial state of LMADs 1-4 and providing options for the City to move forward with the Prop. 218 balloting process. The proposed contract (Attachment C) includes three outreach meetings, informational material preparation and distribution, and ballot distribution.
Pursuant to VMC 2.28.280(b), a negotiated contract for entering into a professional services contract is allowed.
City staff met with the City Attorney’s office to discuss funding options and were advised that assessment district funds can only be used for this endeavor if the ballot measures are ultimately successful. Due to the ballot measures occurring at the end of the project timeline, an alternative funding source is needed to start the project. As Council provided direction not to use Measure P funds for this effort, staff then began assessing the City’s ability to use General Fund dollars.
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Council Policy CP-97-3 (Attachment B) was adopted during a budget study session on July 15, 1997. The policy states that, “it was unanimously determined that these areas (LMADs) should be totally funded by the property tax assessments received and that no General Fund money is to be allocated for the maintenance of these sites.” Therefore, in order to move forward with awarding a contract to Willdan using General Fund monies, this Council Policy must be suspended. Proposed Resolution No. 24-090 (Attachment A) includes a provision to do so.
Additionally, Resolution No. 24-090 amends the FY 2024/2025 budget, appropriating $45,800 from the General Fund under the Engineering Department (1004500-52300) to begin the Prop 218 balloting process for LMADs 1-4, which is necessary to address revenue shortfalls and provide long-term sustainability. If the ballot measures are successful for LMADs 1-3, staff will move the proportional expenses from Fund 100 to Fund 370, under the respective assessment district accounts. However, because LMAD 4 does not have sufficient reserves to cover its proportional expenses of the proposed contract, should the ballot measure be successful, those expenses would remain in the General Fund.
Staff are recommending the City Council adopt Resolution No. 24-090 and award a contract to Willdan in an amount not to exceed $45,800 for Assessment Engineering Services for LMADs 1-4.
Staff are available for any questions you may have.
Attachments: A. Resolution No. 24-090
B. Council Policy No. CP-97-3
C. Draft Contract
D. LMAD Maps