TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Steve S. Charelian, Finance Director
Libby Bretthauer, Financial Services Manager
SUBJECT:Title
Consideration of a Resolution Regarding the Declaration of Intention to Provide for Annual Levy and Collection of Assessments for Street Lighting Maintenance and Setting of Public Hearing for June 20, 2023 (Finance Director Charelian).
A) ADOPT RESOLUTION NO. 23-0047
B) SETTING PUBLIC HEARING DATE TO CONSIDER ASSESSMENTS FOR JUNE 20, 2023
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 23-0047 (1) declaring City Council’s intention to provide for the annual levy and collection of assessments for the Street Lighting and Landscaping Fund; and (2) setting the public hearing to consider assessments for June 20, 2023.
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FISCAL IMPLICATIONS:
The assessment rates remain unchanged from the prior fiscal year (FY) 2022-2023. The Assessment Engineer’s Report includes calculated assessments totaling $377,080 for FY 2023-2024. As the Proposed Budget included a preliminary estimate of $377,688, the FY 2023-2024 Budget presented for adoption on June 6, 2023, will be updated to reflect the estimate in the attached Assessment Report.
BACKGROUND:
At the April 4, 2023, City Council meeting, Resolution No. 23-0032 was adopted, ordering the preparation of the Assessment Engineer’s Report. This report, submitted by the firm of Harris & Associates, has been prepared in accordance with the Street Lighting and Landscaping Act of 1972. The method for the allocation of assessments, which remains unchanged from FY 2022-2023, is discussed in Part IV of the attached Engineer’s Report.
Two related Resolutions and reports regarding the annual levy and collection of street lighting assessments are presented for City Council consideration in separate items at this meeting. In a separate agenda item, staff requested that the City Council adopt Resolution No. 23-0046 to approve the Assessment Engineer’s Report, which is a required step in the process. If approved with this item, Resolution No. 23-0047 declares the City’s intention to levy and collect assessments and sets a public hearing in order for the City Council to consider assessments. Both Resolutions must be adopted in order to proceed with the process.
DISCUSSION:
Assessments are levied on the basis of benefit. The basic unit for allocation of benefit is the single family home which is equal to one Equivalent Dwelling Unit (EDU). All other land use is converted into this measure based on dwelling units or lot size of the parcel.
The Engineer has established six zones of benefit to allocate assessments, five of which employ the EDU method of benefit measure. For zone 10, which includes certain downtown business properties, the Assessment Engineer has determined that frontal footage is the best measure of benefit and uses the Adjusted Front Footage (AFF) basis.
The Assessment Engineer was supplied with revenue and expenditure estimates, as well as an estimated opening fund balance. The preliminary total assessment of $377,080 is based on the property tax roll as of March 2023. Upon receipt of the final roll for fiscal year 2023-2024, which will reflect final parcel changes for the new fiscal year, Harris & Associates will recalculate the total assessment using the rates as shown in the report. Based on history, the difference between the total assessment for the prior year and current year is typically less than $1,000.
The report includes assessments and corresponding operation and maintenance for each zone. Since approximately 10% of the Zone 10 Streetscape area is bounded by City Hall, the City assesses itself 10% ($13,517) of the Streetscape expenditure. Each zone is in a deficit position and is subsidized by a General Fund transfer. Please refer to the Cost Estimate Table in Part III of the Engineer’s Report for a breakdown by zone.
In the report to City Council on April 4, 2023, staff indicated that there is no opening balance for the Street Lighting and Landscaping Fund and that subsidies for all zones (zones 1-9 for street lighting and zone 10 for downtown streetscape) will be required. For fiscal year 2023-2024, total assessment revenues (including the City’s portion) are $390,597 and total expenditures are $695,449, leaving a deficit of $304,852. This amount is subsidized by the General Fund as follows: $290,701 for zones 1-9 and $14,151 for zone 10 (Downtown Streetscape). This subsidy is ongoing and will increase in future years if assessments remain fixed while costs continue to rise. Assessments, which were last adjusted in 1996, can only be increased by a Proposition 218 vote.
Subject to City Council approval of attached Resolution No. 23-0047, a public hearing will be held on June 20, 2023, after which City Council will consider adopting a resolution providing for the levy and collection of street lighting assessments. The assessments are then collected via consolidated property tax bills issued in October.
PUBLIC OUTREACH:
If the City Council adopts Resolution No. 23-0047, the City will provide public notice of the public hearing proposed for June 20, 2023.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Resolution No. 23-0047
2. Engineer's Report FY 2023-2024 (Including District Map)