TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Libby Bretthauer, Finance Director
Julie Bondarchuk, Financial Controller
SUBJECT:Title
Conduct Public Hearing and Consider a Resolution Providing for the Annual Levy and Collection of Street Lighting and Landscaping District Maintenance Assessments for Fiscal Year 2026-2027 (Budgeted) (Finance Director Bretthauer).
(Estimated Time: 15 Mins.)
A) CONDUCT PUBLIC HEARING
B) ADOPT RESOLUTION NO. 26-0057 PROVIDING FOR ANNUAL LEVY AND COLLECTION OF FISCAL YEAR 2026-2027 MAINTENANCE ASSESSMENTS
Body
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RECOMMENDATION:
Staff recommends that, after conducting a public hearing, the City Council adopt Resolution No. 26-0057 to provide for the annual levy and collection of Street Lighting and Landscaping District maintenance assessments for Fiscal Year (FY) 2026-2027.
FISCAL IMPLICATIONS:
The assessment rates remain unchanged from FY 2025-2026. The total assessments for FY 2026-2027 are $377,026.
Assessments have been fixed since 1996 with most single-family residences paying $17.03 per year. Costs, however, have continued to rise (notably electricity, gas, and capital improvements) and now exceed the revenue generated by the assessments. As a result, the General Fund has subsidized the Street Lighting and Landscape Fund since 2007, totaling nearly $3.9 million. The estimated subsidy in the upcoming fiscal year 2026-2027 is $270,687.
BACKGROUND:
The City provides for the maintenance costs of Citywide street lighting and downtown landscaping through a Street Lighting and Landscaping Assessment District. The district was formed pursuant to the California Landscaping and Lighting Act of 1972. The district must be renewed annually through a series of City Council resolutions, culminating with the June 16, 2026, public hearing and consideration of Resolution No. 26-0057.
The following is a summary of previous City Council actions:
April 21, 2026 - Adoption of Resolution No. 26-0019 ordering plans, specifications, cost estimates and the assessment engineer’s report of annual assessments.
May 19, 2026 - Adoption of Resolution No. 26-0039 approving the assessment engineer’s report for the annual levy of street lighting assessments for FY 2026-2027.
May 19, 2026 - Adoption of Resolution No. 26-0040 declaring the City Council’s intention to provide for the annual levy and collection of assessments for street lighting maintenance and setting the public hearing for June 16, 2026.
DISCUSSION:
The assessments for FY 2026-2027 ($377,026), combined with a City contribution of $15,278 for Downtown Streetscape (zone 10), will be used entirely for maintenance and operation of the street lighting (zones 1 through 9) and the Downtown Streetscape (zone 10). The City’s contribution of $15,278 represents the benefit that the City receives via the inclusion of City Hall frontage along Highland Avenue in the Streetscape area (zone 10). In addition, the General Fund will be providing an operating subsidy of $270,688 to cover shortfalls of $248,782 for street lighting (zones 1 through 9) and $21,906 for Streetscape (zone 10).
In summary, total estimated revenue, including the General Fund contribution and damage reimbursements for FY 2026-2027, is $492,304, while the budgeted expenditure for all zones is $762,992, resulting in an estimated deficit of $270,688.
As discussed during the FY 2026-2027 budget meetings and in prior staff reports, the Street Lighting and Landscaping Fund requires a subsidy from the General Fund to relieve the deficit in the current year and for the foreseeable future. Ongoing deficits can be alleviated through service-level reductions/efficiencies, increased assessments (requiring a Proposition 218 vote), or new revenue sources, which may also require voter approval.
PUBLIC OUTREACH:
This public hearing is the final step in the process to establish the FY 2026-2027 assessment. The public hearing was properly noticed in The Beach Reporter on June 4, 2026, and the assessment engineer’s report, map of assessment zones, and register of assessment levies are on file with the City Clerk.
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. 26-0057
2. Engineer's Report Landscaping and Street Lighting Maintenance Assessment District Fiscal Year 2026-2027 (Including District Map)