AGENDA ITEM
TO: HONORABLE MAYOR
AND MEMBERS OF THE CITY COUNCIL
FROM: CARLO TOMAINO
CITY MANAGER
BY: THOMAS BEKELE
PUBLIC WORKS DIRECTOR
SUBJECT:
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RESOLUTIONS APPROVING THE ENGINEER’S REPORT AND DECLARING INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1 (LLMD) FOR FISCAL YEAR (FY) 2024-25
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Summary:
The Landscape and Lighting Maintenance District (LLMD) was formed in 1992 to pay for the maintenance of common landscaped areas within the California Crown Tract. The California Crown Tract boundaries are located south of East Hill Street, north of East 19th Street, west of Temple Avenue, and east of North Orizaba Way. Annually, the City Council must initiate proceedings to renew the levy and collection of special assessments for the LLMD. The proposed resolution declares the City Council's intention to levy and collect the proposed assessments, approve the Engineer's Report, and set the Public Hearing for July 23, 2024. The total proposed assessment for all California Crown Tract lots for FY 2024-25 is $102,465.58. The proposed annual assessment for basic lots is $1,035.87, representing a ten percent increase of $94.17. The proposed annual assessment for landscape easement lots is $1,391.15, representing a ten percent increase of $126.47. Property owners approved the proposed assessments within the LLMD through the last Proposition 218 (Proposition 218) hearing that occurred on June 14, 2022.
Strategic Plan Goal(s):
Goal No. 1 Financial Stability: Ensure the City’s long-term financial stability and resilience.
recommendation
Recommendations:
1. Set the Public Hearing for July 23, 2024.
2. Authorize the use of funds balance or reserves from previous years from LLMD accounts for special projects, as approved by the Public Works Director, in accordance with the City’s Purchasing Policy.
3. Adopt a resolution, entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SIGNAL HILL, CALIFORNIA, INITIATING PROCEEDINGS TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2024-2025 WITHIN AN EXISTING LANDSCAPING AND LIGHTING DISTRICT PURSUANT TO THE LANDSCAPING AND LIGHTING MAINTENANCE ACT OF 1972, APPOINTING THE ENGINEER OF WORK, AND ORDERING THE PREPARATION OF THE ENGINEER’S REPORT
4. 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 2024-25 AND APPROVING THE ENGINEER’S REPORT
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Fiscal Impact:
The proposed LLMD operating budget for FY 2024-25 includes Proposed Expenditures totaling $100,558.00. The LLMD operating budget is funded through assessments collected from property owners within the LLMD. The total proposed assessment will show Proposed Revenues for FY 2024-25 at $102,465.58. The proposed assessment reflects a 10% increase approved by property owners within the LLMD through the last Proposition 218 hearing that occurred on June 14, 2022. The goal of the increased assessment is to create a reserve to cover future costs for plant replacement, drainage installation, sprinkler replacement, and additional clean-up activities.
PROPOSED FY 2024-25 ASSESSMENT
FY 2024-25 Revenue and Expense Forecast
FY 23-24 Projected End Balance $ 71,583.00
FY 24-25 Proposed Revenues $102,465.58
FY 24-25 Proposed Expenses $ 100,558.00
FY 24-25 Projected End Balance $ 73,490.58
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 Tract. 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 2024 Engineer’s Report (Attachment A) is bounded by Tract 48512 and contains 95 individual lots as follows:
• 64 basic residential lots;
• 26 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, which amended the California Constitution by adding Article XIII D, limiting the ability of local government to generate revenue using special assessments, local taxes, fees and charges without taxpayer or property owner approval.
In addition, LLMD 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 maintenance 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 receive a special benefit over and above the benefits conferred on the general public.
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 regarding maintenance of the district. Based on the desired maintenance activities, the ACC proposed approximately $105,400 of reserve revenue to be collected over a five-year term. Community meetings were held in March and April 2022, to inform residents about the upcoming Proposition 218 proceeding and assessment increase for FY 2022-23. At that time, a majority of residents voiced support for the need to better maintain the aging infrastructure and landscape as well as the increased assessment. Therefore, in June 2022, the levy assessment with a new methodology identified in the 2022 Engineer’s Report was conducted (Attachment B). The 2022 Engineer’s Report included the following key points:
• 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 was reduced to 26 and Landscape Easement lots increased to 64.
• Signal Hill Petroleum (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. On April 26, 2022, SHP entered into a Property Maintenance Agreement with the City, to maintain its own landscape to current or better conditions (Attachment C).
• The 2022 Report identified a specific assessment roll for each parcel. The report reflects the planned increase to the annual property tax bill as follows:
o FY 2022-23: $19.62 per month increase
o FY 2023-24: 10% increase
o FY 2024-25: 10% increase
o FY 2025-26: 4% increase
o FY 2026-27: CPI increase
As part of the Proposition 218 proceedings, the City mailed 90 assessment ballots to property owners within the LLMD; 43 of those ballots were received prior to the close of the public hearing. Of these, 26 submitted assessment ballots were in support of the proposed assessments levy, and 17 assessment ballots were in opposition. The assessment ballots in support of the levy of the proposed assessments outweighed the assessment ballots in opposition, therefore, there was no majority protest established and the City Council adopted the resolutions declaring the results of the ballots and the increased assessments.
Analysis:
Based on the proposed FY 2023-24 budget plus planned special projects, the FY 2024-25 estimated operating budget for the LLMD is $100,558. The budgetary breakdown is as follows:
The City Council is required to initiate proceedings for the levy and collection of special assessments within the LLMD on an annual basis. The annual assessment for each of the 95 lots is shown on page eight of the 2024 Engineer's Report. The total proposed assessment for all lots for FY 2024-25 is $102,465.58. The proposed annual assessment for basic lots is $1,035.87, representing a ten percent increase of $94.17. The proposed annual assessment for landscape easements lots is $1,391.15, representing a ten percent increase of $126.47.
Staff meets on a monthly basis with ACC to provide an update on the ongoing maintenance and discuss potential maintenance items that require improvement. Projects slated for FY 2024/25 include the following:
The attached resolutions (Attachments D and E) declare the City Council's intent to levy and collect assessments for landscaping and maintenance activities within LLMD and approves the FY 2024-25 Engineer's Report. If approved, a Public Hearing would be scheduled for the July 23, 2024, City Council meeting, and a notice of the public hearing will be published pursuant to Section 22626(a) of the California Streets and Highways Code.
Reviewed for Fiscal Impact:
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Sharon del Rosario
Attachments:
A. 2024 Engineer’s Report
B. 2022 Engineer’s Report
C. Signal Hill Petroleum’s Maintenance Agreement
D. Resolution Ordering the Preparation of an Engineer’s Report
E. Resolution Declaring Intention to Levy and Collect Assessments