Title
Adoption of Resolution Initiating Proceedings for a Proposed Increase in Assessments and the Filing of an Assessment Engineer's Report for Island City Landscaping and Lighting District 84-2, Zone 4 (Park Street); and
Adoption of Resolution Preliminarily Approving the Annual Report Declaring the Intention to Order the Levy and Collection of Assessments and Providing Notice of Public Hearing on July 7, 2015, Island City Landscaping and Lighting District 84-2, Zone 4 (Park Street). (Public Works 275400)
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Interim City Manager
Re: Adoption of Resolution to Initiate Proceedings for an Increase in Assessments, File an Engineer's Report, and Adopt a Resolution to Preliminarily Approve the Annual Report Declaring the Intention to Order the Levy and Collection of Assessments for Island City Landscaping and Lighting Maintenance District No. 84-2 Zone 4 (Park Street) and Provide Notice of Public Hearing on July 7, 2015
BACKGROUND
The City's Island City Landscaping and Lighting Maintenance District No. 84-2 (District) began in 1984. Zone 4 of the District covers Park Street from the Park Street Bridge to San Jose Avenue, including some adjacent streets. District assessments in this zone fund enhanced maintenance of the sidewalks, litter cans, and landscaping. These assessments have been unchanged since the early 1990s. Consequently, as costs have increased, the level of maintenance decreased.
In 2013, staff began discussions with the Park Street Business Association (PSBA) to explore increasing assessments to fund improved maintenance. The PSBA Board of Directors unanimously approved proposals to increase the property owners' assessments in FY 15-16. PSBA approved doubling assessments over three years with cost-of-living increases thereafter. Increased assessments would fund better sidewalk cleaning, more thorough maintenance of the public litter cans, more frequent tree pruning, and healthier reserves for its zone.
On February 4, 2014, the City Council awarded a contract to conduct the analysis, balloting, and reporting required to increase assessments in Zone 4 for Park Street. This analysis is complicated because any assessment increase triggers Proposition 218, which was passed after the District's founding. Proposition 218's "special benefit" analysis requires a parcel-by-parcel review of land use and benefits, rather than the previous analysis which was exclusively based on the parcel's acreage and frontage. The analysis also showed that some parcels in the district have not been assessed for some time and, additionally, some parcels receive benefit but are not assessed. State law mandates that any property that receives the special benefit must also be assessed. This balloting process corrects assessments to include parcels inadvertently skipped and those receiving benefit but not yet assessed.
As a result of these changes, the next year's average increase per property owner on Park Street is approximately 50%, as PSBA proposed. However, due to the special benefit analysis, the increase in each individual property owner's assessment will vary dramatically and, in some cases, decrease.
City staff shared the results of the analysis with the PSBA Board of Directors, who recommended proceeding with balloting of the property owners. PSBA held a property owners' meeting on April 20, 2015, to fully inform property owners and answer questions. Eight property owners were in attendance and discussed with City staff and PSBA the mechanics of the balloting process and what the additional assessment revenue would fund. At this time, PSBA recommends proceeding with the balloting process to increase assessments in the Park Street zone. Staff recommends initiating ballot proceedings on Park Street. A similar process was executed in 2014 with the West Alameda Business Association and resulted in a successful balloting to increase assessments in FY14-15 for the Webster Street zone of the Landscape and Lighting District 84-2.
DISCUSSION
To conduct the balloting of property owners for an assessment increase, the City is required to follow a prescribed legal process. In this step, the City Council adopts a resolution to initiate proceedings to increase assessments and to file the engineer's report. This step also includes adopting a second resolution to preliminarily approve the annual report, declare the intention to levy and collect assessments for FY15-16, and provide notice of a public hearing on July 7, 2015. The latter resolution is required to be published at least once in a local paper with a minimum of ten days between the first publication of the City's resolution and the public hearing.
With adoption of these resolutions, property owners in Zone 4 will be balloted by mail, postmarked no later than May 21. On July 7, the City Council will hold a hearing to tally the ballots and consider approving assessments for FY15-16. Unless there is a majority protest, the City Council may then consider approval of the increased assessments on Park Street. If there is a majority protest, then the proposed assessment increase will have failed and the existing flat assessments for Zone 4 will remain in effect. To make the County's tax roll, assessments must be submitted by early August.
The Engineer's Report was prepared by NBS, a consultant specializing in assessment districts, in accordance with Section 22565 et seq. of the California Streets and Highways Code. The report includes identifying boundaries, analyzing special versus general benefits, the methodology for assessments, and the assessments themselves. The report provides a maximum budget, which roughly doubles assessments over three years, and a FY15-16 budget, which shows the first year's overall increase of approximately 50%, when compared to the total assessments in FY14-15.
FINANCIAL IMPACT
The direct costs of enhanced maintenance is funded primarily through assessments. If the balloting succeeds, the budget for this zone will increase by $78,670 (from $60,313 to $138,984) by FY 17-18. The General Fund (Fund 001) is scheduled to contribute $4,698 for Park Street in FY15-16. This contribution is required to cover the general benefit portion of the improvements.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action does not affect the Municipal Code.
ENVIRONMENTAL REVIEW
In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under the CEQA Guidelines Section 15301, Maintenance of Existing Facilities.
RECOMMENDATION
Adoption of Resolution to Initiate Proceedings for an Increase in Assessments, File an Engineer's Report, and Adopt a Resolution to Preliminarily Approve the Annual Report Declaring the Intention to Order the Levy and Collection of Assessments for Island City Landscaping and Lighting Maintenance District No. 84-2 Zone 4 (Park Street) and Provide Notice of Public Hearing on July 7, 2015.
Respectfully submitted,
Liam Garland, Acting Public Works Director
By,
Liz Acord, Management Analyst
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibit:
1. Engineer's Report