Title
Recommendation to Authorize the Interim City Manager to Execute a First Amendment in the Amount of $9,500 with NBS for a Total Expenditure Under the Agreement, as Awarded, of $28,000 for Phase 2 of the Process to Ballot Property Owners for Assessment Increases in the Island City Landscaping and Lighting District 84-2, Zone 4; and
Adoption of a Resolution Amending Fiscal Year 2018-19 Operating Budget for the Island City Landscape and Lighting District Zone 4 Fund. (Public Works 275.4)
Body
To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
Assessments in Zone 4 (Park Street) of the City’s Landscape and Lighting District (LLD) 84-2 fund the area’s enhanced maintenance. These assessments have remained unchanged since the early 1990s. As a result, the level of maintenance has significantly decreased.
At the request of the Downtown Alameda Business Association (DABA), the City of Alameda (City) entered into an agreement with NBS in November 2018 to complete the first phase of the process to increase assessments. This first phase involved preparation of parcel data, establishing zone boundaries and services to be funded, and preparation of a findings report.
Staff seeks the City Council’s approval to amend the expenditure section only of NBS’ agreement to include this project’s second phase. This second phase covers the assessment methodology, an engineer’s report, and the balloting itself. If the City Council approves this item, staff will return in April to request the City Council’s permission to initiate the balloting proceedings for the proposed increase in assessments.
BACKGROUND
The City's LLD began in 1984 and has six zones throughout the City. Zone 4 covers Park Street from the Park Street Bridge to San Jose Avenue, including some adjacent streets. Property owners in this zone have an average yearly assessment of approximately $374. The assessments pay for maintenance of this zone’s public areas including sidewalks, litter cans, and landscaping. These assessments have been unchanged since the early 1990s. Since that time, annual costs have increased without any additional revenue. As a result, the level of maintenance has decreased.
In 2013, staff began discussions with the DABA board regarding an assessment increase. In 2014, DABA requested the balloting be postponed to the following year. The balloting occurred the next year and, on July 7, 2015, ballots were tallied: 26% cast in favor, 74% opposed. The balloting did not pass, and existing assessments remained unchanged.
As part of the routine annual process to set assessments, the City Council must approve a budget for each zone for the coming year. With the total cost of services for the zone set to exceed the total assessment, the FY 2018-19 Budget required the use of the zone’s remaining reserves at the time and a $7,421 service cut.
In the fall of 2018, DABA requested City staff initiate balloting to increase assessments. The City entered into a contract with NBS to proceed with the initial portion (Phase 1) of the balloting work. Phase 1 consists of special and general benefit analysis that includes preparation of parcel data, establishing zone boundaries and services to be funded, and preparation of a findings report in anticipation of proceeding with the next phase of the balloting. As the Phase 1 work is now complete, DABA has requested the balloting move forward. When the City Council considers this item, DABA will be able to report on the results of a survey of property owners suggesting the ballot’s likelihood of success.
DISCUSSION
To raise assessments, the City must follow a carefully proscribed legal process. A draft report must be developed and stamped by an assessment engineer. This report must include a budget for the zone, a special-versus-general-benefit analysis, and an assessment method. Then a preliminary Engineer's Report is drafted; property owners are balloted; a public hearing is held to confirm the results, approve the finalized Engineer’s Report, and take the necessary action to ensure an appropriate levy begins on July 1, 2019.
Every dollar a property owner pays in an assessment equals one vote, so it is a weighted ballot. The ballot is successful if there is a lack of majority protest, i.e., 50% of the votes are cast in favor of the proposed assessment.
If the balloting is successful, increased assessments would fund improved maintenance including sidewalk cleaning, more thorough maintenance of the public litter cans, more frequent tree pruning, regular updating of landscaping and seasonal holiday decorations, and establishing and maintaining healthier reserves for the zone.
If the balloting is unsuccessful, maintenance in the zone will continue to decline.
By approving this contract, NBS will complete Phase 2 of the assessment increase project and develop the assessment methodology based on the Phase 1 benefit analysis, prepare an engineer’s report, and perform all of the noticing, legislation, and reporting necessary to conduct a ballot to raise assessments in this zone. If approved, staff will return on April 16, 2019, to request City Council’s permission to initiate the proceedings to ballot for increased assessments, including preliminarily approving the Engineer’s Report and setting a date in June to conduct the required Public Hearing and tabulation of ballots. Additionally, staff will work with DABA to conduct a community meeting following the initiation of proceedings in April.
|
Contract |
Amount Added |
Total Contract |
Total Spent |
|
Original FY 2018-19 |
$ 0.00 |
$18,500.00 |
$11,700.00 |
|
1st Amendment |
$9,500.00 |
$ 9,500.00 |
$ 0.00 |
|
Total |
|
$28,000.00 |
$11,700.00 |
FINANCIAL IMPACT
The fund balance for Island City LLD 84-2, Zone 4 is currently insufficient to fund both phases of the balloting work. To proceed with this contract, the Island City LLD 84-2 Zone 4 Fund (275.4) will partially pay for the cost of balloting ($18,000) and pay the balance of these costs, if needed, with future assessments, which may result in service level reductions within the zone during this period. If the balloting is successful, the cost will be recovered by the increased assessments. The remaining cost of the balloting work ($10,000) will be paid for by the Fleet Industrial Supply Center Fund, which has sufficient appropriations to cover its share of costs. The DABA Business Improvement Area Board made a $10,000 contribution to the Island City LLD 84-2, Zone 4 to provide financial support of the balloting work. Staff recommends the City Council amend the Fiscal Year 2018-19 Operating Budget for the Island City Maintenance Zone 4 Fund by increasing revenue estimates by $10,000 and expenditure appropriations by $18,000. The funding for the additional $8,000 appropriations comes from available fund balance.
As a result of the changing legal landscape, NBS will perform an analysis and determine if there is a general benefit component within the LLD. This is a Proposition 218 special versus general benefit requirement. If general benefit is identified than the share of LLD costs proportionate to the general benefit will be paid by the General Fund (Fund 001).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in compliance with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under CEQA Guidelines section 15301 - Existing Facilities, and Section 15273 - Rates and Charges.
RECOMMENDATION
Authorize the Interim City Manager to execute a first amendment in the amount of $9,500 with NBS for a total expenditure under the agreement, as awarded, of $28,000 for phase 2 of the process to ballot property owners for assessment increases in the Island City landscaping and lighting district 84-2, zone 4; and adopt a resolution amending Fiscal Year 2018-19 Operating Budget for the Island City Landscape and Lighting District Fund.
Respectfully submitted,
Liam Garland, Public Works Director
By,
Liz Acord, Public Works Coordinator
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Original Contract
2. First Amendment