Title
Adoption of Resolution Preliminarily Approving the Annual Report Declaring the City of Alameda's Intention to Order the Levy and Collection of Assessments and Providing for Notice of Public Hearing on June 21, 2022 - Island City Landscaping and Lighting District 84-2 (Various Locations). (Public Works 27041530, 27141530, 27241530, 27341530, 27441530, 27541530)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The purpose of the Island City Landscape and Lighting District 84-2, various locations, (District) is to provide enhanced maintenance in the public areas of the district’s six zones throughout the City of Alameda (City). To levy next fiscal year's assessments, the City is required to follow a prescribed legal process to prepare the annual Engineer’s Report (Report). This annual process began in February with the City Council’s appointment of an engineer and an attorney for the District. Staff is now bringing a draft Report outlining the proposed budgets and assessments for the coming year for preliminary approval, and approval to set a public hearing for June. After the set public hearing, the City Council will consider approving the assessment for the following year.
BACKGROUND
On June 7, 1984, the City Council established the District, whose purpose is to provide enhanced maintenance in certain zones throughout the City. This work, which varies among the zones, includes regular litter collection, landscape maintenance of the medians and planters, and sidewalk cleaning.
To levy next fiscal year's assessments, the City is required to follow a prescribed legal process. This annual process began on February 15, 2022 with the City Council’s appointment of an Engineer-of-Work (Engineer) and an Attorney-of-Record (Attorney) for the District. Staff now seeks the City Council’s preliminary approval of the draft Report outlining the proposed budgets and assessments for the coming year and setting a public hearing date of June 21, 2022. After the public hearing, the City Council will consider approving the assessments for the following year.
The resolution is required to be published at least once in a local paper with a minimum of 10 days between the first publication of the City's resolution and the public hearing.
DISCUSSION
The draft 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 draft Report provides an annual budget to provide enhanced maintenance within six zones throughout the City. Public Works staff worked with the stakeholders of the zones to prepare the proposed budgets and work plans for the coming year. Maps of the six zones are attached as Exhibit 1, and the draft Report, attached as Exhibit 2, provides an estimate of Fiscal Year (FY) 2022-23 costs for each zone. The zones for enhanced maintenance are:
Zone 1 - Lincoln Avenue, between Sherman Street and St. Charles Street: This zone is responsible for the maintenance of the landscaped medians in the 1100 and 1200 blocks of Lincoln Avenue, including the utilities for irrigation. The revenue received through the assessments for this zone is sufficient to cover the maintenance budget. For FY 2022-23, the property assessments will mostly remain unchanged from the previous year's assessment.
Zone 2 and Zone 3: [See Zone 8. In 2014, Zones 2 and 3 conducted a property owner balloting process to combine into one zone (Zone 8) and increase assessments.]
Zone 4 - Park Street, from the Park Street Bridge to San Jose Avenue, including areas of Webb Avenue, Lincoln Avenue, Santa Clara Avenue, Central Avenue and Encinal Avenue. This zone funds maintenance, supplies, and seasonal banners/decorations on Park Street.
The care of the young trees planted on Park Street as part of the Park Street Streetscape is proposed to be funded by Measure B reserves for the upcoming fiscal year.
In FY 2018-19, at the direction of the Zone 4 business association board (Downtown Alameda Business Association (DABA)), the Zone conducted a balloting to increase assessments, add areas to the district and fund improved sidewalk cleaning, better maintenance of the public litter cans and a healthier reserve. The balloting was successful and in FY 2019-20 the increased assessment was collected and Public Works staff started working with the Zone to increase services.
The revenues received through the assessments from this zone are sufficient to fund the proposed FY 2022-23 maintenance budget. For FY 2022-23 the proposed property assessment includes an annual Consumer Price Index (CPI) increase of 3.0%. Although the CPI for the Bay Area for the year ending February 2022 is 5.19%, the annual CPI increase for Zone 4 is capped at 3%.
At the request of DABA, the Association has asked that the $10,000 that was used to help fund the balloting process in FY 2018-19 be repaid to them in FY 2022-23. DABA agreed to budget one-third of the repayment for FY 2020-21, 2021-22 and 2022-23 resulting in a full repayment in FY 2022-23. This expense is included in the budget set forth for FY 2022-23.
The proposed budget for FY 2022-23 includes a one-time capital purchase of $50,000 for holiday decorations. Although the Zone has sufficient fund balance above and beyond the required operating reserve for this project, this purchase would reduce available fund balance for other capital improvements significantly. Staff has discussed this impact with DABA and they understand that future capital projects are subject to available fund balance, and that fund balance may need to be built up over time for future large costs.
Within Zone 4 the Engineer has also identified a general benefit, which is an overall and similar benefit to the people who do not live in or intend to conduct business within the Zone. The amount of general benefit of $6,100 that is provided from the Zone’s maintenance activities cannot be funded via property owners’ assessments. The funding for this portion will come from the General Fund.
Zone 5 - Harbor Bay Business Park: This zone funds irrigation and landscape maintenance within the Harbor Bay Business Park (HBBPA), including tree trimming, sidewalk and pathway repairs, streetlight maintenance, and utilities. Based on previous approval by the property owners, an automatic CPI increase is applied to the assessment. The revenues received through the assessments from this zone are sufficient to fund the proposed FY 2022-23 maintenance budget. For FY 2022-23, the proposed property assessment includes an annual CPI increase of 5.19%, which is the CPI for the Bay Area for February 2022. In prior years, the revenues received through the assessments from this zone were sufficient to fund the proposed annual budget. In FY 2021-22 the zone maintenance budget was reduced to begin reestablishing the required operating reserve and ensure the total budget does not exceed the maximum assessment. For FY 2022-23, the maintenance budget will be reduced again to complete the reestablishment of the operating reserve.
Zone 6 - Marina Village Commercial Areas: This zone funds irrigation and landscape maintenance costs within the commercial areas of Marina Village, including tree trimming, the linear shoreline park, sidewalk and pathway repairs, street lighting maintenance, and energy costs. The revenue received through the assessments from this zone and any accumulated fund balance is sufficient to fund 100% of the proposed maintenance budget. Based on previous approval by the property owners, an automatic CPI increase is applied to the assessment. For FY 2022-23, the proposed property assessment includes an annual CPI increase of 5.19%, which is the CPI for the Bay Area for February 2022.
As of July 1, 2021, Alameda Recreation and Parks Department (ARPD) has performed the Shoreline Park maintenance for this zone. This work is included in the proposed budget for the zone and funded by the proposed assessment.
Zone 7 - 1100 and 1200 blocks of Bay Street: This zone was created at the request of the property owners who wanted enhanced maintenance for the Elm trees along the 1100 and 1200 blocks of Bay Street. The accumulated fund balance for the Zone is sufficient to fund 100% of the proposed maintenance budget and capital improvements for the year. In FY 2016-17, the property owners requested a reduction in assessments to $100 per property (reduced from the previous assessment of $150 per property). In FY 2021-22, property owners requested that no assessment be levied. Property owners request that this reduction stay in place for the coming year. Staff is recommending that no levy take place this year.
Zone 8 - Webster Street from Central Avenue to Atlantic Avenue: This zone funds maintenance and seasonal banners on Webster Street. In 2014, Zones 2 and 3 conducted a property owner balloting process to combine into one zone (Zone 8) and increase assessments. The revenues received through the assessments from this zone are sufficient to fund the proposed FY 2022-23 maintenance budget. For FY 2022-23, the proposed property assessment includes an annual CPI increase of 5.19%, which is the CPI for the Bay Area for February 2022.
Within Zone 8 the Engineer has also identified a general benefit, which is an overall and similar benefit to the people who do not live in or intend to conduct business within the zone. The amount of general benefit of $3,149.73 that is provided from the zone’s maintenance activities cannot be funded via property owners’ assessments. The funding for this portion will come from the General Fund.
In 2016, the City started working with NBS to ensure that each zone has the appropriate operating and capital reserves.
City policy is to maintain an operating reserve consistent with Section 22569 of the Landscaping and Lighting Act as follows:
The estimate of the costs of the improvements for the fiscal year shall contain estimates for all of the following:
(a) The total costs for improvements to be made that year, being the total costs of constructing or installing all proposed improvements and of maintaining and servicing all existing and proposed improvements, including all incidental expenses. This may include a reserve which shall not exceed the estimated costs of maintenance and servicing to December 10 of the fiscal year, or whenever the city expects to receive its apportionment of special assessments and tax collections from the county, whichever is later.
A capital reserve is established and maintained consistent with any upcoming improvements in the zone(s). The Report was updated to show the reserves and fund balance for each zone and any proposed capital improvement plan for each zone.
The City Council has the option of approving the levy without the full automatic CPI increase for the applicable zones, or to instead lower the increase to a percentage below the maximum allowed (3% for Zone 4 and 5.19% for Zones 5 and 6). Doing so would not change the calculation of the maximum possible assessment, and in future years City Council could elect to set assessments at the maximum level. Instead, forgoing or reducing the allowable increase would only impact this coming fiscal year’s assessment.
Staff proposes that the City Council adopt a resolution to preliminarily approve the Report as presented and set the regular City Council meeting of June 21, 2022, as the date for the public hearing.
ALTERNATIVES
• Approve proceeding with levying assessments for the coming year at the allowable maximum assessment.
• Approve proceeding with levying assessments for the coming year at a rate below the allowable maximum assessment. The potential impact on the Zones of the District is that the level of service would need to be reduced to bring the budget in line with the available assessment and/or more reserve funds would be needed to keep the current level of service. Further use of reserves may impact the near term ability to complete capital improvements.
• Do not proceed with approving levying assessments for the coming year. The impact of this option would mean that the City will not be able to collect the assessments for the District and services would be reduced and/or another funding source required.
FINANCIAL IMPACT
Direct costs associated with this work, such as landscape maintenance, are paid by the assessment district, and apportioned to each zone based on the individual zone's percentage of the total work. Funds not expended in a fiscal year remain within the fund for the respective Zone and may be used for future expenses. The Zones are charged their proportional share of approximately $100,000 for fees and expenses related to the annual levy process for the entire District, which is then paid from the Assessment District Administration Fund (Fund 276). In addition, the City funds portions of the maintenance in the zones through the following program budgets (see table below). These budgets are subject to City Council appropriations within the operating budget for each department.
|
Fund/Program |
Purpose |
Amount |
|
Public Works Administration (31041500) |
General benefit contribution on Webster St. in Zone 8 |
$ 3,149.73 |
|
Public Works Administration (31041500) |
General benefit contribution on Webster St. in Zone 4 |
$ 6,100.00 |
|
Measure B (23041540) |
For young tree care and training within Zone 4 |
$ 25,500.00 |
|
Alameda Recreation and Park Maintenance (10051450) |
Maintaining the shoreline park along HBP within Zone 5 |
$ 15,000.00 |
|
Street Tree and Median Maintenance (10041540) |
Street tree maintenance for Zone 7 |
$ 3,000.00 |
|
Annual Assessment Administration (27641530) |
Administrative costs proportionally shared by each zone |
$153,061.00 |
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda 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; and statutorily exempt under CEQA Guidelines Section 15273(a) (Rates, Tolls, Fares, and Charges).
CLIMATE IMPACTS
Maintenance activities supported by these assessments can counter potential, near-term, negative impacts of climate change. The removal of litter and debris from public areas and thus the municipal storm drainage system will assist with providing better storm drainage and decreasing the risk of local flooding, results that improve local resiliency to potential climate change.
RECOMMENDATION
Adopt a resolution preliminarily approving the annual report declaring the City of Alameda's intention to order the levy and collection of assessments and providing for notice of public hearing on June 1, 2021 - Island City Landscaping and Lighting District 84-2 (various locations).
Respectfully submitted,
Erin Smith, Public Works Director
By,
Liz Acord, Public Works Coordinator
Financial Impact section reviewed,
Margaret L. O’Brien, Finance director
Exhibits:
1. Zones 1 through 8 Maps
2. Engineer's Report
cc: Gerry Beaudin, Interim City Manager