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 20, 2023 - Maintenance Assessment District 01-01 (Marina Cove). (Public Works 27741530)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
To levy next fiscal year's assessments for the Marina Cove Maintenance Assessment District 01-01 (District), the City of Alameda (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 assessment district. Staff is now bringing a draft Report outlining the proposed budgets and assessments for the coming year for preliminary City Council approval as well as approval to set a public hearing for June 20, 2023. After the public hearing, City Council will consider approving the assessment for the following year.
BACKGROUND
On June 7, 2002, City Council established the District, whose purpose is to provide maintenance for the sidewalks, landscaping, and City Park in the Marina Cove development (see Exhibit 1 for map).
To levy the next fiscal year's assessments, the City is required to follow a prescribed legal process. This annual process began on February 21, 2023, with the City Council's appointment of an Engineer-of-Work (Engineer) and an Attorney-of-Record (Attorney) for the District. Staff now seeks City Council’s preliminary approval of the draft Report detailing the proposed budget and assessments for the coming year and setting a public hearing date of June 20, 2023. After the hearing, City Council will consider approving the assessments for the following year.
The resolution is required to be published once in a local paper with a minimum of 10 days between the first notice of publication of the resolution and the public hearing.
DISCUSSION
This District funds the maintenance of street trees, medians, sidewalks, pathways, irrigation, lighting, associated utilities and administration of the District. The Report (Exhibit 2), 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 an estimated annual budget to maintain the public improvements within the district.
When the District was established, an automatic annual Consumer Price Index (CPI) increase was pre-approved. Accordingly, for the coming year the assessments for the District are set to increase by 5.302% or $6,492.30, which is the CPI for the Bay Area for the year ending February 2023. This would be the maximum assessment and would bring the District’s Fiscal Year (FY) 2023-24 levy total to $128,938.46.
The purpose of the pre-approved CPI increase is to allow assessments to keep up with the rising costs of providing services within the District. To provide services for the coming year, the FY 2023-24 budget for the District proposes utilization of the maximum assessment. Previously, the District was paying for the full cost of park maintenance for the Marina Cove Park. Staff is currently finalizing a Fiscal Impact Analysis to ensure Marina Cove Park maintenance costs are correctly shared between this District and the Community Facilities District (CFD 14-1) that was formed in 2014 for the adjacent Marina Cove II/Marina Shores development. Such sharing of costs will ultimately reduce the budget for this District and allow for operating and capital reserves to be re-established.
The City Council has the option of approving the levy with the entire automatic CPI increase or some percentage below the maximum allowed 5.302%. Approving below the maximum allowed would not change the annual calculation of the maximum possible assessment, and in future years City Council could elect to set assessments at the maximum level. Forgoing or reducing the allowable increase would only impact this coming fiscal year’s assessment and would reduce the funds available for park maintenance and other city services. A significant portion of the District’s estimated reserve fund balance is being utilized in FY 2023-24, leaving a small remainder in FY 2024-25. Therefore, reducing the assessment would require a reduction in the level of service or General Fund supplemental funding for ongoing costs.
Staff proposes that City Council adopt a resolution to preliminarily approve the Report as presented and set the regular City Council meeting of June 20, 2023, 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 District is that the level of service would need to be reduced to bring the budget in line with the available assessment and/or supplemental General Fund funding 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
The District was created to maintain public improvements associated with the Marina Cove development. Direct costs associated with these services, such as landscape maintenance, are paid by the District. Funds not expended in a fiscal year remain within the assessment district (Fund 277) and may be used for future expenses. The cost to administer the assessment district, including full City cost allocation, in FY 2023-24 is approximately $45,150 plus county administration fees of $2,300 and is included within the proposed budget. There is no impact to the General Fund, however, any reduction in the maximum assessment would require funding from the General Fund to maintain services in the District.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
The work 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 20, 2023, Maintenance Assessment District 01-01 (Marina Cove).
Respectfully submitted,
Erin Smith, Public Works Director
By,
Emily Antenen, Management Analyst
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. District Map
2. Engineer’s Report