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ADOPT RESOLUTIONS OF INTENTION AND SET PUBLIC HEARING FOR FISCAL YEAR 2016-2017 ANNUAL ASSESSMENTS FOR INDUSTRIAL STORM DRAINAGE BASIN MAINTENANCE
recommended action
RECOMMENDATION
It is recommended that the City Council adopt five resolutions of intention authorizing the City Manager to:
1. Preliminarily approve the Fiscal Year (FY) 2016-2017 annual assessments for the five Storm Drainage Basin Maintenance Districts proposed budgets.
2. Preliminarily approve and confirm the Engineer’s estimate of the itemized costs and expenses of the maintenance and incidental expenses contained in the proposed budget.
3. Approve setting a public hearing for June 21, 2016 for the following industrial storm drainage basin districts:
- Arch Road Industrial Park Storm Drainage Basin Maintenance District, Project Number 84-2 (Arch Road)
- Charter Way Industrial Site Storm Drainage Basin Maintenance District, Project Number 86-4 (Charter Way)
- Western Pacific Industrial Park Storm Drainage Basin Maintenance District, Project Number 81-1 (Western Pacific)
- Stockton Airport Business Center Storm Drainage Basin Maintenance District, Project Number 84-1 (Stockton Airport)
- Airport Gateway Center Storm Drainage Basin Maintenance District (Airport Gateway)
It is further recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of these resolutions.
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Summary
If approved, this action will preliminarily approve the proposed budget for the five Storm Drainage Basin Maintenance Districts and set the date for the public hearing to be held on June 21, 2016, for final approval of the same. Annual approval of the budgets is required by the Municipal Improvement Act of 1913 and the Stockton Improvement Code, Part V. Copies of the five budgets are on file in the Office of the City Clerk.
DISCUSSION
Background
The City Council, pursuant to Resolutions 85-0416, 86-1059, 88-0492, 88-0552, and 99-0400, authorized the formation of five storm drainage basin maintenance districts. These storm drainage basins are all located in industrial areas of Stockton. Attachment A is a map showing the location of each basin. Attachment B contains the budgets for each district. As a condition of their subdivision agreements, each developer was required to form a maintenance district to provide ongoing maintenance of the basins after construction was complete and the basins were turned over to the City. The formation of these districts was based on the provisions of the Municipal Improvement Act of 1913 (Act) and the Stockton Improvement Code (Stockton Code). The Act and the Stockton Code contain provisions for the City to form assessment districts for the maintenance and operation of improvements that impart special benefit to an area.
The purpose of these districts is to provide funding for the operations and maintenance of the storm drainage basins. The maintenance includes spraying for weeds, rodent control, and maintenance of fences, removal of debris/trash, and general upkeep of the basin. The original Engineer’s Reports, which were approved by the landowners at the time of formation of each District, detail how the City can legally calculate for the annual assessments. The Engineer’s Report for the Arch Road, Charter Way, and Western Pacific Districts did not allow for a Cost of Living Adjustment to be applied to increase the maximum allowable assessment over the years. Thus, these three basins remain at the same assessment. The Stockton Airport Business Center District was similarly established, but in FY 2004-05 parcels were annexed to the District. The annexed parcels of this District are subject to a Cost of Living Adjustment. The Stockton Airport Gateway District was established in 1999. All parcels in this District are subject to a Cost of Living Adjustment. Any changes to the formulas for the calculation of any of these assessments are subject to the requirements of a Proposition 218 vote of the impacted parcel owners.
Present Situation
Attachment B provides a summary of the proposed FY 2016-2017 budget and assessments for each district. None of the FY 2016-2017 assessments exceed the established Maximum Annual Allowable Assessments contained in the original Engineer’s Reports that were approved by landowner ballots or written consent of the landowners and approved by the Council as part of the district formation proceedings. The proposed budgets for the districts include engineering fees, attorney’s fees, estimated pond (basin) maintenance work, City of Stockton administration costs and a contingency.
By approving the five resolutions of intention, the City Council will:
1. Provide preliminary approval of the budgets for the maintenance of the improvements for the above listed maintenance districts for FY 2016-2017;
2. Set the date of June 21, 2016, for the respective public hearing for the final approval of the proposed budgets for all the districts; and
3. Direct that a public notice be published in The Record at least ten days before the hearing date (to be published by June 11, 2016)
The proposed FY 2016-2017 annual assessment rates for the Arch Road Industrial Park, Charter Way Industrial Site, and Western Pacific Industrial Park Districts are proposed to remain at the same level as the FY 2015-2016 annual assessment. A listing of the FY 2016-2017 annual assessment rates is included below:
|
District |
FY 2015-16 Assessment |
FY 2016-17 Maximum Allowed Assessment |
FY 2016-17 Proposed Budget |
|
|
|
(Recommended Council Action) |
|
Arch Road |
$17,373.00 |
$17,373.00 |
$17,373.00 |
|
Charter Way Industrial Site |
$13,000.00 |
$13,000.00 |
$33,841.00 |
|
Western Pacific |
$17,320.00 |
$17,320.00 |
$57,419.00 |
Administrative and maintenance costs for the Charter Way Industrial Site District are projected to exceed the maximum allowable assessments in FY 2016-2017 by $20,841, based on the contracted costs for preparation of the engineer’s report and maintenance of the district. Repairs to the access road and slope/siding of the basin are necessary due to long-term natural erosion. The additional repairs are estimated to cost $20,841 in FY 2016-2017 and will remedy safety concerns. This work will be performed by outside service consultants/vendors. Similarly, additional repair work is needed on the slope/siding of the Western Pacific Basin as a result of long-term erosion, which has escalated during the recent rainy season. The repair work is estimated to cost $40,099 more than the maximum allowable annual assessment. Staff recommends approving the full operational budget and the transfer of funds needed from reserve balance to cover the gap in expenses in both of these districts. Sufficient fund balance exists in reserve to cover the gap in costs not covered by the new assessment.
|
District |
FY 2015-16 Estimated Year- End Fund Balance |
Proposed FY 2016-17 Assessment |
Proposed Amount to Transfer from Fund Balance to FY 2016-17 Expenditure Account |
Anticipated FY 2016-17 Operational Expenditures |
Projected FY 2016-17 Fund Balance |
|
Arch Road Industrial Park |
$112,911 |
$17,373 |
$0 |
$17,228 |
$113,056 |
|
Charter Way Industrial Site |
$64,584 |
$13,000 |
$20,841 |
$33,841 |
$ 43,743 |
|
Western Pacific Industrial Park |
$85,299 |
$17,320 |
$40,099 |
$57,419 |
$45,200 |
The Engineer’s Report for the Airport Gateway Center District and the portions of the Stockton Airport Business Center District that were annexed in FY 2004-2005 contain provisions for an annual cost of living adjustment. Each year, the maximum annual assessments are increased in an amount equal to the greater of either 3.0 percent or the annual increase as shown in the Local Consumer Price Index (CPI) for the San Francisco-Oakland-San Jose All Items, All Urban Users as published by the Bureau of Labor Statistics for a similar period of time, which was 3.2 percent for December 2015.
For FY 2016-2017, the 3.2 percent adjustment has been applied to the calculation of the total maximum allowable assessment for Airport Gateway Center and only the annexed portions of the Stockton Airport Business Center Districts. Proposition 218 provides cities the latitude to approve the maximum allowable assessment if warranted based on estimated expenditures, or if estimated expenditures do not justify the maximum to collect a lesser amount.
Staff recommends that Council approve the maximum allowable assessment that will set the base for upcoming fiscal year calculations. However, the maximum allowable assessment for the Airport Gateway Center and the Stockton Airport Business Center Districts do not need to be assessed to meet projected operational expenses for these Districts in FY 2016-2017.
The actual FY 2015-2016 and proposed FY assessments for these districts are as follows:
|
District |
FY 2015-16 Assessment |
FY 2016-17 Maximum Allowable Assessment |
FY 2016-17 Proposed Budget |
|
|
|
(Recommended Council Action) |
|
Stockton Airport Business Center |
$13,149.60 |
$38,294.94 |
$20,404.00 |
|
Airport Gateway Center |
$28,258.00 |
$91,106.63 |
$28,258.00 |
The anticipated FY 2015-2016 year-end fund balances for these districts are as follows:
|
District |
FY 2015-16 Estimated Year-End Fund Balance |
|
Stockton Airport Business Center |
$266,675 |
|
Airport Gateway Center |
$277,621 |
Fund balances are for infrastructure replacement accounts to fund construction of new facilities at the end of their operational life.
The tax rolls submitted for collection show the approved maximum assessment as well as the actual amount that will be submitted for collection on the San Joaquin County property taxes.
FINANCIAL SUMMARY
The City makes no financial contribution to any of the Districts. All fees, costs and expenses incurred will be payable solely from the proceeds of the annual assessments to be levied and collected on the San Joaquin County tax roll, or from each District’s reserve funds. The use of the funds collected within the various districts is restricted by Proposition 218, to pay only the expenses related to the maintenance and operation of the specific storm drainage basin for which they were collected. The funds collected from the property owners of a district can only be used for the work on the basin in that district as it imparts special benefit restricted to the properties of that district. District funds are segregated and cannot be used to operate, maintain or support the activities of the stormwater or any other utility at large.
There is no impact to the City’s General fund or any other unrestricted fund as a result of taking the recommended action.
Administrative and operational costs for the maintenance of the Stockton Airport Business Center basin are offset with transfers from the Little Johns Creek Landscape Maintenance District No. 94-1 and Seabreeze Landscape Maintenance District No. 96-2 ($5,096 and $2,116 respectively) as the basin landscaping is provided for in those districts.
Attachment A - Storm Drainage Basin Districts Location Map
Attachment B - Budgets for Each District