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CONSIDER BALLOTS FOR THE PROPOSED SAN JOAQUIN AREA FLOOD CONTROL AGENCY LEVEE CONSTRUCTION AND MAINTENANCE ASSESSMENT DISTRICT FORMATION AS RELATED TO CITY-OWNED PROPERTIES
recommended action
RECOMMENDATION
Consider ballots for the proposed San Joaquin Area Flood Control Agency (SJAFCA) Levee Construction and Maintenance Assessment District (LCMA) formation, as related to City-owned properties, and authorize the City Manager to execute ballots for City-owned properties in response to the proposed annual assessment.
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Summary
The City of Stockton is a Member Agency of the San Joaquin Area Flood Control Agency (SJAFCA). SJAFCA’s mission is to reduce and manage the region’s flood risk. Toward that end, the Agency has objectives and priority actions that include delivering projects and programs to improve flood protection. Separately, the San Joaquin County Flood Control & Water Conservation District Zone 9 (Zone 9), a division of San Joaquin County, maintains 112 miles of urban levees that protect approximately 90,000 Stockton properties including those improved by SJAFCA in 1994 to meet the 100-year level of flood protection for the area. SJAFCA is partnering with Zone 9 to advance an assessment that will raise additional funding to:
• Fund the local cost share (10 percent or $140 million) for the $1.4 billion Lower San Joaquin River Project that is currently under development by the US Army Corps of Engineers;
• Ensure continued Federal Emergency Management Agency (FEMA) accreditation of the levees protecting North and Central Stockton; and
• Address a $1.5 million annual budget shortfall between existing and needed revenues for the proper maintenance of existing levees within Zone 9.
On March 16, 2023, the SJAFCA Board of Directors adopted a resolution of intention to form an assessment district to provide the funding necessary to meet the objectives stated above. This action initiated an assessment ballot proceeding pursuant to the Benefit Assessment Act of 1982 (Government Code §54703 et seq.), Article XIII D of the California Constitution, and the Proposition 218 Omnibus Implementation Act (Government Code §53750 et seq.). A summary of the 630 assessed parcels with assessments totaling $14,995.10 and map showing these parcels is included in Attachment A. Copies of the 63 ballots (up to 10 parcels are listed per ballot) and Notice/Information guide sent to the City, as the City and the former Redevelopment Agency are included in Attachments B and C).
DISCUSSION
Background
SJAFCA, a joint powers authority of the City of Stockton, San Joaquin County, the San Joaquin County Flood Control and Water Conservation District, the City of Lathrop and the City of Manteca, is responsible for reducing flood risk for the greater-Stockton metropolitan region through planning, financing and implementing projects and programs to improve flood protection.
SJAFCA is partnering with the US Army Corps of Engineers (USACE) and the Central Valley Flood Protection Board on the $1.4 Billion Lower San Joaquin River Project. The project will improve 23 miles of levees along the Calaveras and San Joaquin Rivers and move the community closer to a 200-year level of flood protection. Ninety percent of all project costs ($1.26 billion) will be paid with state and federal funding. SJAFCA, as the local project sponsor, must provide the remaining 10 percent cost share (approximately $140 million).
The 2018 Lower San Joaquin River Integrated Interim Feasibility Report together with the Environmental Impact Statement and Report has been included as Attachment D. SJAFCA will also implement other improvements to ensure levees throughout the assessment district meet FEMA requirements for 100-year flood protection. This will avoid properties being mapped into Special Flood Hazard Areas. Residential and commercial properties in Special Flood Hazard Areas would be subject to the financial impact of mandatory flood insurance.
Zone 9 has experienced an annual $1.5 million budget shortfall between existing and needed revenues to maintain 112 miles of urban levees and address deferred maintenance items. This budget short fall is due to increasing costs associated with updated state and federal standards and necessary levee maintenance constrained by available funding. As a result, the Zone 9 levees must be maintained to strict state and federal standards to retain FEMA accreditation and eligibility for federal emergency funding following a flood event. The increased cost of complying with those strict state and federal standards were not factored into the existing assessment which was put in place more than 10 years before the changes that resulted from Hurricane Katrina in 2005. Failing to comply with those new standards may result in levee failures. Emergency repairs of inadequately maintained levees can cost as much as $25 million dollars.
Adequate funding will allow Zone 9 to comply with state and federal regulations for:
• Removal of debris that obstructs storm water and flood flows, or that otherwise damages levees and channels
• Vegetation removal and control
• Rodent removal and control
• Levee patrol during high water warning and flood stages
• Resurfacing of levee maintenance and patrol roads
• Minor repair of levee embankments and erosion protection
• Inspection and repair of gates
• Participation in and reporting for state and federal inspections and evaluations
• State and federal permit application and compliance
In early 2020, Zone 9 had a proposed new benefit assessment to generate additional revenue which was ready to be presented to the San Joaquin County Board of Supervisors that April, but due to the start of the Coronavirus Pandemic in March, the Proposition 218 balloting process was postponed. Following discussions with SJAFCA, Zone 9 decided to combine the proposed assessment. To fund the annual costs of levee maintenance and to finance the cost of levee improvements related to the Lower San Joaquin River Project, the total annual budget for the Assessment District for Fiscal Year 2023-24 is $7,684,000.
As part of the resolution of intention to form the Assessment District adopted by SJAFCA, SJAFCA preliminarily approved an Engineer’s Report that describes the methodology for determining the amount of benefit received by each property. The Preliminary Engineer’s Report (Attachment E) is available on the SJAFCA website at <https://www.sjafca.org/finance/levee-construction-maintenance-assessment>. Each property’s assessment is proportional to the amount of benefit received from the services funded provided by the assessment. Every property’s assessment differs based on property characteristics and what type of benefit it receives. The property location determines the category of benefit. Benefits can be placed into three categories:
1. Levee maintenance
2. Levee maintenance and repairs to non-Lower San Joaquin River Project levees
3. Levee maintenance and Lower San Joaquin River Project improvements
Generally speaking, the factors used to determine each property’s assessment include land use type, parcel size, location of the property, and flood depth. The benefit to each property is the avoidance of flood damage to land and structures resulting from adequate levee maintenance and/or levee improvements. Not all properties benefit from all categories.
Under California law, only property owners within the proposed assessment district boundary are eligible to vote on the proposed assessment. Each property’s vote is weighted by the amount of its proposed assessment. The assessment will not be imposed if the weighted votes against the assessment are greater than the weighted votes in favor.
If the assessment is not approved by property owners, the City of Stockton will lose out on the investment of over a billion dollars in state and federal funding needed to build the Lower San Joaquin River Project and provide the improvements needed for the Zone 9 levees. The additional flood protection and levee improvements are needed to keep the entire community, homes, property, businesses and residents safe now and into the future.
Present Situation
The City of Stockton and the former Redevelopment Agency collectively own 630 parcels that will receive benefit from the services provided by the Levee Construction and Maintenance Assessment. The proposed annual assessments for all of the parcels total $14,995.10 (Attachment A). The maximum authorized Assessment Rate may be increased in future years by an annual inflationary escalator based on the annual change in the Consumer Price Index, subject to a minimum of 0 percent and a maximum of 4 percent in any given year, upon approval by the SJAFCA Board of Directors. The City has been mailed 66 ballots (there are up to 10 parcels listed per ballot) that are being presented to the City Council for consideration.
FINANCIAL SUMMARY
As noted above, the City is the owner on record for 630 parcels that will receive benefit from the services provided by Levee Construction and Maintenance Assessment. If the assessment is approved by property owners and SJAFCA approves the formation of the Assessment District, the City would be directly billed by SJAFCA for the assessment on an annual basis. As described above, the maximum authorized Assessment Rate may be increased in future years by an annual inflationary escalator based on the annual change in the Consumer Price Index, subject to a minimum of 0 percent and a maximum of 4 percent in any given year, upon approval by the SJAFCA Board of Directors during a noticed meeting.
There is no immediate fiscal impact to the City as a result of taking action related to the ballots. The fiscal impact will depend upon the outcome of the ballot proceeding and any subsequent action taken by SJAFCA.
If approved, the initial fiscal impact to the City is estimated to be $14,995.10 in the first year, with an unknown annual escalator not-to-exceed four percent (4%). A separate item would be brought back to Council to appropriate funds for FY 2023-24, and budgeted accordingly during subsequent years.
Attachment A - Summary of Assessments for City of Stockton Owned Parcels and Map of Parcels and Assessment District Boundary
Attachment B - Assessment Ballots for City-owned parcels
Attachment C - Ballot Notice and Information Guide
Attachment D - 2018 Lower San Joaquin River Integrated Interim Feasibility Report and Environmental Impact Statement and Report
Attachment E - Levee Construction and Maintenance Assessment Preliminary Engineer’s Report