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HOLD PUBLIC HEARING TO APPROVE THE ANNUAL BUDGET AND ASSESSMENT ROLLS FOR THE 2017-18 HOLIDAY PARK MAINTENANCE DISTRICT
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RECOMMENDATION
This scheduled public hearing is being held to consider public comments and testimony regarding the Holiday Park Maintenance District 2017-18 Proposed Assessment budget and the levy of assessments.
At the conclusion of the public hearing, it is recommended that Council adopt a resolution authorizing the City Manager to:
1. Overrule any all protests.
2. Approve the Annual Budget for the Holiday Park Pool Recreation Association for the fiscal year 2017-18.
3. Confirm the assessment of $46,598 for the Holiday Park Maintenance District for the fiscal year 2017-18.
4. Authorize the City of Stockton Chief Financial Officer to assess those parcels within the assessment district.
5. Authorize the City Manager to take appropriate actions to carry out the purpose and intent of the resolution.
6. Certify the assessments meet the requirements pertaining to the levy of annual assessments.
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Summary
The City of Stockton owns a swimming pool facility that is operated and maintained through an agreement with the Holiday Park Recreation Association (Association). Each year, the Association is required to submit a budget for pool maintenance and operations. The budget forms the basis for disbursing funds based on an assessment of parcels within a maintenance district (Attachment A) related to the pool. The assessment is submitted to San Joaquin County based on property values.
The pool not only serves the residents within the maintenance district, but it is also open to other members of the public. Those who do not reside in the maintenance district pay a fee to use the pool.
In 1996, California voters passed Proposition 218, after which increases to this assessment were only allowed by a vote of the residents, and consequently, the assessment has not increased since the mid-1990s because no vote has been held. Each year a public hearing is held, and the assessment must be approved by a City Council resolution prior to being submitted to the San Joaquin County Assessor’s Office.
The Holiday Park Recreation Association proposed budget (Attachment B) indicates, estimated operating expenses in 2017-18 will exceed assessment revenue by $6,663, due primarily to higher insurance requirements imposed by the City on all municipal pool operators. To mitigate this year’s shortfall, a $6,663 General Fund appropriation has been included in the proposed FY 2017-18 budget in the Community Services Department Recreation Division.
DISCUSSION
Background
On January 6, 1969, the City Council completed the acquisition of a parcel located at 5703 Kermit Lane, Stockton, California, on which the primary appurtenance was an aquatics facility, the Holiday Park swimming pool. The City accepted the pool and adjacent parking lot as part of a parcel land transfer, from the Holiday Park Recreation Association. On January 13, 1969, the City Council adopted Resolution No. 27,450, creating the Holiday Park Maintenance District whereby the lands lying within the district would be wholly assessed for the costs of maintaining and operating the aquatics facility.
Since acquiring the Holiday Park pool in 1969, the City has continuously leased the facility to the Holiday Park Recreation Association for operation and maintenance. The current agreement with the Association to lease, operate and maintain the facility and property was executed in 1993 with an original term of 15 years and extended in 2008 for ten years. The current agreement expires May 12, 2019.
There are 304 parcels assessed within Holiday Park Maintenance District Assessment Area. The assessment rate is established each year based on estimated expenditures and levied to parcels per the County’s assessed valuation for each individual parcel within the district. The assessment has remained at $46,598 since prior to 1999. Of that assessment, San Joaquin County receives a small fee of less than $500, and the City of Stockton Community Services Department receives $1,700 to administer the assessment and contract, meet with the Association, and prepare the budget and financial reports. The remaining assessment, as needed, has been used by the Association for operations and maintenance, including all utilities, chemicals, supplies, repairs, staffing, professional services, and insurance.
In the summer of 2011, significant repairs to the facility were required. A lack of reserves to finance those repairs stemmed from no increases to the assessment since prior to 1996, so the Association recommended the entire annual assessment be used for repairs, and consequently, the pool was not open to residents that year. In the summers since 2012, the annual assessments were again used for operating and maintaining the pool. Costs for minimum wage increases have impacted the budget, and the pool has limited revenue opportunities (monthly admission and snack bar) to improve the budget.
Due to the combined impacts of an assessment that has not grown, increasing costs of doing business, and higher insurance levels required by the City, the 2017- 2018 assessment will not be sufficient to operate the pool. To increase revenues, the Association allows access to the pool for Stockton residents outside the parcel footprint for a small fee. The 2017 swim season use fees will be $150 for a season pass, $100 for a monthly pass and $50 for a two-week pass.
The budget forecast for 2017-18 indicates that operating expenses will exceed assessment and other revenue by $6,663. An appropriation has been included in the proposed 2017-18 budget in the Community Services-Recreation Department for this estimated difference.
Present Situation
The City submits an assessment roll to San Joaquin County for the Holiday Park Maintenance District on August 1 of each year. Twice a year, in December and April the County submits the collected assessment revenues to the City. The City then forwards resources to the Association sufficient to meet the operating and maintenance needs of the facility for the ensuing year. The amount the City surrenders to the Association is based on a budget submitted by the Association prior to the assessment and an examination of the Association’s operating cash balance and current year financial position at the time of payment. Examination of the cash balance assures the City does not surrender to the Association more than is needed for projected operation and maintenance levels of effort.
The Holiday Park Pool is completely maintained and operated by Assessment funding levels that have not increased since Proposition 218 passed in the 1990’s. The cost of utilities, staffing, insurance, chemicals, repairs, and maintenance continues to escalate.
The resulting 2017- 18 proposed expenditure budget is $6,663 greater than the combined revenue from the assessment and other revenues. To address the shortfall, staff recommends funding up to an additional $6,663 if needed. Staff will work with the Association over the next year to determine revenue-generating options, including a vote by homeowners within the maintenance district to increase the assessment.
FINANCIAL SUMMARY
A 2017-18 budget for the Holiday Park Pool has been developed that takes into consideration increasing costs for operations, utilities and insurance. Costs are projected to exceed revenues by $6,663. A General Fund appropriation sufficient to cover the expected deficit has been included in the city-wide 2017-18 proposed budget in the Community Services-Recreation Department.
Receipts from the assessment are deposited in the Holiday Park Assessment Account 680-0000-239, withdrawn annually by the City under the direction of the Community Services Department, and paid to the Association to cover the reasonable operating and maintenance costs.
The City will receive $1,700 for administration costs of the assessment district for the fiscal year 2017-18, which is credited to revenue account 044-3611-349, Recreation Fund Charges for Services - Administration Fee Holiday Park Recreation Association.
Attachment A - Holiday Park Maintenance District Assessment Area Map
Attachment B - Holiday Park Recreation Association Proposed Annual Budget 2017-18