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HOLD PUBLIC HEARING TO APPROVE THE ANNUAL BUDGET AND ASSESSMENT ROLLS FOR THE 2023-24 HOLIDAY PARK MAINTENANCE DISTRICT
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RECOMMENDATION
This scheduled noticed public hearing is being held to consider public comments and testimony regarding the Holiday Park Maintenance District 2023-24 proposed Assessment budget and the levy of assessments.
At the conclusion of the public hearing, if a majority protest does not exist, it is recommended that the City Council adopt a resolution to:
1. Override any and all public hearing protests.
2. Approve the Annual Budget for Holiday Park Budget for FY2023-24.
3. Confirm and approve the assessment of $46,598 for the Holiday Park Maintenance District for FY2023-24.
4. Authorize the City of Stockton Chief Financial Officer to assess those parcels within the assessment district.
5. Certify the assessments meet the requirements pertaining to the levy of annual assessments.
6. Approve a subsidy in the amount of $116,735 from the Strong Communities Fund (210-000) to continue operations and maintenance of the facility.
7. Authorize the City Manager to take appropriate actions to carry out the purpose and intent of the resolution.
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Summary
The City of Stockton owns the Holiday Park swimming pool located at 5703 Kermit Lane. The facility had been operated and maintained through an agreement with the Holiday Park Recreation Association (“Association”) from the pool’s construction in 1969 until May 2019, when the pool’s operation and maintenance reverted to the city. The pool is now open to the public with residents of the maintenance district receiving a discounted fee to use the pool.
Annually, City staff submits a budget (Attachment A) for operations and maintenance to the City Council for approval. The City Council approved budget forms the basis of an assessment of parcels within the maintenance district (Attachment B) related to the pool. Each year a public hearing is held, and the certified assessment is submitted to San Joaquin County based on County assessed property values.
In 1996, California voters passed Proposition 218, after which increases to the assessment were only allowed by a vote of the residents. Consequently, residents of the district have not favored any increase in the assessment to keep up with the cost of the pool maintenance and repair cost. The assessment rate has thus remained at $46,598 since 1996. The cost of operations has significantly increased over time and is higher than the annual assessment revenues.
From 2015 to 2017, the City Council approved a subsidy from the General Fund to keep the pool open to serve the community. Since 2017 the subsidy has been appropriated from the Strong Communities Fund, per City Council approval, on the condition that the Association would seek additional sources of funds and engage the district members to consider an election to raise the assessment. No additional funding sources were secured, and a survey of district members by the Association indicated there was no willingness to engage in the election process to increase the assessment.
In 2019, the agreement with the Association expired, and the pool was returned to the city. The 2019 assessment funds were used for significant repairs to the pool. In 2020, the city reopened the pool for the swim season, and assumed responsibility for pool operations. The 2021 and 2022 assessment funds were also used for repairs to the pool and opening of the swim season.
DISCUSSION
Background
On January 6, 1969, the City of Stockton completed the acquisition of two parcels 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 Holiday Park 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 27450 creating the Holiday Park Maintenance District whereby the property lying within the district would be wholly assessed for the costs of maintaining, operating, and making necessary improvements, repairs, and upgrades to meet health and safety codes at the Holiday Park swimming pool.
There are 304 parcels assessed within Holiday Park Maintenance District. The assessment rate is established each year based on estimated expenditures and levied on parcels according to the County’s assessed valuation for each individual parcel within the district. In 1996, California voters passed Proposition 218, after which increases to assessments were only allowed by a vote of the residents. Votes to increase the assessments have failed to pass, thus the assessment has remained at $46,598 since 1996, an average cost of $153 per parcel. Of that assessment, San Joaquin County receives a fee of $700, and the City of Stockton Community Services Department receives $1,700 to administer the assessment. 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.
From 1969 to 2019, the City contracted with the Association to maintain, operate, and make necessary improvements, repairs, and upgrades.
Due to financial hardships resulting from increasing costs and fixed assessment revenues, the pool was closed for the 2011, 2015 and 2019 swim seasons (approximately Memorial Day to Labor Day) because the assessment revenues were well below the expenses to repair, maintain, and operate the pool. Starting in 2015, the city began subsidizing the Association to keep the pool open while the Association board developed additional revenue sources.
In 2017, the Board requested an increased subsidy. City staff advised the Board the subsidy would not increase, and the Board agreed to poll the Association membership for a vote to increase the assessment or the pool could face closure due to deferred maintenance. City staff met with the Board and offered limited financial support for the budget shortfall, and the City Council approved a modest General Fund subsidy of $6,663. This was offered in part because City insurance requirements for pool operators had increased. Staff informed the Board that the subsidy would not continue to increase and explained the process and timeline for increasing the Assessment. The Board shared the requirements with the membership, and the city was notified that few residents in the Association were in support of increasing the assessment, even if it meant closing the pool.
In 2018, the City provided an additional $6,663 General Fund subsidy to assist with the shortfall while the Board worked to establish new revenue sources for pool operations. During the 2018 swim season, the pool facility was damaged by a hit and run driver, and the Community Services Department provided additional funds to assist with necessary health and safety repairs. Even with support from the city, the Board was unable to raise additional revenue to pay for a full season of operation and maintenance costs.
City Staff met with the Board president and treasurer on September 29, 2018, to discuss the future of the Association operating the pool. Staff held four formal meetings and regular telephone calls with the Board to find solutions to the operating deficits. On March 21, 2019, the Board informed the City that the Association did not have the ability to develop a financial plan, the support for increased assessments, and could no longer operate the pool for the 2019 season. Furthermore, the Association allowed the operations agreement to expire and did not seek renewal. Consequently, the City assumed responsibility for operating the pool, and on May 19, 2020, by way of Resolution 2020-05-19-1501 adopted the annual budget, confirming the Holiday Park Maintenance district assessment for fiscal year 2020-2021. It also authorized a subsidy of up to $12,902 from the Strong Communities Fund to supplement funding for pool operations. During the year, staff monitored operational expenditures, reviewed prior year actual expenditures, and in completing a full cost of operations estimate for the FY 2021-2022, found that additional operational costs were being absorbed by the city.
On May 25, 2021, Resolution No. 2021-05-25-1601 was approved adopting the annual budget and $75,809.00 subsidy, confirming the Holiday Park Maintenance District Assessment for fiscal year 2021-2022.
On April 19, 2022, Resolution No. 2022-04-19-1601 was approved adopting the annual budget and $81,489 subsidy, confirming the Holiday Park Maintenance District Assessment for fiscal year 2022-2023, authorizing the City of Stockton Chief Financial Officer to assess parcels within the district, and authorizing the City Manager to take all appropriate actions to implement.
Present Situation
A portion of pool operations are funded through an assessment that is subject to an annual public hearing and resolution presented to the City Council approving the assessment roll to San Joaquin County. The $46,598 assessment, unchanged since 1996, is not enough to cover all repair, maintenance, and operating costs. In 2021, the pool maintenance services contract with All Season Pool service ($34,500) was moved from Public Works budget to Community Services Aquatics Budget. The FY 2023-2024 proposed budget for pool maintenance, repair and landscaping is $47,226 total.
For the 2022 Aquatic season, the four City pools still welcomed 19,159 visitors. Holiday Park pool was the second most used pool with 4,647 users (24 percent); Oak Park pool saw the most users with 7,696 (41 percent). The current assessment of $46,598 funds approximately 38 percent of the cost to maintain and open the pool for recreational swimming. The requested subsidy of $116,735.00 intended to cover the increased utility, maintenance, security, and operations of the Holiday Park pool, will allow the City to continue operating the pool for the upcoming 2023 swim season, offering pool access for the Stockton community. Along with the City’s three other pools, Holiday Park pool is scheduled to open for this summer’s swim season on May 29, 2023.
Public Notice
“A Notice of Intent to Hold a Public Hearing” has been published at least ten (10) days prior to City Council Action.
FINANCIAL SUMMARY
The Proposed Budget recommends that receipts from assessment continue to be collected in the Holiday Park Assessment Fund (Account 680-0000-239.10-00 [0000-000-210090-780-781-00-00-000-000-], a non-budgetary account).
Revenues from assessments cover the basic pool maintenance and landscape maintenance contract, but do not generate sufficient revenues for the remaining operational costs. The basic maintenance budget for Holiday Pool is included in the Recreation General Fund (5025-000-XXXXXX-100-125-000-000) and the remaining operational costs are funded by Strong Communities (5025-000-XXXXXX-210-000-000-000). The Proposed action will allow for the continued collection of assessments and for these revenues to be transferred to the Recreation Fund for all actual maintenance costs incurred. In addition, the recommendation will authorize a subsidy from the Strong Communities Fund of up to $116,735.00 to offset costs of operations and maintenance more than the revenue received.
The table below provides operating expense details for Fiscal Years 2021-2022 through 2023-2024:
Attachment A - Holiday Park Annual Budget
Attachment B - Holiday Park Assessment District Map