title
ADOPT RESOLUTIONS OF INTENTION AND SET PUBLIC HEARING FOR FISCAL YEAR 2015-2016 ANNUAL ASSESSMENTS FOR INDUSTRIAL STORM DRAINAGE BASIN MAINTENANCE
recommended action
RECOMMENDATION
It is recommended that the City Council adopt five Resolutions of Intention to provide preliminary approval of the Fiscal Year 2015-2016 annual assessments for the five Storm Drainage Basin Maintenance Districts proposed budgets and set a public hearing for June 9, 2015 for the following industrial storm drainage basins’ districts:
1. Arch Road Industrial Park Storm Drainage Basin Maintenance District, Project Number 84-2 (Arch Road)
2. Charter Way Industrial Site Storm Drainage Basin Maintenance District, Project Number 86-4 (Charter Way)
3. Western Pacific Industrial Park Storm Drainage Basin Maintenance District, Project Number 81-1 (Western Pacific)
4. Stockton Airport Business Center Storm Drainage Basin Maintenance District, Project Number 84-1 (Stockton Airport)
5. Airport Gateway Center Storm Drainage Basin Maintenance District (Airport Gateway)
body
Summary
If approved, this action will preliminarily approve the proposed budget for the five Storm Drainage Basin Maintenance Districts within the City and set the date for the public hearing to be held on June 9, 2015. Annual approval of the budgets, on file in the Office of the City Clerk, is required by the Municipal Improvement Act of 1913 and the Stockton Improvement Code, Part V. Final approval of the Industrial Storm Drainage Basin Maintenance Districts budget will be a part of the City’s Fiscal Year (FY) 2015-16 Annual Budget by Council on June 23, 2015.
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 and are used to capture stormwater during the wet season and are an essential part of the City’s flood control system. Attachment A is a map showing the location of each basin. Attachment B contains the proposed 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 completed 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, maintenance of fences, and general upkeep of the basin.
Four of the five Districts were formed prior to the implementation of Proposition 218, which requires any changes to assessments be approved by ballot by the property owners that will be affected by the assessments. Arch Road, Charter Way and Western Pacific were fully formed prior to Proposition 218, which went into effect in 1996. Because their annual assessments have not increased since their formation, they have not been subject to the ballot approval requirements of Proposition 218. Stockton Airport was also formed prior to implementation of Proposition 218, and the annual assessments to the original parcels have not increased since that time. In FY 2004-05 parcels were annexed to Stockton Airport following a Proposition 218 ballot procedure. As a result, the annexed parcels are subject to the requirements of Proposition 218, while the original parcels are not. The Airport Gateway District was established in 1999. All parcels in the Airport Gateway District are subject to Proposition 218 requirements.
Present Situation
Attachment B provides a summary of the proposed FY 2015-16 budget and assessments for each district. None of the Fiscal Year 2015-2016 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 the FY 2015-16;
2. Set the date of June 9, 2015, for the respective public hearing 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 May 30, 2015)
The proposed FY 2015-16 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 2014-15 annual assessments. A listing of the FY 2015-16 annual assessment rates is included below:
|
District |
FY 2014-15 Assessment |
FY 2015-16 Maximum Allowed Assessment |
Proposed FY 2015-16 Budget |
|
|
|
(Recommended Council Action) |
|
Arch Road |
$17,373.52 |
$17,373.52 |
$17,373.52 |
|
Charter Way Industrial Site |
$13,000.00 |
$13,000.00 |
$13,911.00 |
|
Western Pacific |
$17,320.00 |
$17,320.00 |
$17,320.00 |
Administrative and maintenance costs for the Charter Way Industrial Site District are projected to exceed the maximum allowable assessments in FY 2015-16 by $911, based on the contracted costs for preparation of the engineer’s report and maintenance of the district. This work is performed by outside service consultants/vendorsStaff recommends approving the full operational budget and the transfer of funds needed from reserve balance to cover the gap in expenses. A sufficient fund balance exists in reserve to cover the gap in costs not covered by the new assessment.
|
District |
FY 2014-2015 Estimated Year- End Fund Balance |
|
Arch Road Industrial Park |
$90,337 |
|
Charter Way Industrial Site |
$32,891 |
|
Western Pacific Industrial Park |
$62,957 |
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 2004-05 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 2.5 percent for 2015.
For FY 2015-16, the 3.0 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 2015-16.
The actual FY 2014-15 and proposed Fiscal Year assessments for these districts are as follows:
|
District |
FY 2014-15 Assessment |
FY 2015-16 Maximum Allowable Assessment |
Proposed FY 2015-16 Budget |
|
|
|
(Recommended Council Action) |
|
Stockton Airport Business Center |
$12,549 |
$37,686.68 |
$13,149.60 |
|
Airport Gateway Center |
$27,641 |
$88,281.62 |
$28,258.00 |
The anticipated FY 2014-15 year-end fund balances for these districts are as follows:
|
District |
FY 2014-15 Estimated Year-End Fund Balance |
|
Stockton Airport Business Center |
$322,577 |
|
Airport Gateway Center |
$254,477 |
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 proposed Industrial Storm Drainage Basin Maintenance Districts budget for FY 2015-16 is detailed in Attachment B. The accompanying resolution recommends preliminary approval of this budget with final approval with the City’s FY 2015-16 Annual Budget to be presented to Council on June 23, 2015.
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.
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.
There is no impact to the City’s General fund or any other unrestricted fund as a result of taking the recommended action.
Attachment A - Storm Drainage Basin Districts Location Map
Attachment B - Budgets for Each District