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PRELIMINARILY APPROVE THE FISCAL YEAR 2021-22 CENTRAL STOCKTON LIGHTING MAINTENANCE DISTRICT ANNUAL ENGINEER’S REPORT, PRELIMINARILY APPROVE THE PROPOSED FISCAL YEAR 2021-22 BUDGET, AND SET A PUBLIC HEARING FOR JUNE 8, 2021
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Preliminarily approve the Central Stockton Lighting Maintenance District Annual Engineer’s Report for the Fiscal Year 2021-22.
2. Preliminarily approve the proposed Fiscal Year 2021-22 budget.
3. Set a public hearing for June 8, 2021.
4. Authorize the City Clerk to publish notice of the public hearing.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
The Central Stockton Lighting Maintenance District (District) levies assessments to fund maintenance of specialty streetlights in the Oxford Manor area (Attachment A). The Landscaping and Lighting Act of 1972 (Act), under which this District was formed, requires annual preliminary approval of the District budget (Attachment B) and the Annual Engineer’s Report, and requires an annual public hearing for final consideration of the budget and Annual Engineer’s Report. The Engineer's Report is on file with the City Clerk, and is available for online viewing at: http://www.stocktonca.gov/government/departments/publicWorks/serviceCenter/streetLights.html.
The recommended resolution preliminarily approves the District’s Annual Engineer’s Report and the Fiscal Year (FY) 2021-22 budget, sets a public hearing for June 8, 2021, for the final approval of the FY 2021-22 budget and the Annual Engineer’s Report, and authorizes the City Clerk to publish notice of the public hearing. The proposed assessment rate for FY 2021-22 has not been increased from the rate for the current year.
The assessment formula provides for an annual escalator to the maximum allowable assessment and for adjusting the actual assessment. It is recommended that the FY 2021-22 maximum assessment be increased per the formula; however, it is recommended that the actual FY 2021-22 assessment remain the same as the FY 2020-21 assessment. This recommendation is a result of a comprehensive review and evaluation of current maintenance expenditures, long term capital needs, and available reserves.
DISCUSSION
Background
The City operates and maintains approximately 19,000 streetlights. In most areas of the City, the cost of operating and maintaining streetlights is funded from the Measure K Fund. However, in the area of central Stockton, a special street lighting District was formed to provide enhanced lighting. The enhanced lighting consists of more lights per block than a standard design would require, and more expensive, non-standard poles and fixtures.
The District was formed in 2011 and consists of 278 non-City standard streetlights in the Oxford Manor area. The District allows for assessments to be collected for the special benefit received as a result of the non-standard street lighting (Attachment A). The general benefit portion is included in the Public Works Operating budget.
The District sets annual assessments collected by the County with annual property taxes on each taxable parcel contained within the District. These annual assessments provide funding for operation, electricity, maintenance, and other administrative costs associated with the specialty lighting system, including preparing an Annual Engineer’s Report and assessment roll. The Annual Engineer’s Report contains the District’s budget. The budget details the maintenance and administrative costs for the Oxford Manor zone.
The total estimated revenue required for FY 2020-21 operation and administration costs was $48,490.08. The general benefit was determined to be $30,229.16. The remaining $18,260.92 was determined to be the special benefit and was funded by an assessment levied proportionately to the properties within the District and an appropriation from the reserve.
The special benefit received by each parcel is directly proportional to the Linear Front Footage (LFF) of each parcel fronting the enhanced lighting corridor or street. Therefore, the assessment per parcel was determined by first defining a “Unit Assessment Rate” (dollars per LFF) for the Oxford Manor zone. This assessment rate was calculated by dividing the total special benefit cost in the zone by the total LFF of the zone. This Unit Assessment Rate (dollars per LFF) was then multiplied by each parcel LFF to determine the special benefit assessment for each parcel. The actual FY 2020-21 LFF assessment rate was $0.288011. The maximum FY 2020-21 LFF assessment rate was $0.557949.
The District assessment was approved with an annual escalator. The escalator is the greatest of three percent, or the increase in the San Francisco-Oakland-Hayward All Urban Consumers Price Index. The escalator allows the assessment, when necessary, to keep pace with inflation without having to go through the time and expense to ballot the property owners. The maximum allowable assessment annually adjusts by the Consumers Price Index, while the actual assessment needed to cover a zone's expenses is determined based on the estimated expenses for the fiscal year. The annual increase from 2019 to 2020 of the San Francisco-Oakland-Hayward All Urban Consumers Price Index was 1.1 percent. Therefore, the maximum escalator that can be applied to the maximum allowable assessment for FY 2021-22 is 3.0 percent. The maximum allowable assessment has been increased by the maximum allowable escalator each year since the District was formed. The current maximum allowable assessment rate is $0.557949 per LFF.
Present Situation
A summary of the proposed FY 2021-22 budget for the District (Attachment B) is contained within the Annual Engineer’s Report, which is on file with the City Clerk. The budgeted expenditures include: energy use, bulb replacements, administration, replacement reserves, general maintenance, re-painting, knock downs, and contingency. Funding for expenditures is from assessments levied on the properties within the District and Public Works Operating budget.
The District was established with the expectation that longer-term refurbishment and gradual replacement of equipment would be accomplished utilizing a combination of operating and reserve funds. The reserve was reviewed and determined to be adequate. The reserve can fully fund planned upcoming work, such as fixture repainting.
The total proposed FY 2021-22 cost of the Oxford Manor area is $52,538.62, which is an increase of $4,048.54 from FY 2020-21. The increase is attributable to anticipated increases in utility costs and costs to replace a pole knocked down due to a vehicle collision. Since the reserve is fully funded and in order to keep the assessment the same as FY 2020-21, an appropriation from the reserve of $3,859.94 is proposed. The actual FY 2021-22 assessment rate is proposed to be $0.287868 per LFF. The maximum assessment rate is recommended to be increased the allowed 3.0 percent to $0.574687 per LFF.
At the end of each fiscal year, any unexpended funds are returned to the District’s reserve, which can be used to fund major repairs, such as wire and/or conduit replacement, foundation replacements, or other major repair or improvement.
The recommended resolution will:
1. Preliminarily approve the District’s Annual Engineer’s Report for FY 2021-22.
2. Preliminarily approve the proposed FY 2021-22 budget.
3. Set a public hearing for June 8, 2021.
4. Authorize the City Clerk to publish notice of the public hearing.
Notice of the public hearing is required to be published a minimum of ten days prior to the public hearing. The required notice will be published in The Record on or before May 25, 2021.
FINANCIAL SUMMARY
Total Proposed FY 2021-22 Assessments $15,813.10
Total Proposed FY 2021-22 Appropriation from Reserves $3,859.94
TOTAL PROPOSED FY 2021-22 SPECIAL BENEFIT BUDGET $19,673.04
(FUND 270-001)
Assessments are collected to fund the special benefit costs conferred to the properties in the District and held in a separate fund (Fund 270-001) for this purpose. Funds for the general benefit costs will be presented to Council for consideration during the normal budget process for the FY 2021-22 and are estimated to be $32,865.58.
There is no impact to the City’s General Fund or any other unrestricted fund as a result of taking the recommended actions.
Attachment A - Map of Central Stockton Lighting Maintenance Assessment District (Zone 4, Oxford Manor)
Attachment B - Proposed FY 2021-22 Budget