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ADOPT THE BUDGET FOR THE FISCAL YEAR 2021-22 CENTRAL STOCKTON LIGHTING MAINTENANCE ASSESSMENT DISTRICT
recommended action
RECOMMENDATION
This public hearing is to consider public comments and testimony regarding the Fiscal Year (FY) 2021-22 Central Stockton Lighting Maintenance Assessment District (District) Annual Engineer's Report, budget, and levy of assessments.
After the public hearing, if owners of more than 50 percent of the area of assessable lands within the District have not protested the proposed levy of annual maintenance assessments, it is recommended that the City Council adopt a resolution to:
1. Overrule any and all protests or objections (including all written protests not withdrawn in writing before the conclusion of the public hearing) to the proposed levy of assessments in the District in each zone.
2. Approve and adopt the District’s Annual Engineer's Report for the FY 2021-22 containing the budget for each zone and confirm and levy the assessments for each zone as set forth in the Annual Engineer's Report.
3. Certify that the special assessment(s), fee(s), or charge(s) to be placed on the FY 2021-22 Secured Property Tax bill by the City of Stockton are certified to meet the requirements of Proposition 218 that added Articles XIIIC and XIIID to the California State Constitution.
4. Confirm that the assessments of the annual amount of costs and expenses for the maintenance and operation of the improvements, upon the assessable lands in the District, as contained in the Annual Engineer’s Report, shall be levied and collected for FY 2021-22. The assessments are in compliance with all laws pertaining to the levy of the annual assessment (State of California Streets and Highways Code Section 22500). The assessments are levied without regard to property valuation. The purpose of the assessments is to pay the costs and expenses for administration, maintenance, and operation of the Central Stockton Lighting Maintenance Assessment District, Zone 4, Oxford Manor.
5. Authorize the City Manager or designee, on behalf of the City Clerk, to file the assessments or a copy thereof certified by the City Clerk, with the San Joaquin County Auditor and cause the assessments to be entered on the 2021-22 tax roll for the parcels in the District, Zone 4, Oxford Manor, as set forth in the Annual Engineer’s Report on file with the City Clerk.
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
This public hearing is to consider public comments and testimony regarding the FY 2021-22 District’s Annual Engineer's Report, budget, and levy of assessments. The Landscaping and Lighting Act of 1972 (Act), under which the District was formed, requires this public hearing and approval of the Annual Engineer's Report, budget, and levy of assessments. The FY 2021-22 Annual Engineer's Report for the District which contains the budget, assessment amounts, and description of improvements eligible to be maintained, is on file with the City Clerk and is available for online viewing at:
<http://www.stocktongov.com/government/departments/publicWorks/serviceCenter/streetLights.html>
The District levies assessments to fund maintenance of specialty streetlights in the Oxford Manor area (Attachment A). All funds generated from the assessments in the Oxford Manor zone can only be used for specific work in that zone.
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. It is further 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.
The recommended resolution overrules any and all protests; approves and adopts the District’s Annual Engineer's Report for the FY 2021-22 containing the budget, and confirms and levies the assessments as set forth in the Annual Engineer's Report; certifies that the assessments meet the requirements of Proposition 218 that added Articles XIIIC and XIIID to the California State Constitution; confirms that the assessments are in compliance with State of California Streets and Highways Code Section 22500, that the assessments are levied without regard to property valuation, and that the assessments are to fund maintenance of streetlights in public rights-of-way; authorizes and directs the City Manager or designee to execute all documents, including, but not limited to, agreements and amendments; and authorizes the City Manager to take appropriate and necessary actions to carry out the purpose and intent of the resolution.
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 after achieving a passing vote in a voting process established by Proposition 218. This process requires all benefiting property owners to be given the opportunity to vote on the establishment of a maintenance assessment district. For an assessment district to be established, a majority of the votes cast must be in favor. The District consists of 278 non-City standard streetlights in the Oxford Manor area (Attachment A) and allows for assessments to be collected for the special benefit received as a result of the non-standard street lighting. 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 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's 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 greater 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 Consumer 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 in calendar year 2020 of the San Francisco-Oakland-Hayward All Urban Consumers Price Index was less than 3 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.
On April 27, 2021, Council adopted Resolution No. 2021-04-27-1217, which preliminarily approved and confirmed the FY 2021-22 Annual Engineer’s Report, the proposed assessments, set a public hearing for June 8, 2021, and authorized the City Clerk to publish notice of the public hearing. The Annual Engineer's Report contains the budget, proposed assessment amounts, and a complete description of improvements eligible to be maintained. The Annual Engineer's Report is on file with the City Clerk.
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 total proposed FY 2021-22 cost of the Oxford Manor lighting 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 $3,852.07 is proposed. The actual FY 2021-22 assessment rate is proposed to be $0.288011 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 District was established with the expectation that long 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 District currently generates sufficient revenue for regular operation and has adequate reserves, so no change to the current assessment is in order.
The FY 2021-22 Annual Engineer’s Report for the District, which contains the budget, assessment amounts for each property, and a description of improvements eligible to be maintained, is on file with the City Clerk. The assessments fund the special benefit of 278 non-standard streetlights within the District.
After the public hearing, if owners of more than 50 percent of the area of assessable lands within the District have not protested the proposed levy of annual maintenance assessments, it is recommended that the City Council adopt a resolution to:
1. Overrule any and all protests or objections (including all written protests not withdrawn in writing before the conclusion of the public hearing) to the proposed levy of assessments in the District in each zone.
2. Approve and adopt the District’s Annual Engineer's Report for the FY 2021-22 containing the budget for each zone and confirm and levy the assessments for each zone as set forth in the Annual Engineer's Report.
3. Certify that the special assessment(s), fee(s), or charge(s) to be placed on the FY 2021-22 Secured Property Tax bill by the City of Stockton are certified to meet the requirements of Proposition 218 that added Articles XIIIC and XIIID to the California State Constitution.
4. Confirm that the assessments of the annual amount of costs and expenses for the maintenance and operation of the improvements, upon the assessable lands in the District, as contained in the Annual Engineer’s Report, shall be levied and collected for FY 2021-22. The assessments are in compliance with all laws pertaining to the levy of the annual assessment (State of California Streets and Highways Code Section 22500). The assessments are levied without regard to property valuation. The purpose of the assessments is to pay the costs and expenses for administration, maintenance, and operation of the Central Stockton Lighting Maintenance Assessment District, Zone 4, Oxford Manor.
5. Authorize the City Manager or designee, on behalf of the City Clerk, to file the assessments or a copy thereof certified by the City Clerk, with the San Joaquin County Auditor and cause the assessments to be entered on the 2021-22 tax roll for the parcels in the District, Zone 4, Oxford Manor, as set forth in the Annual Engineer’s Report on file with the City Clerk.
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.
Public Notification
Notice of the Public Hearing was published in The Record on May 25, 2021. The notice is required to be published a minimum of 10 days prior to the public hearing.
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 received by 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