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ADOPT THE BUDGET FOR THE FISCAL YEAR 2021-22 STOCKTON CONSOLIDATED LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT NO. 96-2
recommended action
RECOMMENDATION
This public hearing is to consider public comments and testimony regarding the Fiscal Year (FY) 2021-22 Stockton Consolidated Landscape Maintenance Assessment District No. 96-2 (Consolidated Landscape 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 Consolidated Landscape 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 Overrule any and all protests or objections (including all written protests not withdrawn in writing before the conclusion of the public hearing) to the proposed levy of assessments in the Consolidated Landscape District in each zone.
2. Approve and adopt the Consolidated Landscape 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 Consolidated Landscape District, as contained in the Annual Engineer’s Report, shall be levied and collected for FY 2021-22. The assessments comply 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 maintenance and operation of public parks and landscape improvements in public rights-of-way and public open spaces.
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 Consolidated Landscape District and each Zone within the Consolidated Landscape District 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 Consolidated Landscape District’s Annual Engineer's Report, budget, and levy of assessments. The Landscaping and Lighting Act of 1972 (Act), under which the Consolidated Landscape 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 Consolidated Landscape District contains the budget, assessment amounts, and a description of improvements eligible to be maintained. The Engineer's Report is on file with the City Clerk and is available for online viewing at:
<http://www.stocktongov.com/government/departments/publicWorks/serviceCenter/medians.html>
The Consolidated Landscape District levies assessments to fund maintenance of public parks, landscape improvements, and streetlights in public rights-of-way and public open spaces in 27 zones across the City. All funds generated from the assessments for each zone can only be used for specific work in that zone.
The assessments for 7 zones of the Consolidated Landscape District are fixed and cannot be increased without approval by a majority of the property owners. For FY 2021-22, it is recommended the actual assessment remain the same as FY 2020-21 for the 7 zones with fixed assessments.
The assessment formula for the remaining 20 zones where assessments are levied provide 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 in all 20 zones. This recommendation is a result of a comprehensive review and evaluation of current maintenance expenditures, long term capital needs, available reserves, and COVID-pandemic related economic pressures.
The recommended resolution overrules any and all protests; approves and adopts the Consolidated Landscape District’s Annual Engineer's Report for the FY 2021-22 containing the budget for each zone; confirms and levies the assessments for each zone 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 public parks, landscape improvements, and streetlights in public rights-of-way and public open spaces; 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.
All costs are funded by assessments levied on the properties in the zones of the Consolidated Landscape District.
DISCUSSION
Background
On February 26, 1996, Council adopted Resolution No. 96-0084 that consolidated the 8 Landscape Maintenance Districts that existed at that time into a single Consolidated Landscape District. The City used the provisions of the Act to establish the original individual districts and the Consolidated Landscape District. The Act contains provisions for the City to form an assessment district, or annex territory to an existing district, for the maintenance and operation of improvements that impart a special benefit to an area. Though the title of the Act references landscaping and lighting, a district can be formed to maintain a variety of improvements. These improvements include, but are not limited to, landscaping, fountains, ornamental structures, public lighting (such as streetlights and traffic signals), walls, irrigation, parks, and park equipment. The Consolidated Landscape District provides for the maintenance of these types of improvements in certain subdivisions throughout the City.
The Consolidated Landscape District sets annual assessments, collected by the County with annual property taxes, on each taxable parcel contained within the Consolidated Landscape District. These annual assessments provide funding for maintenance of the improvements, parks, inspection, repair and replacement of improvements, and other associated administrative costs, including preparing an Annual Engineer’s Report and assessment roll. The Annual Engineer’s Report contains the Consolidated Landscape District's budget. The budget details the maintenance and administrative costs for all affected zones. The property owners are responsible to fund only those improvements within their zone.
The assessments are apportioned in a manner to distribute the amounts among all assessable parcels in proportion to the special benefit conferred on each parcel. Each year all properties are evaluated to determine if they meet the criteria to be assessed. If they are to be assessed, a dwelling unit equivalent factor (dueF) is assigned to each parcel. The dueF is based on the parcel's use. A single-family residential lot is equivalent to one dueF. The dueF for other classifications of properties, such as multi-family or commercial, is determined by the Allocation of Costs and Method of Assessment Spread contained in the Annual Engineer’s Report.
There are 34 zones in the Consolidated Landscape District. During the FY 2020-21, no new zones were formed, and no new territory was annexed to any of the existing zones. Assessments are levied in 27 zones (Attachment A). Assessments are not levied in the remaining 7 zones as there are no improvements to maintain.
Of the 27 zones where assessments are levied, 7 of the zones (A-1 Weber/Sperry, A-2 Morada West, B-1 Long Park, B-2 Weston Ranch, B-3 Weston Park, C-1 Spanos East, and D-1 Bridgeport Trails) do not have a provision for an annual increase to the assessment. The assessment in these districts is at the same level as when the zones were originally formed in the early 1990's. Any increase in the annual assessment would have to be approved by a majority of the affected property owners. Consequently, not all of the current assessments collected are used for services. A portion of the current assessment collected is reserved to be able to afford future cost increases resulting from inflation.
Assessments in the remaining 20 zones were approved with an annual escalator. The escalator is the greater of 3.0 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.
On April 27, 2021, Council adopted Resolution No. 2021-04-27-1216, 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
Attachment B is a summary of the proposed FY 2021-22 budget for the Consolidated Landscape District and includes the proposed per dueF/single-family dwelling assessment for each zone where an assessment is proposed to be levied. The budgeted expenditures include: contracted maintenance, utilities, administration, repair and replacement of plant material and infrastructure, allocation to the replacement reserve, and a contingency. The budgeted revenues are from assessments on the property owners. For the zones that have a provision for an annual escalator, it is proposed that the maximum allowable assessment be increased by 3.0 percent.
The overall budget for FY 2021-22 is based on current expenditure projections and is approximately $5.064 million. This is an increase of approximately $40,000 from the 2020-21 budget and is primarily attributable to a small increase of 219 single-family dwelling units from new home construction in the Westlake Villages development in northwest Stockton.
For FY 2021-22, it is recommended the assessment remain the same for the 7 zones with fixed assessments. For the 20 zones where the assessment formula provides for an escalator, it is recommended that the maximum assessment be increased per the formula from the previous fiscal year. It is further recommended that the actual FY 2021-22 assessment remain the same as the FY 2020-21 assessment in the 20 zones that allow for an annual adjustment. This recommendation is a result of a comprehensive review and evaluation of current maintenance expenditures, long term capital needs, the Reserve for Continuing Appropriations fund balances, and COVID-pandemic related economic pressures.
The reserve funds have accumulated over a number of years to fund eventual replacement of improvements such as turf, trees, shrubs, irrigation system components, masonry block and pre-cast concrete back-up walls, and park improvements such as park play equipment, picnic structures, and bathroom buildings when those improvements reach the end of their service life. In zones where street lighting is an improvement whose maintenance is funded, the annual assessment is set at a rate to fund re-lamping and knock-down repairs/replacement as needed.
The comprehensive review and evaluation were completed by staff, following completion of a capital needs analysis by Siegfried Engineering, Inc. This combined effort analyzed current maintenance tasks, long term capital replacement needs, and reserve fund balance for each zone. The analysis identified additional maintenance/service tasks that should be performed, quantified service life and replacement estimates for the various improvements eligible to be funded by the Consolidated Landscape District and recommended the reserve amount to be set aside each year. The recommended reserve set aside is based on the current amount that is in reserve, the appropriate reserve balance for each zone (this number changes as the zone ages), and the recommended adjustment to each zone’s assessment to reach those levels (Attachment C).
Zones with Fixed Assessments
Zones A-1, A-2, B-1, B-2, B-3, C-1, and D-1 do not have a provision for an annual increase to the maximum allowable assessment. Any increase in the annual assessment in these zones would have to be approved by a majority of the affected property owners. In these 7 zones, there is a request for an appropriation from the reserve to balance each zone's budget. Each zone’s budget anticipates contracted costs such as routine scheduled maintenance service and utilities, and also includes eventual but unscheduled expenditures such as wall repairs. If the eventual but unscheduled expenditure was not budgeted, a mid-year appropriation requiring City Council action would have to be processed. To avoid a mid-year appropriation, funds for this type of eventual but unscheduled expenditure are budgeted. If the funds are not used, they are returned to the zone at the end of the fiscal year and are available for the next year. An appropriation from the reserve is the only way to balance the budget and efficiently provide for these types of eventual but unscheduled expenditures. Ultimately, given increases in costs in future years, the reserves in each of the 7 zones will be depleted, and the zones will become unable to fund maintenance at the level currently provided. Current projections are that the reserves in Zones B-1, B-2, B3, and D-1 will be adequate to continue the current service levels for the next five years.
Reserves in Zones A-1, A-2, and C-1 are not sufficient to continue appropriating funds at prior year levels without the zones falling into insolvency within the next two years. It is recommended that these three zones cease funding wall repairs. All walls are a development requirement and are constructed on private property. Stockton Municipal Code Section 8.36.040.D obligates the property owner to repair any wall constructed as a condition of development.
The following actions are further recommended:
• Zone A-1 - Reduce frequency of landscape maintenance services and irrigation. Water for irrigating the East Bay Municipal Utilities District property between Lorraine Avenue and West Lane is approximately 22 percent of the total proposed Zone A-1 Budget.
• Zone C-1 - Fund the proportionate share of Baxter Park maintenance costs, estimated at $22,500, from the General Fund, or consider reduction in maintenance services. When Zone C-1 was originally formed, the budget was set based on maintaining only the street landscaping installed with the development. Baxter Park’s maintenance cost was added to Zone C-1 in 1997 without an increase in the existing assessment. Annually increasing park maintenance costs are taking a larger percentage of the budget and requiring an ever-increasing appropriation from the reserve. If appropriations continue at past year’s magnitude, Zone C-1 will be insolvent in 3 years.
The table below shows the FY 2020-21 actual assessment, the recommended FY 2021-22 actual assessment, and what the per dueF assessment would be for budgeted expenditures. The ‘Cost per dueF for Budgeted Expenditures’ does not include an amount to capitalize a replacement reserve or fund replacement of larger expense items such as extensive landscape rehabilitation or booster pump replacement.
Zone FY 2020-21 FY 2021-22 Cost per dueF for
Actual (Fixed) Actual (Fixed) Budgeted Expenditures
A-1 $46.90 $46.90 $81.51
A-2 $79.88 $79.88 $79.88
B-1 $84.00 $84.00 $135.40
B-2 $117.82 $117.82 $197.99
B-3 $24.00 $24.00 $24.00
C-1 $119.24 $119.24 $133.03
D-1 $85.00 $85.00 $151.89
Zones with an Annual Escalator
There is no change proposed in the actual assessments for the 20 zones with an annual escalator. This recommendation is a result of a comprehensive review and evaluation of current maintenance expenditures, long term capital needs, the Reserve for Continuing Appropriations fund balances, and COVID-pandemic related economic pressures. The recommended budget includes an appropriation from the reserves to fully fund each zone's operating budget. The table below shows the FY 2020-21 actual assessment, the recommended FY 2021-22 actual assessment, and the FY 2021-22 recommended maximum assessment.
Zone FY 2020-21 FY 2021-22 Dollar Percentage FY 2021-22 Actual Actual Difference Difference Maximum
A-3 $253.00 $253.00 $0.00 0.00% $282.44
A-4 $171.40 $171.40 $0.00 0.00% $276.02
A-5 $550.00 $550.00 $0.00 0.00% $1,531.37
A-6 $293.80 $293.80 $0.00 0.00% $658.27
A-7 $99.80 $99.80 $0.00 0.00% $805.63
A-10 $154.50 $154.50 $0.00 0.00% $429.61
B-4 $97.00 $97.00 $0.00 0.00% $101.95
B-5 $75.60 $75.60 $0.00 0.00% $193.21
C-2 $250.00 $250.00 $0.00 0.00% $257.67
C-3 $142.00 $142.00 $0.00 0.00% $221.89
C-4 $78.40 $78.40 $0.00 0.00% $293.79
C-6 $92.00 $92.00 $0.00 0.00% $204.46
C-7/7A $334.20 $334.20 $0.00 0.00% $480.30
D-3 $215.00 $215.00 $0.00 0.00% $268.38
D-4 $114.80 $114.80 $0.00 0.00% $1,278.44
D-6 $11.78 $11.78 $0.00 0.00% $522.28
E-1 $197.20 $197.20 $0.00 0.00% $265.63
E-3 $375.00 $375.00 $0.00 0.00% $876.23
E-4 $11.60 $11.60 $0.00 0.00% $311.11
E-5 $120.00 $120.00 $0.00 0.00% $539.84
The FY 2021-22 Annual Engineer’s Report for the Consolidated Landscape District, which contains the budget, assessment amounts, and a description of improvements eligible to be maintained, is on file with the City Clerk. The assessments fund maintenance of over four million square feet of street landscaping, 68 acres of open space, 42 miles of back-up walls, 10.5 miles of bicycle/pedestrian paths, and 12 parks totaling over 114 acres. A brief summary of the improvements eligible to be maintained by each zone, and the proposed actual assessment and proposed maximum assessment per dueF for each zone is contained in Attachment C.
At the conclusion of the public hearing, if owners of more than 50 percent of the area of assessable lands within the Consolidated Landscape 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 Consolidated Landscape District in each zone.
2. Approve and adopt the Consolidated Landscape 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 2021-2022 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 Consolidated Landscape District, as contained in the Annual Engineer’s Report, shall be levied and collected for FY 2021-22. The assessments comply 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 maintenance and operation of public parks and landscape improvements in public rights-of-way and public open spaces.
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 Consolidated Landscape District and each Zone within the Consolidated Landscape District 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 $3,750,687
Total Proposed FY 2021-22 Appropriation from Reserves $1,313,009
TOTAL PROPOSED FY 2021-22 BUDGET $5,063,696
TOTAL CURRENT FY 2020-21 BUDGET $5,021,474
INCREASE/(DECREASE) $42,222
The requested appropriation from the reserves will leave an estimated $13,070,638 in total reserve funds available for future programming. The reserve analysis recommends that there should be a total of $27,874,593 in reserve. Additional details for all zones are included in Attachment C.
There may be an impact of $22,500 to the City’s General Fund as a result of taking the recommended actions. This cost may be budgeted in the Parks Operating fund through the annual budgeting process; otherwise, maintenance services at Baxter Park may be reduced accordingly. Otherwise, the City makes no financial contribution to the Consolidated Landscape District. All fees, costs, and expenses, including staff costs, are paid from the proceeds of the annual assessments to be levied.
Attachment A - Vicinity Map
Attachment B - Proposed FY 2021-22 Budget
Attachment C - Summary of Zones