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HOLD PUBLIC HEARING FOR APPROVAL OF THE ANNUAL ENGINEER’S REPORT, FY 2023-24 ANNUAL BUDGET, AND CONFIRM AND LEVY ASSESSMENTS FOR THE STOCKTON CONSOLIDATED STORM DRAINAGE MAINTENANCE ASSESSMENT DISTRICT 2005-1
recommended action
RECOMMENDATION
The City Council, at its meeting on April 18, 2023, preliminarily approved and confirmed the Engineer’s estimate of costs and expenses of the Consolidated Storm Drainage Maintenance Assessment District 2005-1 and the annual assessments related thereto and set the required public hearing.
It is recommended that the City Council now conduct the public hearing to consider public comment and testimony regarding the approval and adoption of the annual budgets and assessment rolls for the District.
After the public hearing, if a majority protest based on assessment amount does not exist, it is recommended that the City Council adopt a resolution to:
1. Overrule all public hearing protests or objections (including all written protests not withdrawn in writing before the conclusion of the public hearing) to the proposed levy of assessments in the District in each zone.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 Stockton Consolidated Storm Drainage Maintenance Assessment District No. 2005-1 (District) Annual Engineer’s Report for the Fiscal Year (FY) 2023-24, which contains the budget for each zone.
3. Confirm and levy the assessments for each zone as set forth in the Report.
4. File the assessments of a copy thereof, certified by the City Clerk or other City official, with the San Joaquin County Auditor and cause the assessments to be entered on the FY 2023-24 tax roll as set forth in the Annual Engineer’s Report on file with the City Clerk.
5. Approve the Annual Report providing for various Amendments to the several Zone Assessment Diagrams showing segregated parcels created since the last Annual Report and directing the City Clerk to deliver said assessment to the Superintendent of Streets of the City, along with all Amendments to the Assessment Diagrams attached, with a certificate of such confirmation and of the date thereto, and that said Superintendent of Streets shall record all said Amendments to the Assessment Diagrams and assessment in a suitable book to be kept for that purpose.
6. Authorize the City Clerk to file in the office of the County Recorder a copy of the Amendments to the Assessment Diagrams, after the recording of the assessment and the Amendments to the Assessment Diagrams in the office of the Superintendent of Streets.
It is further recommended that the City Manager be authorized to take all appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
The Municipal Improvement Act of 1913 and Stockton Improvement Procedure Code, Part V, Stockton Code, under which this District was formed, requires the annual Council approval of the Engineer’s Report, Budget, Assessment Rolls, and annual approval to levy the corresponding annual assessments.
If approved, the City Council’s action will adopt the Storm Drainage Maintenance Assessment District’s FY 2023-24 Annual Engineer’s Report, Budgets, and Assessment Rolls for the various zones within the Consolidated Storm Drainage Maintenance District 2005-1. The proposed FY 2023-24 assessments increase the zone assessment amounts by 4.9 percent when allowed by the original Engineers’ Report.
All budgets in each zone are below the maximum allowable amount. Annual approval of the budget and Engineers’ Report is required by the Municipal Improvement Act of 1913 and the Stockton Improvement Code, Part V. The City makes no financial contributions to the District. All fees, costs, and expenses incurred are paid from the proceeds of the annual assessments to be levied and collected on the San Joaquin County tax roll.
A copy of the FY 2023-24 Annual Engineers’ Report is on file in the Office of the City Clerk and can also be found on the City of Stockton website at the following link: <http://www.stocktonca.gov/government/departments/municipalUtilities/utilStormInd.html>
DISCUSSION
Background
On July 26, 2005, the City Council adopted Resolution Number 05-0329 to establish an assessment district designated as the “Stockton Consolidated Storm Drainage Maintenance Assessment District No. 2005-1” (District) and the creation and annexation of Zone 1 to be known as “Riverbend Zone 1.” The formation of the District was based on the provisions of the Municipal Improvement Act of 1913 (Act) and the Stockton Improvement Procedure Code, (Stockton Code). Since then, 14 additional Zones have been formed and annexed to the District for a total of 15 zones. Attachment A is a map depicting the location of each of the zones within the District.
The Act and Stockton Code contain provisions for the City to form an Assessment District and annex zones to the district’s boundary for the maintenance and operation of improvements that award a special benefit to an area. The purpose of this District is to provide funding for the operations, maintenance, and replacement of stormwater quality treatment devices that comply with the City’s Stormwater Quality Control Plan and meet the City’s Stormwater National Pollution Discharge Elimination System Permit (NPDES).
For this fiscal year, Siegfried Engineering, Inc. of Stockton, California, was authorized to prepare the FY 2023-24 Annual Engineer’s Report. A copy of the Annual Engineer’s Report was submitted to the City Clerk and is on file for review by the Mayor and City Council Members. On April 18, 2023, the City Council adopted and preliminarily approved the FY 2023-24 Annual Engineer’s Report, which includes the proposed budgets for the maintenance and operation of the improvements for each zone within the District, and the Assessment Rolls. The City Council’s action also set the public hearing for June 6, 2023.
Through this process, the District sets the annual assessments for each zone to be placed on the San Joaquin County (SJC) tax roll for collection with the SJC real property taxes. These annual assessments also provide funding for the inspection, operations, maintenance, repair, and replacement of the improvements in each Zone and associated administrative costs including preparing an Annual Engineer’s Report and Assessment Roll.
The property owners are responsible to fund only those improvements within their Zone that are identified in the original Engineer’s Report as a special benefit. Each assessed parcel is assigned a dwelling unit equivalent factor (DUE), or a per assessable acre factor. A single-family residential lot is equivalent to one dwelling unit equivalent factor. The DUE factor for other classifications of developed parcels is determined by a formula detailed in the initial Council-approved Engineers’ Report for that Zone.
Present Situation
None of the proposed FY 2023-24 assessments exceed the allowed maximum annual assessment set in the original Engineer’s Report, which were approved by landowner ballots following the requirements of California Constitution article XIII D, section 6, commonly referred to as “Proposition 218.” Proposition 218 was enacted in 1996 and accepted by Council as part of the formation and annexation proceedings The law provides that property owners subject to the assessment have an opportunity to weigh in on the adoption of each proposed annual assessment via a public hearing held by the City Council.
The Engineer’s Report forming most zones included the provision for an annual escalator on the assessments in an amount equal to the greater of either 3.0 percent or the annual increase as shown in the Local Consumer Price Index for the San Francisco-Oakland-San Jose All Items, All Urban Users, as published by the Bureau of Labor Statistics for a similar period. For calendar year 2022, the annual increase is approximately 4.9 percent. For FY 2023-24, a 4.9 percent increase has been applied to the FY 2023-24 maximum allowable assessments.
Proposition 218 provides the latitude to approve the maximum allowable assessment but collect a lesser amount based on projected expenditures. Approving the maximum allowable assessment but only assessing the amount needed for the projected expenses allows the latitude to collect the maximum assessment in the event of unanticipated expenses and/or emergencies and complies with the requirements of Proposition 218.
The proposed budget for each zone within the District includes engineering fees for the preparation of the Annual Engineer’s Report and tax rolls, attorney’s fees, estimated cost of maintenance work, City of Stockton administrative costs, SJC costs to collect the assessments on the tax roll, replacement reserve costs, and a contingency amount. The general maintenance scope of work includes vector control, weed abatement, rodent control, slope dressing, mowing, ripping, grading of the basin bottom (as needed), trash and debris pick-up and removal, cleaning of the structures, and sediment removal, fence and access repair, sediment removal, filter changes, device cleaning, and other maintenance associated with the special benefit.
The table below is a summary of the budget and per DUE factor to be assessed for each zone of the District for both FY 2022-23 and FY 2023-24, as well as the Proposed Operational Budgets and the Maximum Allowable Assessment amounts for FY 2023-24.
Fiscal Year 2023-24 annual assessments for Zone 2B, Cannery Park, and Zone 11, Westlake Villages, do not match their respective FY 2023-24 operational budgets. Both are rapidly growing zones that are now developed lots with services, and several hundred dwelling units. As a result, the actual assessment in these zones reflects a surplus compared to the operational budget. The proposed assessments for these zones have been maintained at a level necessary to fund budgeted maintenance costs that may not be fully realized until the full completion of the development for each zone while maintaining the current reserve. The FY 2023-24 total assessment in Zone 2B is $26,983.28, whereas the operational budget is $15,769.28. The FY 2023-24 assessment will fully fund estimated expenditures and due to the additional dwelling units, the reserve will increase by approximately $11,214.00 in FY 2023-2024. Likewise, the FY 2023-24 actual assessment in Zone 11 is $14,355.32, whereas the operational budget is $12,347.64. The FY 2023-24 assessment will fully fund estimated expenditures and due to the additional dwelling units added by new development, the reserve will increase by approximately $2,007.68 in FY 2023-2024. The annual assessments for both zones will be revisited in FY 2024-25 to determine a potential reduction upon the calculation of the new maintenance costs.
|
Zone No. |
Zone Name |
FY 2022-23 Rate Per DUE Factor |
FY 2023-24 Rate Per DUE Factor |
FY 2022-23 Assessment |
FY 2023-24 Assessment |
FY 2023-24 Proposed Operational Budget |
FY 2023-24 Maximum Allowable Assessment |
|
1 |
Riverbend Estates |
$40.22 |
$42.18 |
$26,210.34 |
$27,487.64 |
$27,487.64 |
$49,534.20 |
|
2A |
Cannery Park |
$7.20 |
$7.54 |
$7,093.58 |
$7,428.58 |
$7,428.58 |
$20,256.33 |
|
2B |
Cannery Park |
$20.02 |
$21.00 |
$15,033.28 |
$26,983.28 |
$15,769.28 |
$41,284.48 |
|
3 |
Simbad Estates |
$427.76 |
$448.70 |
$11,977.28 |
$12,563.60 |
$12,563.60 |
$27,882.96 |
|
4 |
Dama Estates |
$725.00 |
$760.52 |
$12,325.00 |
$12,928.84 |
$12,928.84 |
$36,393.43 |
|
5A |
Silver Springs & Gold Springs |
$121.24 |
$127.18 |
$32,679.02 |
$34,280.08 |
$34,280.08 |
$77,977.92 |
|
5B |
Silver Springs & Gold Springs |
$116.42 |
$125.70 |
$4,074.70 |
$4,273.80 |
$4,273.80 |
$6,026.84 |
|
6 |
Old Oak Estates |
$211.82 |
$222.18 |
$13,132.84 |
$13,775.16 |
$13,775.16 |
$24,069.02 |
|
7 |
Oakmore Meadows, Unit 3 |
$407.08 |
$427.02 |
$21,268.70 |
$22,310.50 |
$22,310.50 |
$25,975.64 |
|
8 |
Little John Creek North & Little John Creek South |
$383.20 |
$401.96 |
$24,141.60 |
$25,323.48 |
$25,323.48 |
$29,475.81 |
|
9 |
Malisa Manor |
$813.38 |
$853.22 |
$13,014.08 |
$13,651.52 |
$13,651.52 |
$30,500.00 |
|
10 |
Meadow-lands Unit 2 |
$329.88 |
$346.04 |
$11,875.68 |
$12,457.44 |
$12,457.44 |
$38,429.28 |
|
11 |
Westlake Villages |
$4.10 |
$4.30 |
$11,770.92 |
$14,355.32 |
$12,347.64 |
$980,979.48 |
|
12 |
Moss Gardens |
$29.30 |
$30.72 |
$11,787.06 |
$12,358.30 |
$12,358.30 |
$82,304.51 |
|
13 |
ProLogis Park at Duck Creek |
$268.25* |
$281.39* |
$26,240.04 |
$27,525.70 |
$27,525.70 |
$82,695.48 |
|
14 |
Calaveras IV |
$418.64 |
$439.14 |
$17,164.24 |
$18,004.74 |
$18,004.74 |
$19,744.78 |
|
15 |
BD Homes |
$850.72 |
$892.40 |
$11,261.12 |
$11,601.20 |
$11,601.20 |
$11,601.46 |
*ProLogis Park at Duck Creek (Zone 13) is the only zone within the District with assessments calculated on an assessable acre basis. The assessments for ProLogis Park are spread in proportion to the adjusted area for each parcel in Zone 13. The current assessable acreage is 97.82. The maximum assessment is $82,695.48, resulting in a per acre maximum assessment of $845.38. The actual assessment is $27,525.70 resulting in a per acre actual assessment of $281.39.
The anticipated FY 2023-24 ending fund balances for the zones are:
|
Zone No. |
Zone Name |
FY 2023-24 Anticipated Fund Balance |
|
1 |
Riverbend Estates |
$ 209,042.34 |
|
2A |
Cannery Park |
$ 53,141.03 |
|
2B |
Cannery Park |
$ 210,211.54 |
|
3 |
Simbad Estates |
$ 101,650.41 |
|
4 |
Dama Estates |
$ 118,835,22 |
|
5A |
Silver Springs & Gold Springs |
$ 522,184.32 |
|
5B |
Silver Springs & Gold Springs |
$ 21,093.40 |
|
6 |
Old Oak Estates |
$ 96,417.61 |
|
7 |
Oakmore Meadows |
$ 179,820.30 |
|
8 |
Little John Creek North & South |
$ 207,538.10 |
|
9 |
Malisa Manor |
$123,390.94 |
|
10 |
Meadowlands |
$ 102,810.66 |
|
11 |
Westlake Villages |
$ 42,128.09 |
|
12 |
Moss Gardens |
$ 136,441.82 |
|
13 |
ProLogis Park at Duck Creek |
$ 201,763.79 |
|
14 |
Calaveras IV |
$ 27,424.36 |
|
15 |
BD Homes |
$ 7,507.05 |
This public hearing allows any interested person an opportunity to make a protest for each zone in the Annual Report, to the maximum annual assessment, to the actual FY 2023-24 assessment, to the proposed budget or to the proposed method and proportion of assessment either in writing or orally. A majority protest exists if more than fifty percent (50%) of the owners of the area of assessable lands within the district in each zone file a written or verbal protest. The required notice of this public hearing was published in The Record once, at least 10 days before the hearing date (published on May 18, 2023).
By approving the proposed resolution, the City Council will approve and adopt the Annual Engineer’s Report for Fiscal Year 2023-24, which includes the Budget for each zone of the District and the Assessment Roll. This action will also confirm the levy and collection of the assessments set forth in the Annual Engineer’s Report for the District.
FINANCIAL SUMMARY
The proposed Consolidated Storm Drainage Maintenance Districts budget for FY 2023-24 is detailed in Attachment B.
The City makes no financial contributions to the District. All fees, costs, and expenses incurred are paid from the proceeds of the annual assessments to be levied and collected on the SJC tax roll. Proposition 218 limits the use of the funds collected within the various zones of this District to be used to pay only the expenses related to the maintenance and operation of the specific stormwater quality treatment device(s) detailed in the Engineers’ Report for each zone. The funds collected from the property owners of a zone can only be used for work on the device(s) in that specific zone because it awards special benefit restricted to the properties of that zone. 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 stormwater treatment basin in Cannery Park Zone 2B are proportionately split with the City’s Stormwater Utility because the basin is also used for flood control purposes.
There is no impact to the City’s General Fund or any other unrestricted fund because of the recommended actions.
Attachment A - District Zones Location Map
Attachment B - Summary of Zone Budgets