Report Prepared by: Ken Elwin, Director of Public Works
Title
SUBJECT: Maintenance Districts Engineer’s Reports and Budgets - Fiscal Year 2017/2018
REPORT IN BRIEF
Consider setting a public meeting for Monday, June 5, 2017, to address the proposed Engineer’s Reports and Budgets. The Council must then conduct a formal public hearing set for Monday, June 19, 2017, before a determination is made on the level of assessment to approve.
RECOMMENDATION
City Council - Adopt a Motion adopting Resolution 2017-20, a Resolution of the City Council of the City of Merced, California, approving the Engineer’s Reports on Maintenance Districts and setting a public meeting and a public hearing thereon.
Body
ALTERNATIVES
1. Adopt Resolution approving Engineer’s Reports and Budgets on the various Maintenance Districts; set a public meeting for Monday, June 5, 2017, and a public hearing for Monday, June 19, 2017; and,
2. Return to Staff with specific direction; or,
3. Deny.
AUTHORITY
Chapter 26 of Part 3 of Division 7 of the State of California Streets and Highways Code provides the applicable general law for Maintenance Districts; and,
Article I (alternative method for the levy of benefit assessments) of Title 13, Division VIII, of the Merced Municipal Code (MMC) dealing with Maintenance Districts, provides for subsequent modifications to existing Maintenance Districts; and,
Initiative Measure (Proposition 218, Sections 2, 3, 4, 5, and 6) approved at the November 5, 1996, election and also known as the “Right to Vote on Taxes Act,” provides for assessment ballot proceedings.
DISCUSSION
The 2017/2018 City Engineer's Reports and Budgets on the various Maintenance Districts have been submitted to the City Clerk’s office, as required by MMC Sections 13.62.130 and 13.62.150, and are available upon request for review. Attachment 1 is a summary of the budgets, assessment levies, and abeyances.
After preparation of the budgets, it has been determined the Pleasanton Park, Olivewood, Mansionette, and Hansen Park Maintenance Districts require special assessment ballot proceedings prior to Council’s approval of these budgets.
This action is necessary in order to obtain property owners’ approval prior to any increase in assessment levy.
This item has been included on a separate administrative report for Council’s approval on the April 17, 2017 calendar.
At the time of this report, the Downtown Maintenance District has an initial negative reserve Fund balance of approximately $10,384. However, Public Works staff is working with the Finance Department to balance the Fund for Fiscal Year 2017/2018.
Fahrens Park II
The budget includes $25,000 in funding for the third phase of the eucalyptus tree maintenance and beautification project. Trees have been identified for inspection, pruning, and removal. They are located on the north and south sides of Buena Vista Drive, between North Highway 59 and Lago Court, including the bike paths along Fahrens and Black Rascal Creeks.
The goal of the project is to ensure these trees are safe and healthy to minimize conflicts with pedestrians, vehicle traffic, and dwellings. Also, it will enhance the existing character and beauty of the area and naturalistic scenic bike pathways.
This work will begin prior to the start of the winter season with all dead, diseased, and hazardous trees or branches removed to include undergrowth and debris.
This project will be a partnership with the California Department of Forestry/Mount Bullion Conservation Camp, private landscape contractor, and Public Works staff.
Oakmont #3, Campus North, and Mansionette
On February 6, 2017, the property owners in Oakmont #3 approved an annual assessment increase $19.43 per unit. This increase was necessary to cover monthly landscape expenses for irrigation, parts, replacement plants, and contract maintenance services.
Conversely, the property owners in the Campus North and Mansionette Maintenance Districts voted against an assessment increase. The proposed increase would have generated the necessary additional revenue required to maintain these Districts at acceptable levels. Due to the large quantity of mature landscape in these areas, as well as the disparity between expenditures and revenue, maintaining existing vegetation within available funding continue to be a challenge.
Currently, the new home developer at Campus North is maintaining the landscape; however, maintenance at Mansionette is not being completed due to lack of funding.
Abeyances
At the Council meeting held on February 17, 2015, Council approved the Maintenance District Operating and Capital Reserve Fund policy to determine appropriate reserve levels; and, determine appropriate benefit assessment abeyances for Districts that have reserve balances above that required by the Fund Balance policy.
The maximum reserve necessary to ensure continued operations, improvements, and repairs for individual Districts shall be calculated by adding the following:
1. An amount equal to one-year operating reserves; and,
2. An amount equal to that necessary to replace foreseeable losses of capital equipment, exclusive of any storm pump specific items contained within the District; and,
3. An amount equal to that necessary to complete any future (unbuilt) planned capital improvement projects.
|
Maintenance |
Reserve |
Recommended |
Reserve |
Annual Assessment |
Annual Assessment |
|
District |
Fund |
5-Year |
Balance After |
Per Unit Without |
Per Unit With |
|
Name |
Balance |
Abeyance |
Abeyance |
Abeyance |
Abeyance |
|
Glenhaven Park |
$34,291.00 |
$15,168.00 |
$19,123.00 |
$36.82 |
$7.36 |
|
Quail Run |
$90,999.00 |
$21,758.00 |
$69,241.00 |
$21.59 |
$12.59 |
|
Sequoia Hill |
$77,382.00 |
$11,200.00 |
$66,182.00 |
$152.82 |
$123.73 |
|
SkyMoss |
$68,726.00 |
$10,701.00 |
$58,025.00 |
$194.76 |
157.23 1 |
|
|
|
|
|
$220.67 |
178.15 2 |
Note 1: SkyMoss Zone 1, Storm Drain Public Improvements
Note 2: SkyMoss Zone 2, Storm Drain and Landscape Public Improvements
Districts receiving abeyances will be for a period of one (1) to five (5) years and not to exceed 80% of the current assessment levy. The four (4) Districts that abeyances are recommended for will require approximately five (5) years to reach appropriate reserve levels.
History and Past Actions
Maintenance Districts were originally established to pay for the operation and maintenance costs associated with maintaining storm drainage systems, street lighting, and aesthetically pleasing landscaping to open spaces such as park strips and street center-islands.
Property owners within these identified Districts are levied annual assessments against each lot or parcel of land to cover these expenses.
Proposition 218, enacted by the voters in 1996, requires the City to conduct an assessment ballot proceeding in order to levy increased assessments, beyond the allowed adjustment, based on the United States Department of Labor’s All Urban Consumers-Western Region consumer price index (CPI) report.
Each year City Council must hold both a public meeting and public hearing on the various Maintenance Districts’ budgets for the coming fiscal year, before final adoption of the budget.
The approval process for Districts with no increase in assessment above the allowable CPI is as follows:
• Public Works Department determines annual budget costs by District;
• City Engineer prepares annual report and assessment spread;
• Council adopts resolution approving Engineer’s Reports and sets dates for public meeting and public hearing;
• Council seeks public input at public meeting, but takes no other action;
• Following a public hearing, Council adopts resolution approving, confirming, and adopting Engineer’s Reports.
The approval process for Districts with an increase in assessment above the allowable CPI is as follows:
• Public Works Department determines annual budget costs by District;
• City Engineer prepares annual report and assessment spread;
• If the proposed increase in annual assessments is greater than the amount allowed under Proposition 218, then an assessment ballot proceeding must be held. Assessments remain at the previous year’s rate, until the legal ballot process is followed;
• Notices and ballots are mailed 45-days prior to the scheduled public hearing.
• Council holds a public hearing to determine voter approval of increased assessments and the public hearing is continued to a subsequent meeting to allow time to open and tally the sealed ballots;
• Following the “continued” public hearing, Council adopts a resolution approving, confirming, and adopting the Engineer’s Reports based on the results of the ballots.
In closing, operating budgets are balanced with available revenue. The CPI adjustment increase to the budgets with previously held successful ballot proceedings will be 2.5%; compared to 1.8% last fiscal year.
The City Attorney's office has prepared the necessary resolution setting a public meeting and public hearing for the various budgets and reports, please see Attachment 2.
Council will have the opportunity to consider a motion on the various budgets following the close of the public hearing scheduled for June 19, 2017.
ATTACHMENTS
1. Budget Summaries
2. Maintenance District Resolution 2017-20