HomeMy WebLinkAbout0455.095I
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TO:
A1TENTION:
FROM:
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City of Palo Alto
City Manager's Summary Report
HONORABLE CITY COUNCIL
FINANCE COMMITTEE
CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVlCES
AGENDA DATE: NOVEMBER 'ii, 1995 CMR:4S5:95
SUBJECT:
REQUfST
OPTIONS FOR FUNDING ADDITIONAL TREE MAINTENANCE
A-"iD SCHOOL DISTRIct PLA VING FlEWS MAINTEN.<\"'~CE;
AND REQUEST FOR CONCEPTUAL APPROVAL TO PROCEED
WITH INITIAL STEPS TO SET UP A LANDSCAPE AND
LIGHTING BENEFIT ASSESSMENT DISTRIct TO FUND
ADDITIONAL COSTS
The purpose of 1hi; report is 10 obtain CoonciJ cooceptuaJ approval 10 pn:><:eed with the initial
stages of setting up • Lanclscape 2nd Lighting Benefit Assessment District 10 fund additional
levels of service related 10 tree care 2Ild IDlIintenance, and maintenance of School District
playing fields. Thi; report discusses several <>!her options fOr funding the new services, and the
rationale fOr selecting. Landscape and Lighting Assessment District (LLD).
RECOMMENDATION
Staff recommends 1l>al !be CounciJ·
I. Give staff dircctioo 00 the specific servk. levels 10 be funded in a LLD. Staff suggests
these to be either.
a) The costs 10 the City for paying for 100 percent of designated athletic field and
augmented tree maintenance, approximately S1.3 million per year;
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1:) . Those costs list~ in "a", plus some level of c.xlsting tree maintenance costs
already in the City bu<lget (Sl.I million is spent annually 01' City =
maillt=);
c) Those costs listed in".", plus some level of existing City park maintenance costs,
to be cleIermined.
If.,," or ·c" were chosen, more olSCussioo regarding wbat setVX:os and costs are to be
included would be required (obooJt 52.1 miUioo is spent annually on City park services).
Enhanc<:c! park servic"" could also be considered.
2. Authorize stafflo obtain consultant ser.iccs 10 prepart' • landscape and lighting district
assessment methodology.
If Conneil approves item 2, staff WIll return to Conncil in early 1996 with a Budget Amendment
Ordinance to fund the study.
DISCImJON
Staff bas evaluated several reven"" op6oos Ivallable to the City to fund augmented aililetic
fields and tree services. These optioos include increasing the lItIlity users tax; increasing the
Iransient occupancy tax; charging residents cfll'cctIy toe street tree care; increasing user fees to
sports particiPants thaI = playing fields; and setting up a landscape lighting assessment
district.
I.andsc1ij)C Hod J igbtjng Benefit Assessment District 0 J 0)
The California Streets and Highwa)'s Code (Section 22500 et seq) authorizes the I"'ying of
assessments on property owners via the property tax bin toe park acquisition, lands<.aping, ond
maintenance. Both tree care and playing field maintenance fall under this cat~gory.
Cities ore authorized 10 set up LlDs by the Landscape and Lighting Ass,e,;sment Act of 1972.
Several cities in the Bay Area use this assetisment =banism, and were discussed in
~cS26~i(attacbe~
No eJection is legally required to set up • Ll.D. Setting up • U,D would be an additional cbarge
to !bose Palo Alto homeowners and/or businesses asses!ed. The eventual assessment, incluomg
bow moch would be borne by busi.~osses versus homeowners, and how the assessment would
be spcead out would ultimately be detennined by • lOcmal engineer's report.
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DiscussionS with the Council during !h~ 1995·96 budget proc~s regarding the p05sibility 0(
setting up • LW were 1lBIT()W in sc<>pe: staff introouccl the idea !hat the new service levels
JlI'OP<lsed fbr maintaining school playing fields and 10 address Tree Task force concerns would
require. new source offimding. It is worth mentioning that lfCouncil cfU"eCts ..... fflO proceed
in initial steps in setting up a LLD, that Cooncil coold choose 10 fund other high priority
services ",iii! that district, such as parks 01' the existing lree maintenance program costs.
POLICY IMPlJCATIO!!iS
Policy implications include:
o Should the City increase servk~ ""'els 01' keep them the sarru:?
o Who should pay for increased servke levels, and wbat is the faires! and most
efficient way 10 obtain those funds?
o Is itllJ'PC<lSlliale 10 redure existing servke levels rather than loot for new revenue
sources?
o What level of "",'ice, and, therefore, what cost does C<><mcil wish 10 include in
such a cflS!rict?
<> Is it appropriaIe 10 consider funding other ~ cum:nt!y in the General Fund
in such a cflS!rict in order 10 make room 10 fund new services. such as increased
attention 10 aging !nfr3structure?
. FISCAL IMPACTS
To adopt the full Tree Task Feece recommendations fbr enhanced tree maintenance,. and 10 fund
fun School District athletic fields' maintenance efK>cts fbr P A USD wm require approximately
$J') nullion annually. (!bat amount wilIl!uctuate as ooe lime capita! purc~ """ur. but will
average $1.3 million annually). Of that amOWlt, $370,000 (funded halfby PAUSD) for athletic
fields, and $100,000 lOr tree maintenance, was added 10 the current budget.
ENVIRONMENTAl. ASSFSSMENT
This does no« c:oostitu1e • project under the California Environmental Quality Act. Therefbre,
no environmental assessment is needed.
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ATtACHMENTS
School Athletic FieW Ccsts
CMR,S26:91
PREPARED BY: Jim Steele, I"mance Manager
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DEPARTMENT HEAD APPR.OVAL,--=-Q)_l:f~ { ~,D
Emily liarrison
CITY MANAGER APPROV AI..:
cc· MMge A~l. Tree Task Force
Deputy City Manager.
Adminlstrative Se~
Walter Freeman. Palo Alto Unified School District
Tun Brow". Palo Alto Unified School District
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City of Palo Alto
City Manager's Report
OPTIONS FOR FlJNDING ADDITIONAL TREE MAINTENANCE A.lIID SCHOOL
DISTRICT PLAYING FIELDS MAINTENANCE; AND REQUEST FOR
CONCEPTUAL APPROVAL TO PROCEED WITH INITIAL STEPS TO SET UP A
LANDSCAPE AND LIGHTING BENEFIT ASSESSMENT DISTRICT TO F1JND
ADDmONAL COSTS
REOUFST
The purjlO5<' oflhis report is to obtain Cooncil', eoo«ptual approval 10 proceed with tho initial
stages of setting l!P • Landscape and Lighting Benefit Assessment Disttict 10 fuM additional
levels of service related 10 tree care and maintenance, and maintenance of School Dis1rict
playing fields. This report discusses several o:b..'I options fur funcfmg the new services, and the
ratiooaIe fur selecting. Landscape and Lighting Asses..<ment District (LW). If Cooncil cfrrects
stafflo proceed, and if Council gives staff ronfirmation ofwhich .. "ices am! costs are 10 be
considered fur inclusion in a LW, staff will obtain • consultant 10 prepare an appropriale
assc:ssmeut methodology. 11 is expected that such • consultant will cost about SI5,()()(}. Staff
would then retura 10 Council with. Budget Amendment Oromance in early 1996 10 fund this
request.
BACKGROUND
In the 1995-96 budgel process, due 10 a favorable revenue outlook, stafl' included startup
funding of 5310,000 lOr alhletic field maintenance at three school sites, funded half by the Palo
Alto Unified School District (PAUSD); and $100,000 lOr additional tree maintenance.
Enhanr.ed tree maintenance bas also be':!! attained by implementingreromrnendatioos contained
in the Hughes, Heiss organizational review, in which certain in-house tree mainlenaoce
functions were shifted \0 contract services. The resulting savings allowed the City 10 add parks
and off-street tree care al DO additional cost.
Additiooal funding required 10 furry take over the capital and maintenance costs of an remaining
school site athletic fields was estimated by Community Services (CMR:526:9!). The costs vary
per year, based"" the level of capital spencfmg. primarily fur irrigation systems. Additional
costs average about $539,000 armually over the neXlIe!l years. Additional funding f« tree
maintenance 10 fuliy implement Tree Task Force (TrF) recommendations Iotals about S342,000
l!llI\ually (CMR:37S:9S). (No costs have yet been defined 10 implement a tree protection
ordinance.) Therefore, 10 fun)' fund designated school site athletic fields' malntenaoc"
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(as,,"1l!lling Ihat Itt. PAUSD would no longer be required 10 p.y half of all costs), .. 'ld to address
augmented tree can: needs would require approximately $1.3 million in addltional resour= 00
an lII11ualbasis.
rote1tJai (Dr Alwlrbia, Com JFit) GeDe ... ' Egad Expepditure Sayjap or ReyeQUG
GnJ .....
The City completed an exhaustive organizational review in December 1994, which concluded
wr, for !be most part, the City's General Fund operations are efficiently managed and
organized. The City Manager submitted • budget for 1995-96. adop!ed by Council, wruch
implemented several recommendations from the organization review. Th: review affirmed
community and Council support for maintaining cw:renI seoice levels. For these reasons. staff
is not proposing to fund $1 j million in new, oogoing service, by reducing existing services
elsewhere in the City budget.
During recent dis<:ussions with the Finance C<>mmittee on the 1996-98 budget guidelines, the
question arose about possibly absorl>ing !!dditional playing fields and tree care ccsts through
nonnaI, ongoing revenue growth in the General Fund. The staff report rerommencfmg 1996-98
budget guidelines (CMR:394:9S) projects • net surplus of about S,8 million in both 1996-97 and
1997·98 for the General Fund.
Several things are worth ootL.g about !be budget guidelines projections. First, they sbow
"steady stale budgets". ThaI is, they do no! contain estimates for new expenditure priorities.
Rather, Ihey show tfu;!. absenl any additional funding requests. !be budget shouid !love. small
surplus of about I percent, oc U million in 1996-98.
The budget guidefmes do no! contain any fuD<fmg for the following iteO'.s;
o C_ of living increase for any 000-.. 1111)' items except the P A usn Lease
payments and human sef\'ice """tracts. C<>st of L'ving increases !love nol been
granted for several YeJl1S, and departmenl spen<ling on ongoing programs bas
gone down in real dollars;
o New or roe time Council priorities. ",hich bave lOIaIed bern'een $.5 and $,6
miliIDn per year over the last two budget )'ears;
o Enhanced infrastructure speuding. While !his >ear's budget contemplates
maintaining !he en.'Janced infrastrocture program initiated in 1995-96, there are
several million dollars of projects waiting 10 be prioritized;
" The Golf Course Master Plan, r~ently approved io concept by Council, has, as
yet, no funlflDg set aside in the budget.
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for all oflbesc reasons, staff does 001 believe it would be feasible 10 contemplate funding two
major DCW on8Oing programs out of the existing re"enue budget Rather, staff believes it
would be more realistic \0 identify. new revenue source foc these new program areas.
AddltlpoaJ Sur", ofF"diDl
Staff has cvalua1ed _eraI revenue options .".Hable 10 the City 10 fund augmented .thIetic
fields IIld _ services. These options include increasing the utt1ity usen tax; increasing the
InnSieIII oc.;upanc;y tax; cbarging resi<lents directly foe street tree care; increasing spo<1S user
fees; IIIId selling up _landscape and 6gbting assessment district. Eoch is discussed below, and
has been melSlftd against five aiteria:
I. ~Benefit Relatiooship: Is there a logical relationsbip berneen the persons
""ying (the source of revenue) and the benefit obtained by the service?
2. Plymeo1-aeo<fil Relatiooship: Is there • relationstJp between the .mount of
paymeol and the amount of benefit received'?
3. EffecIh'eoess: Is IlUs source of revenue both reliable, and sufficient 10 pay fOr the
sorvicc in the fOreseeable future?
4. Etlicieocy: Is IlUs source of revenue relatively simple 10 .dminister and collect?
Will it be feasible \0 implement?
S. Legal Issues: Are there legal restrictions on the option?
I. Extend Ill. Utility U .. n T .. lUV1) 10 laterslafe and hto ..... tiona! Can.
This option was discussed in detail in CMR:423:93. It is estimated that this option
would raise $600,000 .... nually. Depending on thele"el of additional tree maintenance
desired, this op6on would likely fan short of lola! revenue 00>"-<15. Wbile this option
would be very simple 10 adrnini!.1er and would be effective in raising. reliable income
stream, it does 00( meet the source-benefit criteria. in that there is 00( • strong
relationship betwecm the payers of this source of revenue and the benetil den .. ed from
either _ care or School District playing field maintenance. The majority of revenue
from this soorce probably would come from the business community, while homeowners
would reafl2C the most cfrrect benefit from \tee care and from playing fields. It also does
no( meet the paymcal-benetil crit&ria, in that higher payments reflect higber telephone
usage, 00( more benefit.
CMR:45S:9S Pace 7 of U
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The Colifomia Supreme Court'. September 28, 1995 ruling on Santa Clara County's
Measure A raises questions 5bout the ability of citles Ie increase taxes, such as the utility
users tall. without • direct vote of the people. Fer this reason, .. .alf does noI recommend
that tax options be considered at !his time. This applies 10 Options 2-4 below, as wen.
L -Ia~re ... '''_ UtJ1i1y LT ... TI. from 5 Perce.t 10 6 PerceDt
This would geDerate about SI,OOO,OOO annually. Wrth the exception Ibat this option
would generate more revenue, Ibe arguments concerning this option mirror Option I.
Again, t>ccause it does noI meet either the source-benefit or payment-benefit criteria,
tllis option is II()( recoIllIIlCDded.
3-lacrease the Utilit)'LTser Tn from 5 Percent to 6 Percent ror Residential Customen
OR"
This option would generate about $300-400,000 annually_ WIule that would DOt
generate the fWI amount needed, it would be rairly ca.")' 10 administer, and it would be
an eliCctive revenue source. The relationship bet'",eeo payment and benefIt would be
tenU<>US, as all residents ,.-wld he paying, regardless of their usage of playing Nlds.
f'many, the amount paid by utility users would have little relationship 10 henefit.
4. lacrease the Tn.,ielll ~CBp8DCY Tn from II Percent to n Perce.t
This would raise about 5'100,000. It would be an effective Iilld efficient revenue source,
but it does DOt meet either the source-benefit or payment-benefit criteria.
.5. Cost Recovery Options
a. Charge residents lOr street tree care in front of Ibeir homes
CMR:4!5:9S
This option would either directly cbarge homeowners lOr !Tee care ",'ork in front
oflheir homes or would charge a flat fee per year to all homeowners. This would
link source and payment to benefit lOr tree care, but would nO! address NId
maintenance. This option would be difficult 10 administer, in Ib.t • per-tree
billing process would have 10 be set up.
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b. . Iocre""" sport user fees
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WItiIe Ibis option would provide the strongesllink between source ancI payment
for play'.ng field use, It would be diffieult 10 administer and would no( generate
much revenue. There is no simple way to cbarge user fees 10 the casual field
user, and organized spor1 fees generate very little revenue for the City. Currently,
playing field usc generates $43,000 in r",'enue annualIy. Adult softball league
fees generate another $48,000, which pays for the direct costs associated with
organized team play (referees, m.).
6. E,tabn.h • Lond,up< .nd LigllliDg Benefit Asses,meat District (LLD)
The California Streets and Highways Code (Sectioo 22500 et seq) authorizes the levying
of assessments 00 property o\\ncrs via the property tax bill for park acquisiL~
landscaping. and maintenance. Both tree cafe and playing 6e1<l maintenance fall under
tin. category. The amount could be adjusted as budget needs shift or other revenues
become available. TherefOre, it would be an effe<:live source of revenue. It would also
be efficient to administer. There would be • direct benefit 10 all property owners for the
tree care costs, and at least an incftreet benefit for playing field malnterum<:e. (VVlrile not
all borneov.ncrs wonld use enbonced playing fields, all potentially conld use them).
'Because Ibis revenue source bas the most direct relatioosbip, it is recommended by stalL
A.utllority to Set up • ("Ddq" and Idg'6pr A'-WsmeBt Qi&tris:tQ.J.D)
Cities are authorized 10 set up LLDs by the Landscape and Ughting Assessment Act of 1972.
Several cities in the Bay Area use Ibis assessment mechanism 10 ""''Y assessments on property
tax bills, and "'c..'C cflSCUSSed in CMR:526:91 (attached). They include: Watsonville, Berkeley,
San Pablo, Pittsburg. Pleasanton, Albany, Antioch, Clayton, Concad, EI Cerrito, Hercules,
Oakland, Orinda, Pleasant HilJ, and Union City. As was reponed in tbat CMR. "not all attempts
10 establisb an assessment cflS!rict have been successful. In the City of Pinole, the Council
stopped the process and in Ibe Cities of Lafayette and Richmond. the process was stopped by
protests."
No election is legally required 10 set up • LtD. To form an assessment district, • formal
Eugineets report is required, which sets the district's boundaries ancI establishes an assessment
for each property owner, based on relative benefit. A public meeting and pubJi<: bearing would
then be required, where the CoonciI can """J'I and consider dtizen comments 00 the prOJlO'!aI
and decide whether 10 approve or deny the forrnation of the district. A majority protest of all
citywide property owners at Chat public bearing would require the City 10 abandon plans for the
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"district. Assuming the kJrmation of • LtD were approved, assessments woold then be
forwarded 10 the County for in<:lusion on property tax bills"
Setting up • LLD would be an additional ecooomic change on those Palo Alto homeowners
andror businesses assessed. The eventual as=men~ in<:lnding how much woold be borne by
busin....,. versus homeowners and bow the assessment would be spread, woold be delernlined
in the kJrmal engineer's report
Scqpe Or. J.andscape Iud Idrbtip, A,,",mep' District
Discussions with the Cooncil <luring the 1995-96 budget process reganfmg the possibility of
setting up a LtD were narrow in scope: staffintroduced the idea that the new service levels
proposed fOr maintaining scbool playing fields and addressing Tree Task Force coocerns would
require • new soorce of funding" It is worth mentioning !hat ifCOUI' oil directs staff 10 proceed
in i:litial st"P' 10 set up • LtD, the Council could also choose 10 fund other higb priority
services with that district For example, Council could cboose 10 enllance City park
rna intenance effurts, bcluding capital elements, and pay for that enbanced service Jevel iliroogb
the eventual formation of. LLD; or 10 divert existing park and/or tree maintenance "",,'Is from
the General Fund 10 the LLD. Freeing up General Fund resources would be an ellkient way
of addressing other concerns. such IS the aging City infrastructure.
S'ep' For SettjPC lI,p I J.(,p
IfCooncil agJeeS with staff's recommendation in concept, st:.fiwould proceed with obtaining
a CODSUltant 10 n:comrnend an appropriate assessment methodology. After that phase is
wmplete, staffwouJd return 10 Council with. recommended methodology. The methodology
would be a general description of bow the assessment wlll be spread 10 property owners. It
would not be • specific parcel by parcel costing; that would come in the later phase of
consultant work where. 10rmal Engine<:(s report is prepared. Rather, this first phase would be
the description that wll! instruct the F.ngineer bow to later go about spreading the assessment
10 specific parcels.
This first phase work would include a determination of the districr. boundaries and the
appropriate rationale and kJrmulas for assessing costs. For example, the ronsuItant would
recommend whether the cfJStrict should cover aD parts of the City; whether some neigbborbOC'ds
sbould be assessed at different rates due to their proximil)' 10 athletic fields; bow 10 structure
the assessment 10 fairly charge homeowners vs. businesses, etc.
After this initial consultant report containing the assessment methodology is complete, staff
would bring it to CooncilfOr approval. Out.<;de legal counsel would also be retained by the
Attorney's Ollke 10 provide legal advice 00 assessment issues and procedures. Before
h&ela~u
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obtaining a·coo..<ultant, staff .. ill need 10 get am:ctioo from Council on the extent of se .... ices
they wish to fund thcoogh the llD. For example, if just incremental tree and athletic fields
costs are included. the methodology for spreading those costs baclc to property owners ",~11
h"lcely be atfferent !han if the LLD also included City parle maintenance costs.
RECOMMENDATION
Staff recommends that the Council;
I. Give staff direction on !be speciti<: $erv'"" levels 10 be funded in • UD. Staff suggests
Ihese 10 be either.
a) The costllo the City for p")'ing for 100 percent of de,ignated athletic field and
augmented tree maintenance, approxi!nately $13 millioo per year;
b) Those costs listed in "0", plus some level of existing tree maiDten.",. ... costs
already in the City budget (S \J million is spent annually on City tree
mainteoance );
c) Those costs listed in "a", plus some level of existing City pad;. maintenance costs,
10 be detennined.
If"b" or "e" were chosen, more nlSCussion reganfmg what senices and costs are to be
included would be required. ($2.1 million is spent annually on City parle services.)
Enhanced park senices could also be considered.
2. Authorize staff 10 obtain • consultant 10 p<epare • landscape and lighting alS!rict
assessment methodoJogy.
IfCoun-.-iI approves item 2, staffv.i11 return 10 Council in early J 9% ,,;tb • Budge! Amendment
Ordinance to fund the study. Outside legal services ~ also be retained by the Attoroey's
Office. It is not clear at this time whether those costs can be absorte<l in !he existing ootside
legal services cootrael budget.
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V'l8195 Estimated PAuse Field CosI8
(OOO's}
Cosls (OOO} 1995-96 1~97 1991-98 1998-99 1999-00 200().{)1 2001-02 2002.()3 2003-04
Ongoing Main!. $150 $354 $576 $630 $661
Major Capital (t) $45 $476 $615
Minor capital (2} $220 $16 $22 $25
TotalCoet $370 $370 (3) $643 $1,\31 $1,278
Noles:
1_ Major Capilal Expend"rtures include irrigation sYS!f'm deslgn and replacemenl:,
and lemis court resudacing. These lems wil have a useful life 0( about 20 years.
2. M"1nO! CapiIaI Expencfdures are ongoing equij>rnE>N needs. These ~ems, such as
vehicles, wi! recur every 5-7 years.
3. $370,000 was added 10 \he budget i\ 1995-96. Incrementa! """Is above 11a\ amounl
average $5:W,OOO per Y_. dependlng on the level 0( capiIaI spendlng.
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681 701 722 744
609
1290 701 722 744
20().«)5
766
766.
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December 5". 19511
HONORABLE CIT¥ COUNCIL
Palo Alto, California
Attention: Finance com~ittee
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LANDSCAPING AND LIGHTING ASSESSMENT DISTRICT
Members af the Council!
.Report: in Brief
The Landscaping and Lighting Act of 1972 could be used to create an
asa;essment district and shift some capital ilr.provement i!lnd onqoing
maintenance costs from the City budget to the property taxes of
individuals and businesses within an i!lssessment district or
districts.. This report addresses the concept, describes the
process~ presents planned expenditures wnich could be included in
an assessment district, provides examples from other cities~ cites
a case currently before the California Supreme Court, and provides
a potential timetable fGr establishing s~ch a district.
Lan~seaping and Ligbting ~ct of 1972
In California". the most commonly used special. assessment acts, bond
acts and regulatory acts are all contained in the Streets and
Highway Code. Part of that code is the Landscaping and Lighting
Act of 1972 which can be used for improvement or zr.aintenance of
public open spaces" landscapinqr playground equiprr,ent., lighting and
traffic signals~ An assessment district is formed in order to
assess property o,,"'ners via the tax roll for an.."1ual :B'Laintenar-:ee
costs".. debt service costs if capital improvements are financed by
borAs .. or a combination of the two. Payments woul~ be collected by
the county.. Assessments \t,'ould not be tax deductible .on an
individual's federal income taxes.
Cl'!R:526:91
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Tyo-p~a,e Process
It the City Council aotl".oriles staff to pursue the establishlnent of
an asses$~ent district l staff would follo~ a two-phase process~
Phase I would be to hire an engineering firm to: 1) assist in
determining ~hlch expenditures should be included in an assessment
district l 2) determine how residential I industrial arA commercial
property owners should be assessed: based on benefit., and 3}
calculate approximately how lnuch it would cost each category of
property owner~ The intent of Phase I work is to provide Council
with technical data vhich supports an assessment methodol~~ It
does not include obtaining pUblic reaction or consensus on forming
an aSSeSbinent district.
Durlnq Phase II staff would work closely with the consultant to
review three options: 1J an assessment district fO L only mainte
nance expenses~ 2) an assessment district for only capital
improvements., or J} a~ assessment district for both maintenance
expenses and capital improvements~ Staff ~ould also review the
possibility of direct assessments for the. expenditures ... or the sale
of bonds to assist in making the annual assessments more level if
~~e expenditures are different in different years. staff would
return to Council with this information and request authority to
proceed to Pnase II.
During Phase III the city Council would need to take five steps:
1) adopt a resolution initiating proceedings; 2} receive an
engineer's report on the proposal to form the district; 3) adopt a
resolution of intent to fOrJl the district; 4) conauct a pul>lic
he.arIng on the engineer's report after notifyinq the affected
property owr.ers; and 5, adopt a -'resolution ordering the improve
ments. Staff would hire a consultant to prepare the engineer's
repOrt and furnish engineering services including preparation of
boundary maps; preparation of benefit zones, formulas and rationale
for determlning benefit;. development of a budget; spreading of
assessments; preparation of the assessment roll for county tax
collection; and drafting a notice to prope~ty owners.
Staff estimates that the engineering consultant ~ould charge up to
$20",0'0.0 fer Phase I services based upon a city-\l{ide assessment
distric~. The ~ost of Phase II services would be determined after
an assessment methodology has been approved by the Councila Based
on other cities l experience .... this could cost bet .... 'een $50 .. 000 and
$lOO.C>OO.
Potential .1I._ssessment Di_llnrict Expenditures
Staff has reviewed the 1991-92 budget~ including the 19.9.1-96
Capital Improvement program, to determine which expenditures could
conceivably be included in a 1972 Landscaping and Lighting Act
ass.assment -district. Attachrrient A is a list of these e>cpenditures.
CMR:526:Sl 2
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'While staff believes allot the.;:e ex~enditures are items 'Which
could be" included in en assessment district., they will need to be
reviewed by a consultant to determine vhich best tit the process.
staff has intentionally presented a large list to demonstrate t-~at
there are many projects and maintenance activIties ",-hieh may be
financed by the imposition of an I!ssesslIlent district.. Clearly .. the
tinal assessment distr let will contain a mu-ch smaller list of
p.rojects ..
Article XIII B of the California state constitution requires that
the City's Proposition • (Ga~~) appropriations limit be adju3ted
permanently vhenever there is 11 transfer of financial responsibili
ty, in this case from ~neral Fund support to assessment district
tUTrdi1l9~ The legislature clarified tile process of determining 'When
such a transfer bas occurred in Government Code section 75113" 1rIhich
states that transfer of financial responsibility has taken place
only when the d-ollar amount allocated from .other revenues to the
provision of such services has decr-e.ased~ To the extent that there
is a maintenance of effort to fund services that are -reasonably
relat.ed-to those :moved to assessment district financing, the
City's appropriations limit need not be adjusted. In the worst
ease .. the City'S appropriations limit ",ould be permaner-tly reduced
by the entire a~~unt of expenditures moved to assessment district
financing in the year in .... hich the transfer of responsibility
occurs. In this case~ the City could pursue a Gann Limit oVerride
to implement the new Landscaping and Lighting Assessment District.
If, however, tbere is augmented funding for programs Vihich are
-reasonably related-to those programs 'Which are moved to the
assessment district, there potentially ~ould not be such a drastic
reduction in the City's appropriations limit. CUrrent projections
show that the city probably has $3 to $4 million in -room-between
its Ga~~ Limit and appropriatIons subject to the Limit~
EXamples from ot~er Cities
The City of -r;,~atson\ljlle recently establishe:i a s:rr.all landscaping
and lighting assessment district \I.'hich is expected to generate
approximately $127~OOO annually~ At their meeting of June 3, 19~1 ..
the iiiatsonville Recreation and Parks Commission adopted a r~-ommen
dation to assess all residential property at the rate of $l~O'O per
month (single family h-ornes l each apartment unit.. condominium,
mobile home} and accept the engineer's recommendation for commer
cial and industrial rates of $1.00 per unit. Commercial property
is rated as 4 units per acre and industrial at 4 units per acre.
The City of Berkeley established cit~.ide landscaping and lighting
assessment districts in 1981-1982. Currently .. t~o districts raise
appro~imately $7 million annually. The lighting district raises
$1.,( lI1illion by charging residents L 2 cents per square .foot Qf
improved property (approximately $22 per year) ; commercial proper-ty
owners pay 4. e cents per square footi and industrial property
CMR:52S;91 3
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ovners pay 2.4 cents per square foot. Separately# a landscaplng
district. caises '$S.~5 million per year-by charging residential,
co::nl"lercial and industrial property o ... ners 6~9 cents per squa:e
foot.
In At~st 1982# the city of San Fablo formed a citywide district
under the Landscaping and Ligh.ting Act. The costs for lightinq are
apportioned among the benefiting properties according to parcel's
frontage and intensity of street lighting fronting the parcel. The
benefits derived from residential landscaping ~as said to be 1)
inversely proportional to proximity of the parcel to John Davis
Park, and 2) directly proportional to the number of residential
units. Commercial landscaping "Was separated bet'Ween co:m:m.erciel
streets with and without landscaped frontage. 'fotal revenue for F~
1991-92 was estimated at $119~OOO.
The City of Pittsburqh established is cityvide landscaping and
1iqhtinq assessment district in F~ 1~88-e9. The assessments raise
aPeroximately $2 million per year vith residents paying approxi
mately 55 percent and commercial and jMdustrial property o.~ers
payinq 45 percent. The benefit (and charge) received by a single
family residence is uniform and provides the basis for measurinq
the benefit to other land uses; the benefit of a11 other 1and uses
is tied to the single family resident. The benefits for industrial
and,commercial property owners are based on area and frontage and
decrease with increasing parcel size or fr~'tage~
The City of Pleasanton has a citywide assessment district which
raises between $30'0,000 and $40"0,00'0 per year. All assessme.nts are
on commercial property based on a charge per acre ot frontage foot~
The City of LaVerne was the subject of an article in the November
19'91 issue of ·Western City· ~ Prior to adoption of an asse.ssment
district", the city put an advisory vote on the November 1990
eallot. The assessment district vill generate over $~ ~il1ion for
street lighting, parks and l:aodscape maintenance to ·free 'Up.
general funds for police, fire and other city se~~ices.
Other cities which have ~912 Landscapinq and Lighting Act assess
ment districts inclooe: Albany", Antioch, Clayton, Concord I El
Cercit~, Hercules, Oakland~ Orinda~ Pleasant Hill, and Union City.
Not all attempts to e-stablish su<:h an assessment district have been
successful. In the City of Pinole J the Council stopped the process
a.nd in the cities -of Lafayette and Richmond.. the process was
stopped by protests.
Califor~ia supreme cour~_Case
The Califor-nia Supreme COUi."'"t rece-ntly accepted a case involving the.
City of Orland involving t~o issues: 1) ~hether the Landscaping
and Lighting Act of 1972 a 110,,"'5 assessments for the sole purpose of
CHR:525:91
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»aintaininq parks wi~~ut construction of any i~provements, and 2)
whether· a flat assessment of $2. per dwelling unit is a valid
assessment or is a special tar~ The lower court in an unpublished
opinion beld that the Landscaping and Liqbting Act autbo~ized the
maintenance of pre-existing iEprovements and that the flat fee of
$24 "as reasonable based on studies performed by the City~ The
city of Palo Alto has filed an amicus curiae brief in the case~
,. ".t.iIl! l-
If council decides to proceed with the tonaation of a 1972
Landsc"aping and Lighting Act assessment district" the e.arliest it
can be accomplished is 'o~ tbe 1993-94 property tal< roll. The
formation of the district might be delayed due. to any of the
following: Council wishes to place en ao.visory JIIe,asure on the
ballot prior to approving the districtj Council involvement in the
consultant selectIon process; or the chosen assessm~nt meth~logy
is a¥tremely complex. The estimated time require~ tor Phases 1 and
2 are:·
AgtIon
Phase 1:
o Retain consultant
o Prepare report tor Council
Phase II
o Prepare er~ineers report,
bold public hearings, adopt
final resol~tion, send tax
calculations to county
P..·commen~at.iOll
T fIle Regu it ed
3 to C IlOnths
) to 4 lI'Ionths
12 to 16 months
staff reeom:m.ends that Council review the e.ttached exhibit and
provide guidar..ce to staft as to 1) whether or not a landscap
in<J/l~9'htinq assessment district should be fonned; 2} the qeo
grapb1c extent of any such districtj J) t.>-..e scope of s.ervices to be
provided by the district; and 4J the need to place the matter on
the ballot.
QIR:526:91
R~spectf~lly submitted,
AA//~d
• GORDO' B. FORO
Treasury Manager
~~.~p
o~r.ctor :~e
":'~AN~ER ~--citY·'n~qer
I AttacMents:
CMR:526:91
Attachment A
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rOTAL. .:.vITAl. II1J11~ flo,.lECTS
'orAl POSSIII,E" use OF WSCoI.?f. & UGIITlMt. ACl
('9201)
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57,931,700
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"20,000
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