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HomeMy WebLinkAboutAgenda: Study Session C: Annual Rate for Re-Balloting of Citywide Street Lighting Assessment DistrictSTAFF REPORT Public Works Services Department DATE: February 2, 2010 TO: Mayor and City Council FROM: Tom Tait, Public Works Services Director Prepared by: Maria A. Taylor, Senior Management Analyst SUBJECT: UPDATE OF THE ASSESSMENT METHODOLOGY AND ANNUAL RATE FOR THE RE- BALLOTING OF THE CITYWIDE STREET LIGHTING ASSESSMENT DISTRICT Recommendation: Provide Direction SUMMARY The Street Lighting Maintenance District is set to expire on June 30, 2010, which will obligate the City to fund all street lighting costs, approximately $980,725 beginning in fiscal year 2010/11. While it varies slightly from year to year, property owners contribute approximately $400,000 each year which offsets approximately 40% of the cost to provide street lighting. This year's Capital Improvement Budget includes a project to revisit the formation of a new Citywide street lighting assessment district. On September 1, 2009, the City Council awarded a contract to Willdan Financial Services for assessment engineering services. Additionally, at the November 17, 2009 study session, staff presented the City Council with options for Assessment District methodology and budget assessment to determine the new annual assessment rate for each property. As a result, the methodology that was preferred by the Council is based on a two -zone approach. Zone 1 is for property owners on arterial streets who receive street lighting benefit. Zone 2 is property owners who are not located on arterial streets receiving street lighting benefit. Additionally, property owners in Zones 1 and 2 who have sparse lighting will pay twenty percent (20 %) of what the annual rate is for single family property owners. Areas in the City that do not have street lighting will not be assessed. Therefore, staff is seeking the City Council's affirmation that this assessment methodology is acceptable and whether the City Council prefers a 50/50 or 60/40 cost sharing split to determine the annual street lighting assessment rate for fiscal year 2010/11. Page 1 of 4 Mayor and City Council February 2, 2010 BACKGROUND In November 2008, the City conducted ballot proceedings to address two major issues. First, when the current district was formed under the Street Lighting Act of 1919 during the 1970s, it created inequity of assessments. The assessments were based on the value of the property when it was originally purchased; with some properties being assessed on their 1970 purchase price while others are assessed on their 2009 purchase price. Additionally, not all properties were included in the original assessment. Second, when the current district expires on June 30, 2010, the City will lose the funding that the district provides to help pay for a portion of the street lighting maintenance and operating costs. Unfortunately, the November 2008 ballot was not approved and the City Council abandoned the district formation last December 2008. This year's Capital Improvement Budget includes a project to revisit the formation of a new Citywide street lighting assessment district. On September 1, 2009 the City Council awarded a contract to Willdan Financial Services for assessment engineering services. Additionally, at the November 17, 2009 study session, staff presented the City Council with options for Assessment District methodology and budget assessment to determine the new annual assessment rate for each property. DISCUSSION A. Proposed New Methodology and Assessment Rates for FY 2010 -11 The methodology that was preferred by the Council is based on a two -zone approach. Zone 1 is for property owners on arterial streets who receive lighting benefit. Zone 2 is for property owners who are not located on arterial streets receiving lighting benefit. Additionally, property owners in Zones 1 and 2 who have sparse lighting will pay twenty (20) percent of what the annual rate is for single family property owners. Areas in the City that do not have street lighting will not be assessed (see attached map). The total annual budget for this assessment is 1,032,725, which includes the annual street lighting budget of $980,725 plus $52,000 in district administration. Using the single - family property as the baseline for the assessment, the table below lists the estimated new assessment rate options for each zone based on a 50/50 and 60/40 cost sharing split between the City and the District. Page 2 of 4 Mayor and City Council February 2, 2010 Proposed Annual Assessment Rate Based on a Single- Family Property * Annual Assessment Rate for properties in Zones 1 and 2 that have sparse lighting The first option is a 50/50 split with the City and the District each paying 50% of the total lighting cost (or $516,363). The second option is a 60/40 split with the City paying 60% of the total lighting cost ($619,635) and 40% is paid by the District ($413,090). Also the above costs are the maximum proposed assessment that each assessed single - family property will pay for 2010/11 property tax roll, with a 3% inflationary adjustment rate for each fiscal year to account for reasonable increases in electricity and inflation that are inevitably associated with the ongoing maintenance and operations of street lights. In the event that the proposed annual budget for street lighting is less than the annual assessment, the lower amount will be applied. B. Public Outreach Strategy - Update During the last study session, Council also addressed several major issues that contributed to the failure of the November 2008 lighting assessment ballot. These issues included the complexity of the issue itself; the notice and ballot were complicated and need to be more user - friendly; and the public outreach efforts utilized were inadequate in educating and informing the voters the need for an assessment. To address these concerns, staff is currently seeking Request for Proposals from qualified consultants /firms to provide public outreach plan and communication strategy to improve the City's chances of a successful measure for the July 2010 ballot. Staff will seek Council's approval on March 2, 2010 to award a contract to the most qualified consultant. Therefore, in order to proceed with the re- balloting of the citywide lighting assessment, staff is seeking the City Council's affirmation that the new assessment methodology is Page 3 of 4 Total Annual Budget City /District Budget 50/50 Contribution City /District Budget 60/40 Contribution Citywide District $1,032,725 $516,363 $619,635/$413,090 Zone 1 $319,111 $19 $17 Primary Lights ($4)* ($3)* Zone 2 $713,614 $35 $27 Local Lights ($7)* ($6)* Mayor and City Council February 2, 2010 Proposed Annual Assessment Rate Based on a Single- Family Property * Annual Assessment Rate for properties in Zones 1 and 2 that have sparse lighting The first option is a 50/50 split with the City and the District each paying 50% of the total lighting cost (or $516,363). The second option is a 60/40 split with the City paying 60% of the total lighting cost ($619,635) and 40% is paid by the District ($413,090). Also the above costs are the maximum proposed assessment that each assessed single - family property will pay for 2010/11 property tax roll, with a 3% inflationary adjustment rate for each fiscal year to account for reasonable increases in electricity and inflation that are inevitably associated with the ongoing maintenance and operations of street lights. In the event that the proposed annual budget for street lighting is less than the annual assessment, the lower amount will be applied. B. Public Outreach Strategy - Update During the last study session, Council also addressed several major issues that contributed to the failure of the November 2008 lighting assessment ballot. These issues included the complexity of the issue itself; the notice and ballot were complicated and need to be more user - friendly; and the public outreach efforts utilized were inadequate in educating and informing the voters the need for an assessment. To address these concerns, staff is currently seeking Request for Proposals from qualified consultants /firms to provide public outreach plan and communication strategy to improve the City's chances of a successful measure for the July 2010 ballot. Staff will seek Council's approval on March 2, 2010 to award a contract to the most qualified consultant. Therefore, in order to proceed with the re- balloting of the citywide lighting assessment, staff is seeking the City Council's affirmation that the new assessment methodology is Page 3 of 4 Mayor and City Council February 2, 2010 acceptable and whether the City Council prefers a 50/50 or 60/40 cost sharing split to determine the annual street lighting assessment rate for fiscal year 2010/11. FISCAL IMPACT The Capital Improvement Program includes a Street Lighting Assessment District Project for $136,300. Upon a successful establishment of a citywide street lighting assessment district, the LLD 1972 would allow the City to include this project cost as part of the special benefit assessment and would be collected from the property owners' annual property tax bill. Additionally, a Citywide assessment via the Landscaping and Lighting Act of 1972 will provide an equitable cost distribution based on lighting benefit to each property for assessing street lighting costs. RECOMMENDATION Provide Direction on the Annual Assessment Rate for the Re- balloting of the Citywide Lighting Assessment District Attachment Approved by: D Pt-►- ..- Page 4of4 Donald Penman, City Manager WI LLDAN Financial Services Arcadia Citywide Streetlight District m Foothill 81 Legend SIM Arcadia City Boundary Arterials Zone 1 - Arterial Parcels Zone 2 - Non - Arterial Parcels Areas with No Lighting Areas with Sparse Lighting 0.25 0.125 0 0.25 Miles 0.5 0.75 Huntington Dr M.} Pell:: , 11•,,i9