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HomeMy WebLinkAboutItem 10d - Citywide Street Lighting Assessment DistrictResolution No. 7446 - Citywide Street Lighting Assessment District June 21, 2022 Page 1 of 4 DATE: June 21, 2022 TO: Honorable Mayor and City Council FROM: Carmen Masud, Deputy Public Works Services Director By: Jeramie Brogan, Management Analyst SUBJECT: RESOLUTION NO. 7446 CONFIRMING THE ENGINEER’S REPORT FOR THE LEVY AND COLLECTION OF THE ARCADIA CITYWIDE LIGHTING DISTRICT NO. 1 AND THE ASSOCIATED ASSESSMENT DIAGRAM; AND ORDERING THE LEVY AND COLLECTION OF ASSESSMENTS FOR FISCAL YEAR 2022-23 Recommendation: Adopt SUMMARY The Citywide Lighting District No. 1 (“Citywide Lighting District” or “District”) was formed in the City of Arcadia pursuant to state law for the purpose of partially funding the ongoing operation, maintenance, and servicing of the City’s street lighting system. At the June 7, 2022, City Council meeting, the City Council adopted Resolution Nos. 7437 through 7439, which initiated the proceedings for the annual levy and collection of assessments, approved the preliminary Engineer’s Report, and set the public hearing for the June 21, 2022, City Council Meeting. The purpose of the public hearing is to allow the public an opportunity to provide comments regarding the levy and collection of the Citywide Lighting District. Upon conclusion of the public hearing, it is recommended that the City Council adopt Resolution No. 7446 confirming the Engineer’s Report for the levy and collection of the Arcadia Citywide Lighting District No. 1 and the Associated Assessment Diagram; and ordering the levy and collection of assessments for Fiscal Year 2022-23. BACKGROUND The City’s original Street Lighting District was established through the Street Lighting Act of 1919 in the early 1950s and was set to expire on June 30, 2010. This would have resulted in a loss of approximately $420,000 in annual revenue to the City beginning in Fiscal Year 2010-11. To address this issue, in 2009, the City Council directed the formation of a Citywide Lighting District via the Landscaping and Lighting Act of 1972. Resolution No. 7446 - Citywide Street Lighting Assessment District June 21, 2022 Page 2 of 4 Under this Act, assessments are based on the special benefit that street lighting provides to properties within the Citywide Lighting District area. Proposition 218 noticing and balloting requirements were met, and, on August 3, 2010, the City Council by Resolution adopted the Engineer’s Report for the formation of the Citywide Lighting District and approved the levy and collection of assessments beginning in Fiscal Year 2010-11. To ensure appropriate allocation and annual levy of assessments based on proportional special benefits, the Citywide Lighting District established two benefit zones to separate general benefit and special benefit. • Zone 1 includes properties along major thoroughfares and includes parcels that receive the general benefit of street lighting along arterial streets. • Zone 2 includes properties in residential neighborhoods that specifically benefit from maintenance of street lighting on local streets. In addition to the use of zones, an equivalent benefit unit (“EBU”) methodology was established to reflect the proportional special benefit of each parcel. The proportional special benefit calculation for each parcel is determined by land use, number of units, and acreage. Furthermore, a benefit multiplier factor is also employed to account for varying density levels of street lighting within the City, which ranges from a standard level of street lighting to no street lighting. Some areas in the City were developed with less lighting on their streets. These sparsely lit neighborhoods still receive special benefits from their local lights even though their overall lighting density is less than those streets with full lighting. They receive 20% of the standard lighting density and pay 20% of the annual assessment rate. Properties in areas of the City that do not have street lighting do not pay a street lighting assessment fee. This methodology has been in place since Fiscal Year 2010-11. Moreover, as part of the District formation, an assessment range formula was also developed to provide reasonable increases and inflationary adjustments that are associated with providing improvements for the Citywide Lighting District. The maximum rates for the Citywide Lighting District are adjusted annually and are calculated independently of the Citywide Lighting District’s annual budget. Although the City is allowed to increase the annual assessment rates to the maximum assessment rates, the proposed property owners’ assessment rate will not increase to the maximum assessment rate allowed. In fact, the City has consistently kept the assessment rates lower than the allowed inflationary assessment rates, resulting in substantial savings to property owners over the years when compared to the Maximum Allowed Assessment Rates. Resolution No. 7446 - Citywide Street Lighting Assessment District June 21, 2022 Page 3 of 4 DISCUSSION The City’s Fiscal Year 2022-23 proposed Budget for the Lighting District is $1,350,900, of which $1,143,336 has been determined to be of special benefit to properties within the Citywide Lighting District based on the assessment methodology. However, the District was established to fund only a portion of this amount. As a result, the City will be contributing approximately 60%, or $806,878, of the total street lighting budget, while the property owners (“District”) will pay about 40%, or $544,022, of street lighting costs. The Citywide Lighting District budget for Fiscal Year 2022-23, as proposed, includes an increase of 6.76%, or $85,500. The increase is due to an increase in electricity costs and an increase in salaries and wages, including the District’s fair share of retirement costs. As a result, for Fiscal Year 2022-23, the annual assessment rate for a single-family property owner in Zone 1 will increase from $20.04 to $21.50; and for a single-family property owner in Zone 2, the annual assessment rate will increase from $34.17 to $36.60. This will be the first assessment rate increase since FY2018-19. Using a single-family property as the baseline for the assessment, the table below shows the annual assessment rates levied in Fiscal Year 2021-22, and the proposed Fiscal Year 2022-23 annual assessment rates for Zones 1 and 2: Pursuant to the Landscaping and Lighting Act of 1972, notice for the date of the public hearing was published on June 9, 2022. As of the preparation date of this staff report, the City has not received any opposition to the proposed assessment rates for Fiscal Year 2022-23. Fees can only be adopted after the conclusion of the public hearing. ENVIRONMENTAL ANALYSIS The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”) under Section 15061(b)(3) of the CEQA Guidelines, and it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA. FY 21-22 Assessment Rate FY 22-23 Assessment Rate Maximum Allowed Assessment Rate Lighting District Total Budget $1,265,400 $1,350,900 $1,350,900 Zone 1 (Arterial Lights) Sparse Lighting $20.04 ($4.01) $21.50 ($4.30) $23.84 Zone 2 (Local Lights) Sparse Lighting $34.17 ($6.83) $36.60 ($7.32) $40.54 Resolution No. 7446 - Citywide Street Lighting Assessment District June 21, 2022 Page 4 of 4 FISCAL IMPACT Fees collected under the Citywide Lighting District will help defray the total maintenance costs of lighting in the subject areas. Upon conclusion of the public hearing and adoption of the engineer’s report, a total of $544,022 will be levied and collected under the Citywide Lighting District. The levy will not exceed the cost of providing the subject services to the areas nor will the levy exceed the Maximum Assessment Rates allowed. The levy has been set to ensure that the cost to the property owner does not exceed the special benefit to that property. Based on the recommended assessments, the City of Arcadia will contribute $806,878 to the street lighting system in Fiscal Year 2022-23. RECOMMENDATION It is recommended that the City Council determine that the Resolution is exempt under the California Environmental Quality Act (“CEQA”), and adopt Resolution No. 7446 confirming the Engineer’s Report for the levy and collection of the Arcadia Citywide Lighting District No. 1 and the associated Assessment Diagram; and ordering the levy and collection of assessments for Fiscal Year 2022-23. Attachment: Resolution No. 7446 Exhibit "A"