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HomeMy WebLinkAboutItem 10c - Citywide Street Lighting Assessment District ResolutionsCitywide Street Lighting Assessment District Resolutions June 6, 2023 Page 1 of 5 DATE: June 6, 2023 TO: Honorable Mayor and City Council FROM: Paul Cranmer, Public Works Services Director By: Jeramie Brogan, Management Analyst SUBJECT: RESOLUTIONS INITIATING PROCEEDINGS FOR THE ANNUAL LEVY AND COLLECTION OF ASSESSMENTS, APPROVING THE PRELIMINARY ENGINEER’S REPORT, DECLARING INTENTION TO LEVY AND COLLECT ASSESSMENTS FOR FISCAL YEAR 2023-24, AND APPOINTING A TIME AND PLACE FOR A PUBLIC HEARING FOR THE ARCADIA CITYWIDE LIGHTING DISTRICT NO. 1 RESOLUTION NO. 7503 INITIATING PROCEEDINGS FOR THE ANNUAL LEVY AND COLLECTION OF ASSESSMENTS FOR THE ARCADIA CITYWIDE LIGHTING DISTRICT NO. 1 PURSUANT TO THE PROVISIONS OF PART 2 OF DIVISION 15 OF THE CALIFORNIA STREETS AND HIGHWAYS CODE AND ORDERING THE PREPARATION OF THE ENGINEER’S REPORT CEQA: Not a Project Recommendation: Adopt RESOLUTION NO. 7504 APPROVING THE PRELIMINARY ENGINEER’S REPORT OF WILLDAN FINANCIAL SERVICES FOR THE ARCADIA CITYWIDE LIGHTING DISTRICT NO. 1 CEQA: Not a Project Recommendation: Adopt RESOLUTION NO. 7505 DECLARING ITS INTENTION TO LEVY AND COLLECT ASSESSMENTS WITHIN THE ARCADIA CITYWIDE LIGHTING DISTRICT NO. 1 FOR FISCAL YEAR 2023-24 AND APPOINTING A TIME AND PLACE FOR A PUBLIC HEARING CEQA: Not a Project 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. The District Citywide Street Lighting Assessment District Resolutions June 6, 2023 Page 2 of 5 budget for Fiscal Year 2023-24, as proposed, increased by 7.08%, or $95,700. The increase is primarily due to an increase in electricity and contract services. As a result, for Fiscal Year 2023-24, the annual assessment rate for a single-family property owner in Zone 1 will increase from $21.50 to $23.00; and from $36.60 to $39.16 in Zone 2. It is recommended that the City Council adopt the Resolutions initiating proceedings for the annual levy and collection of assessments, approving the preliminary engineer’s report, declaring its intention to levy and collect assessments for Fiscal Year 2023-24, and appointing a time and place for a public hearing for the Arcadia Citywide Lighting District No. 1. 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 and would have impeded the ability to properly maintain the City’s streetlights. Renewal of the Lighting District could no longer be done through the Street Lighting Act of 1919 because the assessments were based on the value of real property, which Proposition 13 prohibits. Additionally, not all properties within the City were included in the original assessment district, which resulted in an inequity of assessments. 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. 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, the method of apportionment established for the Citywide Lighting District to reflect the proportional special benefit of each parcel utilizes a weighted methodology of apportionment referred to as an equivalent benefit unit (“EBU”) methodology. 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 Citywide Street Lighting Assessment District Resolutions June 6, 2023 Page 3 of 5 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. DISCUSSION The City’s Fiscal Year 2023-24 proposed Budget for the Lighting District is $1,446,600, of which $1,221,158 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 $862,224, of the total street lighting budget, while the property owners will pay about 40%, or $584,376, of street lighting costs. The Citywide Lighting District budget for Fiscal Year 2023-24, as proposed, increased by 7.08%, or $95,700. The increase is due to an increase in electricity costs and contract services. Since the Fiscal Year 2023-24 Citywide Lighting District budget has increased, the annual assessment rate for a single-family property owner in Zone 1 will increase from $21.50 to $23.00; and for a single-family property owner in Zone 2, the annual assessment rate will increase from $36.60 to $39.16. 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 annually adjusted by an amount not to exceed 3% each Fiscal Year. The adjusted Maximum Assessment Rate is calculated independently of the Citywide Lighting District’s annual budget. Although the assessment range formula allows the City to increase the assessment rate to the maximum rate, the City has never raised assessment rates to the maximum allowed. For instance, while the Maximum Assessment Rate formula would allow the rates to be raised to $24.55 in Zone 1 and $41.75 in Zone 2, the assessment rates are only being increased to cover the change in budgeted costs in the coming year. Using the single-family property as the baseline for the assessment, the table below shows the annual assessment rate levied in Fiscal Year 2022-23 and the proposed Fiscal Year 2023-24 annual assessment rates for Zones 1 and 2: Citywide Street Lighting Assessment District Resolutions June 6, 2023 Page 4 of 5 1FY 2023-24 Maximum Assessment Rate for Zone 1 is $24.55; Zone 2 is $ 41.75 At the June 20, 2023, City Council Meeting, a public hearing will be conducted to allow the public an opportunity to provide comment regarding the levy and collection of assessments for the District. 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. 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 $584,376 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 $862,224 to the street lighting system in Fiscal Year 2023-24. RECOMMENDATION It is recommended that the City Council find the following Resolutions are categorically exempt pursuant to the California Environmental Quality Act (“CEQA”); and adopt: a. Resolution No. 7503 initiating proceedings for the annual levy and collection of assessments for the Arcadia Citywide Lighting District No. 1 pursuant to the provisions of Part 2 of Division 15 of the California Streets and Highways Code and ordering the preparation of the Engineer’s Report. b. Resolution No. 7504 approving the preliminary Engineer’s Report of Willdan Financial Services for the Arcadia Citywide Lighting District No. 1. FY 22-23 Assessment Rate FY 23-24 Assessment Rate1 Lighting District Total Budget $1,350,900 $1,446,600 Zone 1 (Arterial Lights) Sparse Lighting $21.50 ($4.30) $23.00 ($4.60) Zone 2 (Local Lights) Sparse Lighting $36.60 ($7.32) $39.16 ($7.83) Citywide Street Lighting Assessment District Resolutions June 6, 2023 Page 5 of 5 c. Resolution No. 7505 declaring its intention to levy and collect assessments within the Arcadia Citywide Lighting District No. 1 for Fiscal Year 2023-24 and appointing a time and place for a public hearing. Attachments: Resolution No. 7503 Resolution No. 7504 Resolution No. 7505