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Home My WebLink About04A2- City Manager's Office ORIGINAL CITY OF SAN BERNARDINO -REQUEST FOR COUNCIL ACTION From: Charles McNeely, City Manager Subject: Authorization to Proceed with the formation of a City-wide Maintenance Dept: City Manager's Office Assessment District and securing proposals from consultants for Assessment Engineering Date: June 22, 2010 and Outreach services. File No.: 14.40-169 MCC Date: 06-30-2010 Synopsis of Previous Council Action: 04/27/2010—Approved in concept, the formation of a City-Wide Assessment District as part of the "Budget Balancing Strategy Options"presented by the City Manager. Recommended Motion: That the City Manager be authorized to proceed with the formation of a City-wide Assessment District including securing proposals from consultants for A sessment Engineering and Outreach services. Charles cNe Contact person: LASZLO "Les" FOGASSY Phone: 5026 Supporting data attached: Staff Report Ward: ALL FUNDING $84,640 to $114,640 (estimated formation and outreach costs; REQUIREMENTS: Amount: would be reimbursed upon successful formation of the District) Source: (Acct. No.) 001-092-5502 (Acct. Description) Professional &Contractual Services Finance: Council Notes: '�''u s-7°%l 7_XIKCA1 Agenda Item No. a kq ' J�' �l7 CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION Staff Report Subiect: Authorization to proceed with the formation of a City-wide Maintenance Assessment District and securing proposals from consultants for Assessment Engineering and Outreach services. Background: On April 27, 2010,the Mayor and Common Council approved, in concept, exploring the formation of a City-wide Assessment District as part of the"Budget Balancing Strategy Options" presented by the City Manager. These options were identified to address the City's projected $24 million deficit for FY 2010-11,which is a result of the historic downturn of the local and national economy over the past two to three years. The formation of a City-wide Maintenance Assessment District would potentially finance various City-wide maintenance operations and relieve the General Fund of these costs. The specific maintenance proposed to be funded by the assessment district has not been fully determined;however, street maintenance costs, street lighting maintenance costs,traffic signal maintenance and operations costs, graffiti removal costs, and street tree trimming costs have been identified as potential functions to be funded wholly, or in part, through the assessment district. A more thorough analysis and Engineer's Report will be required to determine the maintenance operation costs that could be funded through this mechanism. In 1990, a City-wide Maintenance Assessment District was formed for street lighting, street sweeping, graffiti removal and traffic signal maintenance. That assessment district,known as Assessment District No. 994 ("AD 994"),was extended in 1994 and expired pursuant to a "sunset clause"in 1997. This district was established prior to the approval and implementation of Proposition 218, which made several procedural changes to the formation of assessment districts. One of these changes includes the requirement of a majority approval of the property owners being assessed,through a mailed assessment ballot process. These ballots are weighted in direct proportion to the assessment amount. Although the finding of a"special benefit"has always been a requirement in the formation of assessment districts, Proposition 218 further required that assessment amounts be directly proportional to the special benefit received by the property. The proposed assessment district will require a more detailed analysis of the special benefit determination than was necessary when AD994 was formed, and will likely involve the need to create"zones of benefit"within the district based on the intensity of maintenance and benefit received by each property. Further, the provisions of Proposition 218 mandate that all public lands included within an assessment district that receive any benefit be assessed. Since these properties are typically not on the property tax rolls, they will need to be assessed and collected through direct billing. Some public properties, such as flood control and right of way, as well as privately owned lands that receive no benefit,would be exempt under the assessment formula. Due to the resources and expertise necessary to perform the required data compilation, analysis and determination of appropriate assessment formulas, staff recommends the use of a consultant for assessment engineering services. One of the major tasks to be conducted by the assessment engineer will be the preparation of an Engineer's Report and maps. The report will contain detailed information relative to the maintenance operations to be funded through the assessment district and the associated costs; the determination of the zones of benefit; the calculation of the assessment formula; and the identification of the assessment spread. The report will also contain an assessment roll,which sets forth the specific amounts to be assessed on each parcel within the district. The target total assessment amount to be generated is proposed to be$6.2 million annually. The per parcel assessment amounts for the various property types are unknown at this time but will be contained in a preliminary Engineer's Report which will be submitted for review by the Mayor and Common Council upon its completion. Many engineering consulting firms also offer services that would be necessary to develop an educational outreach program regarding the assessment district process and benefits for the affected property owners. Staff has surveyed several Cities in the area regarding the existence of current city-wide assessment districts, or efforts to form new districts. Four of the cities surveyed have existing city-wide lighting districts : 1) The City of Arcadia is proposing to extend its district due to a sunset clause that terminates the district this year; 2) The City of Oceanside is proposing to increase its current assessment; 3) The City of Rialto is currently not proposing to increase its assessment, which has no sunset clause; 4) The City of Riverside is currently not proposing to increase its assessment,which has no sunset clause. All of four of these districts were formed prior to the implementation of Proposition 218 in 1996, and no recent efforts to form new districts were noted. Attached is a summary of the survey that also depicts the typical annual assessment for a single-family parcel. Although the cost of assessment engineering and outreach services can be assessed to the district, the City would not be reimbursed for those costs in the event the formation is not successful. The formation costs, including a simple outreach element, is estimated to be approximately$60,000, with an additional $24,640 for postage. A more progressive outreach through a separate public relations firm is estimated to cost an additional $30,000. Upon authorization to proceed, staff will send Request for Proposals to various consulting firms specializing in these services. Due to the time required to form an assessment district of this size and type, the district would not be established in time to meet the County Tax Collector's submission deadline of August 10, 2010, for collection on 2010-11 tax rolls. Therefore, initial revenues would not be received until the first half of the 2011-2012 tax rolls would be due, in December 2012. The attached flowchart outlines the various steps needed to complete the formation process. Financial Impact: If formation of the assessment district is successful, an estimated maximum of$6.2 million in revenue would be generated annually. The actual revenues cannot be determined until the completion of an Engineer's Report. If the property owners approve the district, the formation costs could be included in the first year's assessment; however, if the district is not approved, the City would not be reimbursed for the formation costs, which are estimated to be between $84,640 and $114,640. This amount is allocated in the proposed budget for the 2010-11 Fiscal Year in the General Government Program account for professional services (account 001-092- 5502 ). Recommendation: Authorize the City Manager to proceed with the formation of a City-wide Assessment District and securing proposals from consultants for Assessment Engineering and Outreach services be given. PROPOSED CITY-WIDE ASSESSMENT DISTRICT FORMATION TIMELINE AUTHOR TION TO PROCEED WITH FORMATION OF TWum10 -> ASSESSMENT DISTRICT, INCLUDING REP'S FOR CONSULTANT MAIL"REQUEST FOR PROPOSAL" 1SAUp-10 -> FOR ASSESSMENTENGINEERING AND OUTREACH SERVICES 15-Sap•70 _> LASTDAYTORECENE PROPOSALS CITUDA AGER& CONTRACT OVER _ I NOI — CITY ATTORNEY APPROVE $25,000 T --- CONTRACT I t._-_._._----"-----"—"—"-1 YES 18-0d-10 -> ADOPT RESOLUTION AWARDING CONTRACT CONSULTANT TO PREPARE O1-Nav-10 ENGINEER'S REPORT,BOUNDARY THRU _> AND DIAGRAM MAPS, tb•FeD•11 RESOLUTIONS,AND PREPARE NOTICE AND ASSESSMENT BALLOT ADOPT RESOLUTION OF INTENTION:PRELIMINARILY i4�Aar 11 -> APPROVES ENGINEER'S REPORT AND SETS PUBLIC HEARING (AT LEAST 45 DAYS FROM DATE OF 23-Mar-it _> RECORDDISTRICTBOUNDARY MAP 21 Apr 11 -> MAD.NOTICES ANDBALLOTS CONDUCTOUTREACH MEETING OR MEETINGS CLOSE PUBLIC HEARING Num11 _> CONTINUE ITEM FOR TWO WEEKS TO TALLY BALLOTS —"l ADOPT AND RECORD MAJORITY AN 50 (PROTESTS AND _ NO i _ RESOLUTION TERMINATING LESS THAN SOY.PROTESTS T I PROCEEDINGS I._.___._._YE5._.___._._I 20JUm10 _> ADOPT RESOLUTION APPROVING THE DISTRICT 29JYm10 _> RECORD ASSESSMENT DIAGRAM AND "NOTICE OF ASSESSMENT" 29JYm10 _> MAIL"NOTICE OF FIWNG OF ASSESSMENT" Bef. > FI.EASSESSMENTROLLSWTTH 10-Aug-2011 COUNTY MST HALF OF ASSESSMENTS Dec.2011 -> COLLECTED AND PAD)BY COUNTY SECOND HALF OF ASSESSMENTS Apr.2012 -> COLLECTED AND PAID BY COUNTY ASSESSMENTSVVILLCONTINUETO BE COLLECTED AND PAID EACH SUBSEQUENT DECEMBER&APRIL THROUGH LIFE OF THE DISTRICT PW W WMtalRY1 PORRRw SURVEY OF SELECTED AREA CITIESFOR EXISTANCE OF CURRENT CITY-WIDE ASSESSMENT DISTRICTS OR PROPOSALS TO FORM NEW DISTROCTS. TYPICAL SINGLE FAMILY CURRENT DISTRICTS STATUS PARCEL ANNUAL CITY AND/OR NEW PROPOSALS OR COMMENTS ASSESSMENT Arcadia Extend existing lighting district Pending ballots $ 28 Beaumont No response received N/A N/A Colton None N/A N/A Fontana None N/A N/A Hemet None N/A N/A Oceanside Existing lighting district Pre-Prop. 218 $ 16 Proposed increase $ 13 Proposed new assessment Pending ballots $ 29 Ontario No response received N/A N/A Rancho Cucamonga No response received N/A N/A Redlands None N/A N/A Rialto Existing lighting district Pre-Prop. 218 $ 26 Riverside Existing lighting district Pre-Prop. 218 $ 31 Yucaipa None N/A N/A Public Works/Real Property/06/24/2010