FROM:
Finance
SUBJECT:
Title
Initiation and Intention to Levy Assessments for 2024-25 for Landscape and Lighting Maintenance Districts
End
RECOMMENDATION:
Recommendation
1. Adopt Resolution No. 2024-033, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Landscape Maintenance District No. 1 for 2024-25 and Ordering the Preparation of the Engineer’s Report Therefore.
2. Adopt Resolution No. 2024-034, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 1 ("LMD #1") for 2024-25 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.
3. Adopt Resolution No. 2024-035, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Landscape Maintenance District No. 2 for 2024-25 and Ordering the Preparation of the Engineer’s Report Therefore.
4. Adopt Resolution No. 2024-036, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 2 ("LMD # 2") for 2024-25 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.
5. Adopt Resolution No. 2024-037, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Landscape Maintenance District No. 3 for 2024-25 and Ordering the Preparation of the Engineer’s Report Therefore.
6. Adopt Resolution No. 2024-038, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 3 ("LMD # 3") for 2024-25 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.
7. Adopt Resolution No. 2024-039, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Landscape Maintenance District No. 3-1 for 2024-25 and Ordering the Preparation of the Engineer’s Report Therefore.
8. Adopt Resolution No. 2024-040, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 3-1 ("LMD # 3-1") for 2024-25 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.
9. Adopt Resolution No. 2024-041, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Local Lighting Maintenance District No. 3 for 2024-25 and Ordering the Preparation of the Engineer’s Report Therefore.
10. Adopt Resolution No. 2024-042, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Local Lighting Maintenance District No. 3 ("LLMD # 3") for 2024-25 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.
End
COUNCIL GOALS:
• Practice sound fiscal management by fully funding liabilities and reserves.
• Invest in the City’s infrastructure (streets, sewers, parks, etc.) by maintaining and improving the city's existing infrastructure.
DISCUSSION:
Pursuant to Streets and Highways Code Section 22622 through 22624, the City is required to file an Annual Engineer's Report and establish the intention to levy and collect assessments before the City may adopt assessment rates for 2024-25 for the following districts:
• Landscape Maintenance District No. 1 (throughout The City)
• Landscape Maintenance District No. 2 (Village of Heritage)
• Landscape Maintenance District No. 3 (Hunter's Ridge)
• Landscape Maintenance District No. 3-1 (Empire Center)
• Local Lighting Maintenance District No. 3 (Hunter's Ridge)
A public hearing to adopt the assessment rates for 2024-25 is scheduled for Tuesday, July 23, 2024, at 2:00 p.m.
The City's assessments for these districts have been reviewed considering Proposition 218's passage and comply with the substantive and procedural requirements to impose such assessments.
DTA has prepared the required Annual Engineer's Report for each landscape and lighting maintenance district for 2024-25 (copies are attached).
The Annual Engineer's Report for the following districts proposes 2024-25 assessment rates unchanged from the prior year for LMD #1 and LMD #3-1, as property owners did not previously approve annual increases. The expenditures for both LMDs exceed revenues, resulting in structural deficits, but each has adequate reserves to fund them.
The following LMDs are proposed to increase by annual increases previously approved by the property owners. Such increases are not considered increases that would require approval through a Proposition 218 protest ballot proceeding because they do not exceed the authorized maximum assessments for each LMD.
LMD # 2 (Village of Heritage) will increase by 2.0% ($10.66) to $543.87 per equivalent dwelling unit. The total cost of services for 2024-25 is $4.2 million, and the estimated assessed revenue with the recommended 2% increase is $2.6 million. This results in a $1.6 million structural deficit, which is primarily funded by transfers from the General Fund.
LMD # 3 (Hunter’s Ridge) will increase by 10.0% ($50.00) to $550.00 per equivalent dwelling unit. The increase proposed for LMD #3 is to bring the assessment district up to the approved maximum assessment and will not increase the assessment beyond such maximum authorized assessment. The total cost of services for 2024-25 is $1.4 million, and the estimated assessed revenue with the recommended 10% increase is $877,200, resulting in a $494,560 structural deficit which is primarily funded through the use of fund balance.
LLMD # 3 (Hunter’s Ridge) will increase by 2.0% ($0.44) to $22.44 per equivalent dwelling unit. The total cost of services for 2024-25 is $41,620, and the estimated assessed revenue with the recommended 2% increase is $35,790. This results in a $5,830 structural deficit, which is primarily funded through the use of the fund balance.
It is projected that the proposed rates, combined with the use of fund balance and transfers-in, will be sufficient to fund the estimated maintenance costs for 2024-25. Additionally, except for LMD #2 (Village of Heritage), each LMD also has a minimum 14% operating cash and contingency reserve. However, despite maintenance costs for 2024-25 being fully funded, each LMD has a structural deficit, where expenditures are not fully funded by revenues. Staff is working on long-term financial plans for each LMD to address the deficits and future financings, including the review of service levels and increased assessments, which would require approval by property owners.
FISCAL IMPACT:
The proposed assessment rates for 2024-25 are projected to generate approximately $4.5 million.
MOTION:
Approve staff recommendation.