FROM:
Finance
SUBJECT:
Title
Initiation and Intention to Levy Assessments for 2025-26 for Landscape and Lighting Maintenance Districts
End
RECOMMENDATION:
Recommendation
1. Adopt Resolution No. 2025-024, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Landscape Maintenance District No. 1 for 2025-26 and Ordering the Preparation of the Engineer’s Report Therefore.
2. Adopt Resolution No. 2025-025, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 1 ("LMD #1") for 2025-26 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.
3. Adopt Resolution No. 2025-026, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Landscape Maintenance District No. 2 for 2025-26 and Ordering the Preparation of the Engineer’s Report Therefore.
4. Adopt Resolution No. 2025-027, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 2 ("LMD # 2") for 2025-26 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.
5. Adopt Resolution No. 2025-028, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Landscape Maintenance District No. 3 for 2025-26 and Ordering the Preparation of the Engineer’s Report Therefore.
6. Adopt Resolution No. 2025-029, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 3 ("LMD # 3") for 2025-26 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.
7. Adopt Resolution No. 2025-030, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Landscape Maintenance District No. 3-1 for 2025-26 and Ordering the Preparation of the Engineer’s Report Therefore.
8. Adopt Resolution No. 2025-031, 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 2025-26 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.
9. Adopt Resolution No. 2025-032, of the City of Fontana, California, Initiating Proceedings to Levy and Collect Assessment Within Local Lighting Maintenance District No. 3 for 2025-26 and Ordering the Preparation of the Engineer’s Report Therefore.
10. Adopt Resolution No. 2025-033, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Local Lighting Maintenance District No. 3 ("LLMD # 3") for 2025-26 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 2025-26 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 2025-26 is scheduled for Tuesday, July 22, 2025, 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.
The City has engaged DTA as its LMD administrator and DTA has prepared the required Annual Engineer's Report for each landscape and lighting maintenance district for 2025-26 (copies are attached).
The Annual Engineer's Report for the following districts propose assessment rates for Fiscal Year 2025-2026 that are unchanged from the prior year for LMD #1, LMD #3-1, and LLMD #3.
The following LMDs are proposed to increase by annual increases previously approved by the property owners and such increases are not considered increases that would require approval through a Proposition 218 protest ballot proceeding because such proposed increases do not exceed the authorized maximum assessments for each LMD:
• LMD # 2 Village of Heritage will increase by 2.0% ($10.88) to $554.75 per equivalent dwelling unit.
• LMD # 3 Hunter’s Ridge will increase by 10.0% ($55.00) to $561.00 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.
A funding status for each LMD and LLMD is summarized below:
• LMD #1 Citywide (Fund 395) - This district has a structural deficit, with ongoing revenues being insufficient to cover annual operating costs. As a result, General Fund support of $830,400 is required in 2025-26 to maintain current service levels. Although additional funding is necessary, increasing the assessment is not permissible without voter approval.
• LMD #2 Village of Heritage (Fund 396) - This district has a structural deficit, with ongoing revenues being insufficient to cover annual operating costs. As a result, it will require General Fund support of $1.1 million in 2025-26 to maintain current service levels. As such, although the recommended increase of 2% is not adequate to resolve the structural deficit, it is the maximum allowable increase, and any additional increase is not permissible without voter approval.
• LMD #3 Empire Center (Fund 397) - This district has a structural deficit, with ongoing revenues being insufficient to cover annual operating costs. As a result, it will require the use of available district fund balance of $20,790 in 2025-26 to maintain current service levels. Although a structural deficit exists, this district is considered to be solvent as available fund balance can fund operational deficits for more than 10 years, but funding will continue to be monitored annually.
• LMD #3 Hunter’s Ridge (Fund 398) - This district has a structural deficit, with ongoing revenues being insufficient to cover annual operating costs. As a result, it will require use of available district fund balance in the amount of $145,700 in 2025-26 to maintain current service levels. As such, although the recommended increase of 10% is not adequate to resolve the structural deficit, it is the first step in a multi-year plan to achieve solvency.
• LLMD #3 Hunter’s Ridge (Fund 399) - This district has a structural deficit, with ongoing revenues insufficient to cover annual operating costs. As a result, it will require the use of available district fund balance of $2,470 in 2025-26 to maintain current service levels. Although a structural deficit exists, this district is considered to be solvent as available fund balance can fund operational deficits for more than 10 years, but funding will continue to be monitored annually.
FISCAL IMPACT:
Approval of this item will authorize the proposed assessment rates for 2025-26 and are projected to generate approximately $4.7 million including both the existing rate and proposed increases.
MOTION:
Approve staff recommendation.