FROM:
Finance
SUBJECT:
Title
Public Hearing to Establish Fiscal Year 2026-2027 Assessment Rates for Landscape and Lighting Maintenance Districts
End
RECOMMENDATION:
Recommendation
1. Adopt Resolution No. 2026-062, of the City Council of the City of Fontana, California, Confirming a Diagram and Assessment, and Levying the Assessment for Landscape Maintenance District No. 1 (“LMD #1” throughout the City) for Fiscal Year 2026-2027.
2. Adopt Resolution No. 2026-063, of the City Council of the City of Fontana, California, Confirming a Diagram and Assessment, and Levying the Assessment for Landscape Maintenance District No. 2 (“LMD #2” Village of Heritage) for Fiscal Year 2026-2027.
3. Adopt Resolution No. 2026-064, of the City Council of the City of Fontana, California, Confirming a Diagram and Assessment, and Levying the Assessment for Landscape Maintenance District No. 3 (“LMD #3” Hunter’s Ridge) for Fiscal Year 2026-2027.
4. Adopt Resolution No. 2026-065, of the City Council of the City of Fontana, California, Confirming a Diagram and Assessment, and Levying the Assessment for Landscape Maintenance District No. 3- 1 (“LMD #3-1” Empire Center) for Fiscal Year 2026-2027.
5. Adopt Resolution No. 2026-066, of the City Council of the City of Fontana, California, Confirming a Diagram and Assessment, and Levying the Assessment for Local Lighting Maintenance District No. 3 (“LLMD #3” Hunter’s Ridge) for Fiscal Year 2026-2027.
End
COUNCIL GOALS:
• Practice sound fiscal management by fully funding liabilities and reserves.
• Practice sound fiscal management by developing long-term funding and debt management plans.
• Enhance the local environment for future generations and create a healthy economic and environmental future by promoting programs that encourage reducing Green House Gas emissions.
DISCUSSION:
On June 09, 2026, City Council adopted Resolutions 2026-032 through 2026-041, inclusive, declaring its intention to levy and collect assessments for Fiscal Year 2026-2027 and setting June 23, 2026, for the public hearing to receive public comment pursuant to the Landscape and Lighting Act of 1972. Notice of the public hearing was published as required by law. The annual assessment process for the landscape and lighting assessment districts must be completed before August 10, 2026, in order to place the assessments on the County tax rolls.
The Fiscal Year 2026-2027 proposed assessment rates are as follows:
• LMD # 1 - the proposed rates for Fiscal Year 2026-2027 for residential units range from $77.76 to $495.92 per unit, the commercial and industrial areas range from $117.24 to $613.77 per acre. The proposed rates are the same as the prior year rates.
• LMD # 2 (Village of Heritage) - the proposed rate for Fiscal Year 2026-2027 for residential units is $565.84 per unit, an increase from the prior year of 2% ($11.09 per unit).
• LMD # 3 (Hunter’s Ridge) - the proposed rate for FY 2026-2027 for residential units is $665.50 per unit, an increase from the prior year of 10% ($60.50 per unit).
• LMD # 3-1 (Empire Center) - the proposed rate for FY 2026-2027 for commercial property is $1,000 per acre, the same as the prior year rate.
• LLMD # 3 (Hunter’s Ridge) - the proposed rate for FY 2026-2027 for residential property is $22.44 per unit, the same as the prior year rate.
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, it is estimated that General Fund support of $908,520 is required in 2026-27 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 is estimated that General Fund support of $1.6 million in 2026-27 will be required 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 #3-1 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 $22,210 in 2026-27 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 the use of available district fund balance of $358,810 in 2026-27 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 $1,860 in 2026-27 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.
It is projected that the proposed rates will be sufficient to fund the estimated maintenance costs for Fiscal Year 2026-2027 for all LMD’s with the exception of LMD #1 and LMD #2. Various operational options are being considered to mitigate the on-going funding deficit.
The City’s assessments for all districts have been reviewed in light of the passage of Proposition 218. The recommended actions comply with the provisions of this proposition.
FISCAL IMPACT:
The proposed assessment rates for Fiscal Year 2026-2027 are unchanged from the prior year except for LMD # 2 which will increase by 2% ($11.09 per unit) to $565.84 for the residential rate, and LMD # 3 which will increase by 10% ($60.50 per unit) to $665.50 for the residential rate. The proposed assessment rates for Fiscal Year 2026-2027 are projected to generate approximately $4.8 million.
MOTION:
Approve staff recommendation.