TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Brian Ambrose, Director of Community Services
PREPARED BY: Crystal Arora, Management Analyst - Parks & Recreation
SUBJECT:
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Levy of Annual Assessments for Consolidated Landscaping and Lighting District
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RECOMMENDATION
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Adopt Resolution No. 24-4737 entitled: A Resolution of the City Council of the City of Murrieta, California, Ordering the Preparation of the Engineer’s Annual Levy Report for the Consolidated Landscaping and Lighting District;
Adopt Resolution No. 24-4738 entitled: A Resolution of the City Council of the City of Murrieta, California, Approving the Engineer’s Report for and Declaring the City’s Intention to Levy and Collect Assessments for Fiscal Year 2024/25 in the Murrieta Consolidated Landscaping and Lighting District and Setting A Public Hearing for July 2, 2024; and
Amend the Fiscal Year 2024/25 Operating Budgets for Landscaping and Lighting Districts 5, 10, and 11 as outlined in the Fiscal Impact section of the report.
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PRIOR ACTION/VOTE
Between Fiscal Year 1999/2000 and Fiscal Year 2003/04, the City of Murrieta (City) formed various landscaping and lighting districts as required by applicable laws, including Proposition 218 and California Constitution Article XIII D. In 2009, the City started consolidating the districts. The City levies assessments each year in the districts.
On May 2, 2023, the City Council adopted Resolution No. 23-4661, ordering the preparation of the Consolidated Landscaping and Lighting District Engineer’s Annual Levy Report and Resolution No. 23-4662, approving the engineer’s report for and declaring the City’s intention to levy and collect assessments for fiscal year 2023/24 in the Murrieta Consolidated Landscaping and Lighting District (Vote: 5-0).
On June 6, 2023, the City Council and the Board of Directors adopted joint Resolution No. 23-4671, approving the Fiscal Years 2023/24 and 2024/25 Operating Budget, and approving the schedule of authorized positions (Vote: 4-0-1).
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
BACKGROUND
The City currently has one Landscaping and Lighting Assessment District, as described further below. Each year, the maximum assessment may be increased by the greater of the change in the Consumer Price Index (CPI) or three percent (3%) for inflation in accordance with the adjustment authorized by the property owners at the time of each district’s formation. A district that is not yet assessed at the maximum levy allowed, per the Engineer’s Report, may be increased by a higher amount.
Each year, the City Council is required to initiate proceedings and adopt resolutions allowing for the levy and collection of annual assessments to be placed on the County tax rolls for parcels in the City limits. The proposed assessments are based on the estimated costs and expenses associated with the regular annual maintenance, operation, and servicing of the landscaping and lighting improvements within each zone that resulted from the development of properties within the Community Services District (CSD).
Procedure for Approval of Annual Levy
Pursuant to the Landscape and Lighting Act of 1972, Part 2, Division 15 of the California Streets and Highways Code (Act), after the formation of landscape and lighting districts, the City is required to follow certain procedures in conjunction with the annual levy of the assessment.
First, the City Council is required to adopt an initial resolution ordering the engineer (Willdan Financial Services) to prepare and file a levy report with the City Clerk. The annual levy report includes any proposed new improvements or changes to existing improvements within the District. Once the report is prepared, the City Council may approve it as is or modify it.
Next, the City Council must adopt a resolution of intention to initiate proceedings and declare the intent to levy and collect the proposed assessments and to set a public hearing. The resolution of intention should generally do the following: (a) declare the intention to levy the specified proposed assessments for the coming fiscal year, (b) describe existing improvements and any changes, (c) refer to the District by its official name and indicate the general location of the district, (d) refer to the engineer’s report for a more detailed description, (e) set the time and place, and give notice of a public hearing, and (f) state whether the assessment is proposed to increase from the prior year. Between the publication of the resolution of intention and the public hearing, the engineer’s report must be available for inspection in the City Clerk’s Office by residents. The attached Resolution Nos. 24-4737 and 24-4738 contain the details necessary and as required by the 1972 Act (as defined below).
If the City Council approves the recommendations in this report, a public hearing will be set for July 2, 2024, at which time interested persons will have an opportunity to file written protests or to verbally support or protest the proposal. The City Clerk will cause notice to be published once at least ten days prior to the public hearing. The Council must consider such protests and may order changes to any of the matters provided in the Engineer’s Report. To the extent there is an increase proposed outside of the maximum approved rate, the increase must be abandoned if a majority of interested persons file protests prior to the conclusion of the public hearing; however, the proposed annual levy is within the maximum approved rate, and is therefore not deemed an “increase” for the purposes of the 1972 Act (as defined below) or Proposition 218.
To save paper and reduce the bulk of this item, the parcel numbers and exact assessment amount for each parcel are on file in the City Clerk’s Office and may be reviewed by any interested party.
For Fiscal Year 2024/25, the Murrieta Consolidated Landscaping and Lighting District (Consolidated District) consists of thirty-one primary benefit zones, four of which represent a total of thirteen sub-zones. Of the thirty-one zones, thirty are active, and one is dormant. Each of the corresponding zones and subzones fund specific improvements that benefit parcels within those zones and sub-zones. The parcels receiving this assessment are identified by their own Assessor’s Parcel Number (APN). The County Auditor/Controller uses APNs to identify the tax roll properties charged for this special district benefit. The improvements and the costs of those improvements are identified and budgeted separately for each zone based on the planned services, operation, administration, and maintenance of the Consolidated District improvements authorized under the provisions of the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the California Streets and Highways Code (1972 Act).
Prior to Fiscal Year 1999/2000, local landscaping and lighting improvements associated with new developments in various areas of the City were funded by rates and charges levied through the City’s CSD and these specific improvements are still provided and funded through the CSD today. Although the City could have continued using the CSD as the mechanism for maintaining local landscaping and lighting improvements, it was recognized that the CSD was not the most efficient way to address the rapid development in the City; therefore, between Fiscal Year 1999/2000 and Fiscal Year 2003/04 the City formed various landscaping and lighting districts under the provisions of the 1972 Act and the California Constitution Article XIII D, to address local improvements associated with these developments.
In Fiscal Year 2003/04, the City consolidated the seventeen original landscape and lighting districts into a single district pursuant to Section 22605 (d) of the 1972 Act and established the Murrieta Consolidated Landscaping and Lighting District. As part of the consolidation, the original districts were established as zones, and any benefit zones within those original districts were established as sub-zones. The consolidation was a necessary step toward reducing the administrative complexities of multiple staff reports and resolutions for each district to be reviewed and adopted each year. The consolidation did not directly impact or change the maximum assessment rates previously approved by the property owners.
The annual assessments associated with local improvements are budgeted separately for each zone and charged to only those APN’s or parcels that benefit from those improvements and services. With the formation of each original district and annexation into the Consolidated District, an annual adjustment of two or three percent was approved by the property owners. The annual assessment for each zone varies based on the services provided and the number of parcels within that zone from $69.62 per parcel within Zone 22 for streetlights only to $1,579.56 per parcel for Zone 3 for full maintenance and streetlights.
Some zones have no increases proposed for the next fiscal year, and those with increases range from $5 to $155.36 annually, with LLD 31, Willow Springs, approved by Council in January 2024 as the newest LLD with an assessment of $201 per Benefit Unit. Please refer to the charts included in Attachment 3, pages 47 to 49, for the rates proposed for each zone and sub-zone assessment. If approved, a public hearing will be held on July 2, 2024, to hear any protests or objections in reference to the annual levy of assessments, the extent of the maintenance services, and any other matters by those property owners affected.
FISCAL IMPACT
The Murrieta Consolidated Landscaping and Lighting District levy amount for Fiscal Year 2024/25 is estimated to be $5,052,155.43. The levy and collection of these annual assessments will help offset the costs associated with the maintenance and services provided by the Community Services District. The revenue budgets for the estimated levy have been included in the adopted Fiscal Year 2023/24 and 2024/25 Operating Budget.
LLD Zones 5, 10, and 11 were budgeted to receive General Fund operating transfers in Fiscal Year 2024/25; however, the budget, as prepared by Willdan, is lower than originally anticipated. The operating transfer for LLD Zone 05 can be eliminated altogether, and the operating transfers for LLD Zone 10 and 11 can be reduced.
Staff requests that the Fiscal Year 2024/25 Operating Budgets for LLD Zone 05 be reduced by $3,973, LLD Zone 10 be reduced by $726.40, and LLD Zone 11 be reduced by 232.21.
LLD Zones 9, 12, 15, 16, 27, 28, 30, and 31 are contributing to Unassigned Fund Balance or they are breaking even.
LLD Zones 1-8, 13, 14, 17-26, and 29 have available Unassigned Fund Balance to cover their respective shortfall.
ATTACHMENTS
1. Resolution No. 24-4737
2. Resolution No. 24-4738
3. Engineer’s Annual Levy Report for the Murrieta Consolidated Landscaping and Lighting District
4. Map - LLD Charges by Zone