CC SR 20240416 04 - LLMD Engineer Report Preparation FY24-25
CITY COUNCIL MEETING DATE: 04/16/2024
AGENDA REPORT AGENDA HEADING: Regular Business
AGENDA TITLE:
Consideration and possible action to review assessment rate options for the Citywide
Landscaping and Lighting Maintenance District for Fiscal Year 2024-25.
RECOMMENDED COUNCIL ACTION:
(1) Review and select the preferred option for setting the annual assessment rate for
the Citywide Landscaping and Lighting Maintenance District for Fiscal Year 2024 -
25;
(2) Direct staff to prepare the Engineer’s Report for the Citywide Landscaping and
Lighting Maintenance District for FY 2024-25; and,
(3) Direct staff to return at a later date with the appropriate resolutions memorializing
the Council’s directive for future consideration at a duly noticed public hearing.
FISCAL IMPACT: Preparation of the annual Engineer’s Report for the Citywide
Landscaping and Lighting Maintenance District will result in an expenditure of $8,000,
which is included in the FY 2023-24 budget. The Engineer’s Report is required for the
LLMD to continue to exist, even if the levy is set at zero.
Amount Budgeted: $8,000
Additional Appropriation: $0
Account Number(s): 101-400-3110-5101 VR
[General Fund- PW Administration- Professional Servs]
ORIGINATED BY: Vanessa Hevener, Project Manager
REVIEWED BY: Ramzi Awwad, Director of Public Works
APPROVED BY: Ara Mihranian, AICP, City Manager
BACKGROUND:
On August 6, 1992, the City Council formed an assessment district designated as the
Citywide Landscaping and Lighting Maintenance District (LLMD), pursuant to the
Landscaping and Lighting Act of 1972 (1972 Act). The purpose of forming the LLMD was
to provide funding for the ongoing operation, maintenance, and servicing of landscaping,
street trees, irrigation systems, hardscapes, sidewalks, streetlights, and traffic signals in
City rights-of-way and dedicated easements. The LLMD is funded through assessments
on properties Citywide. In accordance with 1972 Act requirements, each parcel is
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assessed an amount based on the relative benefit the parcel receives from the LLMD’s
operations rather than the parcel’s assessed value.
To ensure a fair and equitable sharing of LLMD costs, the City conducts an annual review
of an engineer’s report wherein the current year’s expenses are reviewed, the ensuing
year’s expenses are budgeted, and the assessment for the ensuing fiscal year is set. In
setting the annual assessment, the City Council will consider any proposed new
improvements or any changes in existing improvements, any fund balances or shortages,
and adjust the assessment accordingly. Payment of the assessment for each parcel is
made in the same manner and at the same time as payments are made for property taxes
for each property.
An Engineer’s Report is necessary to establish assessments based on relative benefit.
The Engineer’s Report classifies areas within the City into various zones which, by reason
of variations in the nature, location, and extent of the proposed activities and
improvements, receive differing degrees of benefit from the operation of the LLMD.
On June 6, 2023, during the City Council’s annual consideration of the LLMD, the City
Council directed Staff to bring the FY 2024-25 LLMD assessment options for the City
Council’s consideration earlier in the year than has typically been the case so that the
City Council’s assessment direction can be incorporated into budget calculations prior to
finalizing the budget.
Tonight, pursuant to last year’s Council directive, Staff seeks direction from the City
Council with respect to setting the preferred option for the assessment rate of the LLMD
for FY 2024-25 in order to prepare the Engineer’s Report.
DISCUSSION:
The LLMD annual levy ranged from $49.99 per parcel for single -family residences
(approximately 94% of properties Citywide) at inception on August 6, 1992, to $23.50 in
FY 1997-98. Beginning in FY 1998-99, the annual levy was set to $20.38 per parcel for
single-family residences, resulting in an annual revenue of approximately $333,000.
On June 21, 2005, the City Council decided to fund streetlight and traffic signal operation
and maintenance costs using a different fund, the 1911 Act Lighting and Maintenance
District Fund (1911 Act Fund), rather than LLMD funds. Staff presumes the City Council
made this decision because of an adequate 1911 Act Fund balance for the operation and
maintenance of streetlights and traffic signals and the desire to reduce the overall tax
burden on residents. Accordingly, the City Council reduced the LLMD assessment rate
and annual levy to $15.92 per parcel for single-family residences, resulting in a revenue
of approximately $256,000.
On May 16, 2017, the City Council set the LLMD rate to zero, which means property
owners were not assessed. The rate has been set to zero in each subsequent year since.
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The 1911 Act Fund continues to collect revenues. For FY 2022-23, the amount received
was $873,229. In general, this annual revenue is sufficient to cover the typical annual
maintenance and operating costs of approximately $480,000 for streetlights and traffic
signals. The fund balance in FY 2022-23 is $2.3 million which is restricted for costs related
to lighting and traffic signals only.
The City Council is being asked to consider the following options for establishing the
assessment levy for FY 2024-25 and to provide staff with direction on the preferred option:
1. Set the LLMD rate to zero, as has been the case since 2017, which means that
property owners will not be assessed.
2. Set the rates to the same amounts that were in effect prior to July 1, 1996 , which
will generate approximately $333,000 in revenue annually.
3. Set the rates in excess of the amounts in effect on July 1, 1996. However, this
would require compliance with the requirements of Proposition 218.
Funds could be used to enhance the current level of landscaping service on arterial
streets, install more landscaping such as additional street trees, or fund arterial street
beautification projects. Routine maintenance of landscaping along City streets is funded
through the General Fund for Public Works.
Following direction from the City Council, the Director of Public Works will order the
preparation of an Engineer’s Report based on the rate directed by the City Council. Upon
completion of the Engineer’s Report, the City Council will be asked to consider a
Resolution of Intent to levy annual assessments (at a rate of zero or greater) for the
Citywide LLMD, with a subsequent public hearing. Staff recommends preparing an
Engineer’s Report and conducting a public hearing, even if the City Council direction is to
set the rate to zero, because this would preserve the ability to set the assessment in the
future, should the City Council desire to do so.
It should be noted that after receiving the Engineer's Report, the Council retains the ability
to reconsider its preferred option for eventual adoption at a duly noticed public hearing.
CONCLUSION:
Staff recommends the City Council provide direction to Staff on setting the assessment
rate of the LLMD for FY 2024-25 and direct Staff to prepare the Engineer’s Report
accordingly.
ALTERNATIVES:
In addition to the Staff recommendations, the following alternative actions are available
for the City Council’s consideration:
1. Direct the Director of Public Works not to prepare the Engineer’s Report for the
Citywide LLMD for FY 2024-25.
2. Take other action, as deemed appropriate.
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