REPORT TO THE CITY COUNCIL June 28, 2018 FROM: SCOTT L. MOZIER, PE, Director Public Works Department BY: ANDREW J. BENELLI, PE City Engineer/Assistant Director Public Works Department, Landscape Maintenance Division AARON A. AGUIRRE, Public Works Manager Public Works Department, Landscape Maintenance Division SUBJECT ..Title HEARING Regarding Increasing the Annual Assessment for Tract 3884 of Landscaping and Lighting Maintenance District No. 1. (Council District 2) 1. Submission by City Clerk of Affidavit Certifying the Mailing of Notices and Ballots for Hearing 2. ***RESOLUTION - Declaring the Results of the Majority Protest Public Hearing Proceedings to Increase Assessments for Tract 3884 of Landscaping and Lighting Maintenance District No. 1 and Authorizing the Levy of Increased Assessments ..Body RECOMMENDATION Staff recommends that at the conclusion of a Proposition 218 (Prop. 218) protest hearing, in the absence of a majority protest, the Council adopt the attached Resolution declaring the results of the protest hearing and levying an increased annual assessment for Tract 3884 of Lighting Maintenance District No. 1 (LLMD No. 1). EXECUTIVE SUMMARY On May 10, 2018, the Fresno City Council unanimously approved and adopted Resolution No. 2018-116 (Resolution of Intention to Increase the Annual Assessment for Tract 3884 of Landscaping and Lighting Maintenance District No. 1) to initiate the Prop. 218 process to increase the annual assessment for Tract 3884 and set a public protest hearing on the matter for 10:00 a.m. on June 28, 2018. On May 14, 2018, the City Clerk mailed notice and protest ballots (weighted according to proportional financial obligation) to each property owner. The ballots are due at the conclusion of the public hearing, which closes the Prop. 218 majority protest process prescribed under the California Constitution. If no majority protest exists (i.e. if weighted ballots submitted in opposition do not exceed weighted ballots submitted in favor), then City Council has discretion to move forward with increasing the annual assessment for Tract 3884 through the adoption of the attached resolution. If the ballots against the increase outweigh those in favor, the City Council cannot increase the assessment, and no further action is necessary. BACKGROUND History of LLMD No. 1. On March 22, 1983, the Council adopted Resolution 83-93 ordering the formation of LLMD 1, originally known as Assessment District 89. LLMD No. 1 was formed to generate revenue for landscape maintenance within public rights-of-way and easements adjacent to existing and newly developed subdivisions. Tract 3884 was annexed to LLMD No. 1 on May 24, 1988, via Resolution 88-159 and contains a total of 173 separate tracts. Assessments collected from the Tract 3884 fund the maintenance of common landscaped areas surrounding the tract along West Avenue between Alluvial and Spruce Avenues, as shown on the attached map. Proposition 218. Prop. 218 became effective in 1996, and changed the California Constitution to require all assessment increases to be subject to a hearing and majority protest procedure. Accordingly, none of the LLMD No. 1 assessments, including assessments for Tract 3884, have been increased since prior to 1996, because no Prop. 218 procedures have ever been initiated. Proposed Increase. Because the LLMD assessments have been frozen at 1996 levels, with the increasing costs of providing services, there has been a steady decline of the tract landscaping throughout the years. Homeowners within Tract 3884 requested the City to initiate the process to increase their annual assessments to fund upgraded landscaping and allowing for more frequent maintenance of such landscaping - at levels comparable to new development. With the increased assessments, plant material and trees will be replaced; the irrigation system will be modified to current industry standards and service levels increased to provide monthly landscaping services. The proposed assessment is as follows: Years 1 through 3: For the first three years, the total amount of the assessment against all parcels in Tract 3884 will be $36,458.12 per year or $210.74 per parcel. This amount will allow phased upgrading of the landscaping within Tract 3884. Year 4 and Onward: Beginning in year four and continuing on, the total amount of the assessment against all parcels in Tract 3884 will be $16,951.86 per year or $97.99 per parcel, subject to a discretionary inflationary adjustment as follows: beginning in January of each year, the assessment may be adjusted upward annually at the discretion of the City in an amount not to exceed the Construction Cost Index (CCI) for the San Francisco Region for the prior 12-month period (December through December) as published in the Engineering News Record, or published in a comparable index if the Engineering News Record is discontinued or otherwise not available. Each annual adjustment of the assessment shall become effective on the subsequent July 1. This lower amount will allow for the continuation of heightened maintenance services. Process. Pursuant to Prop. 218, City Council adopted Resolution No. 2018-116 (Resolution of Intention to Increase the Annual Assessment for Tract 3884 of Landscaping and Lighting Maintenance District No. 1) on May 10, 2018, to initiate the increase. Resolution No. 2018-116 set a public hearing for June 28, 2018, at 10:00 am. The City Clerk mailed notice of the public hearing along with a majority protest ballot was mailed to property owners on May 14, 2018, 45 days prior to the hearing. To be counted, ballots must be returned by the close of the public hearing. If, at the conclusion of the public hearing, ballots submitted in opposition of the proposed assessment exceed the ballots submitted in favor of the assessment, the City may not impose the proposed assessment. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378 this item does not qualify as a "project" and is therefore exempt from the California Environmental Quality Act requirements. LOCAL PREFERENCE Local preference was not considered because this action does not include a bid or award of a construction or services contract. FISCAL IMPACT Total annual LLMD No. 1 assessment for Tract 3884 (all parcels) is $9,757.20. If approved, the assessment will increase to $36,458.12 per year for the first three years and then drop down to $16,951.86 per year thereafter, subject to an annual inflationary adjustment. Attachments: 7-Clerk Certification re Mailing of Notice and Ballot Engineer's Report 5-2-2018 Resolution - Declaring the Results of the Majority Public Hearing Proceedings to Increase Assessments for Tract 3884 of Landscaping and Lighting Maintenance District No. 1 and Authoring the Levy of Increased Assessments