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HomeMy WebLinkAboutAGENDA REPORT 1998 1007 CC REG ITEM 10ETO: FROM: DATE: SUBJECT: Backeround CITY COUNCIL AGENDA REPORT CITY OF MOORPARK ITEM 10 . CITYlnr ,,iw1 vI,�R; %'. C AI,IFOWNIA of �0 The Honorable City Council ACT.---­ e rared Mary Lindley, Director of Community Services October 1, 1998 (CC Meeting of October 7, 199 k) Consider a Property Mail Ballot Assessment for the Maintenance of City Parks Over the past few months, the Budget and Finance Committee (Mayor Hunter and Councilmember Wozniak), has met several times to review potential new revenue sources and possible increases to existing revenue sources. The revenue sources discussed by the Committee included a business license tax, utility user tax, sewer in -lieu franchise tax, and increases to the solid waste franchise fees. Additionally, the Committee looked at revenue sources that would raise revenue specifically for the maintenance of City parks: a mail ballot property assessment and a special/general parcel tax. The City is familiar with the special property tax measure process as a result of its experience with the unsuccessful Measure P in 1997, but has never attempted a mail ballot property assessment. At the conclusion of its last meeting, the Committee agreed to recommend that the Council consider undertaking a mail ballot property assessment prior to the end of the current fiscal year. Property Mail Ballot Assessment The property mail ballot assessment process is most like the park maintenance assessment, initially established by the City for park maintenance in 1985 (known as AD85 -1), and discontinued in June 1998. This assessment district was established under the Landscape and Lighting Act of 1972. Under Proposition 218, the City can establish a property assessment for park maintenance for those properties that derive a "special" benefit from the construction, or ongoing maintenance of improvements. Proposition 218 defines special benefit to mean "a particular and distinct benefit over and above general benefits conferred on real property located in the district, or to the public at large. General enhancement of property value does not constitute a "special benefit ". A local government seeking a property assessment must first determine that a special benefit exists and then calculate the portional special benefit to each property in relationship to the total cost of maintaining/improving said special benefit (total assessment). If the City Council elects to pursue a property assessment for parks, it would need to identify the proportional special benefit each affected property derived from the maintenance of City parks. The apportioning benefit is determined by various calculations performed by an engineer and contained in an engineer's report. The requirement of an engineer's report is consistent with the Landscape and Lighting Act, and has historically been prepared by the City each fiscal year for its existing assessment districts. Under Proposition 218, there are special noticing requirements for mail ballot assessments that local governments must follow. These requirements are very similar to the noticing requirements used by the City for AD 85 -1 and AD 84 -2. The noticing requirements include a 45 -day mailed notice to M: AML .indley\ADMIMassessmentballot .agd.doc G"OO :S4 recorded property owners and a noticed public hearing. The notice can be mailed via U.S. First Class Mail and must contain the assessment amount for the entire assessment district; assessment chargeable to each parcel; duration of proposed assessment; reason for assessment; basis on which the amount of proposed assessment was calculated; date, time, and place of public hearing; and summary of voting procedures and effect of majority protest. Under preexisting assessment law, owners of 50 percent or more of the total property proposed to be assessed, determined by acreage, had to file written protest in order to defeat a proposed assessment. With Proposition 218, property owners express their support or opposition to a proposed assessment by returning the ballot, which will accompany the notice, referred to above. The ballots must be returned before the conclusion of the public hearing (within 45 days of mailing the ballots), and are then tabulated at the public hearing. No assessment may be imposed if a majority protest exists. A majority protest exits if ballots submitted in opposition, weighted according to proportional financial obligation of the affected property owners, exceeds the ballots submitted in favor of the assessment. Another way to define a majority protest is when the number of property owners representing fifty percent of the total proposed assessment submit ballots opposing the assessment. General and Special Taxes There are two property tax options: 1) a general tax, and 2) a special tax. A general tax is defined as any tax imposed for general government purposes. Under Proposition 218, no local government may impose, extend, or increase any "general" tax until such tax is submitted to the electorate and receives approval from a majority of the voters. The election to approve a general tax must be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body. A special tax is imposed for a specific purpose, such as the tax which would have been imposed had Measure P succeeded. For a "special" tax, no local government may impose, extend, or increase any special tax until such tax is submitted to the electorate and approved by two- thirds of the voters voting in the election. Unlike a general tax, there are no timing restrictions on elections to approve a special tax. Note that any property related tax still requires a two- thirds vote. In an election involving either a special or general tax, any registered voter is eligible to vote, regardless of whom the tax will be imposed upon. The differences between a mail ballot property assessment and a general or special tax measure (similar to Measure P) include: a property assessment can only be collected to pay for "special" benefits, whereas a general tax can fund general benefits and in the case of a special tax, a specific benefit; only property owners who will be impacted by an assessment can cast ballots, whereas any registered voter can cast a vote on a tax measure; under a property assessment, the ballots are weighted based on a property's proportional share of the total assessment, whereas under a property tax measure, each vote has equal weight; and a property assessment requires that the majority of the ballots returned be in favor of the assessment before the assessment can be enacted, whereas, under a special property tax it takes a two -thirds favorable vote and for a general tax, a majority favorable vote is required. As stated earlier, the property assessment requirements under Proposition 218 are very similar to the process adhered to by the City under the Landscape and Lighting Act. Like AD 85 -1 and AD 84 -2, only those owning affected property are eligible to vote and it requires a majority of those voting to affirm the assessment. M:\NEindley\ADUR4\assessmentballot.agd.doc 00OZ55 Case Study Elk Grove Community Services District had an existing assessment in place pursuant to the 1972 Landscape and Lighting Act to fund 100 percent of its park, trail, open space, and landscape corridor maintenance (this differs from Moorpark's, where parks and parkway /medians were two separate assessment districts, and neither district funded operation and maintenance at 100 percent). With the passage of Proposition 218, the District proceeded with a property mail ballot assessment to replace its existing assessment. Elk Grove secured the services of a professional consulting firm to assist them with their efforts to establish an assessment district (with individual zones of benefit). They mounted a successful public education campaign, which focused on the positive benefits of its park system and maintenance of open space and landscape corridors. Additionally, they used a citizens committee to review and provide input into the budget/expenses for which the assessment would be levied to support. Elk Grove also used volunteers as speakers and to operate a door -to -door campaign. It appears that the involvement of the citizens committee and volunteers provided credibility to the District's efforts. Because of the complexity of the law and the level of work required to prepare the engineer's report and public notice/ballot, if the City Council elects to undertake a mail ballot property assessment effort, the City would need to secure the services of a qualified consultant. There are consulting firms that provide Proposition 218 compliance services. These firms provide a range of services including: preparation of an engineer's report (including the determination of special versus general benefit), preparation of the notice/ballot, ballot proceeding service such as surveying property owners, coordinating focus groups, financial planning, strategy development, and public education/information efforts. Most firms advise that governments pursuing a mail ballot assessment allow for at least a six -month process, ending with counting the ballots. In preparation for this Agenda Report, staff secured written proposals from two consulting firms that have successfully facilitated mail ballot assessment efforts. The cost to secure these firms varies depending on the scope of services required by the client. Based on the City's needs, staff estimates that fees for consulting services would be approximately $30,000 to $40,000. If the City Council agrees to proceed with a property mail ballot assessment, the effort would need to be funded from General Fund Reserves. It appears that if the City were successful in getting a mail ballot assessment established, the cost of preparing and mailing the ballots could be included in the assessment budget. Conclusion It is the Committee's and staff s view that without closing parks and/or significantly cutting back City services, it is necessary to generate sufficient revenue to replace the revenue lost from the Maintenance Assessment District. Other revenue options, such as a business license tax, will not generate the amount of funds necessary to support the maintenance of parks. Therefore, the Committee and staff believe that the City needs to initiate a property assessment or tax for either general or special purposes. In the past, the City Council has favored a special tax over a general tax. The Committee's recommendation to pursue a property assessment is consistent with the Council's position on a special tax, since an assessment can only be collected for the maintenance or construction of "special" benefits. Additionally, a property assessment is very similar to the Park Maintenance Assessment District supported by the City Council for the last twelve years. A successful property mail ballot assessment would provide a significant portion of the revenue required to maintain the sizable investment the City has in its parks and allow the parks to remain open. M:1 MI ..indley\ADNMassessmentballot .agd.doc 600256 In order for the Council and staff to undertake the FY 1999/2000 budget process, there needs to be some resolution to the current funding issues. That is, if the City is going to pursue a property assessment, it should be concluded no later than April 1999. If the Council is not interested in initiating a property assessment or tax, staff should be directed as to other options the Council may wish to explore. If the City Council agrees to pursue a mail ballot assessment proceeding, the next step would be for staff to conclude interviews and negotiations with qualified consultants, which could be completed in the next two weeks. Staff would then return to the Council with a recommendation for consultant services and a budget amendment to fund the assessment process. Recommendation The Budget and Finance Committee and staff recommend that the City Council indicate its intent to undertake a mail ballot property assessment proceeding prior to the end of the FY 1998/99, and direct staff to interview prospective consultants and return to Council by November 4 with a recommendation. M:\NEindley\ADN4lMassessmentballot.agd.doc 00025'°