HomeMy WebLinkAboutAGENDA REPORT 2008 0903 CC REG ITEM 09ATO:
FROM:
DATE:
MOORPARK CITY COUNCIL
AGENDA REPORT
Honorable City Council
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CITY OF MOORPARK, CALIFORNIA
City Council Meeting
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Mary K. Lindley, Parks, Recreation & Community Services Director,:
August 25, 2008 (CC Meeting of September 3, 2008)
SUBJECT: Consider Revisions to Landscape and Lighting Assessment District
Capital Reserve Fund Balance Policy
DISCUSSION
Beginning in FY 2002/03, the City Council approved Engineer's Reports provided for a
Capital Reserve Account for each Assessment Zone /District to ensure that any
significant repairs, improvements, and replacement would be funded by the affected
property owners. Such repairs, improvements, and repairs include, but are not limited
to, walls, slopes, irrigation, monument signage, fences, and trails.
As provided for in the Engineer's Report, the Reserve Account is not to exceed an
amount equal to three times (300 %) the projected current annual operating budget for
any Zone /District. When a Reserve Account exceeds that amount, the amount of the
assessment is adjusted according to the CPI (maximum assessment), but the amount of
the assessment levied upon the affected properties is reduced to an amount determined
by the Assessment Engineer to be sufficient to fund the program for the next year, but
not less than 10 percent of the maximum assessment amount. When the Capital
Reserve falls below the established cap, the levy is adjusted upwards and maintained
at, or about the 300% level. The City Council is being asked to revise the 300% Capital
Reserve Account cap on all of the City's Landscape and Lighting Assessment Districts
to 100% (equivalent to one year of projected current operating budget).
Due to the slow pace of development, often times properties are assessed for
landscape and lighting improvements long before the City assumes responsibility for the
maintenance of those improvements. As a result, the fund balance in these accounts
builds up. To address this problem, it is recommended that the fund balance cap be
reduced. Consistent with the current policy, it is staffs intent to perform CIP adjustment
on all Zone /Districts, where applicable. Those that have a Capital Reserve Account
balance of one year operating cost or greater will be assessed a levy amount
commensurate to bringing the balance to within the approved cap range. When the
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Honorable City Council
September 3, 2008
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Capital Reserve Account balance falls below one year operating costs, the levy will be
adjusted upwards, but not greater than the maximum rate. If approved, the one -year
cap will not take effect until FY 2009/10.
At this time, the amount of the proposed assessment levy the Council will be asked to
consider for the above identified Zones /Districts in FY 2009/10 is unknown. The
Assessment Engineer and Finance Department will begin calculating annual operating
costs and Capital Reserve Account balances around March 2009. All that can be known
at this time is that the levy will fall somewhere between the Maximum Assessment and
the revised one -year cap.
FISCAL IMPACT
In the case of a major event such as slope failure or act of nature that destroys the
improvements within the LMD's, there may not be sufficient funds in the Capital
Reserves to make necessary repairs. However, the City would have the ability to
recover such costs over one or more years by raising the levy to the maximum. The
downside in such an event is that the City would need to loan the money to front the
funds needed (if City funds are available) or use short term borrowing for such
purposes. In either case, interest costs would also have to be funded by the
Zone /District.
STAFF RECOMMENDATION
Approve the Capital Reserve Account cap of one year's operating expense for the City's
Landscape and Lighting Assessment Districts.
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