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HomeMy WebLinkAboutAGENDA REPORT 1997 0507 CC REG ITEM 09L/. /n3. s CITY OF WWA M CALnVOM city Council Mating CITY OF MOORPARK ACS 0 TO: HONORABLE CITY COUNCIL FROM: RICHARD HARE, DEPUTY CITY MANA G SUBJECT: MOSQUITO ABATEMENT DISTRICT MEETING MAY 6, 1997 DATE: MAY 7. 1997 I attended the MMAD meeting on the above date and have received the report prepared by Bill LaPerch and Jim Hartley (attached). In addition to Hartley and LaPerch, Robert Coughlin and David Austin were in attendance at the meeting. This was David Austin's last meeting and Jim Hartley has been appointed as the new chairman. Mr. LaPerch favors a negative tax for the next twenty years (Option C) and operation of MMAD from the reserve. The remainder of the Board appear to be leaning in that direction as well. They have received the opinion of the County Assessor's Office that they can have a negative tax and will be able to reinstate the tax at some point in the future. I asked them to hold off on making any decisions until there is an opportunity to explore the provision of services by the city. To that end, I have asked the MMAD ad hoc committee to be available to meet with the Council Ad Hoc Committee (Mayor Hunter and Council Member Evans) on Wednesday, May 14, 1997. The MMAD Board has expressed concerns regarding the continued services of the district. This was discussed at the first meeting of the ad hoc committees and the general impression has been that the City would be interested in continuing the same level of service, if not, increasing services by combining the efforts of our public works department and code enforcement. The MMAD report brings into question whether or not there would be budget savings. Given a cursory review I believe there would be a reduction of $10,000 - $201000 per year providing the same level of service. However, as noted above the revenues would allow for an expansion of services. The reserve of over one million dollars would also allow the City to expand services to the taxpayers so -that they Page 2 receive a return for the taxes they have already paid. Technical questions remain to be worked out regarding the dissolution of the district. The district could dissolve and the City could workout a joint powers agreement with the County so that the City could enforce health and safety code violations in the unincorporated area surrounding the City. These questions should be addressed at the joint meeting of the ad hoc committees on Wednesday, May 14. MMAD would like a declaration from the City of the City's intentions. It would be to everyone's advantage if the Council and the District could agree on a timetable for resolution of the district's administration. If however the District Board does not agree with the City's position there are steps, such as petitioning LAFCO, which the City can take unilaterally to transfer the services to the City along with the portion of the property tax allocated for the services. Attachments: Thomas Mahon Memo Noel Klebaum Memo MMAD Committee Report 970507.034 MOORPARK MOSQUITO ABATEMENT DISTRICT P.O. BOX 62 MOORPARK, CALIFORNIA 93020 -0062 PHONE: 805 -329 -0267 PROGRESS REPORT # 1 Submitted by: TRUSTEES: JAMES HARTLEY BILL LA PERCH MAY 6, 1997 DISCUSSION In the initial cacophony of criticism concerning the District and its failure to spend all of the funds allocated to it by stringemt cost control, it seemed that only one option was being advocated, i.e., to disband the district, eliminate the services provided by the District and to share the reserve fund with the County and the City effecttively going out of business. This simplistic solution, the subject of a petition being circulated, ignores some basic realities. Based on this agenda, the District tried to demonstrate that the services provided by the District were vital to the health and welfare of the people within the District. In addition to the multitude of inspections, corrective measures and education, there are new threats to be dealt with. The appearance of the Africanized killer bees in Palm Springs, having traversed the desert from Arizona, and the concern that tic -borne Lyme disease is suspected in Malibu, would mandate increased vigilance rather than elimination of services. Within the past month, District personnel were called upon to contain a beehive near a bus stop where school children wait. A meeting was held with the County Supervisor, Judy Mikels, Mayor Hunter, Council member Evans, City Manager Steve Kueny, Assistant City Manager Richard Hare and Hartley and La perch from the District on May 23, 1997. It appears that a consensus was reached on some points. The initial consensus appeared to be that services should be continued. To be determined was the organizational vehicle and manner in which to perform these services. Reduction or waiver of assessment income The District has wanted to reduce or waive the assessment to demonstrate a commitment to reducing the burden on taxpayers and to return the money to the taxpayers while not eliminating services. Concern was expressed that once waived or reduced, it could never be reassessed. Mr. Mahon expressed the opinion that waiving or reducing the assessment for a period of time would not forfeit the ability to reactivate the assessment. Our staff has researched this subject and has found that an exactly similar situation existed in the King County MAD. This MAD had accumulated a surplus of 1.6 Million dollars and wanted to return the surplus to the taxpayers. Their Auditor had ruled that the assessment may be waived or reduced on a year -to -year basis. In fact, if the assessment is waived for one year, it will be automatically reinstated the next year unless positive action is taken to waive it on each successive year. A copy of this opinion is attached (Appendix A) and supports Mr. Mahon's opinion exactly. This duplication of opinions should put any fears to rest; and hopefully, in concert with the City and the County, we will be able to demonstrate our commitment to returning the surplus to the taxpayers without further delay. Therefore, Moorpark MAD could waive the assessment for the next tax year and not jeopardize the ability of the District or any successor organization to receive the full assessment at any future time. Whoever provides the needed services would want to avoid the procedural error in accepting more money than required to provide the actual cost of services. However, to examine the full spectrum of options as requested by Supervisor Mikels, the following is offered for consideration. OPTION A Disband the District, eliminate the services and distribute all funds between the City and County. This would be a Draconian solution with only a short term financial benefit to the City and County. It may well trigger a legal question as to whether funds collected for Vector control can legally be distributed to organizations as a windfall. It may be that legally the funds must be transferred to County Vector Control if the District is disbanded. A review of the Health and Safety Code touches upon this subject and creates the implication that funds collected by MADs must be spent only on Vector control. If this option is adopted, and the County cost of $1.10 average cost per parcel is valid, then the County Vector will have $11,000-00 per year to service Moorpark. The level of service will obviously decrease dramatically, and the 1.4 million dollars will be dissipated serving other areas. A seminal question is if the District and the services were discontinued, would the taxpayers of Moorpark get a reduction in their taxes? There is the possibility that the tax will be continued to be collected and be diverted elsewhere. In this case, taxes will continue unabated,, and services will be decreased. There is a question that must be resolved as to the legality of dispensing 1.4 million dollars for any purpose other than Vector control. Option B Disband the District and shift the services provided to the City of Moorpark along with the equipment and personnel of the District. The engineering axiom of, "If it ain't broke, don't fix it," comes to mind. Questions that arise are: Would services provided be better? Would services provided by the City be more cost efficient? In terms of cost efficiency, based on our budget, the City estimated that there would be a 36% cost savings if the City assumed operating the District. The budget does not reflect reality as it covers a multitude of contingencies. Many of these contingencies have never happened, so that the budget reflects an incorrect basis for comparison. However, if l operating costs are utilized, there is not an apparent cost savings, but operation by the City might be more expensive. Appendix B is a comparison of actual operating expenses compared to the hypothetical budget average. Cost savings by the District include less costly employee benefits, extremely low rent, and the only General and Administrative costs are $3,000 (total) for five trustees and $10,000 for a part -time secretary annually. Again, the question of the District's being able to distribute its funds for any other purpose but Vector control must be researched. If the Trustees distributed the money, would they be open to charges of improper use of funds? If the City assumes the services of the District, would they reduce the assessment to reflect actual operating costs, or would they continue to accept the amount which is currently assessed at almost the double of actual costs? Would the surplus of funds received over operating costs go to other purposes? If the 1.4 million is absorbed, and the assessment continues at a higher rate than actual costs, this would appear to be disadvantageous to the taxpayer. Option C This is the option discussed in our previous report to reduce any future assessments to zero dollars for the next 20 years and to continue to operate the District from the accumulated reserve plus accumulated interest. This would provide operating expenses for at least 20 years, and there would be no additional funds required. Option D The District distribute all but one year operating reserve fund to the County and City, that the District reduce the assessment to reflect actual operating costs and continue to provide the services. This option again depends on the legality of dispensing MAD funds on non - Vector operations. Have an election in which the District taxpayers be offered a choice as to the proper course of action. Arguments could be placed before the electorate by advocates of various alternatives. We are responding to the request of the City and County to delay action and not to act in haste. We do so in the hope that the City and County will do likewise and that appointments to the District will be of persons with an open mind and no preconceived notions pro or con for any alternatives without proper deliberation. Conclusion Therefore, whoever operates the Vector control services, if the reserve fund is kept in trust in a segregated fund, there will ,actually be a tax credit of 1% of assessed value appearing on the taxpayer's annual bill for the next 20 years. If the funds are not committed to Vector control, the taxpayers will be doubly taxed. Instead of receiving a 1% credit, they will continue to pay the 1% cost. Such double taxation should be anathema to all of us concerned about lessening the burden on our citizens. That further meetings be held with the County and City. Accept that the opinion expressed by Mr. Mahon and King County are correct amd do not further delay instituting a waiver of assessment. If amy future Service Delivery organization wants to raise assessments in excess of operating costs, they may do so. To actually compare costs on an apple -to -apple basis between the City and the District to determine the most cost- effective quality service to the taxpayer. The City has asked that we not rush to reduce or eliminate our assessment. Since August 15 is the deadline, we can conform to the City request. That the legality of distributing funds for purposes other than Vector control be referred to County Counsel or the State Attorney General for determination. errr,ivlil� ti 01/23/1997 14:53 2095843310 KINGS MAD 9&5q4,it& ��iatemevct� �i5t�icL `S�a'61i*J•Q�' �Becs S�u,wow jaiuw4ut, &an9yi/co, 9lan�aul 9towa�l tilaaMwn•, �klawY �ouitty ab taiga S��eana+d �juciuu+i; �oueefyab�,.w.�tr Date: January 23, 1997 70a, Offim, 933x,, 907 W44044, <ali jaxnia 93232 It's, a,,,,..FAX TO: Mark Westerline Company: Moorpark MAD Prom: Lue Casey FAX #: (209) 5843310 Phone #: (209) 584 -3326 e -mail: kingsmad @ kingsnet.com Message: PAGE 01 Sgi,c, C/iW4f� �ixkid %72ana�,. cjsay of wya. !0871 �3onn�oy �i/deu„Seurw 9( -4mi, ` b-Pwlia. 93230 Tdtikow (20y) 534 -33,26 `dw. (209) 584 -33 10 hlnpawrad�Ql�inys�ia2eeaH• (Including cover sheet) 2 Page(s) I hope this information is of assistance to your cause. Please call if you have questions. 0.21 J a- 01/23/1997 14:53 2095843310 KINGS MAD OFFICE OF AUDITOn-- CONTAOLI COUNTY OF KINGS Cof" rr Cevi9%r MC►,T cc„rCp 106 $OUT" tORIVL H,' NrOPT0. CALWORNIA !3230 TELErWONE IZOsl SO Z•�il 1 ,,1.01 1 3 . 1991 'ro: -+hom it IN12y C,ncern rrnia: DAcrell Warnock Subject: Tax rate redllctloil PAGE 02 ER DAr+IteLL tvAPrYOCK AUVIT174 C.oNrPQLLea lnrnu -2lly, any ju;l diction may rcqueKt the Cnunty Auditr)r to seduce its t�.c zllncation b� 't ..pecified ,�moulnt. The requcst must be made by August 1 of any tax ye.,r. Tl�c amount of reduction is thcn divic?ad b the va11,IC of the district to compute the tnx rote eduiv� Y assa.ssed lent. irI the case of the Yings Nosgl,tite 1?i.strl1 t, a one cent reduction in the dollar rate would require a $292,642 rcvenuc reduction ( 292,642/29,264,1.83 a.v, hundred) or in round figures, each. 1100,00 reduction would reduce the per approximately one - third of one cent. taY rate For a ta- cpnyar in the district with a hill of $.LOCO in the rare would result in c $10 reduction in taxes.`' one e re eduction, inn sho:J on the ta,; bill as a reduction by the district. The reductionisofor d one ye"T only necessitating or.tion aanual.ly by the district if then pant to continue the S.'me n: a nlffe :eat arestlr,t. Revenue & Tax code Section 96,8 is as follow,,: 96.8. Effective tax rate reductions. (a) On or before Aulfwl 1, 19M and on or before August 1 of each year thereafter, any jw- isdiction may request that the amcvrit computed for it pursuant to this chapter be reduced for the current RscaI yew* by a specined amount Upon receiving a equest as so describcct, the county auditor shall compute an effective -tax ate reduction by dividing the amount of property tax revenue to be educed by the taxable assessed value or the secured roll of the jurisdiction and multiplying the quotient by 104. The effective tax rate reduction shall be applied to the taxable assessed value on each secured roll tax bill for property within the jurisdiction, and the resulting amount shat be subtracted from the property tax owed by the taxpayer w'bicn is attributable to the tax rate provided by subdivision (b) of Section 2237. This subtracted amount shall be shown on each such tax bill wit% a notation reading: "rax reduction by (name of jurisdiction)." The saWe effective tax rate reduction shall be applied in a comparable manner to the taxable assessed value on the next succeeding unsecured roll tax bill for property wihin t1he jurisdiction, except that for the 1981.82 fiscal year any such rate reduction used on that year's unsecured roll shall be eqv l to trhe 1930 -81 rats divided by four. (b) Notwithstanding any other pro,�zsion of law, if 3 school entity acts Pursuant to subdivision (a), thk state shall not increase school apportionments t6 that school entity to make up the reduction in property tar revenues. (c) Effective t;ix rate reductions made pu:raua.nt to this sectiva shall not L FISCAL YEARS FISCAL YEARS MOORPARK MOSQUITO ABATEM NT 1994/96-1 1994/'95- 1995/96 BUDGET EXPENDITURE ACCT.# TWO YEAR TWO YEAR AVERAGE AVERAGE SALARIES & EMP. BENEFITS Regular Salaries 1101 $77,300.00 $75,892.99 Extra Help 1102 $4,000.00 $0.00 OASDI Contributions 1122 $6,250.00 $5,872.67 Grou Insurance 1131 $9,000.00 $8,284.56 TOTAL S. & E. B. $96,550.00 $90,050.21 SERVICES & SUPPLIES Misc Cloth & Pers Supp 2221 $400.00 $144.44 Telephone 2232 $900.00 $684.26 Fire & Earthquake Ins. 2262 $3,500.00 $1,385.00 Liability Insurance 2263 $6,500.00 $7,930.00 Workmans Comp. Insurance 2264 $8,500.00 $5,552.28 Automobile Maintenance 2281 $2,000.00 $1,045.15 Office Equip. Maintenance 2282 $700.00 $30.00 Communication E u Main 2283 $300.00 $0.00 Other Equipment Main. 2289 $2,500.00 $60.64 Building Maintenance 2291 $2,000.00 $421.93 Lab. Supplies & Expense 2314 $300.00 $43.19 Membership Dues 2321 $1,500.00 $855.31 Printing & Binding 2341 $700.00 $82.75 OfficeSupplies 2343 $800.00 $496.28 Postage & Express 2344 $350.00 $244.15 Misc Office Expense 2349 $300.00 $143.78 Board Member Fees 2351 $3,000.00 $2,525.00 Com utor Services 2355 $500.00 $0.00 Other Special Services 2359 $5,000.00 $2,398.05 Publica. & Legal Notice 2361 $300.00 $0.00 Attorney Services *2377 $47,500.00 $2,919.66 Ground Facility Lease 2382 $1,250.00 $540.00 Minor Equipment _ 2392 $500.00 $141.66 Special Dept. Expense 2401 $4,000.00 $1,865.08 Insecticide Special Dept. Expense 2402 $2,000.00 $300.74 (Petty Cash Fund Private Vehicle Mileage 2522 $450.00 $354.64 Conference & Seminar Exp. 2523 $2,000.00 $607.94 Gas/Diesel Fuel __ 2525 $1,550.00 $1,063.39 Utilities 2531 $1,200.00 $983.74 TOTAL SERVICES & SUPPLIES $100,500.00 $32,819.00 FIXED ASSETS Land Improvements 401 $$5,000.00 $75.00 Other Prof & Spec Ser 4062 $3,000.00 $0.00 Re lace Equipment - Auto * *4819 $10,000.00 $9,485.29 Furniture & Fixtures 4850 t $2,000.00 $75.06 Office Machines 4860 $1,000.00 , $207.79 Com utor Software 4863 $1,000.00 $0.00 Communication Equip 4870 $1,000.00 $33.72 Other Equipment 4889 $5,000.00 $1,495.18 TOTAL FIXED ASSETS $28,000.00 $11,372.03 CONTINGENCIES Contingency 6101 $15,000.00 $0.00 TOTAL CONTINGENCY $15,000.00 $0.00 TOTALS $240,050.00 $134,241.23 *2377 High cost for abatement enforcement. District was reimbursed. ** 4819 High cost for purchase of truck, first purchase in 10 years. "i MWV0 5: YVjoco55WC 7(..•orgy (.Q QIQ nvr+ RECEIVED APR 05 159? JUNDY CQ`s ,4€ VJPVWWM *'FtH 460wrxcr CAROLE FILE To: Keith M. Jajko, SupervisoZDISTRICT Office Date: April 1, 1997 From: Thomas 0. Mahon So*ect: MOORPARK MOSQUITO CiAnad'below is ttae response to your March 17, 1997 memo as we understand the situation. Obviously, these matters stoM be reviewed by County Counsel. 1. LAFCO action is necessary to dss W the Moorpark Mosquito Abatement District (District). The final resolution is filed with the State Board of Equalization (BOE), County Assessor, and County AAudditor- Controker. 2. If the LAFCO resolution regarding the dissolution has no provision for distribution of the Districts portion of the 196 tax levy, all of the Districts tax levy would be transferred to the County General Fund. 3. if the LAFCO resolution provides for an allocation of the Districts tax levy in the city, it must be speck. 4. Any other distbAon contained in the LAFCO resolution must also be adopted and signed by both affected parties.. It must also specify how and what share each party would receive. 5. Dissolution of the District does not require voter approval, if the District Board supports the dissolution. 6. Distribution of the Districts assets would normally be contained in the final resolution. 7. The District Board could adopt a resolution prior to July 1, 1997 which would: A. Contain an amount for which a negative tax rate would be levied (for one year) approximating the allocation to the District. Keb, M. Jaiko, SWrvisor Judy Mikels' Office t, i997 Page 2 L"- • 06 LO 6 LG nQ" B. Add additional money to the curfent allocation, thereby reducing the excess funds available. A continuation of a negative rate would require specific District Board action of adopting a resolution, annually, containing the amount to be returned to the taxpayers via the negative tax rate. TOM,DLM:akr:0518 cc: Honorable Harold S. Pittman, Treasurer -Tax Collector Honorable Glenn Gray, County Assessor James L. McBride, Esq., County Counsel Arwld Dowdy, LAFCO D. L. McWaters Im Zl • OVJ (+o, GYJ rIv" JJV VI.VJJV� �➢t'K -23 -y (� WED UZ 'L4 Fn SAX NU. 8Ub6b42185 P. 02 MEMORANDUM COUNTY OF V NTUR.A COUNTY COUNSEL'S OFFICE April 22, 1997 TO. Judy Mikels, Supervisor, District 4 FROM oel A. K.lebaA m Assistant County Cowisel RE: MOORPARK MOSQUITO A13ATF -MENT DISTRICT Attention: Keith M. Jajko, Administrative Assistant This is in.response to your memo of March 17, 1997, in which you asked that we advise you regarding two issues which may arise in the context of a dissolution of the Moorpark Mosquito Abatement District. The first issue concerned the distribution of the District's reserve fund at the time of dissolution. You correctly described in your memo the rifle which would be applied to remaining cash assets after the payment of all debts of the District: The second issue concerned 'what happens to the District's share of the 1 percent property tax if the District is dissolved. That issue is addressed in Revenue and . Taxation Code section 99, subdivision (b), which requires that before the Local Agency Formation Commission may complete a dissolution, the local agencies whose -service areas or responsibilities will be aitercd by the jurisdictional change must meet and negotiate an exchange of property tax revenues, and propose to LAFCO, by adopted. resolution,, an agreed exchange. The negotiation period is limited to 34 dayswith a Possible 157dav extension if LAFCO modifies the proposal. If a proceeding to dissolve the District is initiated, the County and the City of Moorpark would have to negotiate a redistribution of the share of the l percent property tax revenue presmitly allocated to the District. Thus, the City's concern about "elimirna.tion" of the District's small share of the property tax revenue is misplaced. Several of the observations in the Auditor - Controller's racino, of April 1, 1997, also require comment, First, with regud to items 2 and 3 in the open* it is unlikely za =Jaa yC : bb Lb s Lb AUW APR -23 -97 WED 02:24 PM r iA Nu. tSu OV I tlb r. us Judy Mikels, Supervisor, District 4 April 22, 1997 Page 2 LAFCO would adopt a resolution approving a dissolution, yet W. to sptcificaily address the reallocation of the District's share of the property tax With regazd to item in his memo, the Auditor- Controller is refezrisig to that, section of the Cortese -Knot Act which provides for a dissolution without an election if the District's board .votes unnnirnMIsly to approve a dissolution, As I informed you orally a few days ago, it is also possible for LAFCO to approve the dissolution without an election under limited authority granted in Governmetrt Code section 56839.1. Item 7 of the Auditor - Controller's DI=Orandum appears to respond to a subject raised by the. District's board. whether the District could stop collWing its share of the I perccnt property tax The answer, as indicated by the Auditor- Controllcr, is that adoption by the District of a negative tax rate could have the desired effect. NAKlrnt \1*043Aomem Fa ' 390cd SSOK r- S =;'��z SZ : 6E L6, Lo ,ldw kK -23-9 WED U2:24 "r MX NO, 80b6b4218b P-02 MEMORANDIUM COUNTY O c'EN Z'L1� COUNTY COUN'SEL'S OFFICE April 22, 1997 TO. Ludy Mikels, Supervisor, District 4 FROM:-ALNoel A. Klebauin, Assistant County Counsel RE: MOORPARK MOSQUI'T'O ABATEMENT DISTRICT Attention: Keith M. Jajko, Administrative Assistant This is in xesponse to y vur merno of March 17, 1997, in which you asked that . we advise you regardint; tyro issues which may arise in the context of a dissolution of the Moorpark Mosquito Abatement District. The first issue concerned the distribution of the District's reserve fund at the time of dissolution. You concectiy described in your memo the rule which would be applied to zernaizting cash assets after the payment of all debts of the District.' The second issue concerned 'what happens to the District's share of the 1 percent property tax if the District's dissolved. That issue is addressed in Revenue and Taxation Code sectim 99, subdivision (b), which requires that before the Local Agency Formstion Commission may complete a dissolution, the local agencies v�,hvse sorvice areas or responsibilities will be altered by the jurisdictional change must meet and negotiate an exchange of property tax revenues, and propose to LAFCO, by adopted resolution, an agreed exchange The negotiation period is Bruited to 34 days, with a Possible 157dav cxt�er lion if LAFCO modifies the proposal. d is If a proceeding to dissolve the 'District is initiated, the County and the, City. of Moorpark tivould have to negotiate a redistribution of the share of the l percent property tax re venue PreSeAuy allocated to the District. Thus, the City's concern about "elimination" of the District's small share of the property tax revenue is misplaced. Several of the. observations in the Auditor - Controller's rricuxo of April. �, 1997, also require comment, First, with regard to items 2 and 3 in the meriio, it is unlikely 20'300d SSOKesso& APR -23 -97 WED 02:24 FM Judy Mikels, Supervisor, District 4 April 22, 1997 Pale 2 9z:6e z6, ze Adw -HAS NU, dUt)bb411 dt r. U1J LAFCO would adopt a resolution approving a dissolution, yet fail t 0 specifcally address the reallocation of the District's share of the property tax. With regard to item ,,5 in his memo, the Auditor - Controller is referruig to that.section of the Cortese -Knox Act which provides for a dissolution without an election if t#re District's board .votess unanifnatisty to approve a dissolution. As I informed you orally a few days ago, it is also'possible for LAFCO to approve the dissolution without an election under limited authority granted in Governmeut Code section 56839.1. Item 7 of the Auditor- Controller's memorandum appears to respond to a subject raised by the District's board: whether the District could stop collecting its share of the 1 percent property tax. The answer, as iendieatcd by the Auditor - Controller, is that adoption by the District of a negative tax rate could bave the desired effect. NAK/rnt 113t' 0aikomem