DATE: June 28, 2016
TO: Mayor and City Council
FROM: Development Services Director
SUBJECT
Title
Adopt a Resolution of Intention to Preliminarily Approve the Engineer's Report and Levy Assessments for Fiscal Year 2017 for Maintenance District No. 1 - Storm Drainage Pumping Station and Storm Drain Conduit Located at Pacheco Way, Stratford Road and Ruus Lane, and Set July 19, 2016, as the Public Hearing Date for Such Actions
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RECOMMENDATION
Recommendation
That the City Council adopts the attached resolution (Attachment I).
Body
BACKGROUND
The annual Engineer’s Report (Report) for Maintenance District No. 1 (MD1) is presented to the City Council in compliance with Section 10-10.25 of the Hayward Municipal Code. The Report is attached (Attachment II) and includes the recommended assessment to be levied against each property for FY 2017.
MD1was formed in June 1995 to fund the operation and maintenance of a storm drain pumping station that serves the Stratford Village development near Stratford Road and Ruus Lane. MD1 includes four tracts totaling 174 residential homes and one park site.
A 1995 agreement between the City and the Alameda County Flood Control and Water Conservation District (Flood Control District) vests responsibility for the maintenance and operation of the storm drain pumping station with the Flood Control District. The 1995 agreement states that the Flood Control District concurred with the transfer of the pump station, subject to MD1 providing the Flood Control District with sufficient funds to operate, maintain, and provide for capital equipment replacement and modifications that may become necessary for the optimal performance of the pump station. The Flood Control District, based on its experience as operator, provided an annual estimate of operation costs for FY 2017, which is included in the attached Report.
DISCUSSION
• Maximum base assessment amount: is unchanged from the original amount of $243.92 per parcel, set when MD1 was created.
• Annual CPI increase: the maximum base assessment amount cannot be increased annually based upon the prior year’s change in the CPI.
• Assessment revenue: the FY 2017 amount needed to operate and maintain the facilities and contribute to the capital reserve is $42,686.
• Annual assessment charge: Each of the 175 parcels shall be apportioned an equal share of the total assessment for this zone as the special benefit derived by the individual parcels is indistinguishable from each other. The FY 2017 per parcel charge will remain the same as the FY 2016 amount of $243.92 per parcel. This amount is at the maximum base assessment, and is sufficient for maintaining levels of service and for keeping a reserve balance.
• Proposition 218: Future increases in the assessment amount above the maximum base assessment amount would require the noticing and balloting of property owners, per the requirements of Proposition 218.
• In FY 2016, the annual cost of one-time pump station repair in the amount of $18,426 and the annual cost pump station capital reserve in the amount of $5,500 was paid for out of capital reserves.
• In FY 2017, the annual cost of the pump station capital reserve in the amount of $5,500 will be paid for out of capital reserves. If additional work occurs in FY 2017, it would be funded through capital reserves.
FISCAL IMPACT
There is no fiscal impact to the City’s General Fund for this recommendation, because the present expenditures are to be paid for by MD1 funds. Staff has evaluated the operating and capital reserve fund balances and asserts that the combined fund balances will be adequate for FY 2017.
However, it is likely that beginning in FY 2018, annual assessments will not be sufficient to cover ongoing costs and to maintain adequate operating and capital reserves. In that case, other sources of funding will be needed or alternatively, the level of maintenance and services provided by MD1 will need to be reduced. Possible sources of additional funding include funds from LLAD Zone 4 if available, or increased assessments within MD1, which would require a Proposition 218 approval process where property owners would vote to approve, or reject an assessment increase. LLAD Zone 4 funds have been used in the past for this purpose, but the same issues related to cost escalation over time and a base maximum assessment amount that is capped also exist in LLAD Zone 4, which may eliminate this possible funding source for MD1.
PUBLIC CONTACT
Before the City Council public hearing on July 19, 2016, notices will be published once in The Daily Review newspaper and sent to all affected property owners about the hearing. A public meeting was held on May 19, 2016 for the property owners within MD1. At that meeting, staff were available to explain MD1’s responsibilities, maximum assessment and funding; and property owners were given the opportunity to ask questions regarding assessments and services. The property owners may also raise concerns about assessments during the scheduled public hearing at the July 19, 2016 Council hearing.
NEXT STEPS
If the City Council adopts the attached resolution of intention, the City Council will hold a public hearing on July 19, 2016 to consider approving the Engineer’s Report and ordering the levy of assessments for FY 2017.
Prepared by: Peter Rei, PE, PLS, Contract Development Review Engineer, Development Services Department
Staff contact
Recommended by: David Rizk, Development Services Director, AICP
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Approved by:
Fran David, City Manager
Attachments:
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Attachment I |
Resolution |
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Attachment II |
Engineers Report |
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