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HomeMy WebLinkAbout1996/12/11 - Agenda PacketTo: From: Date: Subject: Memorandum City Manager's Office Mayor and Members of the City Council Jack Lam, City Manager December 10, 1996 Proposition 218 and PD-85 Introduction. The Fox Initiative (Proposition 218) amends the California Constitution by imposing stringent voting requirements on general and special taxes, assessments, and fees. Because it is a Constitutional amendment, it applies to all local govemments including school districts as well as charter cities, which have been arguably unaffected by the limitations of Prop 62. The initiative changes the rules for many fiscal processes but specific impacts of the Proposition will vary from jurisdiction to jurisdiction. Impacts on Rancho Cucamonga. The following are our findings of impact to date: We have determined that all our lighting districts are in the exempt category because these are included in the streets exemption of Prop 218 and will not require ratification. All other landscape and lighting districts originated shortly after incorporation as property owner petitioned districts. These provided the basis for handling growth and future funding. Growth was to pay its own way. As a result, these districts have been "grand fathered" but in the future, when these districts require an increase, the increase would be subject to a property owner vote. (This increase issue is still subject to further legislative or judicial guidance). The Fire District Mello Roos Districts do not require ratification but will be subject to the same property owner election requirement for any future increases. j The City Attorney is reviewing the current planning conditions that require project annexation to respective districts prior to development. The City Attorney will determine how these conditions might be worded to better comply with Proposition 218. The wording may need to be amended. ~Vithout the ability to ensure that future growth continues to contribute to the City's services, an important policy question will be shouM growth be allowed to continue, and in what way? The City Attorney is also reviewing the City's false alarm ordinance to determine any needed changes. Because the Initiative power is expanded to permit the electorate for the first time to repeal previously authorized assessments even for capital financing, confusion has been brought to the financial markets regarding the ability to sell infrastructure bonds in California. Until either the Legislature or the Courts clarify Prop 218's provisions with respect to this issue, there may be little opportunity to create business improvement districts as an economic development tool. PD-85 (a 1972 Act park district) is not covered by any exemptions of Proposition 218. However, of the many ambiguities existing in Proposition 218, the ratification time period for such districts is troublesome. At the present, there are two prevailing interpretations with regard to ratification of such an existing district. One is that ratification by property owners must occur prior to July 1, 1997. The other interpretation is that if the normal annual assessment process is completed prior to July 1, 19e/7, there is another year in which to ratify the district. The difference in interpretation has implications for the ratification process. The ratification process must either be hurried up or done with more time to process the issue. Again, unless there is Legislative or Judicial clarification, there is no "right" answer. The more conservative interpretation is the former and the process presented herein is consistent with this interpretation. PD-85. PD-85 is a free-standing, sell:funded 1972 Act Assessment District created in July 1, 1985 to provide funds for construction of Red Hill and Heritage Park as well as its annual maintenance and operations (M&O) costs. Red Hill Park, 44 acres, and Heritage Park, 40 acres, are two major community parks providing many park amenities as well as being major activity centers of youth sports. Attachment "A" describes the parks and contains a statistical summary of PD-85. In order to implement Proposition 218, PD-85 must be submitted to a property owner vote to ratify the district. It makes no difference that PD-85 has been in existence for 11 years providing all the $1.68 million annual support for the park construction and M & O. Without property owner ratification, no further funds may be collected for the maintenance and operations of these parks after July 1, 1997, leaving these parks without funding. Procedures For Validating PD-85. The following process is proposed to implement the property owner validation of PD-85: An updated Engineer' s Report must be available prior to the printing of ballots. As a result, we have asked the assessment engineering firm to begin updating this report immediately. The Engineer's Report will serve as a basis for technical information as required by Proposition 218. We will recommend that the firm of Martin and Chapman, a well-known and experienced election firm, process the property owners' election. Martin and Chapman will print, distribute, and count the ballots under the direction of the City Clerk. The Assessment Engineer, NBS Resource Group, is working to be able to obtain, from the County and a company called Metro Scan, updated parcel and ownership data one month prior to the mailing of ballots. The Assessment Engineer will merge the two files and create a ballot list for the Elections firm. The Act requires that the property owners be given at least 45 days to vote and the votes are to be canvassed at a public hearing. Since there cannot be a public hearing without the Council being present, a Council meeting must be set to do the canvassing. In order to have a process that makes sense, we propose that the Council meeting be opened, public testimony, if any, be taken, public testimony closed, and then the Council would direct the votes be counted, however long this might take. After the counting of the last ballots, the Council would adopt a resolution certifying the vote and should the vote be positive, adopt the levy afterwards. The property owner ballot process is a reformatted majority protest process under Proposition 218. Sorry, we believe the Council must remain while the vote is counted and be present to act after the count. We recommend that the actual public hearing commence at 6:00 pm. Ballots can be accepted up to the opening of the commencement of the public hearing. Martin and Chapman, under the direction of the City Clerk, will do the ballot counting. This process will be semi-automated and must be conducted in the Council Chambers. The "single vote" properties can be counted in an automated fashion while the "multiple" vote properties under the Prop 218 proportional vote requirements must be manually tabulated. While the Act requires at least a 45-day voting period, the 1972 Act proceedings also require a public hearing to consider the assessment. (This is the hearing we have every year in June for all our assessments). This 1972 Act hearing can be done on the same night of the Prop 218 hearing. A legal notice must be advertised 10 days prior to the 1972 Act hearing and prior to that, the Council must set the date for that public hearing. Given the fact that it will be costly to do the ratification election, it does not make sense in the future to call for a vote on small cost increases in the district, whether these be water, electricity, or fertilizer costs, etc, since the costs of the election can exceed the costs of such increases. It is recommended that the Council consider a Gann Initiative escalator be included in the measure to handle minor cost adjustments without resorting to another expensive election. Without a process for a minor adjustment, there is no way for the District to absorb such increases without reducing maintenance levels until such time as it becomes cost effective to initiate another election. This is a dilemma of any ratification issue. The Jarvis group is not opposed to an escalator provision provided these are included in the ratification election. Elections Timing. Ratification of PD-85 is a "hurry up" process, no matter how it is viewed! The elections must be accomplished prior to July 1, 1997. In considering the time factors involved, and the time necessary to process a property owner election, it is recommended that the City Council consider Attachment "B" as an initial guideline for implementing the election. Attachment "B" also includes all the 4 necessary actions to accomplish the ratification process. This "early altemative" will provide guidance in time for the budget preparation process. However, it will be a much more hurried process. If the election is moved forward until a later date, either two budgets must be prepared (not recommended) or the budget must be adopted later in the summer, but it would enable more time to implement the election. Attachment "C" presents a later alternative and Attachment "D" presents a late alternative. These are presented for the purposes of discussion. Conclusion. It is recommended that the City Council consider all the factors regarding the need to ratify PD-85 and provide the necessary direction to implement the process. Respectfully submitted, Jack Lam, AICP City Manager 5 ATTACHMENT "A" SUMMARY INFORMATION FOR PD-85 District formed in July 1, 1985 by City Council Action District funds construction of Red Hill (44 acres) and Heritage Park (40 acres) and its annual maintenance and operations costs. Park Amenities: · Red Hill Park: 4 baseball fields, 2 soccer fields, amphitheater, lake, tot-lots walking paths, par course, picnic areas, horseshoe pits, restrooms, snackbars. · Heritage Park: 3 baseball fields, 2 overlay soccer fields, equestrian facilities, walking paths, par course, tot-lots, basketball courts, restrooms, picnic areas, snackbars. Geographic area of PD-85 Coverage: · 16,666 acres · 24,853 parcels Current Assessment Rates: · Single Family: · Multi-Family: · Comm/Indust: · Vacant Land: $52.00 per year $52.00 per year per unit Formula: varies by size of parcel Formula: varies by size of parcel $52.00 Assessment Rate Division: · $ 21.00 Debt Service (Bonds) · $ 31.00 M & O Cost Total Annual Revenues Generated by PD-85: $1.68 million · $ 677,000 Debt Service · $1,006,370 M & O Approximate Revenue Distribution By Generation Source: · Single Family: $ 476,763 Debt Service/$ 703,793 M & O · Multi-Family: $122,199 Debt Service/$180,389 M & O · Comm/Indust: $ 80,860 Debt Service/$119,366 M & O Current estimated cost to implement voter election for PD-85:$50,000-75,000 November 26. 1996 ATTACHMENT "B" Early Alternative RED HILL & HERITAGE PARK PROPERTY OWNER ELECTIONS PROCESS ACTIONS TO RATIFY PD-85 Implementation Actions 1. City Council directs City Attomey and City Manager to develop formal ballot language based on Council Direction. 2. City Council adopts resolution to take the following actions: · Approving Engineer's Report and designating City Engineer as Engineer of Work. · Calling for a property owner election for PD-85 and directing the City Clerk to proceed with all measures to implement the measure. · Approves the ballot language, form of ballot, and all ballot materials. · Sets the date for the 1972 Act Public Hearing and Proposition 218 Hearing. 3. Last day tbr City Clerk to submit ballot materials to Elections Consultant for printing and mailing preparation. 4. Elections Consultant delivers ballots to Post Office for mailing. 5. Last day for City Clerk to submit 10-day Public Hearing Notice. 6. City Council conducts 1972 Act Public Hearing. 8. City Council conducts Public Hearing to Canvas Votes. 9. City Council adopts resolution certifying the final vote. 10. City Council adopts resolution authorizing the assessment if approved. Date Wed- Dec. 11, 1966 Wed-Jan. 15, 1977 Wed-Jan. 22, 19q7 Wed-Feb. 12, 1997 Tues-March 18, 1997 Thurs-April 3, 1997 Thurs-April 3, 1997 Thurs-April 3, 1997 Thurs-April 3, 1997 December 10, 1996 ATTACHMENT "C" Later Alternative RED HILL & HERITAGE PARK PROPERTY OWNER ELECTIONS PROCESS ACTIONS TO RATIFY PD-85 Implementation Actions 1. City Council directs City Attorney and City Manager to develop formal ballot language based on Council Direction. 2. City Council adopts resolution to take the following actions: · Approving Engineer's Report and designating City Engineer as Engineer of Work. · Calling for a property owner election for PD-85 and directing the City Clerk to proceed with all measures to implement the measure. · Approves the ballot language, form of ballot, and all ballot materials. · Sets the date for the 1972 Act Public Hearing and Proposition 218 Hearing. 3. Last day for City Clerk to submit ballot materials to Elections Consultant for printing and mailing preparation. 4. Elections Consultant delivers ballots to Post Office for mailing. 5. Last day for City Clerk to submit 10-day Public Hearing Notice. 6. City Council conducts 1972 Act Public Hearing. 8. City Council conducts Public Hearing to Canvas Votes. 9. City Council adopts resolution certifying the final vote. 10. City Council adopts resolution authorizing the assessment if approved. Date Wed- Dec. 11, 1966 Wed-Feb. 19, 19q7 Fri-Feb. 28, 19e]7 Fri-March 21, 1997 Wed-April 23, 1997 Tues-May 8, 1997 Tues-May 8, 1997 Tues-May 8, 1997 Tues-May 8, 1997 December 10, 1996 ATTACHMENT "D" Late Alternative RED HILL & HERITAGE PARK PROPERTY OWNER ELECTIONS PROCESS ACTIONS TO RATIFY PD-85 Implementation Actions 1. City Council directs City Attorney and City Manager to develop formal ballot language based on Council Direction. 2. City Council adopts resolution to take the following actions: · Approving Engineer's Report and designating City Engineer as Engineer of Work. · Calling for a property owner election for PD-85 and directing the City Clerk to proceed with all measures to implement the measure. · Approves the ballot language, form of ballot, and all ballot materials. · Sets the date for the 1972 Act Public Hearing and Proposition 218 Hearing. 3. Last day for City Clerk to submit ballot materials to Elections Consultant for printing and mailing preparation. 4. Elections Consultant delivers ballots to Post Office for mailing. 5. Last day for City Clerk to submit 10-day Public Hearing Notice. 6. City Council conducts 1972 Act Public Hearing. 8. City Council conducts Public Hearing to Canvas Votes. 9. City Council adopts resolution certifying the final vote. 10. City Council adopts resolution authorizing the assessment if approve& Date Wed- Dec. 11, 1966 Wed-April 2, 19~7 Thurs-April 17, 19q7 Thurs-May 8, 1997 Wed-June 11, 1997 Thurs-June 26, 1997 Thurs-June 26, 1997 Thurs-June 26, 1997 Thurs-June 26, 1997 December 10, 1996 BA'V I~NIIJeH . *1.=( : I~ i ,:1 · '