HomeMy WebLinkAbout1996/12/11 - Agenda PacketTo:
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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.
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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 .
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