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Home My WebLink About031025-03.5-MME6. L—A V] KEEPING PACE WITH RISING COSTS r� Costs for just about everything have gone up since 2003, but LLAD assessments have remained flat. The 2025 LLAD initiative will ask property owners to help keep pace with rising costs:* •ice DANVILLE CALIFORNIA r ate. 1 E. Utilities $1.4 million r IA' � ' Bay Area CPI: 196 Bay Area CPI: 348 Maintenance Maintenance �+ n $2.7 million Funding LLAD Funding $3.1 million $3 million -&Utilities $2.5 mill CAST YOUR VOTE: Ballots will be mailed to property owners in April Based on FY 2003/04 & FY 2023/24 actual Town expenditures. F 4 ion Bay Area CPI: 348 Maintenance : $4.8 million ®LLAD Funding ' $3.1 million CAST YOUR VOTE: Ballots will be mailed to property owners in April Based on FY 2003/04 & FY 2023/24 actual Town expenditures. F 4 rr- LA"V' 1.I"• FAte' 0PSV` What does my vote mean? J Maintain a consistently J Up to $1.4 million in G YES high level of quality programs and services for parks, lighting and E id(t could be cut to balance landscaping. the 2025/26 budget. How much am I paying now and what is my adjusted LLAD rate? Rates vary, but most individual homeo up to $305 per year, and the adjusted t would be up to $322 per year. The curr and proposed adjusted rate will be on property owner's ballot. What about property tax? While the LLAD shows up on your property tax bill, it is not linked to property taxes. For a property worth $1,000,000 the Town general fund receives just $700 of the $10,000 property tax assessed by the County. What is the Town doing to make up for the LLAD shortfall? Before considering an adjustment, the Town has cut costs as much as possible through energy efficient lighting initiatives and reducing water use for landscaping, wners pay otalfee ent rate each 9 .wo. *—, Has the Town cut programs or 11 services to cover the funding gap? Not yet, but the contribution to the LLAD fund from the general fund has increased 607% since 2003 — not sustainable without an adjustment to either assessments or programs. Imagine making the same salary you did 20 years ago. How would that impact your quality of life? On average, that would be about half of what you make today. The Town maintenance budget is facing this scenario, with funding that hasn't kept up with rising costs of the past 20 years. LLAD Funding Gap j 80% <' Maintenance 70% Bay Area CPI s0 r° s0% Utilities 40% LLAD Funding 30% 20% — — -- 10% 2003 2014 2024 Danville property owners pay an annual assessment that directly and specifically is earmarked by law to fund public parks, lighting, landscaping, and public facilities through the Lighting and Landscape Assessment District (LLAD). Lighting for safety, parks for recreation, and community buildings—these essential services rely on LLAD funding. The last LLAD increase was in 2003, and in 2025, the Town is seeking an adjustment to sustain these services. LLAD funds are restricted by state law to fund only these amenities, but the general fund has covered the gap, supplementing the LLAD fund by $1.35 million in fiscal year 2023/24. To avoid cuts to general fund programs, the Town is proposing an adjusted LLAD following extensive analysis. The proposed 2025 LLAD would reduce a $2.38 million maintenance and operations shortfall by more than half in the first year. Without increasing assessments for this special fund, the general fund must cover the gap. Property owners can prepare for the April LLAD ballot by visiting www. danville. ca.govAlad. ADMINISTRATIVE STAFF REPORT 6,7 TO: Mayor and Town Council February 4, 2025 SUBJECT: Resolution No. 7-2025, initiating formation of Danville Landscaping and Lighting Assessment District No. 2025-1 and ordering preparation of the required Engineer's Report pursuant to the Landscaping and Lighting Act of 1972 and Section 4 of Article XIIID of the California Constitution. BACKGROUND Since incorporation of the Town of Danville ("Town') in 1982, a significant portion of the annual budget corresponding to the maintenance and operations of the Town's landscaping, park, and streetlighting improvements has been funded through assessments levied under the Danville Street Lighting and Landscape Assessment District No. 1983-1 ("LLAD No. 1983-1"). LLAD No. 1983-1 was established pursuant to the provisions of the Landscaping and Lighting Act of 1972 ("Act") and its assessments are approved annually by Town Council for placement on the property tax rolls. The passage of Proposition 218 in 1996 created new procedural and substantive requirements for all Landscaping and Lighting Assessment Districts ("LLAD" or "LLADs") in the state, the most significant being that any increase or modification to existing LLAD assessments require notices and ballots to be mailed to all affected property owners. Assessment increases or modifications to existing LLAD assessments can be implemented if a majority of ballots returned, weighted by proposed assessment, do not oppose the proposed assessments. In 1997, property owners in the Town ratified the LLAD No. 1983-1 assessments with more than 87% support. In 2003, property owners in the Town approved an assessment increase which did not include an annual escalator to keep pace with inflationary increases in maintenance costs and accumulate funds for repairs and capital improvement projects. The Town has not proposed any increases or modifications to the LLAD No. 1983-1 assessments since 2003 and maintenance costs have continued to rise, creating a significant budget shortfall. The total LLAD No. 1983-1 revenue for Fiscal Year 2003/04 was $3,016,300 as compared to the projected $3,129,750 forecast for current Fiscal Year 2024/25. During that same time period, annual operating expenditures have increased from $2,727,000 for Fiscal Year 2003/04 to a budget of $5,518,916 for current Fiscal Year 2024/25. This represents a 3.8% increase in revenue compared to a 102% increase in expenditures. A significant portion of the increased expenditures are attributable to utility costs that are largely outside of the Town's control. Direct water and electricity costs have increased by $1.41 million, accounting for over 56% of the expenditure increase. Despite steps taken by the Town to curb water and electricity usage, these costs are expected to continue to increase substantially in future years. It should also be noted that the total expenditure figures cited include operating expenses only, and do not include capital maintenance costs. For Fiscal Year 2024/25, capital maintenance costs will add approximately $1.3 million to the total budget. At its September 10, 2024 Study Session, the Town Council considered various options to address the growing budget shortfall and provide additional funding to continue maintenance of the Town's landscaping, park, and streetlighting improvements to the standard residents have come to expect. As a result of that discussion, the Town Council directed staff to proceed with efforts to generate an estimated $1.4 million in additional revenue commencing Fiscal Year 2025/26, if approved by Town property owners and Town Council. The additional revenue will cover approximately two-thirds of the current annual operating deficit and will include an annual assessment escalator, not to exceed 3 %, to keep pace with inflationary increases in maintenance costs. In working with the District Engineer, it has been determined that given the changes in proposed methodology and rates, it would be appropriate to initiate proceedings to form Danville LLAD No. 2025-1, pursuant to the Act and Proposition 218. If approved by property owners in the Town, LLAD No. 2025-1 will replace existing LLAD No. 1983-1 commencing Fiscal Year 2025/26 and provide ongoing funding for the operation, maintenance and servicing of landscaping, irrigation, parks, streetlighting, and associated improvements that are the responsibility of the Town. DISCUSSION The Act and Proposition 218 require that the formation of a LLAD be supported by a detailed engineer's report prepared by a registered professional engineer certified by the State of California. On November 19, 2024, Town Council awarded a contract to Francisco and Associates to prepare the required engineer's report and conduct the Proposition 218 proceedings corresponding to the formation of LLAD No. 2025-1. Francisco and Associates has served as the Town's LLAD Assessment Engineer for over twenty years. The proposed Proposition 218 schedule during calendar year 2025 to form LLAD No. 2025-1 is as follows (Council meetings in bold): • February 4th - Town Council adopts Resolution of Initiation for LLAD No. 2025-1. March 181h - Town Council adopts Resolution of Intention and preliminarily approves Engineer's Report for LLAD No. 2025-1. LLAD 2025-1 - Resolution of Initiation 2 February 4, 2025 • April 4th (minimum of 45 days prior to public hearing) - Deadline to mail required notices and ballots to property owners in the Town pursuant to Proposition 218. • May 201h - Town Council holds public hearing, declares balloting period closed, and continues item to June 3rd meeting. • May 21St - Ballot tabulation and determination of results. • June 3rd - Town Council declares results of ballot tabulation and if property owners are in favor of the formation of LLAD No. 2025-1, Town Council may adopt Resolution confirming the assessments for LLAD No. 2025-1. • August 10th - Deadline to submit LLAD No. 2025-1 assessments to Contra Costa County for placement on the Fiscal Year 2025/26 property tax roll. If formation of LLAD No. 2025-1 is not approved by property owners in the Town, staff will recommend Town Council initiate proceedings on June 3rd to approve the existing LLAD No. 1983-1 assessments for Fiscal Year 2025/26 and hold a public hearing in July of 2025 as required by the Act to place the assessments on the property tax roll. PUBLIC CONTACT Posting of the meeting agenda serves as notice to the general public. FISCAL IMPACT Adopting the attached resolution will initiate proceedings to form LLAD No. 2025-1. If formation of LLAD No. 2025-1 is approved by Town property owners and Town Council, the Town is expected to generate approximately $1.4 million in additional revenue for an approximate total of $4.5 million in Fiscal Year 2025/26 to fund the ongoing operation, maintenance, and capital replacement of Town landscaping, park, and streetlighting improvements which would be escalated by the Consumer Price Index annually (not to exceed 3%). LLAD 2025-1 - Resolution of Initiation 3 February 4, 2025 RECOMMENDATION Adopt Resolution No. 7-2025, initiating formation of Danville Landscaping and Lighting Assessment District No. 2025-1 and ordering preparation of the required Engineer's Report pursuant to the Landscaping and Lighting Act of 1972 and Section 4 of Article XIIID of the California Constitution. Prepared and reviewed by: Dave Casteel Maintenance Services Director Attachment: Resolution No. 7-2025 LLAD 2025-1 - Resolution of Initiation 4 February 4, 2025 Docusign Envelope ID: 0715C9D0-7931-4892-83D0-3FE78DDA8052 RESOLUTION NO. 7-2025 INITIATING FORMATION OF DANVILLE LANDSCAPING AND LIGHTING ASSESSMENT DISTRICT NO. 2025-1 AND ORDERING PREPARATION OF THE REQUIRED ENGINEER'S REPORT PURSUANT TO THE LANDSCAPING AND LIGHTING ACT OF 1972 AND SECTION 4 OF ARTICLE XIIID OF THE CALIFORNIA CONSTITUTION WHEREAS, the Danville Town Council is proposing the formation of an assessment district pursuant to the provisions of the Landscaping and Lighting Act of 1972 (commencing at Section 22500 of the California Streets and Highways Code), hereafter referred to as the "Act", to replace existing Danville Street Lighting and Landscape Assessment District No. 1983-1; and WHEREAS, the Danville Town Council is required by Section 22585 of the Act to adopt a resolution initiating proceedings for the formation of the proposed assessment district, describing the District and its improvements, specifying the distinctive designation of the proposed assessment district as Danville Landscaping and Lighting Assessment District No. 2025-1 (the "District"), and ordering the District Engineer to prepare and file a report in accordance with Article 4 of the Act; and WHEREAS, by its Resolution No. 76-2024, the Town of Danville (the "Town") has contracted with the firm of Francisco and Associates to serve as the District Engineer; and WHEREAS, the improvements for the District are generally described as the operation, maintenance and servicing of landscaping, irrigation, parks, lighting, and associated facilities that are the responsibility of the Town; and WHEREAS, Section 4 of Article XIIID of the California Constitution outlines the procedures and requirements for imposing special assessments on properties within the District, stating that only parcels receiving a "special benefit" from District improvements can be assessed, and that the Town must identify all such parcels and provide proper notice and ballots to property owners before holding a public hearing on the proposed assessments for the District; and WHEREAS, the Town shall not impose assessments for the District if there is a majority protest. A majority protest exists if, upon the conclusion of the public hearing, ballots submitted in opposition to the District assessments exceed the ballots submitted in favor of the District assessments. In tabulating the ballots, the ballots shall be weighted according to the proportional financial obligation of the affected property; and WHEREAS, the Town intends on continuing levying assessments for existing Danville Street Lighting and Landscape Assessment District No. 1983-1 if there is a majority protest opposing the District assessments for District No. 2025-1; now, therefore, be it ATTACHMENT A Docusign Envelope ID: 0715C9D0-7931-4892-83D0-3FE78DDA8052 RESOLVED, that the Danville Town Council hereby initiates proceedings for the formation of Landscaping and Lighting Assessment District No. 2025-1 and directs the District Engineer to prepare and file a report in accordance with Article 4 of the Act and Section 4 of Article XI1ID of the California Constitution. APPROVED by the Danville Town Council at a regular meeting on February 4, 2025 by the following vote: AYES: NOES: ABSTAINED: ABSENT: MAYOR APPROVED AS TO FORM: ATTEST: DocuSigned by: IR $ �� 895C6C40ADBF4BF... CITY ATTORNEY CITY CLERK PAGE 2 OF RESOLUTION NO. 7-2025 ATTACHMENT A