REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF BOARD GOVERNED COUNTY SERVICE AREAS
AND RECORD OF ACTION
January 23, 2024
FROM
TREVOR LEJA, Assistant Executive Officer, Department of Public Works - Special Districts
SUBJECT
Title
Public Hearing on Proposed Increase to Property Related Service Charge for Road Maintenance and Snow Removal Services in County Service Area 70 Zone R-22 (Twin Peaks)
End
RECOMMENDATION(S)
Recommendation
Acting as the governing body of County Service Area 70, Zone R-22 (Twin Peaks):
1. Conduct a public hearing, pursuant to Proposition 218, to hear and consider any protests against the proposed increase to property related service charge from $100 per parcel per year to an increased amount of $268.42 per parcel per year for ongoing operating and maintenance costs (with an annual inflationary increase of up to 3%) effective 2024-25, for road maintenance and snow removal services.
2. Direct the Clerk of the Board of Supervisors to count and determine the number of written protests submitted by owners of the identified parcels to determine if a majority protest to the proposed increased property related service charge exists.
3. Adopt Resolution, if determined no majority protest exists, for the proposed increased property related service charge, which:
a. Authorizes a mailed ballot election, pursuant to Proposition 218, of property owners within County Service Area 70, Zone R-22 (Twin Peaks) regarding the proposed increase to property related service charge from $100 per parcel per year to an increased amount of $268.42 per parcel per year for ongoing operating and maintenance costs (with an annual inflationary increase of up to 3%) effective 2024-25, for road maintenance and snow removal services.
b. Establishes March 8, 2024, or any day thereafter, as the date of the mailed ballot election for vote by the property owners within County Service Area 70, Zone R-22 (Twin Peaks), with the election conducted by an independent election service provider.
c. Directs the Auditor-Controller/Treasurer/Tax Collector to place the $268.42 per parcel service charge on the 2024-25 property tax roll, if the mailed ballot election is successful.
4. Direct the Department of Public Works - Special Districts to begin procedures to dissolve County Service Area 70, Zone R-22 (Twin Peaks), if determined that a majority protest exists.
(Presenter: Trevor Leja, Assistant Executive Officer, 387-4443)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Ensure Development of a Well-Planned, Balanced, and Sustainable County.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). All costs associated with the property related service charge increase of County Service Area 70, Zone R-22 (Twin Peaks) (Zone) will be paid by the property owners within the Zone. The Zone currently generates annual revenue of $18,700 (187 parcels at $100 per parcel) through the existing property related service charge. This revenue is currently used to fund road maintenance and snow removal services.
If the proposed service charge increase is ultimately approved by the property owners of the Zone, annual revenue of $50,194.54 (187 parcels at $268.42 per parcel) will be generated, effective 2024-25, with an annual inflationary increase of up to 3% in future years. This inflationary factor is a key component as it will help fund future increases in operations and maintenance costs.
BACKGROUND INFORMATION
In 1989, the Zone was formed to provide road maintenance and snow removal services for 77 parcels in the Twin Peaks area. Through subsequent annexations and other actions, the Zone boundaries have increased to now include 187 parcels. When the Zone was formed, a $100 per parcel annual service charge was established. However, there was no inflationary factor built into the service charge. Therefore, the $100 annual charge has remained unchanged. Had an inflationary factor of 3% been included since 1989, the per parcel service charge would now be approximately $265 per year. With the annual cost of inflation over the past 34 years and the lack of a corresponding increase in revenue, services to the Zone have been reduced. This reduced service, including reduced road maintenance, has resulted in a degrading of the road surface. Without immediate action to increase the annual service charge, the Zone’s long-term sustainability and solvency is threatened.
Property owners residing in the Zone contacted the Department of Public Works - Special Districts (Department) staff regarding the provision for enhanced ongoing maintenance and snow removal services. On May 27, 2021, an informational letter and map were mailed to property owners outlining the anticipated costs and timelines related to enhanced services, including a road paving project for the Zone. A second letter mailed on March 7, 2022, detailed a community town hall meeting, which was held on March 31, 2022. The second informational letter included a property owner survey card that was sent to all 187 property owners within the Zone. Of the 187 surveys mailed, 75 were returned with 50 in favor of the property related service charge increase. A third letter mailed on September 23, 2022, detailed another community townhall meeting, which was held on October 20, 2022, that also included an online portal for online attendance. The third informational letter included another property owner survey card that was sent to all 187 property owners within the Zone. Of the 187 surveys mailed, 52 were returned with 36 in favor of the property related service charge increase.
On April 25, 2023 (Item No. 82), a public hearing, pursuant to Proposition 218, was held to consider any protest against the proposed increase in the Zone’s per parcel assessment from $100 to $816.60 and authorize a ballot election. This increase would have increased operating and maintenance revenues as well as provide funding for the repayment of a 10-year loan for new paving of roads within the Zone. Following the conclusion of this hearing, the Board of Supervisors (Board) determined that further outreach and coordination with the community regarding the proposed updated service charge, and if the community was ultimately in favor of the capital improvement project. Thus, the property owner election did not proceed and the Board instructed staff to re-engage property owners in discussions regarding an increase in assessment solely for operation and maintenance services.
Another town hall meeting was held on August 2, 2023, and it was discussed with those in attendance the need to consider the current and future level of service within the Zone, and if a capital improvement project should be considered now or at a later date. At this town hall meeting, approximately 25 residents were in attendance, the majority of which favored a service charge increase to address the reduced road maintenance and snow plowing services and the desire to create a sustainable Operation and Maintenance (O&M) program for ongoing road maintenance and snow removal services. Residents at the town hall meeting requested funding for a capital improvement project be reviewed separately, at a later date.
The annual service charge is now proposed to increase from $100 per parcel to $268.42 per parcel to financially support enhanced operation and maintenance services for the Zone. The amount of $268.42 per parcel, per year, with an annual inflationary increase of up to 3%, is to establish a sustainable O&M program to continue to fund the Zone’s sustainability long into the future. This includes greater frequency for snow removal services and ongoing road maintenance/repairs, including future paving projects. The proposed increase is based upon past and future anticipated maintenance costs, current administrative and operational costs, and future anticipated improvements. This increase will not include funding for a road paving capital improvement project.
Pursuant to Proposition 218 requirements for proposed increases to property related service charges, written notice was mailed on November 10, 2023, to the record owner of each identified parcel upon, which the service charge is proposed for imposition. The notice included the amount of the charge proposed to be imposed upon each, the basis upon which the amount of the proposed charge was calculated, the reason for the charge, together with notice of the January 23, 2024, public hearing date, time, and location on the proposed property related service charge.
The Board shall hear and consider any and all protests against the proposed increased property related service charge pursuant to Proposition 218. At the conclusion of the public hearing, if the Board determines that written protests against the proposed increased service charge are presented by a majority of owners of the identified parcels, then the Board shall determine that a majority protest exists. Should this occur, the increased service charge shall not be imposed, and the proceedings will terminate. In such a circumstance, the Department will then recommend that the Board consider procedures for the Zone’s dissolution, pursuant to Recommendation No. 4, as anticipated future costs and current financing will make the Zone insolvent. If dissolved, the responsibility to maintain the road and perform services such as snow removal would revert to the property owners. If the Board determines that a majority protest does not exist, then the Board may proceed, pursuant to Proposition 218 and California Constitution Article XIII D, § 6(c), by authorizing a mailed ballot election of property owners within the Zone for the proposed increase to the property related service charge. The election for the increased service charge shall be conducted not less than 45 days after the close of the public hearing.
Recommendation No. 3 adopts a Resolution authorizing a mailed ballot election, pursuant to Proposition 218, regarding the proposed property related service charge and establishes March 8, 2024, or any day thereafter, as the date of the mailed ballot election for vote by the property owners within the Zone. The election will be conducted by an independent election service provider. The Department will return to the Board to adopt the certified election results.
If a simple majority of the ballots returned from the property owners approve the proposed increased service charge, the Department will recommend that the Board approve the increase and authorize placement of the new amount on the annual tax roll beginning in 2024-25, upon approval from the California State Board of Equalization. If a simple majority of the ballots returned are not in favor of the proposed increase, the Department will terminate the proceedings and may recommend that the Board direct the Department to begin procedures for the Zone’s dissolution as the Department would have exhausted all available options to maintain the Zone’s solvency.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Aaron Gest, Deputy County Counsel, 387-5455) on December 6, 2023; Auditor-Controller/Treasurer/Tax Collector (Franciliza Zyss, Interim Chief Deputy, 382-3176) on December 15, 2023; Finance (Tom Forster, Administrative Analyst, 387-4635) on December 29, 2023; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on December 29, 2023.