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Home My WebLink AboutNB 2 COUNTY ST LGHTNG 11-17-86DATE: NOVENBER 12, 198 TO: FROM: SU BJ ECT: WILLIAM HUSTON, CITY MANAGER PUBLIC WORKS DEPARTMENT/ENGINEERING DIVISION ASSUHPTION OF THAT PORTION OF THE COUNTY STREET LIGHTING MAINTENANCE DISTRICT SERVICING THE CITY OF TUSTIN RECOMMENDATION: For the City Council meeting of November 17, 1986. Authorize the assumption of the County Street Lighting Maintenance servicing the City of Tustin and the adoption of the attached Resolution. District BACKGROUND: For several years, Council has been considering the feasibility of assuming that .portion of the County's Street Light Maintenance District (OCSLMD) servicing Tustin. In 1982, the City of Tustin was serviced by four small Uistricts operated by the County: OCSLMD No's. 6, 10, 13 and the Tustin Highway Lighting District. That same year, the four small districts were collapsed into one larger district which was designated as OCSLMD No. 6. At this time, the County requested the City assume economic and administrative responsibility for OCSLMD No. 6. This request was made because the lighting district was a Special Assessment District and with the passage of Proposition 13 in 1978 Special Assessment Districts realized the most severe impact of property tax limitations. At that time, the County estimated the district's proportional share of revenues from the basic property tax, augmentation and subvention funds would not be sufficient to meet the constantly increasing utility costs. In ~983, all street lighting districts within the County's sphere of influence were collapsed into just one district; therefore, Tustin no longer had a district designated as its own. · Council then directed staff to again research the feasibility of assuming from the County that portion of the district servicing Tustin. Work on this project was halted pending a decision of the First District Court of Appeals in the San Jose vs. South case. The decision rendered from this case removed the impediment created by the San Jose case to take over the street lights from the County. All previous staff reports supported the assumption of the street lights from the County by forming an Assessment District using the Lighting and Landscaping Act of 1972 as this Act was the only method that provided for both installation and maintenance within the district, automatic annual adjustments of assessment fees, and an avenue for the assessment of fees for landscape maintenance. Using the 1972 Act, an Assessment District could be established with "areas of benefit" to assure assessments levied were in accord with the benefit received. It also allowed Council to choose what services were to be assessed. November 12, 1986 Page Two In 1985, the City formulated the Tustin Landscape and Lighting District utilizing the Lighting and Landscaping Act of 1972 for the East Tustin area. Subsequently, those street lights not belonging to any district and supported by the general fund have been annexed to this district. DISCUSSION: The original requests by the County to have the City assume economic and administrative control of the lighting district was because there was an anticipated shortfall of revenue verses expenditures. In 1984, it was estimated that the shortfall would occur in 1986 as property tax revenues coupled with augmentation and subvention funds were increasing at approximately 6% annually while utility costs were increasing at approximately 15%+ annually. It now appears that the shortfall will not occur for quite some time as: 1) augmentation and subvention funds are diverted directly into the property tax; and, 2) the deceleration of utility cost increases. There has been a recent change in County policy. Previously, tax revenues were received by the County and the Board of Supervisors distributed the funds to the appropriate agencies. Current practice, with the adoption of a Resolution governed by Section 99 of the Revenue and Taxation Code, allow revenues to go directly to the agency. Thus, by adopting the attached Resolution, all tax revenues would go directly to the City of Tustin. County revenue and ekpenditure reports are as follows: FISCAL 1984-85 FISCAL 1985-86 FISCAL 1986-87 REVENUE $275,639.04 $296,519.52 $319,552.56 EXPENSE 157,917.00 156,331.20 193,555.92 SURPLUS 117,722.04 140,188.32 125,966.64 As is readily seen on the attached chart, there is an annual surplus of revenue funding through 1994-95 for future City use within the Lighting District. The accummulated balance of this surplus funding will carry the Lighting District expense through fiscal year 2001-02 based upon the following worst case scenario: 1. Property tax revenue is projected at a flat 2% annual increase rather than the 2% plus increased assessment due to resale. 2. Average increase of 5% per year for energy costs. e Energy costs for installation of fifty (50) new street lights each year to the District. This is a conservative number based upon the number of installations in past years. 4. The surplus amounts do not include any accummulated interest amounts. November 12, 1986 Page Three As a result of utilizing the worst case scenario, it is conceivable that the 1994-95 and 2001-02 dates could be extended. The rapid decline of the accummulated surplus balance commencing in 1994-95 is a result of the energy/maintenance expenses exceeding projected revenues, as caused by the on-going installation of new street lights (estimated at 50 lights per year) and the projected inflationary increase for energy cost. There are two major advantages to assuming the street lights from the County. One, the City would have absolute economic and administrative control. Two, for some time now, the County has refused to install new lights into the district. By the City having control, we can provide the higher level of service to the citizen which has always been the desire of the Council. The installation of any new lights will ultimately reduce the annual surplus. In the future when the surplus funds are totally used for operational/maintenance costs, any shortfalls can be funded through an implementation of a 1972 Landscape and Lighting Assessment District as a supplement to the original district revenue source. Originally the City informed the County that we would consider this action July 1, 1987; however, we can assume the County controlled lights at an earlier date if Council desires. Property tax revenues would be transferred to the City on the designated date less expenses incurred and paid. Each subsequent year, the full amount of property taxes would automatically be received by the City. The attached Resolution provides for the City to assume the economic and administrative control of the County Lighting District subject to the transfer of all property tax revenue associated with the District lands transferred from the County to the City, as prescribed by Section 99 of the Revenue and Taxation Code. The adoption of this Resolution is required if the City Council is desirous of assuming the responsibilities of the Lighting District. Bob Ledendecker Director of Public Works/City Engineer BL:MB:jm Attachment Mo h-c~ Buckl~ (~l Acting Maintenance Superintendeh~c OUNT¥ I.%BHTINB OI RI BDDDDD. REVENUE £~PEN~£ SURPLUS Big- B 7B?- g BBB- B 9B~m- ~lO ~ID-~I I~I:L- ~ E~E- EI3~I3-EI 4~14-~15~15-~1G ~G- ~ 7~7- ~ 8~B- ~ ~9~- e DeD- O ~ DI- D eO~- D 3 File Name "B:STLIT" Row Fiscal Year 1 86-87 2 87-88 3 88-89 4 89-90 5 90-91 6 91-92 7 92-93 8 93-94 9 94-95 10 95-96 11 96-97 12 97-98 13 98-99 14 99-20 15 20-01 16 01-02 17 02-03 Revenue Expense Surplus 320767 197262 123505 327183 213409 237279 333727 230679 340327 340402 249143 431586 347210 268878 509918 354155 289966 574107 361239 312492 622854 368464 336547 654771 375834 362230 668375 383351 389642 662084 391018 418892 634210 398839 450637 582412 406816 484509 504719 414953 520644 399028 423252 559186 263094 431717 600285 94526 439923 630293 -87527