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HomeMy WebLinkAboutNB 5 STREET LIGHTING 04-21-80BATE: TO: FROM: SUBJECT: APRIL 9, 1980 NEW BUSINESS No. 5 4-21-80 Inter,Corn HONORABLE MAYOR AND CITY COUNCIL DAN BLANKENSHIP - CITY ADMINISTRATOR STREET LIGHTING BACKGROUND For years, the City resident has been provided street lighting through a special district tax on the property owners so benefited. The Tustin Street Lighting District covers a major portion of the City and parts of three numbered street lighting maintenance districts cover most of the rest. Parts of the City are not lighted and are not in a lighting district, Due tolthe passage of Proposition 13, street lighting districts no longer have sufficient property tax revenue to support their existing lights, to say nothing of new'developments which no longer share in the property tax revenues. The County Board of Supervisors is, therefore, presently reviewing the question of street lighting funding and, especially, the desirability of continuing to a~mini- ster lighting dist,'ic;s servin? riL';es (specifically, Tustin, Irvine, Placentia, a~i Los Alamitos). CURREHT STATUS gob LedEndecke:~, Ed Bushong and myself met with Elaine LaPorte and Buck Weaver of the County Environmental Hanagement Agency to review the current status. The problems are as follows: No new areas or developments will be annexed to liqht~ng districcs until a mutually agreeable solution to the problem of funding is found. This means that a solution must be found or the City m~.y not be able to require street lighting in new developments. The staff recommends that the City continue to require developer-installed street lighting facilities such as cables or conduit, and a deposit for the cost of the decorative standards as a ;:inimum. even if a funding plan is not ceveloped or agreed upon }n tile near future. Honorable Mayor and City Council April 9, 1980 Page 2 Re: Street Lighting In any event, existing lighted areas will not generate adequate property tax funds to pay the complete cost, and so one of the following solutions must be employed to make up the differeace: ao Reduce the number of lights to the number that can be supported. Turn over street lighting to the utilities to add to their bill. This has be~q studied by the Public Utilities Ce~nmission, which has led to a prelimi~iary report which states they neithe' support nor recommend this approa, 5. Use General Fund monies. The County could not l~gally spend their general fund monies ,'ithin a city for this purpose, an~] are not even sure they could affc?~i to do so in the unincor- proated are.~. The City of Tustin could assist up t<= a certain point, but would have to seriously consider theimpact of a major ~bsidy. Levy an assessment on benefited property. This places the cost back on the property owner and appears philosophically sound. It is somewhat more cumbersome as a col- lection app~oach for the County (or City, if the City has assumed the lighting dis- trict respo~Isibility), but is certainly feasible. There is significan.t work the first year in identifying all proPerty within the City and that which is benefited, in developing a basic f©~?~Jla for determining the benefi, t to differe~N~ types of property, in locating all lights =~]d identifying costs, and in developing ~l~e administrative interface with the County Tax Collector. The effort in sub- sequent years is significantly less. Honorable Mayor and City Council April 9, 1980 Page 3 Re: Street Lighting Who will administer the lighting function and take responsibility to insure it will be funded? The County would prefer that the City take it over, as it represents a real headache due to the future funding problems. The City is the logical choice in order to locally set standards, set policy, secure the lighting level and uniformity, desired~ resolve how unlighted areas are to be lighted (if they are to be)~ monitor replacement of burned out lights, and integrate street lighting with the overall priorities of the community. The question of future funding is not to be overlooked, however, as it is a severe question. If the City does not take over responsibility, the County may remove the City areas from their districts (thus forcing the City to assume the responsibility or see the lighting turned off) or, more likely~ would insist that the City adopt a resolution supporting the County coiiecting an assessment on property within the City being benefited. T~is latter course of action would avoid much of the political heat on the Board of Supervisors in levying benefit assess- ments. FIi~Ai~iCt AL S ITUATI OIt The future financing of street lighting is a real question which compounds the issue. Let us first lore at the most omtimistic outlook. If the AB-8 deflator does not take effect (it is triggered by lower than anticipated State revenues), and if Proposition 9 this June either does not pass or is completely absorbed at the State or other non-special district levels~ then it appears that the existing property taxes will oay for approximately 89 percent of the cost of about $215,000 for all lighting within the City. The City could probably absorb with ease the approximately S24,000 annually not covered by the property Caxes in that case. However, even under this very optimistic view, that $24,000 will increase due to the exceptionally rapid in- crease in fuel costs which greatly affect electrical energy costs. Tills is an overly optimistic outlook for the following reasons: State revenu$~ may be lo;.~er than expected due to Proposition 9 or other reasons, which could reduce actual property taxes to as low as 50 percent of the $215,000 total requirement. In that case, the City would h~,,e to come '~r' ,...,ith S107,50~]' r~ther than S24,000. ]'his is a major increase which would come at the same time other City revenues are reduced. The City could protect itself at that time by levying a, assessment for the difference if the Council were pre- pared to levy such a charge. Honorable Mayor and City Council April 9, 1980 Page 4 o Electrical utility rates are rapidly increasing due to the cost of oil; thus: the cost of service will probably outstrip assessed valuation growth until the price of oil stabilizes. New developments (with new lighting) do not have any way to receive part of that area's property tax revenue (from the basic $4.00 rate). Thus, any new lights will have to be paid for from the general fund or some annual benefit assessment. RECOMMENDATION it is very hard to develop a clear and unanimous recommendation to this complex problem. We all believe that it is logical and apmropriate for the City to administer the street lighting function if funding were assured, as it was prior to Proposition 13. We all recognize that Council will take political heat and may not want to invoke a user-benefit assessment e~,.en if needed. If Such a user fee is needed in order to avoid reducing the le',L~i of service in other existing services, and is not enacted, then our existing ~)~.2rams would be inadequately funded. Vie do not believe this should take place. However, if the Council will c~mmit itself to absorbing any short fall only to the extent that it does not interfere with adequately funding existing prog~am~, and beyond that point will ac~ to establish a user-benefit assessment, then our recommendation would be for the City to take over the administration of the lighting service. Stated a different way, the following are the Council's alternatives: tf Council does not wish to subsidize street lighting at all, nor to levy a user-benefit assessment to make up the difference even though City coordinating of street lighting has merit, then: ao Council should have staff indicate to the County it is not interested in assuming administration, and indicate it would adopt a resolution supporting County enactment of a user- benefit assessment within the City. If Council is willing to subsidize street lighting to a moderate extent, but does not wish to levy a user-benefit assessment when the amount of subsidy exceeds availab!~ =unds, then - follow actions a and b under alternative l. 3. If Council is willing to subsidize street lighting to a moderate extent and is willing to levy a user-benefit assessment to make up Honorable Mayor and City Council April 9, 1980 Page 5 any major subsidy beyond that extent which might be necessary, or to levy a user-benefit assessment to make up all the excess cost above the street lighting property tax (or remove sufficient lights from service as may be necessary), then: Council should have staff indicate to the County it is interested in assuming admin- istration, and direct staff to analyze and recommend the best alternative to accomplish that end with the maximum amount of existing property tax support. 4. If Council is not interested in street lighting at alt, then: Bo Council should have staff so indicate that fact to the County and let them do what they think best. RECOMMENDATION We recommend alternative 3 above, as we believe street lighting is important to traffic safety and the protection of property and should be controlled at the local level under the home rule principle. In addition, it will be necessary to require any new developments to agree to a user-benefit assessment through an association or on individual parcels in order to permit expansion of street lighting within the City. This is the first of a series of reports identifying policy decision which must be made in the area of street lighting. The relevancy or direction of additional policies will depend on the decisions made in this report and should have no impact on the present decision questions. What is the pleasure of the City Council? Please let us know if you need addi- tional information. This question needs to be resolved within 30 days to allow the County to make its decision, as well as for the City's staff to plan accordingly. Respectfully submitted, Dan Blankenship /~ City Administrator DB/hl r CC: Bob Ledendecker, Director of Public Works Ed Bushong, Director of Finance Mike Brotemarkle, Director of Community Development DATE: April 10, 1980 TO: FROM: SUBJECT: Dan Blankenship, City Administrator Ed Bushong, Finance Director COUNTY BILLING OF STREET LIGHTING At your request, we have contacted Mr. Ken Jones of the Orange County Auditor-Controller's office with regard to collecting an assessment for the City on the Property Tax bill. The following information must be submitted to the County b~.? August 10th at the latest: 1) List of all parcels 2) Amount of charge on each parcel 3) Copy of Resolution adopted by Council A collection charge of 1/4 of 1% of all collections must be paid to the County for this service. After the first year effort to set up the list this procedure appears to be relatively simple and worthy of  rther consideration. Finance Director cc: Bob Ledendecker ENVIRONMENTAL MANAGEMENT AGENCY H. G. OSBORNE DIRECTOR Light. Dis t. Admin. Mr. Dan Blankenship City Administrator City of Tustin Main at Centennial Tustin, California 92680 Dear ~fr. Blankenship: On March tl, 1980, the Board of Supervisors directed the County Environmental Management Agency (EMA) to advise cities of options to assume administration of street lighting services now provided by county lighting districts in respective ciCi~!::. A sum~ary of proposed options is provided in the attached letter. E~ v~as a~o directed to report back to the Board by the end of April 1980 as to city ~,,~!>~.as~s Lo ii, ese options. Our records indicate the majority of Tustin Highway Lighting District and portions of Orange County S:reet Lighting Maintenance District Nos. 6, 10 and 13 are within the boundaries of the City of Tustin. An updated inventory is now being prepared of existing lights and estimated additional lights to be operated by these dis- tricts within city boundaries between now and June 1981. In the interim, a preliminary estimate of lights and proposed fiscal year (FY) 1980-81 district budgets have been prepared. Using an average increase of 34% over November 1979 rates, a summary of proposed revenue and utility budget require- ments for the entire districts with parcels in your city is provided below: District Estimated FY 1980-81 Revenue Including Funds Carried Forward From FY 1979-80 Estimated FY 1980-81 Revenue Including Reserves Available July 1, 1980 Proposed FY 1980-81 Utilities Requirement Tustin HLD $ 94,094 $155,747 $195,325 OCSLMD ~8 /~ 33,323 53,323 56,200 OCSLMD #10 326,619 511,578 557,000 OCSI.>~ #13 164,724 238,324 270,885 Estimates for both revenue and requirements may increase as a result of updated Assessor/Auditor-Controller estimates of property tax revenue, a revised inventory of lights and proposed additional utility rate increases. Dan Blankenship City of Tustin The above revenue estimates also do not incl~epotential Special District Aug- mentation funding to these districts. An estimated $70,000 will be collected for this fund in FY 1979-80 from tax rates areas in Tustin HLD alone. If the fund continues and the city assumes administration of district parcels in the city as a subsidiary district, corresponding augmentation fund revenue in the future would be transferred to the city. EMA also proposes that applicable district property tax revenue be transferred for your administration if the city assumes districts' responsibilities. As directed by the Board, ail pending annexations of parcels within Tustin to county lighting districts are suspended. Further, as the current, legal adminis- trators of these districts, any modifications to the existing lighting system in districts must first be approved by the Board, or by me as the Board's designee, prior to authorization of new county purchase orders to pay for these modifica- tions. Please ensure that all recent or proposed modifications, for which pur- chase orders have not yet been authorized, are submitted to me for review. This should be done as promptly as possible in order that the city and/or private in- dividuals or groups may be advised soon if modifications are acceptable, and will b= mainteained by the county district. La Porte, EP~ Special Districts Administrator, is available to discuss light- district financing, applicable legislation add other factors you may wish to c~pns~der regarding assuming administration of lighting services in your city. Very truly yours, H. G. Osborne Director EL:pb Attachments AGENCY SANTA ANA, CALIFO'R,"',I[A Board o£ Supervisors County, of Orange SUBJECT: SYNOPSIS: Light. Dist,-Admir,. Lighting District Services in Ci~es (All [)istrlc['s) County-aam~ms,cr~:,: lighting dish'icts provicJe s.ervs~.e in unmcorporutecJ terr~t~,y and several cities. The county currently encourages c~ti'as to assume Ih.jn,lr, g responsibilities v, ith~n their L-.oun:i':ric-s. ;\!tem,.atlv,~:s !o ~ssume ?his ;u_'por:s;biJlry are discussed. Members of the Board: Coun~-administerad l[ghting districts ~r:.:.,.,~c:: ~er,.'ica ir: unh~co:'po,a' x ierritory and severe! citie . ' ' '~' '~' ' rendered t~,: Few one district ~s entirely in one c~. ]n~:::~::r clhes, d~.,n~, ~vi,ze,s Fxrccls. hc,~,.'cver, tire cities, '~ypr~,ss, Los A~cm,,os, Piacentia and lusrin receive extensive service {rom ~r,e or m.~re county dis~rich,. Most districts are ex,~c._,e,., to have msu~,riclen; revenue nex~ {]sca] ~eer to mo~ntain existing service '" ' ........ 19au--8 ] levels. This "shortfeli will be :u:rher discussed with the ~,~ suDn'i~to~ of proposed ?d ~ special district buoge,s in March. The anticipated revenue shortfall can be alJevlated by allocation of S:>ecial District Augmentation · " ~ .. contributions tO funds, benefit assessments for parcels serv,cee, or ay city or county qeneraJ fund '" ' sup~rt services. Augmentation £und;ng may be reduced or eliminated if Proposition 9 is approved in June 1980. Benefit assessments require significant staff resources to pre,ax:re necessary (legaJly required) docu- ments to levy assessment; and for existing county districts~ also require electorate approval of she majority of those voting. (Pursuant to Board Resolution No. 79-1503, Eb.t& is now preparing such documents for Placentia Highway Lighting District.) It may be considered un£ortunate [~ it became neces~:ary for the board to actually !evy assessments for ligh:'ing services ir, cities--as ~i;ies receive significant revenue From the areas serviced by such. lights ar, d, therefore, could help su:.r.:~c, rt the sc:vice to the exte:'~; r:er:z-.itted by Iow. U.:e c;f'.coun:y gene,al funds to ' ; .... "' ' ' ' "' ~ ' suer,r, ilgnhng ser:sces may be dill'fault, given ;~e L:oun~'y~s currez, r r n,;nc :; situatlor,. To use co:.m~y general fund'- f.~r what ere e,:sc-~tiall'.,' alt7 seiyices iS ~::p~z:~zll¥ q~.estior,- ab!e, and County Counsel ~,,arns ceuid be ruled illeguJ. Given these factors, the cour. ty has e:;couraged cities to assume licgi~ting responsibilities withln the[ boundaries, especJalt? Tustin, Piccentia and lrvine which have experienced recent major grc, wth in lighting services. These three cities have indicated some !hi'crest in administering ti:is service. Beard direction to continue negotiations witheppJicable citie,~ i: desired. Alternative~ reassume the responsibilit';,' and/or provide alternate financing are discussed below for consider,at]an b,/ your board and applicable cities. Board of Supervisors Page 2 Alternative Parcels now serviced by count~,. Jighting dibasic Is could b,~ w]lhc~ra',,;n flora ,zpplicable districts with service assumed dTrecr!-..' by cities. According to Cour, t? Ce~m?~, h,:msfer of district property tax revenue enthlements to the city would be negotiable bric!er e>:isth~.3 lc,,.,'. Alternative 2 in LosAJamitos~ PJacenria crud Tustin, mz)re than one .~is~rict pr~vic~es service to the city; and said ~istrlcts were established under both the improvement Act of 1911 crud the Highway Lighting Act ,~respectively Sections 5300 et. seq. and 19000 e;. seq. of the Streets and Highways Code or SHC). ~he City o~ Irvine is servised by one district, established under tt~e Improvement Act o£ 1911. ?e city of Cypress is c~[so serviced by one district, estc:blished under tke Highway Lighting Act. }:or districts establlshe5 under the Improvement Act of i911, Section 5351 o,~ the SHC permits a c~ty jo administer suchodlstrlct--ifall territory of the district is within ?.-,~ city's boundaries. City ~ake-over of a district can beaccompilshed by: a) trar~sferring parce. Jswi~rhin cities, iF necessary, ta o~ appropriate district; b) respective ciiy councils adopting a resolution to be filed ,....iih your board requesting transfer of jurisdictio~ over the district; ant! c) your board ado?ting th,: resolution. Pulsuant to Section 5851, property tax ~evenue allocated to the district would then b~, transferred 'o t.~e city foradminlstro?]on. Section 1922'1 of the ~,,~ mekesslm provision for c[t,~odm]uis- "rc~,tion of districts es ~'~sned under the Highway Lighting Ac~. ~ ~' ' ~ . , ~' o ~'¢ '- .~' '-.~:. '~ . · city jS~.c,Jon 16271 of the G.ve,nment Code ae, m~s a o~.tr~t aa,,.Im~,~r~d ~y a c~ty counci! as a ,~ubsidiary dlstrict for p~;rz, c~ses of receivlna Speck~l Di~TrictAufimentafion Funds. 'D~ere,~ore, such ~u~,~,~entntlon funding c;c,r[vcd in a given county district would be automatically trcnsferred t3 the c~ty for distribution, if :F~e clh/ assumed a~ministration of the districT. ,~,: to,native 3 C[t)~ odmlnistration o£ i[gkting services could else be accomplished by cities est~blishir, g their own districts under the L~ndsccge and Light]no Act o,~ 1972, ,,,.,]th the existing county distrlcrs subsequent: be[no dissolved (or remz]nin? Unh',.cor~orated parceis retained ~s a county district or annexeo ~a other County districts). Cour. t'/ Counsel advises that while there isambigu[t¥ in existing Jaw, tr~r',s:,"er of the previous coun~z district's property tax revenue entitlements to ~ city would probably be negotiable~ end if not negotiable, that it,,vouJd be sub[ect to determination by the Lo,:c~l Agency Foamer]on Commission. Alternative I may be rr,~st preferable ]n ;h,z~e cases v. herc: relatively few city ~Jrcels are serviced and/or for cities with existing me~r',s to pcr~i,aily Fi~',c:nce s~trvice. Al~ernetlve 2 ismore complicated to accomplish, but n~c:,.' [',e preferk~bl~' F-,~ c,:.rtein clfi~: wh~r~ (:;.:tc~r*s[','e~ ,,~rvic:c~ is r:~nder:~d~ as city c~s~;mption of responsibilities can be occc::.?[[d~ed wifhau~ Cormatior :~ r~¢~,'/ dis~r;c~. This a[temative ollow~ cities t:. continually rucf~ive pre?err? mx rc;ve~,ue e'.lc,c,::ted ~o the d~frlct c,s weJ~ a~. Special District A:?::enta~ion ~undat iF F:evic. usl/ c,~ti~led, to assi:r in f]nc~r~cln.~ lighting services. ~" l- pc~ssage o[ Assemb!v Bill :749 in ~o':'o " ' .- " ' ..... If none of the three alTcrnctives is accomplished, it ap?e:~s that the county would retain admin]s- trc~tion o[ districts with, in cii'[es. If retained, formc~l a~yr~:ument with the cities involved is recommend~ to establish or clarify city lighting standards, procedures for annexation, changes in existing lighting systems, and purchase order processing For services. The c~greement~ could clarify that cities involved endorse the lev7, of benefit assessment in their cities i£ needed to fi?once street lighting, or the agreement could speci,~y a contribution by lhe cities to avoid or reduce assessments. Board of Supervisors Page 3 Presentation of the above alternatives to cities is recommended with a subsequent report to your board in eight v.'eei:s as to the cities' response to the alternatives. In presenting alternatives, it is recemmended cities be advised that no county generel {unds are pro?asea at this time ta support lighting servicesin cities. Due to funding un.certainties and questlonso,rwhai'jurlsdic~iz,nsshall cMmin~ster city lighting, an cq~ht-','.eek m~rdtorium c:n oil annexations of city Fcrcels t~ county lighting districts is recommencied. It is rs[so rccomrnended your board outhorlze EM,z-, to prepare o plan to reorganize count)' lighting ' . " ' ot:~er o:'¢;c:~ thc: extent fr:asibie. This dishlcts, Io reouce rnult]pllclty of '.x.~st:~cts i~ cities and ' to plan is proposec! to be coordinated with c:F?!icab!e cities when considering alternatives ~ar lighting di~trict administration. Currently~ modification (i.e., increase in lights or energy use) to existing county lighting systems wi~hln a district end within city boundaries usually occur without EMA or board approvol of the mc. dification. These mod[fications are primarily initiated by cities or developers. However, once the lights are instal!ed or modified, a county lighting district essumes responsib[lity f~r ongoing maintenance and energy costs. To eliminate this situation, Director, EM~,, approval of such modifications is recommended, prior to EM~'~ requesting purchase orders to pay [or new costs related to modifications. CGM?LIANCE V/ITH CE©A: Not a proiect within the meaning o{ CE©A; tr~nzfers or annexations, '.vitbd~wals or diss3luf]or,s [[ pursued woul~ be ca~eg~rica!ly ~,~-~'t '- a. Piesent a]ternatives to a.:_.pl[cr:ble cJlles and advise cit[e~ that no co'.~mt?, gener'ul funds are now proposed to s~ppor~ lightlnc~ services [n rifles; b. Report to your board ,,,it'~in eight weeks on city posJtions; aha c. Prepaie e plan to reduce multiplicity of districts in cities and other areas to the extent feasit. Ie. Suspend new r:nnexatlons of parcels in :ities to coun,~y lighting districts for eight weeks. Aurhorh'_e Director, EMA to discontinue hsuancu a.r purchase orders for mod~f,cc~hons to e.',:istir'~g dh. trier lighting systems w~mn cities until such madificuiians are cppro'.,'~d by the Direcrc.r. Re.h., .... ut ly sc, brriit,ea, H. G. ,_;s:~arne, Director ELP:ps LaPorte 2173 api,l~ca:)te cities cc: City F,*,anagers of " ' ~ ! 3 4 5 6 7 8 9 10 11 13 .5 16. ~9 20 '2!" 23 24 27 28 RESOLUTION OF ThE BOAP, D O~: SUPERVISORS OF O}N%NGE COUNTY, CALIFORNIA 5:arch 11, 1980 On motion of Supervisor Miller, duly seconded and carried, the following Resolution was adopted: WHE~AS, County-administered lighting districts provide services in unincorporate~ territories in several cities; and WiiE~AS, ...... d{mtr{~.es are exoectecl to have insufficient revenue YTHEP~AS, ~'~-~,... Count5' ~, _, . ,:' :"-' c~c, uu'~:.:~:~'" '" cit~c:~; to ~.-,_,-~" ..... ~:: lighting ~;~ '.'%' ~ ,h'.5 , A. Present altern.a~ives to -:~l{n-~R~o cieies and advise cities that nc County c ......... ~.. ~ ...... aA funds are now proposed to suo~orh lighting ~.~_ ..... 7'zc~.~s in cities; B, Repcr~ ~.~_~ the Boerd of Supm~-v~ -,~ withmn ~_z= ~- ~.~.~ weeks cities positions; and ..... ~ ' ~- mu~ti}~licitv_ of dishr.icts in cities C, Prepar:.~ a p]a~ to ~du~u BE t'T FU., ,,.:::.':'.. .,~,.,..._v,,:,~.c-,~ '"",5. x ..... ,._,,a'4'' ,~. ,,~ .... annox,lttioI~s to Ceunty Ligh, lng ::lstric,_~, a:.n ..... t~ ....... [ for B~ IT F=:,.,:~:.;-, RESOLVED Lbo / }?esol. utic}n NO. 80-289 Lighting'District Services in Cities 1. ~..~: 6 7 I 8 10, 2O -- 22 Agency is authorized to discontinue_~ssuance of ;r~'"rchase.~ orders for modifications to -' e:.~s~lng distr~ct ligh'ting systems v;Athin cities until such modifications are approved by 'Nc': DJ ~'cctor. ?,YES: NOES: SU?ERV!SCR$ SUPERVISORS .... z hu,;~, HARRIE'fT R £ L E 'f · '1 9 March 25, 1980 g ? l Su FILE NO City and County Officials and All Interested Parties: This will inform you that the Commission staff has submitted its draft of the feasibility study re the direct assumption by electric uti!i~y ratepayers of costs and charges associated with the provision of street li~hting services by public utilities required by 1979 Assembly Concurrent Resolution No. 30 to the Commission for its approval° We take this opportunity to provide you with a summary of our findings and reco~,~mendatiens and solicit your views with respect thereto. If you would prefer to make ccr~,ents only after reviewing a draft of the re~ort, you shoui~ request, in writing, a copy of the draft by ~o later than Asril 4, 1980, and one will be provided to you. Co~ents regarding the draft should be sent by May 1, 1980. The Commission has received from Assemblyman John Knox an extension of the deadline for completing this study to June 1. In order for us to meet this deadline, we ask that you please observe these dates. Ail correspondence dealing with ACR 30, the report or its contents should be addressed to me at the above address° Thank you for your participation and cooperation in this effort. Sincerely, Legal Counsel Enclosure CC: Ail Commissioners and Assistants Executive Director Ail Division Director~ ASP:kn SUMO~{ARY OF FEASIBILITY STUDY RE THE DIRECT ASSUHPTION BY PUBLIC UTILITY RATEPAYERS OF COSTS AND CHARGES ASSOCIATED WITH THE PROViSiON OF STP. lET LIGHTING SERVICES BY PUBLIC UTILITIES ~. Introduction: in response Vo Assembly Concurrent Resolution No. 30 af--i979 {ACR 30), the Con~ission staff sent data requests to the state's regulated elecSric utilities and questionnaire forms to over ~-~ local governments and agencies concernin~ ACR 30. In addition, ~=e,_,_n~s were held to obtain public reaction to the import of ACR 30. -h~ d s~u~y summmrizes the data and responses received and concludes -ba.'c, 'very little benefiv would attach to shifting the operation and assr of street lighting services from local taxpayers to utility ~epayers. The Pre- and Post-Proposition 13 o~-~ ~ Prior to the ~_~ ~uat~. on: :,~ssage of Proeosition ~ street lighting charges were local a~encies which paid such bills from tax revenues, ani most :instances, p~·o.,~=~-'~,~y ~ax~s.~ Each~o.-~-~Y°~ formutaSel an ,'.'P:~.Lgement wish the utility serving its area as to which of the would own lighting facilities and perform necessary maintenance. charges u!.;~em all arrangements, whether by contract or ~z, ...... =~ovea h'~ t~ Commission · ?,ae,~uent to the passage of Proposition 13, the agencies which :tt'~a±ly ~,n~'fi for st~e-~v light'~ ~op .... ~ tax monies nave -' - . ........ l~q~ with ~'~ ~=~e~, '~s}rted ts various a.~ .... ~a~ive funds to make up for lost .... b~ ~ =t assessments, ~ ~e~ ~y taxes: user fees or ~-~ gasoline h~m=-ouv funds. Others installed mcre aCR l{: ,~nzztins vhP S~d~,,. The ~ ................... ; ..,~ ,.. SL ~li,~ bear c ...... uenc six would ............. ~1., raise electric r'Tts a~. a title when ~h?s-~ roses afc alre%J2 rapidly climbing. _:-,.e u~~~ ....... nra a!ss f=eL~fui taav t!.e t-:ubilc wouli '~,/_~.~,, .... them ~ ',,~il]i~ '-erblcipanss ~ a scheme des~Rned 5o $,-? n~ ' ............... e~.~ the InT. ent -:rcoosiClcn !~. NoPeo---f~ She cost oS b~lyirk- oP Fep!c.C" ~_:.z-- ~.-..n,f y-owxe2 .f~sill ~ie~. _'.~ ~id b~_ a ~na~or buF,le}~ 0~! the ,~'-~ :~" -.l .... ~nc ~tz~s mhd ow::e-~"hin of st.:-'eet l!zhtil;'} "aciiities to ' ~_ -_.,] ....... of which . .n~'~y believe th~$, --:~-.:~s. sure~ , of .srobec:oia'n for ratepayers against unFeasonebie -~' ..... ..... ~,'~ ..... "" ncs, i agencies ~.o !o;-'~e'~'~ b~id]~d~ _~ by budgetary con- - r';iilLS. These local - -h .... les~ no'.,rever~ strongly favor continua- "[ -. of tocsl control cver su{h The comments received from the public at-large were u m orm±~y in opposition to the imporv of ~CR 30. The pubii2, in agreemen't with 4,,~, ~ r. he to d~ the utility ~u=try, saw intent cf ACR 30 as a scheme ~feat ~be ~urpose of ~roposi~ion 13. -[V~ Rate and kequ!ator~ ~ + ~ ~ ~ ......~ ~ - ~.~,e ~ .... ~ves: o~.~ ~ ._ raze proposals are .. Sc,2sSe~ itl %ne study as reasonable a!terna~iv~s to the current ~ '>,~' ~ ~ proposals range fro~ those o~ ..... m~ of street lightin~ rates. The~ ~mp~.ementing a complete shift of costs to others implementing partial subsidies. V,_C°nclusi°ns and Recommendations: After thoroughly stuQying the implications~ of any ACR 30-type cost shift, the study conclu~des that any such action would be ill-advised and recommends against passage of & .... 30-type _e~zsla~mon Two principal reasons led the C~om~mission ~.~tal.~ to this conclusion: Local agencies have found several a!vernatives (including both financial and service aiverna- tires) to dee~.ergizing streer~ lights, thus al- 1. evia~ing the need for ACR 30-type le/~islation; passed. The increased co~es~ o*'_. .s,~ ,_...-~ to the ut[iicv would far outweisho,~.~*~ ~-h savin~s to ~-a~.,~ ]~cal agency w>,i2h, if i? xtq .:-ain any sus~ ben:fit, would pro~ ably hoc pass i~ ~-'o~ to ~h~ ~o,-a~ -~-. ...... ~ In the  REPORT 11-5-79 OCTOBER 30, 1979 DATE: 10: DAN BLANKENSHIP, CITY ADMINISTRATOR FROM: BOB LEDENDECKER, DIRECTOR OF PUBLIC WORKS/CITY ENGI~;EER SUBJECT: TUSTIN LIGHTING DISTRICT AND COUNTY LIGHTING DISTRICT NUMBERS 6, lO and 13 Recently an article appeared in the Orange Ceunty section of the Los Angeles Times (copy attached), regarding the County administered light- ing districts in the four Orange County cities of Irvine, Placentia, Los Alamitos and Tustin. This article addresses the idea of each city taking over the lighting districts within their respective jurisdic- tions to relieve the County of the financial responsibilities. BACKGROUND Tustin is made up of four (4) separate lightiDg districts as follows: I. Tustin Lighting District ~ 2. Orange County Street Lighting -Maintenan¢e District No. 6 3. Orange County Street Lighting - Maintenance District No. lO 4. Orange County Street Lighting - Maintenance District No. 13 There are several areas within the incorporated limits of the City that are not included within any one of the four districts. As de- velopment takes place in any one of these areas, the City requires that parcel of development be processed through the County and annexed into the Tustin Lighting District. The Tustin Lighting District is one of 13 districts formed by the County of Orange under the Highway Lighting District Act (Section 19DO0, Streets and Highways Code). The Orange County Street Lighting Main- tenance Districts No. 6, l0 and t3 are three of the eleven districts formed by the County under the Highway Lighting Maintenance District Act (Section 5820, Streets and Highways Code). Prior to Proposition 13, an annual tax rate was set to generate revenue to cover the cost of energy, maintenance and administration. Since that time, a combina- tion of a limited Proposition 13 tax rate plus extreme energy rate in- creases has set the districts in financial difficulties. A brief summary of the various street lighting acts is outlined below: Section 5820, Streets and Highways Code Improvement Act of 1911- Maintenance Districts. Administered by: County or City Powers: Installation (no), Service and Maintenance (yes) Formation: Public Hearing, no majority protest or 4/5 Council vote Collection Method: Property tax assessment DAN BLANKENSHIP October 30, 1979 Page 2 o Section 18000, Streets and Highways Code Street Lighting Act of 1919. Administered by: City Powers: Installation (yes), Service and Maintenance (yes) Formation: Public Hearing, no majority protest or 4/5 Council vote Collection Method: Assessment District or Property tax assessment Section 18300, Streets and Highways Code Street Lighting Act of 1931. Administered by: City Powers: Installation (yes), Service and Maintenance (yes) Formation: Public Hearing, no majority protest or 4/5 Council vote Collection Method: Assessment District Section 18600, Streets and Highways Code Municipal Lighting and Maintenance District Act of 1927. Administered by: City Powers: Installation (no), Service and Maintenance (yes) Formation: Public Hearing, no majority protest or 4/5 Council vote Collection Method: Property tax assessment on land only Section 19000, Streets and Highways Code Highway Lighting District Act. Administered by: County Powers: Installation ~es), Service and Maintenance (yes) Formation: 60% of assessed valuation petition or election required Collection Method: Property tax assessment Section 22500, Streets and Highways Code Act of 1972. Administered by: County or City Powers: Installation (yes), Service and Maintenance (yes) Formation: Public Hearing, no majority protest or 4/5 Council no election required Collection Method: Assessment District Landscaping and Lighting vote- NOTE: Collection methods i.nclude, property tax assessments (which me.ans that a tax rate is applied to property tax assessed valuation such as City property taxes, this is no longer a feasible method) and assessment district procedures (which means a map or list of property identifying an assessment amount; this is much more com- plex, but appears essential if the existing revenues are inade- quate and the City cannot make up the difference). As of this date, the County has not formally approached the City of Tustin with a proposal for the City to take over the County administered DAN BLANKENSHIP October 30, 1979 Page 3 Tustin Lighting District and Districts No. 6, l0 and 13 within the incorporated City territory. Staff will be in contact with County Administrative offices regarding these lighting districts and will keep the City Council informed as to when any actions are required concerning this matter. In the event the City considers assuming the administrative duties, consisting of collecting assessments and dispersing the energy and maintenance costs of these districts, the following conditions should be included within any acquisitions from the County: County transfers all lighting district areas within the City to the City and retains the lighting district areas outside the City; County transfers "appropriation subject to limitation" credits equal to the full current cost of the district ~.~ithin the City in the event the Gann Initiative (Proposition No. 4) is adopted; County transfers sufficient property tax entitlements to the City to provide the City with at least 901~ of the full and current cost of providing lighting; County agrees to eliminate or reduce lighting outside the City to the property tax funds available or to levy an assessment on the unincorporated property to make up the difference. In regard to item number 4, the City does not want to be sacrificing some of its funds and have the County make up the difference from the General Fund in other areas, thus creating a new tax inequity problem. A further condition would include the City's ability to absorb the ad- ditional 10% from existing revenues, rather than having to establish an assessment against the properties. The reasons why the City might be best off to accept some burden for street lighting are as follows: 1. Street lighting standards ~vithin the City should be set by the City. o The City should ~e in a position to insbre'that all areas of the City are uniformly light to that standard. (The standard would re- flect the greater need on major streets as opposed to local, .resi- dential streets.) 3. The County might refuse to accept new annexations or add lighting to existing areas if we do not act. DAN BLANKENSNIP October 30, 1979 Page 4 If the City generates too much property tax or sales tax revenues, it may have to turn the excess back to the State and residents anyway if the Gann Initiative passes. 5. The City should do what it can to reduce special districts. 6. The City should be willing to accept its municipal responsibilities, one of which is street lighting. The following is 1978-79 County Budget information on lighting districts which serve parts of Tustin. The Tustin Lighting District is the major source of our lighting. The numbered districts provide only small sec- tions of our City with lighting and are predominantly unincorporated areas. Data for 1979-80 was not readily available. SOURCE OF FUNDS FOR 1978-79 From Property Reg. Tax Total Reserves Taxes Relief Bail Out Financing Tustin $33,649 $ 50,511 $11,460 S 51,i26 $146,746 No. 6 24,479 26,730 6,994 17,450 75,653 No. 10 68,618 152,848 39,511 115,023 376,000 No. 13 82,177 66,623 17,514 19,431 185,745 APPROPRIATIONS FOR 1978-79 Utilities Co. Services Contingency Total Tustin $137,280 $ 4,466 S 5,000 $146,746 No. 6 65,853 2,800 7,000 75,653 No. 10 330,000 12,000 34,000 376,000 No. 13 175,875 5,870 4,000 185,745 Ending Balance S 56,000 39,000 .237,920 50,000 DAN BLANKENSHIP October 30, 1979 Page 5 This report is not an action item, but is being submitted for informa- tion only. BOB LEDENDECKER Director of Public Works/ City Engineer BL:rvm cc: City Clerk Any Change Wou!d??s · . .. P acent e, Los .. :.. . ~Y LEO ~-WO~x~,~ l~ ~ Eve La ~,-~-'" LOCAL EDiTORiAL PAGES C~.~ LUG !7 1979 uni~cc~a~d areas, have made b:ll lc: ~y cf '~ ';' ' "WYse got to l!~Lw ou~ ~m~" ~,'~e~ aha: Gq~ mceey can ~me i~cl~4.an of $i~ ne~ ~¢en~a dzvel~ "We could ~ ~g ~ come up with ~e money ~mme~t:ly. But we shc~d g~ N~ se~o~ n~ti :' atleas ~th ~em ~ L~t ~he start ping ~ (~e c~) and not' !o~ce the ~'anty ~ ~nan~ ~)~g ar~ ~ ~ c:~t the coua~y each ye~: for eN~r.~7 and which acc~uztad f~r'!3% c: on [ac!::~ng aay new deve!coment~ . inm~om~ areaz ~dy iactdd~ lng them ~ ~b~h ~eir own ~- = ': The county, m~nwNle appe~ re.?dy to b~itute a ~- k~ ~ help pay for sL~t h~ng co~a:~ ~. and ~e comn~y · co:~..[ siu~'ly O~e far hgh~g tae ti:h ~y m the o'..:e;s. .:: . . Tk e c=unty p~em~y pa~ fcr ,r.~ .... ' hgh~, 7.~ ~ whkh the r=o!.d ~ce o.: devei~menL t~e c~-.~, to new dev~m~ ~t ~ the D~ge cf ~f~n t3, the ~ m~ ~Yw~g ~ witi~n B) day~ ..... ::' ' ' \ ' Among the ~ticrm i~ a mm~'~' .:: .; ': : A~g to a county , '~e m~ent ~ t~ath wa'~d ke ia the lgl~-81 b~gek at wNcb ~me yea we'~d ~ t-&n- th~ problem ~it ~ b a deft- rfi:~ ~rd~ cf ~ruF~y ~ revenue" ~fl N~n, a ~k~ for E~e cc~mcy's ~ ku~n ~ ~mg~eat Agent. ~ ~a y~a ~n't ~ve ~e cf m:~ no~ m E-~t you do have t~ e ( and ~u~ cafi~ ~e ~ why La, gbmi~ P~e.n~ and ~&ne ~ded up cn ~e comnty m~ :'%Ve ~n't r~y kmow," ~id ~'lo>d },::~ ~e county's manager of .~eenng s~c~ "51~ cities wan: ~mg!e~ cen~%k "Eu~ before ~t~r mu aw~ [oL ~:ca ~mh ~ct w se:f-~zpFc~g and if you needed mo meney you Cmply San Diego, fac~ ~ a ~m{:~ prcb!e~ d~deJ La a n~bercf ~ ~ ~?y tn L~. t~ g~ne~A i~ he add~_ ~:~ f~, k~ne has Ln~cit~ it rater ~ fc~ i~ o~ ~L~ct and b~a ~np~M a~ut doL~g ccunr7 k~ no,yet c~ned ~.~ ~dn OW A~m~r D~ Bhn'<e sY~p ~!d T'~ ce~ge~ ~g ov~- sY~ cf the ~unty'a hack~ off M~r la. County cffida{~ would like to get t Fmblem ~h~neJ cut ~ef:re a d~.~ N made on Ur;der p~et ~a~, t; ~h sucl ckm-ge todd ~-z a vo~ cf the pub: ' Kui,?er. _~ny attempt ~ Lm~e a new r,'iu=a a dcm ce,:;d be ~cu!L "W~ are l~i~g at as an ~atama~ve and I think it wcdd awkwi~ ~'ken ',~ get ~ th~.; ~cint ~ I