TO:

TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL

FROM: LES EVANS, CITY MANAGER

DENNIS McLEAN, DIRECTOR OF FINANCE AND INFORMATION TECHNOLOGY

DATE: APRIL 19, 2005

SUBJECT: WATER QUALITY AND FLOOD PROTECTION PROGRAM – PROPOSED STORM DRAIN USER FEE

Co-Authors: Kathryn Downs, Accounting Manager

Gary Gyves, Senior Administrative Analyst

RECOMMENDATION:

The Infrastructure Financing Team (the "Team"), which includes Staff, makes the following recommendation to the City Council:

  1. Accept and approve the Rate Analysis Report, dated April 13, 2005, prepared by Harris & Associates;
  2. Approve establishment of the User Fee Assistance Program and direct Staff to develop procedures for the proposed Program for adoption by the City Council on or before June 21, 2005;
  3. Adopt the attached RESOLUTION NO. __; A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DESIGNATING A TIME AND PLACE FOR HEARING PROTESTS IN CONNECTION WITH A PROPOSED ANNUAL STORM DRAIN USER FEE, APPROVING PROCEDURES IN CONNECTION THEREWITH AND TAKING CERTAIN OTHER ACTIONS;
  4. Introduce the attached ORDINANCE NO. __; AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES AUTHORIZING THE USE OF MAIL BALLOT ELECTIONS; and
  5. Introduce the attached ORDINANCE NO. __; AN ORDINANCE OF THE CITY OF RANCHO PALOS VERDES ESTABLISHING AN ANNUAL STORM DRAIN USER FEE AND AMENDING THE RANCHO PALOS VERDES MUNICIPAL CODE.

EXECUTIVE SUMMARY:

The Team and the FAC have been working towards the recommendations contained within this Staff Report, including the establishment of a Storm Drain User Fee (subject to the voters approval) since late 2001. The 2004-05 winter storms caused the City Council to take immediate action and approve a 16-month expenditure plan totaling in excess of $3 million for the Water Quality & Flood Protection Program on March 15, 2005. The action resulted in a significant reduction of General Fund Reserves, now expected to be about $11 million at the end of FY04-05.

On January 4, 2005, prior to the worst of the 2004-05 storms, the City Council directed the Team to develop a Storm Drain User Fee Rate Model based upon the inclusion of annual maintenance costs, thirty-eight Priority 1 and 2 construction projects over 20 years with a flat fee. Staff prepared Version 6 of the Rate Model during the month of February with a $135/ERU fee rate based upon the City Council’ direction.

Prior to conducting the mail survey in late March 2005, True North Research, Inc. ("True North"), the City’s public survey advisor, recommended that two lower fee rates/ERU should be surveyed along with $135/ERU, Version 6 of the Rate Model, to determine property owners’ sensitivity to lower rates. The Team agreed and decided to prepare Version 7 (at $86/ERU) and 8 (at $96/ERU) of the Rate Model. The lower fees/ERU that were calculated in Versions 7 and 8 generally resulted from stretching the project timeline from 20 years to 25 years (Version 7) and 30 years (Version 8), as well as use of an escalating fee methodology, rather than a flat fee methodology used for Version 6. Additionally, the preliminary McCarrell Canyon pre-construction activity has been moved forward to begin in FY05-06 in Versions 7 and 8 of the Rate Model.

The mail survey was completed on March 31, 2005. True North completed the preparation of their "top-line" summary of the results from the mail survey on April 7, 2005. The Team conducted a conference call on April 7, 2005 to discuss True North’s conclusions and recommendation. Upon concluding its discussion, the Team unanimously agreed to recommend the $86/ERU Storm Drain User Fee Rate to the City Council, based upon Version 7 of the Rate Model.

If the Storm Drain User Fee is approved by a majority of the property owners, the City Council will conduct a noticed public hearing annually to set the Storm Drain User Fee rate. In any given year, the City Council may reduce the Storm Drain User Fee rate (even to zero). In subsequent years, the City Council may increase the Fee rate back up to the maximum rate or a lesser amount. Because of this feature, the City Council may decide, on an annual basis, to apply other General fund resources, such as the TOT, to the WQFP Program. And, if a crisis occurs during a subsequent year, the City Council could reinstate all or a portion of the Fee, up to the maximum amount that can be imposed under the Ordinance.

The Team has included a proposed User Fee Assistance Program in this Staff Report for the first time. The Team is recommending that the City reimburse 50% of the Storm Drain User Fee to eligible property owners with gross income under $35,000. The property owner would pay the Storm Drain User Fee then submit a claim to the City for reimbursement. Based on $86/ERU (Version 7 of the Rate Model) and about an 80% program participation rate, Staff estimates a maximum annual General fund expenditure of $61,500 for this program. The 2004 Five Year Financial Model – Revision 2, includes a provision of $75,000 annually for minor storm drain improvements. Staff recommends that the same amount be re-allocated to finance the proposed User Fee Assistance Program and the Storm Drain User Fees for City owned parcels at an estimated cost of $13,427.

It’s important to understand that project cost estimates and timelines identified in the City’s 2004 Storm Drain Master Plan Update and included in the Rate Models are subject to change in the future due to uncertainty and changing priorities (see the Rate Model Is Subject To Change In The Future Due To Uncertainty And Changing Priorities section of this Staff Report on Page 8). The working draft of the 2005 Five-Year Financial Model does not include any costs for storm drain construction projects, except the storm drain costs included in the $3.05 million Spending Plan approved by the City Council on March 15, 2005. The working draft of the 2005 Five-Year Financial Model is based upon an assumption that the voters approve the Storm Drain User Fee. Any necessary storm drain projects that are not financed by the Storm Drain User Fee may require the use of General Fund Reserves in the future. Based upon the working draft of the 2005 Five-Year Financial Model, it appears as though General Fund reserves will decline over the five years to a level below the reserve policy level during FY09-10.

In the event the Council elects to proceed with the mail ballot election to be conducted on August 30, 2005, the critical actions and associated dates are described in the section titled "Process To Establish A Storm Drain User Fee". The initial Public Hearing would be set for June 21, 2005 to determine whether a majority of protests have been filed. If not, assuming the City Council elects to proceed, ballots would be mailed on/about July 15, 2005 and tabulated on/about August 30, 2005. Assuming the property owners approve the proposed fee, it would be included on the FY06-07 tax rolls. The first installment would be equivalent to approximately half of the annual Storm Drain User Fee revenue.

BACKGROUND AND DISCUSSION:

Joint Workshop With Finance Advisory Committee On November 30, 2004

Staff presented a Staff Report on November 30, 2004 titled "Infrastructure Financing – Proposed Water Quality And Flood Protection Program", which includes a chronology of the City Council’s actions and the Infrastructure Financing Team and Finance Advisory Committee’s activities leading to the recommendations contained in this report. During the meeting, Staff and the Team presented an overview regarding the Water Quality and Flood Protection Program (the "Program") and members of the Finance Advisory Committee (the "FAC") and the City Council discussed the following topics:

  • The mail ballot process that would be conducted to establish a Storm Drain User Fee to finance the proposed Program;
  • The user fee concept, including the definition of an equivalent residential unit ("ERU");
  • The merits for establishing a dedicated Enterprise Fund for budgeting and accountability of all expenditures for the proposed Program;
  • The utilization of potential future revenue from the proposed Long Point Resort project in lieu of establishing a Storm Drain User Fee to finance the Program;
  • The potential fiscal impact of the proposed Program on General Fund Reserves; and
  • The rationale for not considering a sewer user fee at this time.

January 4, 2005 City Council Meeting

Staff presented a Staff Report on January 4, 2005 titled "Infrastructure Financing – Proposed Water Quality and Flood Protection Program – Additional Information". The Staff Report included what-if scenarios to explore the fiscal impact of using potential transient occupancy tax (TOT) from the proposed Long Point Resort project to finance the Program, as well as the pros and cons related to each what-if scenario.

With the aid of a presentation he prepared, Councilman Gardiner offered an alternative proposal for Council to consider, based on increases in TOT revenues from the proposed Long Point Resort project.

During the meeting, the City Council took the following actions:

  1. Received and filed the staff report, including the preliminary Rate Model (formerly referred to as the Preliminary Financial Model), for the Program, the pro-forma calculations of the pro-forma user fee rate and "What If" Scenario Alternatives A-C, that considered utilization of potential future revenue from the proposed Long Point Resort project in lieu of establishing a Storm Drain User Fee to finance the Program;
  2. Authorized Staff to continue to develop a Program, including the development of a Storm Drain User Fee system and the preparation for a mail ballot measure that would be conducted during Summer 2005 in accordance with Proposition 218 requirements;
  3. Authorized Staff to proceed with the Community Education and Outreach Strategy regarding the Program to be designed by Moore Iacofano Goltsman, Inc. ("MIG"), the City’s Public Information Consultant;
  4. Approved an appropriation of $220,000 for consulting services to continue development of the proposed Program; and
  5. Provided the Team with direction to prepare a slight modification of the preliminary Rate Model, Version 2, for the Program as follows:
    • Include annual maintenance and staffing costs;
    • Include a $2,000,000 General fund equity transfer to the proposed Enterprise fund [Note: The City Council authorized the $2 Million equity transfer from the General fund to the newly created Water Quality and Flood Protection Enterprise Fund at a subsequent meeting on March 15, 2005];
    • Spread Priority 1 and 2 projects over a 20-year time line, rather than 22 years; and
    • Calculate a flat Storm Drain User Fee using pay-as-you-go financing, rather than debt financing.

March 15, 2005 City Council Meeting

As a result of the recent storms and their damage to public and private property, the City Council conducted a Special Meeting on February 26, 2005 at which they requested staff to propose a revised storm drain expenditure plan to be presented at the March 15, 2005 meeting of the City Council. During the meeting, the City Council took the following actions:

  1. Approved a 16-month expenditure plan for the Water Quality & Flood Protection Program totaling in excess of $3 million;
  2. Established a Water Quality & Flood Protection Program Enterprise Fund for renewal and improvement of the City’s storm drain infrastructure;
  3. Approved a $2,000,000 General fund equity transfer to the new Enterprise fund;
  4. Authorized the expenditure of $445,000 from the Capital Improvement Fund for FY 04-05; and
  5. Authorized the expenditure of $100,000 from the Water Quality and Flood Protection Enterprise Fund for FY 04-05.

Overview of Findings and Recommendations Resulting from the Phone and Mail Surveys

True North, a sub-contractor of the City’s Public Information Consultant, Moore Iacofano Goltsman, Inc. ("MIG), conducted phone and mail surveys of the City’s property owners during the months of September 2004 and March 2005 respectively. True North issued a "draft" Executive Summary report of its conclusions and recommendation titled "Draft Executive Summary For The Storm Drain User Fee Feasibility Surveys", dated April 2005 (see Attachment C). The mail survey was recently completed on March 31, 2005. True North completed the preparation of their "top-line" summary of the results from the mail survey on April 7, 2005. There was not sufficient time to enable True North to prepare their final report. Staff will distribute any additional information completed by True North, if any, as late correspondence before the April 19th meeting of the City Council. Several excerpts from True North’s conclusions included in the draft Executive Summary follows:

"The vast majority of residential property owners in the City consider

protecting water quality and maintaining the City’s storm drain system

to be very important issues -- even more important than reducing traffic

congestion, improving youth sports facilities or limiting tax increases.

Naturally, the willingness of property owners to support the proposed

Storm Drain User Fee is contingent -- in part -- upon the fee rate associated with the measure.

Based on the results of both the telephone and mail surveys, the context

in which each survey was administered, the statistical margins of error

associated with the surveys, as well as True North’s experience conducting similar revenue measure studies, we recommend that the City adopt a Storm Drain User Fee that is based on an ERU of $86.

One of the clear patterns to emerge in the study was the importance

that basic information about the Program had on support for the proposed

measure.

On the other hand, it must be recognized that this feasibility study was

conducted in a local context that, for a variety of reasons, can be considered quite favorable to the proposed Water Quality and Flood Protection Program measure -- perhaps more favorable than can be expected when the user fee ballots would be mailed this summer.

The results of this feasibility study and the conclusions noted above

must be viewed in light of the current economic and political climates at

both the State and local level. Should events or developments occur at

either level that would negatively impact property owners’ opinions

about the Water Quality and Flood Protection Program, support for the

propose measure can be expected to be lower than that recorded in this

study."

The Team conducted a conference call on April 7, 2005 to discuss True North’s conclusions and recommendation. Upon concluding its discussion, the Team unanimously agreed to recommend the $86/ERU Storm Drain User Fee Rate to the City Council, based upon Version 7 of the Rate Model.

Rate Models

Prior to conducting the mail survey in late March 2005, True North recommended that two lower fee rates/ERU should be surveyed to determine property owners’ sensitivity to lower rates. The Team agreed and decided to prepare Version 7 (at $86/ERU) and 8 (at $96/ERU) of the Rate Model to enable a lower fee than $135/ERU (Version 6) that was calculated in accordance with the City Council’s direction during the January 4, 2005 meeting. The lower fees/ERU that were calculated in Versions 7 and 8 generally resulted from stretching the project timeline from 20 years to 25 years (Version 7) and 30 years (Version 8) respectively, as well as use of an escalating fee methodology, rather than a flat fee methodology used for Version 6.

The following table is a mini-summary of the versions 6, 7 and 8 of the Rate Model. A more comprehensive summary table and the actual Rate Models are attached to this staff report (see attachments A1 through A4).

Version 6

Version 7

Version 8

20 Yr Project Timeline

30 Yr Project Timeline

25 Yr Project Timeline

Flat Fee

Increasing Fee

Increasing Fee

City Council Direction

Team Recommendation

Not Recommended

Total 20 Year Program Cost

$39,729,000

$30,537,827

$34,123,795

Initial Program Cost Paid By User Fees

$2,091,000

$1,337,000

$1,494,000

User Fee per ERU – Year 1

$135

$86

$96

User Fee - Year 20

$135

$123

$137

Identified Project Timeline

20 Years

30 Years

25 Years

Fee Inflator (subject to City Council approval)

0%

2%

2%

Version 6 - $135/ERU Based Upon City Council’s Direction On January 4, 2005 (see attachment A2)

Staff prepared Version 6 of the Rate Model in accordance with the direction provided by City Council on January 4, 2005, based upon a slight modification of the preliminary Version 2 of the Rate Model and includes:

  • Annual maintenance costs;
  • A General fund equity transfer of $2,000,000 [Note: The City Council authorized the $2 Million equity transfer from the General fund to the newly created Water Quality and Flood Protection Enterprise Fund at a subsequent meeting on March 15, 2005; and
  • A 20-year timeline for Priority 1 and 2 projects.

Based upon the assumptions used in the preparation of Version 6 of the Rate Model, Staff included summary Storm Drain User Fee data in the Frequently Asked Questions ("FAQ") and Fact Sheet documents published on the City’s Web site, as part of the community education effort.

The Team elected not to revise Version 6 of the Rate Model to incorporate the $3,050,000 spending plan authorized on March 15, 2005. If Version 6 of the Rate Model were revised to incorporate the $3,050,000 spending plan, the resulting Storm Drain User Fee rate would be greater than $135/ERU (Version 6 rate) by several dollars/ERU to provide additional revenue in the early years of the Rate Model to finance the acceleration of the McCarrell Canyon project. The Team decided to leave Version 6 intact and continue to refer to the $135/ERU rate as "directed by the City Council" in the FAQ and the Fact Sheet posted on the City’s website and distributed to the public.

Version 7 - $86/ERU Based Upon Recommendation By The Team (see attachment A3)

After City Council authorized the $3,050,000 spending plan on March 15, 2005, Staff developed Version 7 of the Rate Model with the following assumptions:

  • Incorporation of the $3,050,000 spending plan, including acceleration of the McCarrell Canyon project;
  • Priority 1 and 2 projects were spread over 30 years, compared with 20 years in Version 6; and
  • An annual 2% increase was added to the initial Storm Drain User Fee, compared with use of a flat fee in Version 6.

In Version 6 of the Rate Model, preliminary activity (permitting and obtaining rights of way) for the McCarrell Canyon project begins in FY15-16. In Version 7 of the Rate Model, the preliminary McCarrell Canyon activity begins in FY05-06. To accelerate the timeline for the McCarrell Canyon project, other projects were re-ordered and re-organized into a 30-year timeline.

In the event that an emergency project arises, project costs are more than estimated or it becomes essential to construct one of the 18 Priority 3 projects not included in the recommended plan; the additional cost will likely compete with other programs and projects for General fund available revenues or reserves.

The Team’s recommended rate of $86/ERU has been included in the Final Rate Analysis report prepared by Harris & Associates. Using the rate of $86/ERU, a majority of residential properties would pay an annual Storm Drain User Fee of less than $85 (or about $7 per month). About 15% of single-family residences are condominiums and townhouses, and the majority would pay $24 or less. Less than 3% of residential parcels would have a fee of $200 or more. More comparative Storm Drain User Fee information is provided in the following table:

Parcels

Estimated

Served

Impervious

Version 7

 

Parcel Use

Acreage

By City

Percentage

Low Fee

High Fee

Avg Fee

SFR1

Single Family Residence

0.010 to 0.16

1,191

74%

$16.03

$86.00

$77.57

SFR2

Single Family Residence

0.161 to 0.20

1,928

58%

$72.15

$84.55

$77.81

SFR3

Single Family Residence

0.201 to 0.28

3,098

49%

$74.34

$99.12

$84.16

SFR4

Single Family Residence

0.281 to 0.54

2,823

41%

$86.73

$161.07

$118.07

SFR5

Single Family Residence

0.541 to 2.99

963

35%

$138.48

$721.52

$197.79

SFR6

Single Family Residence

3.0+

11

Actual

$67.78

$953.28

$383.69

CNDO

Condominiums

All

1,779

Actual

$9.48

$121.72

$35.44

COM

Commercial

All

43

Actual

$26.24

$21,595.48

$1,136.98

GOV

Governmental

All

51

Actual

$7.28

$24,315.41

$2,245.43

INST

Institutional

All

22

Actual

$134.10

$13,162.37

$2,300.43

MFR

Multi-Family Residences

All

39

Actual

$76.52

$3,410.85

$759.69

Total Parcels Served By City

11,948

Version 8 - $96/ERU Based Upon A Modification Of The Team Recommendation (see attachment A4)

Excluding one key assumption, Version 8 of the Rate Model is identical to Version 7. Staff developed Version 8 of the Rate Model to understand the effects of spreading priority 1 and 2 projects over 25 years versus 30 years. No dramatic changes were made to project timeline. Certain individual projects were simply moved forward slightly. The result was a $10/ERU increase of the Storm Drain User Fee. Based on the results of the mail survey and the absence of a substantial improvement to project timeline, the Team does not recommend Version 8 of the Rate Model.

Rate Model Is Subject To Change In The Future Due To Uncertainty And Changing Priorities

Project cost estimates and timelines identified in the City’s 2004 Storm Drain Master Plan Update and included in the Rate Models are subject to change in the future due to uncertainty and changing priorities, including:

  • The complete failure of known, deficient storm drainpipes and catch basins will likely occur in the future, and may change the priority of scheduled projects.
  • The Rate Model includes 38 known top priority projects, yet the Storm Drain Master Plan Update, prepared by outside engineers and presented to the City Council on June 15, 2004, included an additional 18 construction projects that are not included in the Rate Model. Several of the 18 construction projects may become higher priority projects, compared with the 38 construction projects included in the Rate Model.
  • It is expected that the Storm Drain Master Plan will be updated every 5 years or so. It is likely that several high priority storm drain construction projects will be discovered that are not known today.
  • Like the Winter 2004-2005 storms demonstrated, future storms will inform us that some storm drain systems are not capable of handling abnormal amounts of stormwater and debris flow. Accordingly, the future discovery of storm drains and catch basins during abnormal rainfall will likely change the priority of construction projects.
  • Similar to the San Ramon storm drain reconstruction project completed during 2003, some storm drain construction projects will cost significantly more than the engineering estimates included in the 2004 Storm Drain Master Plan Update.

Why A Sunset Provision Is Not Recommended

The Team considered the merits of including a provision to discontinue the proposed Storm Drain User Fee at a set time after its initial imposition (a "sunset" provision). Some residents of the City have expressed an opinion that the proposed Storm Drain User Fee should include a sunset, either after a pre-determined number of years or after the proposed Long Point Resort project begins operations and collects transit occupancy tax ("TOT") for the City. The Team, as well as the FAC, especially its Infrastructure sub-committee, does not recommend the inclusion of a sunset provision for the following reasons:

  • The storm drain system, like other infrastructure, must be systematically maintained, repaired and replaced. While the priority projects will repair or replace currently inadequate storm drain facilities, storm drain facilities that are now in good condition will continue to age. In the future, engineers will likely identify additional storm drains that need lining, replacement or upgrading. The City Council has directed Staff to develop a long-term financing system for the repair and on-going renewal of the City’s storm drain system.
  • Generally, sunset provisions are incorporated into municipal financing plans which have durations of less than ten years. The Rate Model for the proposed Storm Drain User Fee is based upon performing initial storm drain construction projects over at least 30 years.
  • The Rate Model excludes 18 storm drain construction projects that are included in the City’s 2004 Storm Drain Master Plan Update. It may become necessary to complete some of the excluded 18 construction projects if it is later determined that property damage has occurred, or could occur, as a result of a failure of those storm drains, and other priority projects will undoubtedly come to light in the future.
  • The Storm Drain User Fee provides potential lenders with a dedicated revenue stream for loan repayment, in the event the City must borrow funds to construct a multi-million dollar emergency storm drain project. The existence of a dedicated revenue source for collateralizing a long-term financing arrangement probably would enable the City to obtain lower interest rates. The inclusion of a sunset provision would eliminate a dedicated revenue source that lenders would require as collateral for long-term financing.
  • The Staff from the Sacramento office of the State Water Resource Control Board have suggested that the proposed Storm Drain User Fee would be an essential collateral source if they could ever provide long-term financing of storm drain construction projects.
  • The proposed Storm Drain User Fee methodology is based upon a fee with an indefinite duration.

If the Storm Drain User Fee is approved by a majority of the property owners, the City Council will conduct a noticed public hearing annually to set the Storm Drain User Fee rate. In any given year, the City Council may reduce the Storm Drain User Fee rate (even to zero). In subsequent years, the City Council may increase the Fee rate back up to the maximum rate or a lesser amount. Because of this feature, the City Council may decide, on an annual basis, to apply other revenues, such as the TOT, to the WQFP Program.

If the City Council determines that TOT or other new sources of revenue are sufficient to finance the costs of the WQFP Program in a particular year, the Fee for that year can be reduced to zero. And, if a crisis occurs during a subsequent year, the City Council could reinstate all or a portion of the Fee, up to the maximum amount that can be imposed under the Ordinance. The Team, as well as the FAC, recommends that the Storm Drain User Fee Ordinance not include a sunset provision so that maximum flexibility is provided to future City Councils to address these changes in circumstances.

Storm Drain User Fee Versus Flat Parcel Tax

The Team and the FAC considered several financing alternatives for financing the Program before making a recommendation to establish a Storm Drain User Fee to the City Council. Several residents have expressed a belief that a flat parcel tax would be a more equitable financing alternative to a Storm Drain User Fee. The Team and the FAC chose to recommend a Storm Drain User Fee over a flat parcel tax for the following reasons:

  • A Storm Drain User Fee would spread the costs fairly and equitably across all types of property owners. City Staff believes a flat parcel tax would favor large commercial property owners while penalizing small residential properties. In fact, based on Version 7 - $86/ERU Based Upon Recommendation By The Infrastructure Financing Team, about $230,000, or 17% of the cost would shift to residential property owners if a flat parcel tax were enacted. About 64% of residential property owners (especially smaller, single family properties) would pay more with a parcel tax, compared with a Storm Drain User Fee. Some would pay as much as $82/year more.
  • A parcel tax vote would include all registered voters, not just the property owners who would pay the parcel tax.
  • A parcel tax would require two-thirds majority to pass. However, since nearly 20% of registered voters in the City are renters, potentially 20% of the voters would participate in a decision about a parcel tax that they would not directly pay.

Process To Establish A Storm Drain User Fee

The Deputy City Attorney presented the Summary Timeline for the Proposition 218 Mailed Ballot Election to Establish a Water Quality And Flood Protection Program User Fee to the City Council and the Finance Advisory Committee during the Joint Workshop conducted on November 30, 2004. In the event the Council elects to proceed with the mail ballot election to be conducted on August 30, 2005, the critical actions and associated dates are listed below.

  1. Prior to April 19, 2005 – Harris & Associates has prepared and filed with the City Clerk a written report containing the identity of each parcel upon which a fee is proposed, a description of each parcel of real property receiving storm drainage services, and the annual fee amount for each parcel.
  2. April 19, 2005 - Adopt the attached Resolution No. ____, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DESIGNATING A TIME AND PLACE FOR HEARING PROTESTS IN CONNECTION WITH A PROPOSED ANNUAL STORM DRAIN USER FEE, APPROVING PROCEDURES IN CONNECTION THEREWITH AND TAKING CERTAIN OTHER ACTIONS setting June 21, 2005 for the public hearing, and ordering notice to be mailed.
  3. April 19, 2005 - Introduce for first reading of Ordinance No.____, AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES AUTHORIZING THE USE OF MAIL BALLOT

    April 19, 2005 - Introduce for first reading of Ordinance No.____, AN ORDINANCE OF THE CITY OF RANCHO PALOS VERDES ESTABLISHING AN ANNUAL STORM DRAIN USER FEE AND AMENDING THE RANCHO PALOS VERDES MUNICIPAL establishing fee (subject to voter approval) and providing for fee to be collected on the tax rolls.

  4. May 3, 2005 – City Council adopts the Ordinances authorizing mail ballot election that were introduced for the first reading on April 19, 2005.
  5. May 6, 2005 - Mail notice of public hearing to the record owner of each identified parcel upon which a fee is proposed. The Mailed notice must contain the fee amount the City proposes to impose on each parcel, the basis upon which the proposed fee amount was calculated, the reason for the proposed fee, and the date, time, and location of the public hearing.
  6. No later than June 7, 2005 - Publish notice (first publication) of the time and place of the public hearing, that the written report prepared was filed, and include a general explanation of the matter to be considered in a newspaper, which is regularly published once a week or more.
  7. No later that June 14, 2005 (one week after step 5) – Publish notice (second publication) detailed in the step described previously.
  8. June 21, 2005 - City holds public hearing on the proposed fee. At the public hearing, the City shall consider all protests against the proposed fee. If written protests against the proposed fee are presented by a majority of the identified parcels, the City shall not impose the fee.
  9. June 21, 2005 - Assuming no majority protest, City Council adopts ordinance establishing fee (subject to voter approval) and providing for fee to be collected on the tax rolls. As an alternative, the Council could elect to discontinue the process and/or postpone the Public Hearing and mail ballot election until 2006.

    June 21, 2005 - Adopt resolution calling special mail ballot election and submitting the ballot measure to the voters.

  10. July 15, 2005 - Mail ballots and ballot materials to property owners.
  11. On/before August 19, 2005 - Publish notice of time and location that ballots will be canvassed. Notice must be published in a newspaper of general circulation that is published in jurisdiction where election is to be held or if no such newspaper exists, then prominently post notice in office of elections official.
  12. August 30, 2005 (Last Tuesday of August) – The deadline for mail ballots to be returned.
  13. On/before September 23, 2005 - City Clerk canvasses the votes and certifies the results to the City Council.
  14. September 23, 2005 - City Council adopts resolution declaring the results of the election.
  15. On/before August 10, 2006 - Assuming proposed fee is approved by a majority of the ballots received from the property owners of the property subject to the fee, City Clerk files with the County Auditor-Controller a report containing a statement endorsed on the report that it has been finally adopted by the City and that the auditor shall enter the amounts of charges against the respective parcels as they appear on the current assessment roll.

Overview of Subsequent Annual Public Hearing to Set Storm Drain User Fee Rate

If the Storm Drain User Fee is established, the City must annually provide published notice and hold a public hearing to set the Storm Drain User Fee for every subsequent year. The public hearing must be completed by August 10th each year to meet the County’s deadline for submitting the Storm Drain User Fee for collection on the County tax roll. Prior to setting the Storm Drain User Fee for the next year, the City Council will review the current and projected annual costs and the long-term projections for the improvements to the storm drain facilities. In setting the annual rate, the City Council will consider any new or updated costs, and any fund balances or shortages, and adjust the rate within the maximum rate per ERU as described previously. The database for the Storm Drain User Fee will be updated annually with the latest information available from the County Assessor’s office.

If written protests are received from the property owners of a majority of parcels subject to the Storm Drain User Fee, the proposed Fee cannot be collected on the tax roll, but could be collected by an alternative means (i.e. water bill, hand bill). No further proceedings will be required under Proposition 218 so long as the Storm Drain User Fee is not increased above the maximum rate.

The proposed Storm Drain User Fee detailed in the Rate Analysis Report sets the maximum annual Storm Drain User Fee at $86 per ERU for FY06-07. Such maximum annual rate per ERU shall be increased annually commencing with FY07-08 by an amount equal to the annual change in the Consumer Price Index, not to exceed a maximum increase of 2% per year. In any year, the City Council (following a public hearing and consideration of a an annual fee report outlining the estimated annual costs of the Program) may reduce the rate per ERU below the maximum rate or increase the rate per ERU up to or below the maximum rate if it has previously been set below such rate. In no event may the City Council increase the rate per ERU in excess of the maximum rate without a subsequent mail ballot election in compliance with Proposition 218.

If the Storm Drain User Fee is established, the Enterprise Fund would receive the first installment of Storm Drain User Fee revenue on or about December 20, 2006. The first installment would be equivalent to approximately half of the annual Storm Drain User Fee revenue. The second installment for the remainder of the annual Storm Drain User Fee revenue would be received on or about April 20, 2007.

Water Quality and Flood Protection Enterprise Fund

As previously discussed, the City Council approved the establishment of a Water Quality and Flood Protection Enterprise Fund (the "Enterprise Fund") on March 15, 2005. In addition, the City Council also approved a General fund equity transfer of $2 million into the Enterprise Fund. If the City Council adopts a resolution stating the City’s intent to establish a Storm Drain User Fee and the property owners approve the Storm Drain User Fee, user fees would be billed using the County property tax rolls beginning in FY06-07. The Storm Drain User Fees would be deposited into the City’s Enterprise Fund to enable program accountability and separation from all other financial activities of the City. The Enterprise Fund will be audited annually by independent Certified Public Accountants as a part of their examination of the City’s financial statements.

User Fee Assistance Program

The Team recommends the establishment of a User Fee Assistance Program. The Team is recommending that the City reimburse 50% of the Storm Drain User Fee to eligible property owners with gross income under $35,000. To substantiate eligibility, property owners would be required to submit a copy of their prior year tax returns along with an application form before August 30th. A valid request for reimbursement would be paid before October 30th of the same year.

Due to property ownership and income changes, the Team is recommending that eligibility be established annually. The property owner would pay the Storm Drain User Fee then submit a claim to the City for reimbursement.

Based on $86/ERU (Version 7 of the Rate Model) and about an 80% program participation rate, staff estimates a maximum annual General fund expenditure of $61,500 for this program. Staff has included the estimated expenditure for this program in the Fiscal Impact section of this Staff Report, as well as the working draft of the 2005 Five-Year Financial Model.

Government-Owned Properties

The parcels owned by the City, County, Palos Verdes Peninsula Unified School District ("PVPUSD") and other governmental agencies would be charged a Storm Drain User Fee. However, the City has no method to enforce collection of taxes, fees and assessments levied upon government owned parcels. Based upon Version 7 of the Rate Model - $86/ERU, Staff has estimated that Storm Drain User Fees of approximately $100,000 would be charged to other governmental agencies in FY06-07. The amount of collection from the other government agencies is not known at this time. Staff suggests that any future revisions to the spending plan for the Enterprise Fund, if necessary, be made in FY07-08, after the amount of collection from other governmental agencies becomes more certain.

Based upon recent research by the Deputy City Attorney, the City will not be required to pay any charges on behalf of other government agencies. Therefore, nothing has been included in the FY06-07 budget document or the working draft of the 2005 Five-Year Financial Model. The City will pay the appropriate Storm Drain User Fee for all of the parcels it owns. Staff has included an estimated annual amount of $13,427 for its City-owned parcels (based upon $86/ERU) in the Fiscal Impact section of this Staff Report, as well as the working draft of the 2005 Five-Year Financial Model.

Parcels Served Exclusively By Water Quality And Flood Protection Systems Of The County Or Other Cities

Areas within the City that flow out of the City without going through any City-maintained drainage infrastructure are not included in the proposed Storm Drain User Fee. There are also a number of County-maintained drain facilities within the City. If properties drain exclusively to either County-owned drains or drains owned by other cities, the properties would not be included in the Water Quality And Flood Protection Program. There are approximately 2,800 parcels that would be excluded from the Water Quality And Flood Protection Program.

Overview of RPV Custom Impervious Table

As described in the staff report dated November 30, 2004, the Preliminary Rate Analysis prepared by Harris & Associates used the impervious factors contained in the County Hydrology Manual. Impervious Factors represent the estimated percentage of a parcel with impervious cover, such as buildings, patios and sidewalks, and is hereafter referred to as "impervious percentage". There are a number of reasons to expect, however, that impervious percentage based on a countywide parcel analysis would not accurately represent the impervious percentages in the City of Rancho Palos Verdes. For example, unlike most areas on the County, many single family residential (SFR) parcels in the City are (1) located on hilly terrain; (2) located adjacent to canyons where the parcels extend down to or near the centerline of the canyon; (3) larger than the average parcel size throughout the County; and/or (4) include a substantial amount of open space.

Accordingly, staff directed Harris & Associates, assisted by True North Research, to develop impervious percentages based on lot size that are specific to the City of Rancho Palos Verdes, thereby eliminating the potential bias associated with relying on the factors contained in the County Hydrology Manual. The creation of the City’s custom impervious percentage table for SFR parcels was based upon the following:

  • A statistically valid, random, stratified sample of 1,006 single-family residential parcels in the City;
  • For each of the sample parcels, calculation of the actual impervious percentage using the City’s GIS System; and
  • Creation of five single-family residence categories with estimated impervious percentages.

The creation of the City’s custom impervious percentage table for SFR parcels provides an equitable method for determining the Storm Drain User Fee for each parcel. Additionally, the Team expects that the creation and use of a custom SFR impervious table will reduce the frequency of Storm Drain User Fee appeals based upon the contention that the impervious percentage should be significantly less.

Revision Of Preliminary Rate Analysis Report For Storm Drains, Dated March 29, 2005

The City’s consultant Harris & Associates prepared a Preliminary Rate Analysis dated December 23, 2004, which was attached to the January 4, 2005 Staff Report to City Council. Harris & Associates have prepared a revised Rate Analysis Report dated April 13, 2005 (see attachment C). The Rate Analysis Report contains:

  • Proposition 218 requirements;
  • Rate structure analysis;
  • Sample Storm Drain User Fee calculations; and
  • An overview of the proposed appeals process.

The Rate Analysis Report has been revised to include the use of the RPV Custom Impervious Table (discussed above). As part of developing the custom table, actual impervious percentages were calculated using the City’s Geographical Information System (GIS) for all condominiums, town homes, and single-family residential parcels with 3 or more acres. After calculating actual impervious percentages for 24% of the residential parcels served by the City’s storm drain system, the total number of calculated ERU’s changed slightly from 16,602 to 15,556.

Appeals Process For Property Owners

If a property owner disagrees with the calculation of his or her fee, based on the parcel area and/or estimated impervious percentage assigned to the property, then the property owner may appeal the calculation as follows:

  1. The property owner must provide written documentation explaining the reason why the fee should be changed. This documentation must include:
    1. The name, phone number, mailing address, and email address, if available, of the property owner.
    2. The Assessor’s Parcel Number (APN) of the property in question. The APN is listed on the property owner’s tax bill (and will also be included on the public hearing notice and ballot information provided during the establishment proceedings).
    3. To-scale drawings of the property in question and the impervious areas located on it with accompanying calculations. The to-scale drawings shall include square footage estimates and labels for each impervious area (i.e. house, garage, driveway, patio, tool shed, carport, etc.).
  2. If additional documentation is required or insufficient documentation was submitted, a representative of the Public Works Department or his designee (Staff) will notify the property owner in writing within two (2) weeks of receipt.
  3. Once Staff has determined that sufficient documentation has been submitted, Staff will perform the initial review. Staff will notify the property owner in writing within four (4) weeks from the time sufficient documentation was submitted as to whether or not the fee amount will be changed
    1. If the determination is to change the fee amount, then the new fee amount will be documented within the fee database.
    2. If the determination is that the fee should not be changed, the property owner can appeal Staff’s decision to the Director of Public Works (Director). The appeal must be made in writing and returned no later than four (4) weeks from the date of the mailing of Staff’s initial review decision. The Director will notify the property owner in writing within four (4) weeks from the date of receipt as to whether or not the fee amount will be changed

If the Director’s determination is that the fee should not be changed, the property owner can appeal this decision to the City Council. The appeal must be made in writing and returned no later than four (4) weeks from the date of mailing of the Director’s appeal decision. The City Clerk shall fix a time and place for the appeal hearing and shall give notice to the property owner in writing. The City Council’s determination on the appeal is final.

If the fee is approved by property owner election for placement on the property tax bills, then any modification to the fee amount assigned to a particular parcel will be made prior to the submission of the fees to the Auditor-Controller’s office in any given year. Appeals will be accepted annually up until June 30 for inclusion on the following fiscal year’s property tax roll submittal. However, if an appeal is granted by Staff, Director or the City Council that does not permit inclusion for the following fiscal year’s property tax roll submittal, a reimbursement will be provided to the property owner by the City.

Staff does not recommend the adoption of a Water Quality & Flood Protection User Fee Appeal Processing Fee (Appeal Processing Fee) during the first year of implementation. However, if approved by voters, staff will be recommending the adoption of an Appeal Processing Fee during the second year at the time when all City fees are brought before the City Council.

Catch Basin Inserts – NPDES – Prevention Of Storm Water Pollution

The City of Rancho Palos Verdes has installed catch basin inserts in twenty-two of the City’s 584 catch basins in order to capture trash and other pollutants before they go into our storm drain system. This is being done in response to a federally mandated program to eliminate all trash and other pollutants from entering our storm drain system, which eventually leads to the ocean.

Catch basins are openings that are typically located next to street curbs that catch rainwater runoff on its way to the ocean. Catch basin inserts are fine mesh screens that attach to or mount inside the catch basin entrance. The inserts are designed to improve storm water quality by preventing debris and pollutants from entering the catch basin or by detaining and treating the water in the basin. The 22 existing inserts capture several hundred pounds of debris every year. The inserts can also absorb oil with absorbent materials such as a polymer or charcoal layer at the bottom of the basket. The polymer changes color and gets darker as more pollutants are captured. With this information, the City can roughly estimate the amount of pollutants flowing off City streets based on how often the filter must be replaced. The polymers can absorb up to four times their weight in oil.

Presentation To The FAC On April 13, 2005

Finance & IT Staff expect to present an overview of Team’s recommendation, included in this Staff Report, to the FAC at a meeting conducted on April 13, 2005. Because this Staff Report was completed prior to the FAC meeting, Staff will verbally provide any comments or recommendations offered by the FAC to the City Council during its presentation to the City Council on April 19, 2005.

FISCAL IMPACT

Finance & IT Staff have been preparing the 2005 Five-Year Financial Model (the "2005 Five-Year Financial Model") in conjunction with the development of the City’s budget for FY05-06. Staff expects to present the 2005 Five-Year Financial Model to the FAC at its regular meeting on April 27, 2005. Staff expects to present the 2005 Five-Year Financial Model to the City Council at the scheduled Budget Workshop on May 31, 2005. Since the 2004 Model was last presented to the City Council, the following significant changes have been incorporated into the working draft of the 2005 Five-Year Financial Model:

  • Based on conversations with staff from Los Angeles County, no expenditures have been included in the working draft 2005 Five-Year Financial Model for sewer cleaning, video filming, or line segment reconstruction.
  • The State’s Budget included components of a "local government agreement" that required local governments to contribute $1.3 billion towards the State Budget crisis in both FY04-05 and FY05-06. The Draft 2005 Five-Year Financial Model restores the City’s share of approximately $350,000 annually beginning with FY06-07.
  • On March 15, 2005, the City Council approved the establishment of a Water Quality and Flood Protection Enterprise Fund (Enterprise Fund) for the renewal and improvement of the City’s storm drain infrastructure. At the same meeting, the City Council authorized the transfer of $2 million from the City’s General Fund to the Enterprise Fund in FY04-05.
  • On March 15, 2005, the City Council approved a 16-month expenditure plan for the Water Quality and Flood Protection Program totaling $3.05 million partially funded with the $2,000,000 equity transfer noted above. The City’s Draft FY05-06 Budget and Draft 2005 Five-Year Financial Model include expenditures of $445,000 in FY04-05 and $1.9 million in FY05-06 for storm drain projects.
  • The 2004 Five Year Financial Model – Revision 2, includes a provision of $75,000 annually for minor storm drain improvements. Staff recommends that the same amount be re-allocated to finance the proposed User Fee Assistance Program discussed above, with an estimated cost of $61,500 and the Storm Drain User Fees for City owned parcels discussed above at an estimated cost of $13,427. The working draft of the 2005 Five-Year Financial Model has been prepared with the inclusion of both the proposed User Fee Assistance Program and the Storm Drain User Fees for City owned parcels.

It’s important to understand that project cost estimates and timelines identified in the City’s 2004 Storm Drain Master Plan Update and included in the Rate Models are subject to change in the future due to uncertainty and changing priorities (see the Rate Model Is Subject To Change In The Future Due To Uncertainty And Changing Priorities section of this Staff Report on Page 8). The working draft of the 2005 Five-Year Financial Model does not include any costs for storm drain construction projects, except the storm drain costs included in the $3.05 million Spending Plan approved by the City Council on March 15, 2005. The working draft of the 2005 Five-Year Financial Model is based upon an assumption that the voters approve the Storm Drain User Fee. Any necessary storm drain projects that are not financed by the Storm Drain User Fee may require the use of General Fund Reserves in the future. Based upon the working draft of the 2005 Five-Year Financial Model, it appears as though General Fund reserves will decline over the five years to a level below the reserve policy level during FY09-10.

Respectfully submitted,

Les Evans

City Manager

Dennis McLean

Director of Finance and Information Technology

Attachments:

A – Rate Model Versions 6, 7, And 8 With Summary Comparison Table

B – True North Executive Summary Results Of Phone And Mail Survey

C – Harris & Associates Rate Analysis Report Dated April 13, 2005

RESOLUTION NO. _________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DESIGNATING A TIME AND PLACE FOR HEARING PROTESTS IN CONNECTION WITH A PROPOSED ANNUAL STORM DRAIN USER FEE, APPROVING PROCEDURES IN CONNECTION THEREWITH AND TAKING CERTAIN OTHER ACTIONS

THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES HEREBY FINDS, DETERMINES, ORDERS AND RESOLVES AS FOLLOWS:

Section 1. The City Council of the City of Rancho Palos Verdes (the "City Council") is considering a proposal to impose an annual Storm Drain User Fee (the "Proposed Storm Drain User Fee") for services and facilities furnished by the City in connection with its storm drain system. The Proposed Storm Drain User Fee would be collected on the County of Los Angeles tax roll, commencing in Fiscal Year 2006-07, in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City in the manner prescribed by Sections 5473 et seq. of the California Health and Safety Code.

Section 2. The City Council has caused a written report entitled, "Rate Analysis Report" and dated April 13, 2005, (the "Written Report") to be prepared by Harris & Associates and filed with the City Clerk containing a description of each parcel of real property within the City to which the Proposed Storm Drain User Fee is applicable (collectively, the "Identified Parcels") and the amount of the Proposed Storm Drain User Fee for each such Identified Parcel for Fiscal Year 2006-07. The Written Report is on file in the office of the City Clerk and is available for public inspection.

Section 3. Article XIII D of the California Constitution and the Proposition 218 Omnibus Implementation Act (Government Code Section 53750, et seq.) (the "Implementation Act") imposes certain procedural and substantive requirements relating to the imposition of property-related fees and charges (as defined in Article XIII D), such as the Proposed Storm Drain User Fee, including the requirement to conduct a protest hearing and election for consideration of the Proposed Storm Drain User Fee. In accordance with Article XIII D and the Implementation Act, the City Council hereby approves the "Procedures for the Conduct of a Protest Hearing Relating to a Proposed Storm Drain User Fee" as set forth in Exhibit "A," attached hereto and incorporated herein by reference (the "Procedures").

Section 4. NOTICE IS HEREBY GIVEN THAT THE CITY COUNCIL DESIGNATES TUESDAY, JUNE 21, 2005, AT THE HOUR OF 7:00 P.M., IN THE COUNCIL CHAMBERS, FRED HESSE PARK COMMUNITY CENTER, 29301 HAWTHORNE BOULEVARD, RANCHO PALOS VERDES, CALIFORNIA, AS THE TIME AND PLACE FOR A PUBLIC HEARING ON THE ABOVE-DESCRIBED WRITTEN REPORT AND PROTESTS OR OBJECTIONS TO THE IMPOSITION OF THE PROPOSED STORM DRAIN USER FEE.

Section 5. At the above-described public hearing, all interested persons shall be afforded the opportunity to hear and be heard, and the City Council shall consider all protests against the Proposed Storm Drain User Fee. If written protests against the Proposed Storm Drain User Fee are presented by a majority of owners of the Identified Parcels, the City shall not impose the Proposed Storm Drain User Fee. In the absence of a majority protest, the City Council may submit the Proposed Storm Drain User Fee to a vote of the property owners in accordance with Article XIII D of the California Constitution.

Section 6. The City Clerk is hereby authorized and directed to give notice of the above-described public hearing in accordance with law and the Procedures.

Section 7. Reference is hereby made to the Written Report described in Section 2 hereof, which is on file in the office of the City Clerk, for a full and detailed description of the Proposed Storm Drain User Fee upon parcels of land within the City.

Section 8. The City Council hereby designates Dennis McLean, the City’s Director of Finance and Information Technology, telephone number (310) 544-5212, to answer inquiries regarding the public hearing, protest proceedings and procedural or technical matters.

PASSED, APPROVED and ADOPTED this _______ day of _________, 2005.

_____________________________

Mayor

ATTEST:

___________________________

City Clerk

EXHIBIT "A"

 
 

PROCEDURES FOR THE CONDUCT OF A
PROTEST HEARING RELATING TO A PROPOSED
STORM DRAIN USER FEE

 

 

The following Procedures have been adopted by the City Council of the City of Rancho Palos Verdes for the purpose of conducting a protest hearing required by Article XIII D of the California Constitution for consideration of the imposition of a proposed Storm Drain User Fee (the "Proposed Storm Drain User Fee").

 

TABLE OF CONTENTS

A. Written Report Page 1

B. Notice of the Public Hearing on the Proposed Storm Drain

User Fee Page 1

C. Eligibility to File a Protest Page 2

D. Submission of Written Protests Page 3

E. Conduct of the Public Hearing; Determination of A

Majority Protest Page 3

Written Report

The City shall cause to be prepared a written report ("Written Report"), which shall contain a list of all parcels to which the Proposed Storm Drain User Fee will apply (the "Identified Parcels") and the amount of the Proposed Storm Drain User Fee for each Identified Parcel for Fiscal Year 2006-07.

The Written Report shall be placed on file in the office of the City Clerk at least forty-five (45) days prior to the date set for the public hearing on the Proposed Storm Drain User Fee and shall remain available for public inspection.

Notice of the Public Hearing on the Proposed Storm Drain User Fee

Notice of the public hearing on the Proposed Storm Drain User Fee shall be sent, postage prepaid, by first class mail at least forty-five (45) days prior to the date set for the public hearing to the Record Owner of each Identified Parcel.

"Record Owner" means the owner of an Identified Parcel whose name and address appears on the last Los Angeles County equalized secured property tax assessment roll (the "Assessment Roll"), or in the case of any public entity, the State of California, or the United States, means the representative of that public entity at the address of that entity known to the City.

Notices shall be mailed to the Record Owners of the Identified Parcels, addressed to the names and addresses as they appear on the Assessment Roll, and, in the case of any public entity, the State of California, or the United States, addressed to the public entity at the address of that entity known to the City. In addition, notices shall be mailed to owners of the Identified Parcels, addressed to the names and addresses known to the City Clerk, if different than shown on the Assessment Roll.

Each mailed notice shall contain all of the following:

· A reference to filing of the Written Report;

· A reference to the proposed ordinance imposing the Proposed Storm Drain User Fee and providing for the collection of the Fee on the County tax roll;

· The amount of the Proposed Storm Drain User Fee to be imposed upon the Identified Parcel covered by the notice;

· The basis upon which the amount of the Proposed Storm Drain User Fee was calculated;

· The reason for the Proposed Storm Drain User Fee;

· A statement that the Proposed Storm Drain User Fee will be collected on the County of Los Angeles tax roll each year, commencing with Fiscal Year 2006-07;

· The effect of a majority protest; and

· The date, time and location of a public hearing on the Proposed Storm Drain User Fee.

The City Clerk, or the designee of the City Clerk, may certify the proper mailing of notices by an affidavit, which shall constitute conclusive proof of mailing in the absence of fraud.

Failure of any person to receive notice shall not invalidate the proceedings.

Notice of the filing of the Written Report and the public hearing shall be published once a week for two successive weeks in the Peninsula News, with the first publication at least fourteen (14) days prior to the date of the public hearing, and with at least five (5) days intervening between the first and second publications.

Eligibility to File a Protest

The Assessment Roll shall be presumptive evidence of ownership of an Identified Parcel for protest purposes.

If the owner of any Identified Parcel is not shown on the Assessment Roll, such owner may file a protest for such parcel by filing with the City Clerk a proxy from the Record Owner in a form satisfactory to the City Attorney or evidence of ownership satisfactory to the City Attorney. Any such proxy or evidence must be received by the City Clerk prior to the conclusion of the public hearing.

When an Identified Parcel is held by a partnership, as community property, in joint tenancy, or as a tenancy in common, any partner, spouse, joint tenant, or tenant in common, as the case may be, may file a protest for such parcel.

An executor, administrator, or guardian may file a protest for an Identified Parcel on behalf of the estate it represents. If such representative is shown on the Assessment Roll as paying taxes and assessments levied against the parcel, that fact shall establish the right of such representative to file the protest. If such representative is not shown on the Assessment Roll, the representative must file with the City Clerk written documentation satisfactory to the City Attorney establishing the legal representation. Any such documentation must be filed with the City Clerk prior to the conclusion of the public hearing.

When an Identified Parcel is held by a corporation or unincorporated association, a protest may be filed by any person authorized in writing by the board of directors or trustees or other managing body thereof to take such actions. The corporation or unincorporated association must file with the City Clerk written authorization satisfactory to the City Attorney. Any such written authorization must be filed with the City Clerk prior to the conclusion of the public hearing.

Submission of Written Protests

Written protests may be mailed (via U.S. mail) to the City Clerk at City Hall or delivered in person to the City Clerk at City Hall or at the public hearing.

No protests delivered via e-mail will be counted for purposes of determining whether a majority protest exists, but the City Council may, in its discretion, consider such protests in making determinations regarding the Proposed Storm Drain User Fee.

Each written protest must identify the property covered by the protest and be signed.

No protest received after the close of the public hearing shall be counted in determining the existence of a majority protest. The last pick up by the City Clerk of protests mailed or delivered to City Hall will occur at 4:30 p.m. on the date scheduled for the public hearing. To ensure that protests which are mailed or delivered to City Hall are received by the City Clerk prior to the close of the public hearing, such protests must be received by the City Clerk at City Hall prior to 4:30 p.m. on the date scheduled for the public hearing. The City Clerk shall endorse on each written protest the date it is filed with the City. The City Clerk shall identify any protests which are received after the close of the public hearing.

Written protests may be withdrawn in writing at any time before the conclusion of the public hearing by the person who submitted the written protest.

For purposes of determining whether a majority protest exists, only one protest for each Identified Parcel will be counted.

All written protests shall be considered public records.

Conduct of the Public Hearing; Determination of A Majority Protest

    1. At the time, date and place fixed for the public hearing, the City Council shall:

(i) Hear a staff presentation pertaining to the Proposed Storm Drain User Fee;

(ii) Hear all persons interested in the matter of the Proposed Storm Drain User Fee; and

(iii) Receive all written communications regarding the Proposed Storm Drain User Fee.

2. The public hearing may be continued from time to time, as the City Council determines is necessary to complete its consideration of the Proposed Storm Drain User Fee.

3. If the City Council determines at the close of the public hearing that written protests have been presented, and not withdrawn, by a majority of owners of the Identified Parcels (i.e., there is a majority protest), the Proposed Storm Drain User Fee shall not be approved.

4. If the City Council determines at the close of the public hearing that there is not a majority protest, the City Council may:

(i) Remedy and correct any clerical error in the Written Report or

otherwise modify the Written Report; provided that any such modification or correction shall not result in a Proposed Storm Drain User Fee for any Identified Parcel which is greater than the amount shown in the notice of the public hearing that was mailed to the Record Owner of the Identified Parcel;

(ii) Confirm the Written Report, as originally filed or as amended in

accordance with subparagraph (i), above;

(iii) Adopt an Ordinance imposing the Storm Drain User Fee, subject to voter approval; and

(iv) Adopt a resolution calling for an election regarding the Proposed Storm Drain User Fee.

ORDINANCE NO. _________

AN ORDINANCE OF THE CITY COUNCIL

OF THE CITY OF RANCHO PALOS VERDES

AUTHORIZING THE USE OF MAIL BALLOT

ELECTIONS

RECITALS:

WHEREAS, California Elections Code Section 4000 provides that any election or assessment ballot proceeding required or authorized by Article XIII C or XIII D of the California Constitution may be conducted wholly by mail; and

WHEREAS, pursuant to California Elections Code Section 4000, the City Council is required to authorize the use of mailed ballots for such an election; and

WHEREAS, the City Council wishes to achieve higher voter turn-out by allowing for the use of mailed ballots for such an election; and

WHEREAS, the City Council wishes to reduce the cost of such an election by the use of mailed ballots.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES HEREBY ORDAIN AS FOLLOWS:

Section 1. Chapter 2.50 is hereby added to Title 2 of the Rancho Palos Verdes Municipal Code to read as follows:

"Chapter 2.50 Mail Ballot Elections.

Sections:

2.50.010 Purpose.

2.50.020 Application of Chapter.

2.50.030 Procedure.

2.50.010 Purpose. The City Council is authorized to conduct elections wholly by mail ballot as set forth in Section 2.50.020 of this Chapter 2.50. The City Council shall determine whether an election will be conducted by mail at the time the election is called. Actions of the City Council pursuant to this Chapter shall be set forth in a resolution approved at a regular or special meeting of the City Council.

2.50.020 Application of Chapter. The following items may be the subject of an all-mail ballot election:

(a) Any election to approve a special tax as required or

authorized by Article XIII C of the California

Constitution.

(b) Any election to approve a property-related fee or

charge as required or authorized by Article XIII D of

the California Constitution.

(c) Any assessment ballot proceeding required or

authorized by Article XIII D of the California

Constitution; provided, however, that such a

proceeding shall be denominated an ‘assessment

ballot proceeding’ rather than an election, and

ballots shall be donominated ‘assessment ballots’.

2.50.030 Procedure.

(a) Elections authorized by this Section shall be held on an established mail ballot election date pursuant to Elections Code Section 1500.

(b) Elections authorized by this Section shall be conducted in accordance with special provisions as may be adopted by resolution of the City Council and with the applicable provisions for mail ballot elections set forth in California Elections Code Sections 4100 et seq., as they now exist or may hereafter be amended."

Section 2. Enabling Authority. This Ordinance is adopted pursuant to the authority granted by Section 4000(c)(9) of the California Elections Code.

Section 3. The City Clerk shall certify to the passage of this Ordinance and is hereby directed to post this Ordinance in accordance with law.

PASSED, APPROVED AND ADOPTED this ____ day of ___________, 2005.

Mayor

ATTEST:

City Clerk

ORDINANCE NO. _____

AN ORDINANCE OF THE CITY OF RANCHO PALOS VERDES ESTABLISHING AN ANNUAL STORM DRAIN USER FEE AND AMENDING THE RANCHO PALOS VERDES MUNICIPAL CODE

THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES HEREBY ORDAIN AS FOLLOWS:

Section 1. The City Council finds:

1.1 The City of Rancho Palos Verdes (the "City") is empowered by Health and Safety Code Section 5471 to prescribe and collect rates and charges, including a Storm Drain User Fee for services and facilities furnished by the City in connection with its storm drain system.

1.2 Pursuant to Health and Safety Code Section 5473, the City Council hereby elects to have such Storm Drain User Fee collected on the County of Los Angeles tax roll commencing with fiscal year 2006-07, in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City in the manner prescribed by Sections 5473.1 to 5473.11, inclusive, of said Code; provided, however, in any year the City Council may, by resolution, provide for an alternative procedure for collection of the Storm Drain User Fee.

1.3 The City Council has caused a written report entitled, "Rate Analysis Report" and dated April 13, 2005, to be prepared by Harris & Associates and filed with the City Clerk containing a description of each parcel of real property within the City to which the Storm Drain User Fee is applicable (the "Identified Parcels") and the amount of the Storm Drain User Fee for each such Identified Parcel for fiscal year 2006-07.

1.4 On June 2, 2005 and June 9, 2005, the City Clerk caused a notice of filing of the written report and proposed ordinance and of the time and place of the hearing thereon and on the proposed Storm Drain User Fee to be published pursuant to Section 6066 of the Government Code. The City Clerk further caused to be mailed notice of the filing of the written report and proposed ordinance and of the time and place of the hearing thereon and on the proposed Storm Drain User Fee to the Record Owner of each Identified Parcel (as defined in Government Code Section 53750) addressed to the names and addresses as they appeared on the last Los Angeles County equalized secured property tax assessment roll available on the date the written report was prepared (the "Assessment Roll"), and, in the case of any public entity, the State of California, or the United States, addressed to the public entity at the address of that entity known to the City. In addition, the City Clerk caused notices to be mailed to owners of the Identified Parcels, addressed to the names and addresses known to the City Clerk, if different than shown on the Assessment Roll.

1.5 On June 21, 2005, at the time and place set forth in the notice, the City Council conducted a public hearing on the above-described written report, proposed ordinance and the proposed Storm Drain User Fee and heard and considered all objections and protests thereto. The City Council determined at the close of the public hearing that written protests had not been presented by a majority of owners of the Identified Parcels.

Section 2. Title 3 of the Rancho Palos Verdes Municipal Code is hereby amended by adding new chapter 3.44 to read as follows:

"Chapter 3.44. Storm Drain User Fee.

Sections:

3.44.010 Purpose.

3.44.020 Fee Levied.

3.44.030 Collection of Fee.

3.44.040 Appeals Process for Property Owners.

3.44.050 Deposit of Fee Revenues.

3.44.010 Purpose. This chapter establishes an annual Storm Drain User Fee for all parcels of real property in the City which drain into City-maintained storm drain infrastructure, including pipes, inlets, outlets and natural drainage courses (the "City’s storm drain system").

3.44.020 Fee Levied.

A. Commencing with fiscal year 2006-07, an annual Storm Drain User Fee is levied upon each parcel of real property in the City that drains into the City’s storm drain system. The amount of use of the City’s storm drain system attributed to each parcel is measured by the amount of storm runoff contributed by the parcel to the City’s storm drain system. The amount of contributed storm run off is directly proportional to the amount of impervious area (Impervious Percentage) on the parcel (such as buildings and concrete), with greater impervious area equal to greater storm runoff generated. The amount of the Storm Drain User Fee shall be computed annually for each Identified Parcel as follows:

(i) (Parcel Area) x (Impervious Percentage) = Drainage Units

(ii) (Drainage Units) ¸ (0.118) = Equivalent Residential Units

(ERU’s)

(iii) (ERU’s) x (the annual rate per ERU) = the annual Storm Drain User Fee.

The Storm Drain User Fee will not be deemed to be increased in the event the actual payment from a person in any given year is higher due to an increase in the amount of the impervious area of the subject parcel caused by new development.

B. Table 1 shows the estimated percentage of impervious area (Impervious Percentage) assigned to single-family residential (SFR) parcels of various size ranges.

Table 1 – SFR Impervious Percentages

Land
Use

Impervious
Percentages

SFR Size Ranges

SFR1

74.0%

0.01 -0.16 acres (~1 sf-~7,012 sf)

SFR2

58.0%

0.161-0.20 acres (~7,013 sf-~8,755 sf)

SFR3

48.5%

0.201-0.28 acres (~8,756 sf-~12,239 sf)

SFR4

41.0%

0.281-0.54 acres (~12,240 sf-~23,565 sf)

SFR5

34.5%

0.541-2.99 acres (~23,566 sf-~130,680 sf)

SFR6

n/a*

3.0 acres and greater

*the actual Impervious Percentage is used for each parcel.

The Impervious Percentages assigned to condominiums and non-SFR properties, which include multi-family residential, institutional (such as churches and private schools) and government-owned properties, are based on the actual impervious area of each such parcel.

C. The parcel areas for condominiums are calculated by dividing the total area of the condominium complex (which includes the common area) by the number of condominium units, and the total imperviousness of the entire complex is attributed to each individual condominium parcel in the complex. (This divides the runoff of the entire complex to each of the individual units.) Because the condominium common areas are taken into consideration in this manner, they are exempt from the Fee.

D. Vacant, unimproved parcels are still in their natural states and do not contribute any additional runoff to burden the City’s storm drain system; therefore Storm Drain User Fee is not applicable to these parcels.

E. $86.00 is the maximum annual Storm Drain User Fee rate per ERU for fiscal year 2006-07.

F. Such maximum annual rate per ERU shall be increased annually commencing with fiscal year 2007-08 by an amount equal to the change in the Consumer Price Index for all Urban Consumers for the Los Angeles, Riverside and Orange County areas (the "CPI"), including all items as published by the U.S. Bureau of Labor Statistics as of March 1 of each year, not to exceed a maximum increase of two percent (2%) per year.

G. Notwithstanding Section 9217 of the California Elections Code, without a vote of the property owners, in any year the City Council may do any and all of the following: (i) repeal this Ordinance; (ii) reduce the rate per ERU for the Storm Drain User Fee below the maximum rate; or (iii) increase the rate per ERU for the Storm Drain User Fee up to or below the maximum rate if it has been previously set below such rate. In no event shall the City Council increase the Storm Drain User rate per ERU in excess of the maximum rate without approval by a majority vote of the property owners subject to the Storm Drain User Fee.

3.44.030 Collection of Fee. Commencing with fiscal year 2006-07, the Storm Drain User Fee shall be collected for each fiscal year on the County of Los Angeles tax roll in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City; provided, however, in any year the City Council may, by resolution, provide for an alternative procedure for collection of the Storm Drain User Fee. For any fiscal year that the Storm Drain User Fee is not collected on the tax roll, the City may collect all or a portion of the Storm Drain User Fee for such year on the tax roll in the following fiscal year or years.

3.44.040 Appeals Process for Property Owners. If a property owner disagrees with the calculation of his or her Storm Drain User Fee, based on the parcel area and/or Impervious Percentage assigned to the property, then the property owner may appeal the calculation as follows:

1. The property owner must provide written documentation explaining the reason why the Storm Drain User Fee should be changed. This documentation must include:

a. The name, phone number, mailing address, and email address, if available, of the property owner.

b. The Assessor’s Parcel Number (APN) of the property in question.

c. To-scale drawings of the property in question and the impervious areas located on it with accompanying calculations. The to-scale drawings shall include the square footage and labels for each impervious area (i.e. house, garage, driveway, patio, tool shed, carport, etc.).

2. If additional documentation is required or insufficient documentation was submitted, a representative of the Public Works Department or his or her designee (Staff) will notify the property owner in writing within two (2) weeks of receipt of the appeal.

3. Once Staff has determined that sufficient documentation has been submitted, Staff will perform the initial review. Staff will notify the property owner in writing within four (4) weeks from the time sufficient documentation was submitted as to whether or not the fee amount will be changed.

a. If the determination is to change the fee amount, then the new fee amount will be documented within the City’s fee database.

b. If the determination is that the fee should not be changed, the property owner can appeal Staff’s decision to the Director of Public Works (Director). The appeal must be made in writing and returned no later than four (4) weeks from the date of mailing of Staff’s initial review decision. The Director will notify the property owner in writing within four (4) weeks from the date of receipt of the appeal as to whether or not the fee amount will be changed.

If the Director’s determination is that the fee should not be changed, the property owner can appeal this decision to the City Council. The appeal must be made in writing and returned no later than four (4) weeks from the date of mailing of the Director’s appeal decision. The City Clerk shall fix a time and place for hearing the appeal and shall give notice in writing to the appellant in the manner prescribed in Section 3.16.090 for service of notice of hearing. The City Council’s determination on the appeal shall be final.

Appeals will be accepted annually up until June 30 for inclusion on the following fiscal year’s property tax roll submittal. However, if an appeal is granted by Staff, the Director or the City Council that does not permit inclusion for the following fiscal year’s property tax roll submittal, a reimbursement will be provided to the property owner by the City. Any action brought against the City pursuant to this Section shall be subject to the provisions of Government Code Sections 945.6 and 946. Compliance with these provisions shall be a prerequisite to a suit thereon.

3.44.050 Deposit of Fee Revenues. Upon receipt of moneys representing Storm Drain User Fees, the City Treasurer shall deposit the moneys in the City treasury to the credit of the Water Quality and Flood Protection Program Enterprise Fund and the moneys shall only be expended for facilities and services furnished by the City in connection with its storm drain system."

Section 3. For each tax year in which the City proposes to collect the Storm Drain User Fee on the tax roll, the City Council shall cause a written report to be prepared and filed with the City Clerk, and the City Council shall hold a duly noticed public hearing on the written report and hear and consider all objections and protests thereto. If the City Council determines at the close of the public hearing that written protests have not been received by a majority of the owners of the property subject to the Storm Drain User Fee, the City Council may adopt the written report and may order the annual Storm Drain User Fee to be collected on the tax roll, in the same manner, by the same persons and at the same time as, together and not separately from, the general taxes of the City in the amounts shown in the written report. If a majority protest is received, the Storm Drain User Fee shall not be collected on the tax roll for that tax year.

Section 4. On or before August 10th of each year in which the City proposes to collect the Storm Drain User Fee on the tax roll, commencing with Fiscal year 2006-07, the City Clerk shall file a copy of the written report with the City Treasurer with a statement endorsed on said written report over the City Clerk’s signature that the report has been approved and finally adopted by the City Council. Upon receipt of the written report from the City Clerk, the City Treasurer shall enter the amount of the Storm Drain User Fee against the parcels as they appear on the current assessment roll.

Section 5. On or before August 10th of each year in which the City proposes to collect the Storm Drain User Fee on the tax roll, the City Clerk shall file with the County Auditor of the County of Los Angeles a copy of the written report, with a statement endorsed thereon over the City Clerk’s signature that the written report has been approved and finally adopted by the City Council, with a certified copy of this Ordinance.

Section 6. The City Council is empowered to adopt or amend the procedures, rules and regulations that are necessary to implement this Ordinance.

Section 7. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this ordinance, or the application thereof to any person or place, is for any reason held to be invalid or unconstitutional by a court of competent jurisdiction, such decision shall not affect the validity of the remainder of this Ordinance. The City Council hereby declares that it would have adopted this Ordinance, and each and every section, subsection, subdivision, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, or portions thereof be declared invalid or unconstitutional.

Section 8. This Ordinance shall not take effect unless the Storm Drain User Fee is submitted to an election and approved by a majority vote of the property owners subject to Storm Drain User Fee.

Section 9. The City Clerk is directed to certify to the enactment of this Ordinance and to cause this Ordinance to be posted as required by law.

PASSED, APPROVED AND ADOPTED THIS ______ DAY OF _____________, 2005.

______________________________

Mayor

ATTEST:

_______________________________

City Clerk

 

Land
Use

Impervious
Percentages

SFR Size Ranges

SFR1

74.0%

0.01 -0.16 acres (~1 sf-~7,012 sf)

SFR2

58.0%

0.161-0.20 acres (~7,013 sf-~8,755 sf)

SFR3

48.5%

0.201-0.28 acres (~8,756 sf-~12,239 sf)

SFR4

41.0%

0.281-0.54 acres (~12,240 sf-~23,565 sf)

SFR5

34.5%

0.541-2.99 acres (~23,566 sf-~130,680 sf)

SFR6

n/a*

3.0 acres and greater