Staff recommends that the City Council adopt two resolutions: 1) Approving the Annual Engineer’s Report for the Landscape and Lighting Maintenance District (LLAD) No. 3, and 2) Declaring Its Intention to Levy and Collect Assessments, setting June 24, 2025, as the Public Hearing Date.

This agenda item is aligned with the following:

Goal D: Create a healthy, sustainable community and maintain and improve the City’s Infrastructure.

In accordance with the Landscape and Lighting Act of 1972 and the California Government Code, the City Council is required to follow a public hearing process regarding the levy of annual assessments for the upcoming fiscal year. As part of the three-step process, the City Council must initiate proceedings (Step 1 – completed on 4/8/2025), hold a meeting to accept the annual Engineer's Report and declare its intent to levy the assessments at a future public hearing date (Step 2 – 5/27/2025), and conduct a public hearing and confirm and levy the assessments (Step 3 – 6/24/2025).

The services to be provided through this assessment district are described in the Annual Engineer’s Report for the LLAD No. 3, based on the proposed FY 2025 - 2026 budget, as described in the attached resolutions and include, but are not limited to, operating, maintaining, and servicing all the public landscaping improvements consisting of plant materials, shrubs, trees, ground cover, irrigation systems, pathways, hardscapes, walls, fences, street lighting, traffic signals and associated appurtenant facilities.  Operating, maintaining, and servicing include, but are not limited to, personnel, materials, electricity, and water.   The necessary services provided include operations, administration, and maintenance required to keep the improvements in a healthy, vigorous, and satisfactory condition, all within the city limits of Union City.

By the attached resolutions, and pursuant to State law, on June 24, 2025, the City Council is to hold a public hearing regarding the proposed district and assessments.  Following the public hearing, the City Council may take action to amend the Annual Engineer’s Report, overrule minority protests, and order the levy of assessments.

An Annual Engineer’s Report, prepared by NBS Government Finance Group, is hereby submitted for review by the City Council.  This comprehensive report describes the boundaries, goals, objectives, and budget associated with the district.

The base assessment levy is proposed to remain at the rate of $90.19 per parcel for single family residences, $0.0751 per square foot for commercial parcels, and $0.0563 per square foot for industrial parcels. The total net assessment amount is expected to generate $2,670,621.14 of revenue to be applied against $3,832,457.34 of eligible costs.  This will leave a maintenance funding shortfall of $1,161,836.20, which will be partially covered by the General Fund.

Upon renewal of the LLAD No.3, a single-family home would be assigned one (1) Equivalent Dwelling Unit (EDU) or Benefit Unit. It will have the same assessment rate of $90.19 per EDU as in the previous twenty-nine (29) years since the formation of the District in 1996.  Since the assessments for other land uses (Commercial, Industrial, etc.) and special zones of benefit are also based upon the same Benefit Unit, the assessment rates for those land uses remain unchanged as well.

Keeping the base assessment fixed to the amount established almost three decades ago does not allow for the annual adjustments to be made due to inflation as typically expressed by the consumer price index (CPI).  Therefore, as the cost of providing City services continues to rise each year, the increases in the annual funding deficits need to be covered by the General Fund.  Had there been a CPI factor included when the Assessment District was initially formed, the annual assessment for a single-family home would now be $202.60.

As noted in the Annual Engineer’s Report, the City would need to conduct an assessment ballot procedure to enable the property owners to express their support for, or opposition to, any proposed increase in the assessment amount.  Staff recommends that the City Council consider scheduling a future discussion to evaluate the assessment ballot procedure to increase the annual levy assessments. For several years, the City’s General Fund has been transferring $750,000 to the LLAD Fund. This is a hardship for the General Fund and does not even fully cover the recurring annual shortfall in the LLAD Fund, and thus the LLAD fund balance is decreasing every year and will soon be down to $0, then requiring the General Fund to subsidize even more than $750,000 per year. This is not a sustainable situation. It is not unreasonable for the beneficiaries of the district’s services (the residents and businesses) to fully fund the LLAD’s costs. As stated in this staff report, the LLAD assessments have not been increased for 29 years and this has caused a great hardship to the City’s General Fund because the costs of providing the services have continued to go up each year.  Increasing the annual assessments would eliminate the need for the General Fund to subsidize the LLAD Fund every year.

Staff recommends that the City Council adopt two resolutions: 1) Approving the Annual Engineer’s Report for the Landscape and Lighting Maintenance District (LLAD) No. 3, and 2) Declaring its Intention to Levy and Collect Assessments, Setting June 24, 2025, as the Public Hearing Date.

Farooq Azim, City Engineer

Marilou Ayupan, Public Works Director