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HomeMy Public PortalAbout11) 10C Exploration of Community Needs and Fiscal ChallengesMANAGEMENT SERVICES DEPARTMENT MEMORANDUM DATE: April2, 2019 TO: The Honorable City Council FROM: · Bryan Cook, City Manager Susan Paragas, Administrative Services Director AGENDA ITEM 10.C. SUBJECT: EXPLORATION OF COMMUNITY NEEDS AND FISCAL CHALLENGES RECOMMENDATION: The City Council is requested to: 1. Provide direction to the City Manager on whether to explore survey services concerning community needs and measures to address fiscal challenges ; and 2. Authorize City Manager to provide a budget amendment at the next City Council meeting for survey services and supplemental services. BACKGROUND: Over the past several months of City Council meetings, staff has brought forward discussion items related to the challenges that the City faces related to City services and the available resources to meet service and maintenance needs . These discussions have included the operating deficit within the City's Landscape and Lighting District (LLD); the condition of the City's road system and the cost to repair and replace roads via the Pavement Management Program update; and, through the mid-year budget update, the challenges in the City's operating (General Fund) budget. These challenges have an impact on the level of services that the City can provide in a fiscally sustainable manner. · ANALYSIS: In an effort to begin to address the service challenges discussed, the City CoLJncil directed staff to explore State legislation to address the use of funds within the Landscape and Lighting District. Staff has already submitted legislation to be introduced by our State Senator and that is expected to begin the legislative hearing process this month . Additionally, earlier this year the City Council adjusted the majority of Planning and Public Works fees to recover 100% of the cost of services. While these steps are important to creating the path to continued fiscal sustainability and City Council April 2, 2019 Page 2 of 3 addressing community service needs, a survey to gain a sense of how the community assesses service needs and any potential fiscal measure to address community service needs will be valuable to the Council as it considers any next steps to implement going forward. The cost of a survey and supplemental services is between $45,000 and $50,000. The cost of an election to be run by Los Angeles County for any potential ballot measure is estimated at $210,000. An assessment district mail-in ballot election is estimated at $75,000. There are four service areas where both operational and fiscal challenges exist today or project to exist in the immediate future. Landscape and Lighting District (LLD) -As discussed in prior Council meetings, the City could consider increasing the single-family residential assessment rate to cover the current deficit, and if the State legislation passes, to fund ongoing costs within the district. The assessment rate adjustment from $25.03 to $53.23 could generate about $381 ,000 in additional annual revenue. An assessment change would require a mail-in ballot election by the property owners within the district (i.e., slightly over 1 0,000), with approval by a majority of persons casting ballots. Parks Maintenance District -The City could seek to establish a new Parks Maintenance District separate from the LLD. An annual assessment of $68.61 per single-family residential parcel and a scaled rate for multifamily residential and commercial parcels would generate just over $1 million in annual revenue. Establishing such a district would require a mail-in ballot election by property owners within the district (i.e., slightly over 10,000), with approval by a majority of persons casting ballots. Pavement Management-As discussed during the past agenda item concerning the Pavement Management Program, the cost of simply maintaining City streets at their current pavement condition is well above available City resources and would require a parcel tax of $300 to $400 per parcel per year in order to adequately fund and maintain the road system at a sustainable level. Each would produce $3 million and $4 million respectively on an annual basis. A parcel tax would require a regular election by voters with a supermajority 66.6% plus one voter approval to pass. General City Services -The City General Fund operating budget is projected to be in a slight deficit even if the General Fund is relieved of the current subsidy of the LLD necessary to fund LLD ongoing costs. The City's main operating budget will likely be out of balance (expenditures exceed revenue) for the next several years. A sales tax measure of 0.75% would produce approximately $1.3 million in additional sales tax revenue annually. Other cities in the San Gabriel Valley have considered or are considering a sales tax measure in either June or November of this year. A general sales tax measure would require a regular election by voters with a simple majority 50% plus 1 voter approval to pass. City Council April 2, 2019 Page 3 of 3 Conducting a community needs survey will provide the City with information about what services are important to the community and gauge the community's understanding of the issues surrounding City services. This will inform future discussions about the feasibility of putting one or more of the above-mentioned measures to an election. CITY STRATEGIC GOALS: Providing direction on exploration of community needs is consistent with City Strategic Goals of Public Health and Safety, Quality of Life, Sustainable Infrastructure, and Fiscal Sustainability. FISCAL IMPACT: If directed by Council, staff would return at the next Council meeting with a budget amendment from General Fund Reserves to fund the cost of a survey and supplemental services estimated at $45,000 to $50,000 in the current fiscal year. The cost for a special election in November is estimated at $210,000 and an appropriation can be included in the budget process for Fiscal Year 2019-2020. ATTACHMENT: None