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AGENDA BILL Agenda Item No. 6(B) Date: May 20, 2014 To: El Cerrito City Council From: Lori Trevino, Senior Financial Analyst Lisa Malek-Zadeh, Finance Director Subject: Fiscal Year 2014-15 Storm Drain Annual Report and method of collecting storm drain fees ACTION REQUESTED Conduct a public hearing and upon conclusion adopt a resolution approving the Fiscal Year 2014-15 Storm Drain Annual Report and directing that Storm Drain Fees be collected on the property tax rolls. BACKGROUND In March 1993, the voters of the City of El Cerrito approved the issuance of $6.3 million in revenue bonds for the reconstruction of the City’s storm drain system. In June 1993, the City Council adopted Ordinance 93-4, which amends Title 4 (Revenue and Finance) of the El Cerrito Municipal Code by adding a new Chapter 4.44, providing for the imposition and collection of Storm Drain Fees to pay the debt service on the revenue bonds. Ordinance 93-4 set the Storm Drain Fee at $58 for each single-family residential property and other amounts for other property types. Ordinance 93-4 further provided that the Storm Drain Fees are to be collected on the property tax roll, based on amounts specified in an annual written report. Attachment 2 to this staff report is the FY 2014-15 Storm Drain Annual Report (Annual Report) which contains the description of each parcel of real property receiving storm drain services and the amount of the annual fee for each parcel. The engineering firm of NBS Local Government Solutions prepared the Annual Report. The City must annually conduct a public hearing to consider the method of collecting the Storm Drain Fees. Notice of such a public hearing must be made at least twice within a two-week period, as specified in Government Code §6066, as follows: Publication of notice pursuant to this section shall be once a week for two successive weeks. Two publications in a newspaper published once a week or oftener, with at least five days intervening between the respective publication dates not counting such publication dates, are sufficient. The period of notice commences upon the first day of publication and terminates at the end of the fourteenth day, including therein the first day. ---PAGE BREAK--- Agenda Item No. 6(B) Page 2 The City met this notification requirement by publishing the notice of public hearing in the West County Times on May 5, 2014 and May 12, 2014. This hearing is not for consideration of the amounts of the Storm Drain Fees, which were already set by the City Council by adoption of Ordinance 93-4; however, the City Council may consider corrections to the use classification of properties in the Annual Report. ANALYSIS The City Council needs to determine whether a majority protest exists with respect to the method of collecting the Storm Drain Fees. If a majority protest is lodged against collecting these fees on the property tax roll (as a method of collection), the Storm Drain Fees shall be collected on behalf of the City by a public utility and the City Council would be required to authorize negotiation of an agreement with such a utility. If the City Council finds that protest is made by the owners of a majority of the parcels of property described in the Annual Report, then the Annual Report shall not be adopted. In the event of such majority protest, the Storm Drain Fees may be collected with the rates for any publicly or privately owned utility through an agreement with such utility. The administrative costs of collecting the Storm Drain Fee through utility services are substantially higher than by using the property tax bill. Also, if collected through a utility, the Storm Drain Fees would not constitute a lien against any parcel or parcels of land, which would make delinquent collections far more cumbersome and costly. Since the amount of the Storm Drain Fee is based on property use, the public hearing also provides an opportunity for property owners to contest the fee amount based on the actual use of their property. The City Council may accordingly adjust the fee amount based on the property use. The adoption of the Annual Report requires the same two-thirds vote as was required to enact Ordinance 93-4. If approved, the Annual Report must be filed with the County Auditor-Controller not later than August 10, 2014, per California Health and Safety Code Section 5474.4, as follows: On or before the tenth day of August of each year following such final determination, the legislative body shall certify to the auditor a list of the lots or parcels of land, as they appear on the current assessment roll, subject to such fees or charges and the amounts of the installments of such fees or charges and interest to be entered against such lots or parcels on the assessment roll. FINANCIAL CONSIDERATIONS The annual Storm Drain Fee will continue to be assessed at $58 for each single-family residential unit. Such a rate is expected to generate annual revenues of approximately $698,000. The last debt service payment on the Storm Drain Revenue Bonds was paid in FY 2013-14. Therefore, the FY 2014-15 proceeds of the Storm Drain Fees will be used ---PAGE BREAK--- Agenda Item No. 6(8) to fund storm drain improvements, maintenance and related activities which will be reflected in the City's FY 2014-15 Budget. LEGAL CONSIDERATIONS California Health and Safety Code Section 5470 et seq. requires that a public hearing be held prior to adopting a resolution to accept the Annual Report and levying the annual Storm Drain Fees. The City has complied with the minimum public notice requirements. Scott Hanin, City Manage;= Attachments: 1. Resolution 2. FY 2014-15 Storm Drain Annual Report Page 3 ---PAGE BREAK--- Agenda Item No. 6(B) Attachment 1 RESOLUTION 2014–XX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL CERRITO ADOPTING THE FISCAL YEAR 2014-15 STORM DRAIN ANNUAL REPORT AND DIRECTING THAT STORM DRAIN FEES FOR FISCAL YEAR 2014-15 BE COLLECTED THROUGH THE PROPERTY TAX ROLLS WHEREAS, the City of El Cerrito, by Ordinance 93–4, directed the filing of an annual report for the imposition and collection of storm drain fees; and WHEREAS, the Engineering firm of NBS Local Government Solutions has prepared said Fiscal Year 2014-15 Storm Drain Annual Report (the “Annual Report”); and WHEREAS, the City provided notice on May 5, 2014 and May 12, 2014 of a public hearing to be held by the City Council, with the notice of the hearing being given in the time and manner required by law; and WHEREAS, at the public hearing the City Council afforded to every interested person an opportunity to make a protest to the Annual Report and the City Council has considered each protest. NOW THEREFORE, BE IT RESOLVED that the City Council of the City of El Cerrito hereby confirms the storm drain fees as set forth in the Annual Report, directs the collection of these fees through the property tax rolls, and directs the City Clerk to file the Annual Report or a certified copy thereof with the County Auditor-Controller not later than August 10, 2014. I CERTIFY that at the regular meeting on May 20, 2014 the El Cerrito City Council passed this resolution by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAINED: COUNCILMEMBERS: IN WITNESS of this action, I sign this document and affix the corporate seal of the City of El Cerrito on May 2014. Cheryl Morse, City Clerk APPROVED: Janet Abelson, Mayor ---PAGE BREAK--- Agenda Item No. 6(B) Attachment 2 ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- ---PAGE BREAK--- A copy of the parcel levy list contains owner names and addresses. The List of Charges - Levy List is available for review at the following locations: 1) OFFICE OF THE CITY CLERK EL CERRITO CITY HALL 10890 San Pablo Avenue El Cerrito, CA 94530 (510) 215-4305 2) EL CERRITO LIBRARY 6510 Stockton Avenue El Cerrito, CA 94530