Loading...
HomeMy WebLinkAbout12 - Underground Assessment District 75• CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 12 February 24, 2004 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Public Works Department Patrick Arciniega 949 - 644 -3311 parciniega@city.newport-beach.ca.us SUBJECT: UNDERGROUND ASSESSMENT DISTRICT NO. 75 (BALBOA BUSINESS DISTRICT) —STATUS REPORT RECOMMENDATION: Proceed with placing Assessment District No. 75 Balboa Business District on the Council Agenda for Resolution of Intention for March 9, 2004 meeting. DISCUSSION: • On January 27, 2004 a Public Hearing was held for AD — 75 Balboa Business District Underground Utilities Assessment District. The result of the ballot was a majority protest with 66 ballots being turned in by the end of the Public Hearing, with 54% voting against the district, and 46% voting for the district. Since that ballot, we have received information that several property and business owners have reconsidered and that the district may be supported if the vote could be retaken. In response to this information, the City requested that Bond Counsel, Bob Hessell, investigate how the City may proceed. Mr. Hessell's response letter (see attached) states that the City may proceed with bringing the matter to Public Hearing again per the Proposition 218 Omnibus Implementation Act. As a result of this Act, the City may proceed without delay to impose assessments for proposed Assessment District No. 75. The renewed proceedings require that a new Resolution of Intention be adopted, followed by the 45 day notice, protest, and hearing requirements established by the Implementation Act. The quickest timetable to bring AD — 75 to Public Hearing would require adoption of a Resolution of Intention at the March 9, 2004 City Council Meeting, with Public Hearing notices mailed out by Friday, March 12, 2004 for a Public Hearing scheduled for April 13, 2004. However, that schedule could be affected by the need to revise the Engineer's Report due to revised cost estimates. • SUBJECT: Underground Assessment District No. 75 (Balboa Business District)— Status Report February 24, 2004 Page 2 In general, a Preliminary Engineer's Report is presented to Council when adopting a • Resolution of Intention to begin Assessment District Hearing proceedings. The utility companies provide the City with Final Cost of Improvements and Underground Utility Agreements that are valid for a period of 180 days. The Final Costs from Southern California Edison for AD — 75 were received on November 18, 2003 and are valid until May 18, 2004. The Final Cost from SBC was received on October 3, 2003 and is valid until April 3, 2004. Even under the best of circumstances, the quote from SBC will need a time extension (keeping the existing quote) or need cost revisions. If a time extension is approved, the existing Final Costs from the Utilities Companies can be reconfirmed and the existing Final Engineer's Report can be utilized 'as is'. If the time extension is not approved and SBC revises their costs, then the Engineers Report will need to be revised and the schedule of the new hearing will need to be revised. However, the actual date of the hearing would not affect the starting date of a successful assessment district as the work would not be permitted to start until after Labor Day. Staff will make every effort to encourage the most expeditious process to minimize any delay to the proposed schedule. Environmental Review: This project qualifies for a Class 2 California Environmental Quality Act (CEQA) exemption under Section 15302, item "d" of the Implementing Guidelines as follows: "Conversion of overhead electric utility distribution system facilities to • underground including connection to existing overhead electric utility distribution lines where the surface is restored to the condition existing prior to the undergrounding." Prepared by: Submitted by: 4111 /1 PqWk Arcipga S h . Badum Associate Engineer uW u ' Works Director Attachment — Letter from Bob Hessell dated February 10, 2004 Law Office of Robert E. Hessell 127071ficu BLUFF DRIVE, SUITE 200, SAN Disco, CA 92130 PH: (858) 350 -4288 FAX: (858) 350 -4289 February 10, 2004 Stephen G. Badum P.E. Director of Public Works City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92568 Re: Assessment district majority protests — prior prohibition to further proceedings Dear Mr. Badum: On January 27, 2004, after a pubic hearing on the matter, property owner ballots were tabulated on the question of authorizing the imposition of assessments for proposed Assessment District No. 75. The ballots submitted in opposition to the assessments exceeded the ballots submitted in flavor of the assessments. As a consequence, there was a majority protest and the assessments may not be imposed. You now ask whether the City is precluded from renewing the proceedings for Assessment District No. 75 for a period of one year (or some other period) or whether the City may again seek authorization to impose the assessments without delay. The short answer is that the City may proceed without delay if it chooses to again present the matter to property owners. Discussion: Assessment district proceedings are typically conducted under two acts: the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (commencing with section 2800 of the Streets and Highways Code) and the Municipal Improvement Act of 1913 (commencing with section 10000 of the Streets and Highways Code). Prior to the adoption of the Proposition 218 Omnibus Implementation Act, the notice, protest and hearing requirements of the 1913 Act and the 1931 Act were followed. The notice, protest and hearing requirements of the 1913 Act and the 1931 Act are substantially similar and were usually complied with through ajoint proceeding. In general, the 1913 Act and the 1931 Act required mailed notice of the proposed assessment and a public hearing. The required notice also informed owners of property subject to the proposed assessment that they had a right to file a written protest against the improvements or assessments. In pertinent part the 1913 Act and the 1931 Act read as follows: 1931 Act, Section 2930: [Ifj ... a written protest filed with the clerk of the legislative body by the owners ... of a majority of the frontage of the property fronting on the acquisition or improvement in those cases where the cost in whole or part of the acquisition or improvement is to be assessed upon the property fronting on the . acquisition or improvement, or by the owners of more than one -half of the area of the property to be assessed for the acquisition or improvement Stephen G. Badum, P.E. Page 2, February 10, 2004 in those cases where the cost in whole or part of the acquisition or improvement is to be assessed upon the property within a district, and protests are not withdrawn so as to reduce the same to less than a majority, then the proposed proceedings shall be forthwith abandoned, and the legislative body shall not for one year from the filing of that written protest commence or carry on any proceedings for the same improvement or acquisition.... [emphasis added]. 1913 Act, Section 10310 Protests; filing; presentation: After the legislative body passes on the report pursuant to Section 10301, any interested person may object to the proposed improvement, the extent of the assessment district, or to the proposed assessment by filing a written protest with the clerk of the legislative body at or before the time set for the hearing.... 1913 Act, Section 10311 Majority protest; overruling protest; modification or confirmation of proposed assessment: If the protest is against the proposed improvement and the legislative body finds that the protest is made by the owners of more than one - half of the area of the land to be assessed for the improvements, and protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings shall be taken for a period of one year from the date of the decision of the legislative body on the hearing, unless the protests are overruled by an affirmative vote of four -fifths of the members of the legislative body finding that the public health and • safety require that the improvements be made.... [emphasis added]. If a majority protest to the improvements was determined to exist, by the terms of the above quoted acts, the proceedings were to be terminated and no further proceedings were permitted for a period of one year.' Proposition 218 altered the conduct of assessment district proceedings. Among other things, Proposition 218 established new notice, hearing, and protest requirements with respect to any new or increased assessment regardless of the principal act being used to authorize the new or increased assessment. With the adoption of Proposition 218, a question arose as to whether or not the notice, hearing, and protest provisions of the 1913 Act and the 1931 Act remained applicable and were to be followed at the same time as the notice, hearing, and protest provisions of Proposition 218. To clarify matters, the Proposition 218 Omnibus Implementation Act was adopted. The Implementation Act answered the question pertinent to this discussion as follows: ' Both the 19I3 Act and the 1931 Act allowed the legislative body to overcome the one -year limitation period. Section 2931 of the 1931 Act states:... Nothing in this act contained shall prohibit the legislative body, within said one -year period, from commencing and carrying on new proceedings for the construction of a portion of the improvement or the acquiring of a portion of the acquisition so protested against if it finds, by the affirmative vote of four - fifths of its members, that the owners of a majority of the property within the area of the assessment district to • be established under said new proceedings are in favor of going forward with said portion of the improvement or acquisition. Stephen G. Badum, P.E. Page 3, February 10, 2004 53753 (a): The notice, protest, and hearing requirements imposed by this section supersede any statutory provisions applicable to the levy of a new or increased assessment that is in existence on the effective date of this section, whether or not that provision is in conflict with this article. Any agency that complies with the notice, protest, and hearing requirements of this section shall not be required to comply with any other statutory notice, protest, and hearing requirements that would otherwise be applicable to the levy of a new or increased assessment, with the exception of Division 4.5(commencing with Section 3100) of the Streets and Highways Code. If the requirements of that division apply to the levy of a new or increased assessment, the levying agency shall comply with the notice, protest, and hearing requirements imposed by this section as well as with the requirements of that division. The Implementation Act applies to all assessment district proceedings; it is not limited to those under either the 1913 Act or the 1931 Act. By its terms, the Implementation Act supersedes all other notice, hearing and protest requirements in existence on the effective date of the statute. Following the requirements of Proposition 218, the Implementation Act calls for a ballot protest procedure. Specifically, section 53753 of the Implementation Act further states: (b) Prior to levying a new or increased assessment.... an agency shall give notice by mail to the record owner of each identified parcel.... Each notice shall also include, in a conspicuous place thereon, a summary of the procedures for the completion, return, and tabulation of the assessment ballots required pursuant to subdivision (c), including a statement that the assessment shall not be imposed if the ballots submitted in opposition to the assessment exceed the ballots submitted in favor of the assessment, with ballots weighted according to the proportional financial obligation of the affected property. An agency shall give notice by mail at least 45 days prior to the date of the public hearing upon the proposed assessment.... (c) Each notice given pursuant to subdivision ('b) shall contain an assessment ballot .. . (d). . . (2) A majority protest exists if the assessment ballots submitted, and not withdrawn, in opposition to the proposed assessment exceed the assessment ballots submitted, and not withdrawn, in its favor, weighting those assessment ballots by the amount of the proposed assessment to be imposed upon the identified parcel for which each assessment ballot was submitted [emphasis added]. (3) If there is a majority protest against the imposition of a new assessment, or the extension of an existing assessment, or an increase in an existing assessment, the agency shall not impose, extend, or increase the assessment.... The ballot protest procedure under the Implementation Act is significantly different than the majority protest procedures under the 1913 Act and the 1931 Act. Neither the 1913 Act nor the 1931 Act requires that a ballot be delivered to each property owner. Instead, those acts simply require notice to the owners that they may submit a written protest. More importantly, a majority protest is determined under the 1913 Act only when the protest is made by the owners Stephen G. Badum, P.E. Page 4, February 10, 2004 of more than one -half of the area of the land to be assessed for the improvements. Similarly, under the 1931 Act, a majority protest exists only when written protests are filed by owners owning more than one -half of the property fronting on the acquisition or improvement or more than one -half of the area of the property to be assessed for the acquisition or improvement, whichever is applicable. However, under the Implementation Act, a majority protest is determined by a ballot procedure and the assessment ballots are weighted by the amount of the proposed assessment to be imposed upon the identified parcel for which each assessment ballot was submitted. Front footage and area of land assessed are not considered . 2 In addition, the notion of "majority" differs considerably between the Implementation Act and the 1913 Act and the 1931 Act. Under the 1913 Act and the 1931 Act a majority protest requires written protests from owners of more than half of the front footage or the land assessed. Under the Implementation Act a majority is determined based on the amount of weighted ballots actually received. A majority protest exists when the weighted ballots in opposition to the proposed assessment exceed the weighted ballots submitted in its favor. Thus, while the 1913 and 1931 Acts require at least a fifty percent protest, the Implementation Act may have a majority protest based on a single ballot irrespective of front footage or parcel size (e.g. a majority protest exists when only one ballot is returned and the ballot is in opposition). Although not a controlling factor, the notice, hearing, and protest requirements of the Implementation Act are, as discussed above, inconsistent with those of the 1913 Act and the 1931 Act. In any case, the notice, hearing, and protest requirements of the Implementation Act supersede those of the 1913 Act and the 1931 Act. The provisions found in the 1913 and 1931 Acts that prohibit any further proceedings for a period of one year following a majority protest are part of the protest requirements of those acts. Accordingly, the one -year prohibition period is also superseded. The Implementation Act does not contain a similar restriction. One may pose the argument that notwithstanding its connection to the superseded protest provisions of the 1913 Act and the 1931 Act, the one -year limitation should stand -alone and be applicable whenever there is a majority protest under the Implementation Act. The argument, however, lacks merit. First, as noted, the prohibition period results from and is part of the protest provisions of the 1913 Act and the 1931 Act. As such it is superseded whether or not it is inconsistent with the Implementation Act. Second, a majority protest under the Implementation Act may be, but more likely is not, equivalent to a majority protest under the 1913 Act and the 1931 Act. There often would be no way to determine that a majority protest under the 1913 Act and the 1931 Act existed from the results of a ballot procedure. Nothing in the 1913 Act and the 1931 Act or the Implementation Act suggests that the criteria for imposing the prohibition period should be changed. Third, the Implementation Act does not prohibit renewed proceedings after a Z Assessments in some instances may be based entirely on front footage or parcel size. In those instances, a correlation may exist between the weighted ballot and the front footage or parcel size. Nonetheless, the Implementation Act does not take into consideration front footage or parcel size. Moreover, the Act does not suggest that one should analyze ballots to determine if a correlation may be possible in some instances. Stephen G. Badum, P.E. Page 5, February 10, 2004 majority protest. The Implementation Act is not limited to proceedings brought under the 1913 Act and the 1931 Act; the statute applies to all assessment proceedings in a uniform manner. In the absence of a statute that prohibits further proceedings to impose the assessments for proposed Assessment District No. 75, the City may proceed without delay. In general; renewed proceedings would begin with a new resolution of intent followed by the notice, protest, and hearing requirements established by the Implementation Act. Should you have any further question or comment regarding the matters discussed in this opinion; please do not hesitate to contact me. Respectfully submitted, 1, Robert E. Hessell 0 P