REPORT TO COUNCIL
SUBJECT
Title
Approve the FY 2024/25 Preliminary Engineer’s Report for the Downtown Parking District Assessment, Adopt a Resolution of Intention to Levy and Collect an Assessment for the Downtown Parking Maintenance District for FY 2024/25, and Set the Date of June 25, 2024 for the Public Hearing on the Proposed Assessment
Report
BACKGROUND
The operation and maintenance of certain downtown parking areas are supported by an assessment district (the Downtown Parking Maintenance District, hereinafter called the “District”). On July 28, 2009, in response to property owner’s approval by ballot, the City Council adopted Resolution No. 398-09 (RTC No. 09-196), ordering the formation of the District. Council also confirmed the final Engineer’s Report to levy an assessment for FY 2009/10 and for each fiscal year thereafter by adjusting the annual assessment rate based upon the previous year’s change in the Consumer Price Index (“CPI”) for All Urban Consumers for the San Francisco-Oakland-San Jose area, as determined by the United States Department of Labor.
On July 25, 2023, the City Council approved the current (FY 2023/24) assessment rates (RTC No. 23-0513), as shown in Table 1 below:
|
Table 1 - FY 2023/24 Assessment Rates per Benefit Zone |
|
Benefit Zone No. |
Assessment Rate Per Deficit Parking Space |
Total Deficit Parking Spaces |
Total Assessment Revenue |
Less County Administration (1%) |
Net Assessment Revenue |
|
1 |
$0.00 |
56.80 |
$0.00 |
$0.00 |
$0.00 |
|
2 |
$207.64 |
172.38 |
$35,792.98 |
($357.93) |
$35,435.05 |
|
3 |
$90.16 |
2,165.86 |
$195,273.80 |
($1,952.74) |
$193,321.06 |
|
4 |
$27.16 |
459.17 |
$12,471.04 |
($124.71) |
$12,346.33 |
|
Total |
|
2,854.21 |
$243,537.82 |
($2,435.38) |
$241,102.44 |
The benefit zones are shown on the District diagram in the Engineer’s Report (Attachment 1, Appendix A). Property owners in Benefit Zone 1 (commonly known as CityLine Sunnyvale, formerly known as Town Center) are not assessed because the CityLine Sunnyvale developer is required to maintain the new parking facilities as well as the existing parking structure adjacent to Target. Additionally, property owners in Benefit Zone 1, south of Iowa Avenue, are able to use the available parking facilities, even though the CityLine Sunnyvale developer pays for the maintenance and operation of those parking facilities. Benefit Zones 2, 3, and 4 have a different assessment rate based upon the City’s operation and maintenance costs for the public parking lots within each benefit zone.
In FY 2023/24 the assessment rates per deficit parking space of each benefit zone were levied at 100% of the maximum assessment rate per deficit parking space, thus capturing all the increases forgone during the COVID-19 pandemic.
EXISTING POLICY
Council Resolution No. 6643, dated September 1, 1964, authorized the City to levy an annual assessment on all lands and improvements within the District to pay debt service, operations, maintenance, and improvement costs.
ENVIRONMENTAL REVIEW
Adoption of the subject Resolution of Intention is not a project within the meaning of the California Environmental Quality Act (CEQA) as CEQA does not apply to governmental funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant impact on the environment (CEQA Guideline Section 15378(b)(4)).
DISCUSSION
Francisco & Associates, Inc., the Assessment Engineer, has prepared the FY 2024/25 preliminary Engineer’s Report (Attachment 1) for the FY 2024/25 assessment.
Each fiscal year the maximum annual assessment rates are calculated by adjusting the previous year’s maximum assessment rate by changes to the CPI for San Francisco-Oakland-San Jose Area as determined by the U.S. Department of Labor. The increase in CPI applied to FY 2024/25 rates is +2.3661%.
The proposed assessment is 100% of the maximum assessment, which increases the rate per deficit parking space by about 2.37% from the FY 2023/24 rates.
The District is also anticipating an additional revenue of $43,200 in FY 2024/25 from electric car charging stations that are installed in some of the parking spaces within the District.
This revenue will be deposited in the reserve fund. Reserve funds are used to pay for longer-term capital projects and any deficits in the operating budget. For FY 2024/25, the proposed City budget anticipates an expenditure of $138,397 in capital projects to take place in some of the parking facilities to keep them in a good state of repair.
The number of deficit parking spaces for each parcel is determined based upon the difference between the number of parking spaces needed per the City’s Parking Demand Guidelines and the number of existing parking spaces located on the parcels included within the District. The assessment for each parcel is based upon an assessment rate multiplied by each parcel’s corresponding deficit parking spaces.
The County Tax Collector requires all individual assessments to be levied in even pennies so that the property tax bill can be split evenly in two payments. This results in having the Total Deficit Parking Space multiplied by the FY 2024/25 Assessment per Deficit Parking Space off by pennies from the FY 2024/25 Assessment Revenue. Individual assessment roll calculations are in Appendix B of the preliminary Engineer’s Report (Attachment 1).
A public hearing process is required by state law to provide the City authority to levy and collect the assessment for the District for FY 2024/25. Adoption of the Resolution of Intention (Attachment 2) will approve the preliminary Engineer’s Report, authorize publication of the Notice of Public Hearing, and set a public hearing date for June 25, 2024.
|
Table 2 - FY 2024/25 Proposed Assessment Rates per Benefit Zone |
|
Benefit Zone No. |
Assessment Rate Per Deficit Parking Space |
Total Deficit Parking Spaces |
Total Assessment Revenue |
Less County Administration (1%) |
Net Assessment Revenue |
|
1 |
$0.00 |
56.80 |
$0.00 |
$0.00 |
$0.00 |
|
2 |
$212.56 |
172.38 |
$36,641.09 |
($366.41) |
$36,274.68 |
|
3 |
$92.29 |
2,165.86 |
$199,887.22 |
($1,998.87) |
$197,888.35 |
|
4 |
$27.80 |
500.81 |
$13,922.52 |
($139.23) |
$13,783.29 |
|
Total |
|
2,895.85 |
$250,450.83 |
($2,504.51) |
$247,946.32 |
A Council study issue on Downtown Development Policies for Parking was concluded. It included a parking needs and capacity study for the Downtown Parking Maintenance District. The outcome of the Study may result in future changes to parking requirements for properties within the District and/or possible modifications to parking standards and options within the District. While CityLine Sunnyvale is part of the Downtown Parking Maintenance District, it is obligated to provide all its parking space requirements within the Project, so no effect on the District is anticipated.
FISCAL IMPACT
The planned FY 2024/25 operating budget for the maintenance and administration of the District is $249,940. As shown on Table 2 above, approval of the recommended FY 2024/25 assessment is expected to generate a total revenue of $250,450.83. The City is expected to receive a net assessment revenue of $247,946.32 after County administrative fees are subtracted. The anticipated difference of $1,993.68 between the planned expenditure and the net assessment revenue will be taken from the reserve fund. The proposed capital expenditure of $138,397 in the City budget will also be taken from the reserve fund. For FY 2024/25 the reserve fund is expected to recognize revenue from the electric car charging station within the District in the amount of $43,200. The projected reserve fund balance on June 30, 2024 is $947,599. Due to timing of the Final Engineer’s Report and the development of the FY 2024/25 Recommended Budget, the revenue and expenditure figures may be different from the figures presented in the final FY 2024/25 Recommended Budget.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
On April 20, 2023, informational letters were mailed to each property owner explaining the proposed assessment methodology and assessment rate per deficit parking space. Specific information pertaining to the assessment methodology, the demand for on-site private parking, the number of on-site private parking spaces, and any respective deficit was provided for each parcel within the District.
RECOMMENDATION
Recommendation
Approve the Fiscal Year (FY) 2024/25 preliminary Engineer’s Report for the Downtown Parking District Assessment, adopt a Resolution of Intention to Levy and Collect an Assessment for the Downtown Parking Maintenance District for FY 2024/25, and set the date of June 25, 2024 for the public hearing on the levy of the proposed Assessment.
Staff
Prepared by: Sherine Nafie, City Property Administrator
Reviewed by: Chip Taylor, Director, Public Works
Reviewed by: Tim Kirby, Director of Finance
Approved by: Sarah Johnson-Rios, Acting City Manager
ATTACHMENTS
1. Fiscal Year 2024/25 Preliminary Engineer’s Report
2. Resolution of Intention