(1)Existing law, the Landscaping and Lighting Act of 1972, authorizes local agencies, including a city or county, to form an assessment district for the purpose of making improvements by, among other things, installing landscaping.

This bill would, in addition to the districts existing authority to perform specified maintenance under the Improvement Act of 1911, authorize the Landscaping and Lighting District of the City of La Puente to also perform maintenance and make improvements pursuant to the Landscaping and Lighting Act of 1972.

(2)This bill would make legislative findings and declarations as to the necessity of a special statute for the Landscaping and Lighting District of the City of La Puente.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

(1)Existing law, the Landscaping and Lighting Act of 1972, authorizes local agencies, including a city or county, to form an assessment district for the purpose of making improvements by, among other things, installing landscaping.

This bill would, in addition to the districts existing authority to perform specified maintenance under the Improvement Act of 1911, authorize the Landscaping and Lighting District of the City of La Puente to also perform maintenance and make improvements pursuant to the Landscaping and Lighting Act of 1972.

(2)This bill would make legislative findings and declarations as to the necessity of a special statute for the Landscaping and Lighting District of the City of La Puente.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

(1)Existing law, the Landscaping and Lighting Act of 1972, authorizes local agencies, including a city or county, to form an assessment district for the purpose of making improvements by, among other things, installing landscaping.

This bill would, in addition to the districts existing authority to perform specified maintenance under the Improvement Act of 1911, authorize the Landscaping and Lighting District of the City of La Puente to also perform maintenance and make improvements pursuant to the Landscaping and Lighting Act of 1972.

(2)This bill would make legislative findings and declarations as to the necessity of a special statute for the Landscaping and Lighting District of the City of La Puente.

(3)This bill would declare that it is to take effect immediately as an urgency statute.

Date of Hearing: June 14, 2017

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Cecilia Aguiar-Curry, Chair

SBPCA Bill Id:SB 361

Author:(Hernandez) – As Introduced Ver:February 14, 2017

SENATE VOTE: 39-0

SUBJECT: Maintenance districts: City of La Puente.

SUMMARY: Authorizes the Landscaping and Lighting District of the City of La Puente (District) to perform maintenance and make improvements, pursuant to the Landscaping and Lighting Act of 1972. Specifically, this bill:

1. Authorizes the Landscaping and Lighting District of the City of La Puente (District) to perform maintenance and make improvements, pursuant to the Landscaping and Lighting Act of 1972, in addition to the existing authority granted to the District to perform maintenance, pursuant to the Improvement Act of 1911.
2. Contains an urgency clause.
3. Provides facts constituting the necessity of the urgency clause for the District to utilize $7 million granted to the District in October, 2016.
4. Finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning in the California Constitution because of the unique need to perform immediate maintenance and make improvements by the District.

FISCAL EFFECT: None

COMMENTS:

1. Assessment Districts. Special assessment districts (also called benefit assessments) have a long history in California. The formation of an assessment district allows local officials to charge benefit assessments on property owners to pay for public works and public services. Most assessments are levied against real property, and are generally collected on the property tax roll, secured by a lien against the assessed property, and subject to Proposition 218 (1996), which provides notice, hearing, and protest requirements. Generally, assessments go toward paying for specific tangible benefits, of which each parcel partakes, like lighting or irrigation improvement, which can then be apportioned in relationship to the total cost of the improvements. Local agencies must determine the special benefit for each identified parcel and the cost of the assessment cannot exceed the reasonable cost of the proportional special benefit that parcel receives. Most of the special assessment acts provide for the issuance of bonds, generally secured by the property within the district, and then the bonded indebtedness is repaid with money generated by the assessments.
2. Existing Law and Bill Summary. The Improvement Act of 1911 (1911 Act) allows local officials to create an assessment district to fund transportation systems, street paving, grading, sidewalks, parks, recreation areas, sewers, drainage systems, fire protection, flood control systems, water systems, and other necessary improvements. Under the 1911 Act, an assessment district may be formed for the purpose of lighting maintenance which may include the replacement of obsolete lighting system equipment. Landscaping is not an authorized use of assessment revenue under the 1911 Act.

This bill builds upon the existing authority granted to the District to perform lighting maintenance granted by the 1911 Act to allow the District to perform maintenance and improvements, pursuant to the Landscaping and Lighting Act of 1972 (1972 Act). Under this bill, the District may perform maintenance and improvements, pursuant to the 1972 Act, which includes: installation and maintenance of landscaping, statues, fountains, general lighting, traffic lights, recreational and playground courts and equipment, and public restrooms; acquisition of land for parks and open spaces; and, construction of community centers, municipal auditoriums or halls to be financed. This bill is sponsored by the City of La Puente (City).

1. City of La Puente. In 1990, Los Angeles County (County) consolidated portions of two separate lighting districts located within the jurisdictional boundaries of the City and formed County Lighting Maintenance District 1744 (CLMD). Existing law authorizes a county to adopt a resolution requesting transfer of jurisdiction over the district and its funds to a city if the whole district is included within a city. On May 10, 2016, the City adopted a resolution requesting the County to transfer jurisdiction and the approximately $7 million in existing funds to the City. Subsequently, on October 25, 2016, the County adopted the City’s resolution establishing the District. Commencing July 1, 2017, all assessments, including reserve funds, will be transferred to the City.
2. Author's Statement. According to the author, "SB 361 expands authority of the City of La Puente Landscaping and Lighting District to perform duties pursuant to the [1972 Act], in addition to the district’s existing authority to perform specified maintenance under the 1911 Act. When the [City] entered into an agreement with the [County] to take over the administration of County Lighting Maintenance District 1744, located within their jurisdictional boundaries, the transfer granted the city the fund balance in excess of $7 million. However, given that this district was formed under the 1911 Act, the money in this account can solely be used for lighting maintenance and not landscape as intended. The account will continue to accrue unusable funds. Providing the District with the authority to utilize the 1972 Act for landscape and lighting maintenance will better allow the District to provide aesthetic improvements to the city including landscaping, parks and recreational improvements, community center acquisition, and graffiti removal. This in turn will help give residents of La Puente greater access to green space and a healthy living environment."
3. Arguments in Support. Supporters argue that the 1972 Act is more expansive than the 1911 Act and permits funds to be used to install landscaping and make upgrades to parks, medians, and other important community assets.
4. Arguments in Opposition. None on file.
5. Urgency Clause. This bill contains an urgency clause and requires a two-thirds vote of each house.

REGISTERED SUPPORT / OPPOSITION:

Support

City of La Puente [SPONSOR]

Los Angeles County Division of the League of California Cities

Los Angeles County Sheriff's Department

Opposition

None on file

Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958

 CONSENT 

Bill No: SB 361

Author: Hernandez (D)

Introduced: 2/14/17

Vote: 27 - Urgency

SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 3/29/17

AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara, Moorlach

SUBJECT: Maintenance districts: City of La Puente

SOURCE: City of La Puente

DIGEST: This bill allows the City of La Puente to conduct maintenance and make improvements authorized under the Landscaping and Lighting Act of 1972.

ANALYSIS:

Existing law authorizes the Landscaping and Lighting District of the City of La Puente to use raised revenue to perform maintenance under the Improvement Act of 1911, which does not allow for landscaping. Commencing July 1, 2017 the County of Los Angeles will transfer to the City of La Puente the Landscaping and Lighting District of the City of La Puente and all relevant reserve funds.

This bill authorizes Landscaping and Lighting District of the City of La Puente to perform maintenance and make improvements under the Act of 1972.

Background

In 1990, the County of Los Angeles consolidated portions of two separate lighting districts located within the jurisdictional boundaries of the City of La Puente and formed County Lighting Maintenance District 1744.

Current law allows a county to adopt a resolution requesting transfer of jurisdiction over the district and its funds to that city if the whole district is included within a city. On May 10, 2016, the City adopted a resolution requesting the County to transfer jurisdiction and the approximately $7 million in existing funds to the City. Subsequently, on October 25, 2016, the County adopted the city’s resolution establishing the Landscaping and Lighting District of the City of La Puente.

Commencing July 1, 2017, all assessments will be transferred to the City, including all reserve funds. Currently, the city only has authority to perform maintenance under the 1911 Act which does not allow for the assessment to be used for landscaping purposes. The City wants the Legislature to expand the authority of the Landscaping and Lighting District of the City of La Puente to allow it to perform maintenance under the Landscaping and Lighting Act of 1972 in addition to the district’s existing authority to perform specified maintenance under the Improvement Act of 1911.

Comments

Purpose of the bill. According to the author, “SB 361 expands authority of the City of La Puente Landscaping and Lighting District to perform duties pursuant to the Landscaping and Lighting Act of 1972, in addition to the district’s existing authority to perform specified maintenance under the Improvement Act of 1911 (1911 Act). When the City of La Puente entered into an agreement with the County of Los Angeles to take over the administration of County Lighting Maintenance District 1744, located within their jurisdictional boundaries, the transfer granted the city the fund balance in excess of $7 million. However, given that this district was formed under the 1911 Act, the money in this account can solely be used for lighting maintenance and not landscape as intended. The account will continue to accrue unusable funds. Providing the District with the authority to utilize the 1972 Act for landscape and lighting maintenance will better allow the District to provide aesthetic improvements to the city including landscaping, parks and recreational improvements, community center acquisition, and graffiti removal. This in turn will help give residents of La Puente greater access to green space and a healthy living environment.”

Limitations under the 1911 Act. After the passage of Proposition 218, maintenance districts formed under the 1911 Act became a less beneficial tool for funding local infrastructure projects. Proposition 218 requires local agencies to gain property owner approval through a protest process if a new assessment is created or an existing one is increased. Because the 1911 Act requires upfront money to pay for construction, local agencies run the risk of paying for the improvements out of agency funds with no repayment if the subsequent assessment is disapproved by residents. Giving all maintenance districts that were formed under the 1911 Act the authority to also function under the 1972 Act could renew the viability of these districts throughout California. Proposition 218’s constitutional requirements would still apply, which includes resident’s ability to protest a new or increased assessment. The committee may wish to consider if all 1911 Act districts should be given the expanded authority under the 1972 Act.

Urgency. As an urgency statute, SB 361 must be approved by 2/3 vote of each house of the Legislature. Regular legislation takes effect on the January 1 following its passage, but urgency bills take effect as soon as they're passed, signed, and chaptered.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 3/30/17)

City of La Puente (source)
Los Angeles County Sheriff’s Department

OPPOSITION: (Verified 3/30/17)

None received

Prepared by: Jimmy MacDonald / GOV. & F. /

3/30/17 16:10:39

**** END ****

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2017 - 2018 Regular

Maintenance districts: City of La Puente

Allows the City of La Puente to conduct maintenance and make improvements authorized under the Landscaping and Lighting Act of 1972.

Background

Assessments. A benefit assessment is a charge that property owners pay for a public improvement or service that provides a special benefit to their property. The amount of the assessment must be directly related to the amount of the benefit that the property receives. Benefit assessments can finance public projects like flood control, street improvement, streetlights, and public landscaping, among many others.

California statute authorizes local agencies to adopt a wide variety of assessments through the formation of assessment districts. An assessment district is not a separate government agency but rather a defined area containing the property that especially benefits from certain public improvements and within which the special assessments are apportioned and levied according to some benefit formula approved by the legislative body.

With the passage of Proposition 218 (1996), assessments became more difficult to impose, including those levied by assessment districts because of newly enacted property owner approval requirements. In general, Proposition 218 ensured that all new or increased taxes and charges on property owners are subject to property owner approval, and it sought to curb the use of these revenue-raising tools to pay for general governmental services rather than property-related services.

1911 Act. The Improvement Act of 1911 (1911 Act) allows local agencies to fund a variety of types of infrastructure, including transportation systems, street paving, grading, sidewalks, parks, recreation areas, sewers, drainage systems, fire protection, flood control systems, water systems, and other necessary improvements. Landscaping is not an authorized use of assessment revenue under the 1911 Act. Improvements must be completed before their total cost is assessed against the properties within the district. The 1911 Act requires that sufficient funds be available for the project before construction begins and contractors are reimbursed for their work from the proceeds of the district. Essentially, the local agency has to use upfront revenue out of pocket to fund the construction of a project and then ask residents to repay the costs at a later date through the imposition of an assessment. If the residents refuse to approve an assessment as required by Proposition 218, the local agency would be unable to recover the funds already spent on the infrastructure project.

1972 Act. The Landscaping and Lighting Act of 1972 (1972 Act) is a tool used by local government agencies to pay for landscaping, lighting and other improvements and services in public areas. Bonds can be issued to finance improvements under the Act. The many approved uses include, but are not limited to, the following:

• Installation and maintenance of landscaping, statues, fountains, general lighting, traffic lights, recreational and playground courts and equipment, and public restrooms.
• Acquisition of land for parks and open spaces.
• Construction of community centers, municipal auditoriums or halls to be financed.

City of La Puente. In 1990, the County of Los Angeles consolidated portions of two separate lighting districts located within the jurisdictional boundaries of the City of La Puente and formed County Lighting Maintenance District 1744 (CLMD).

Current law allows a county to adopt a resolution requesting transfer of jurisdiction over the district and its funds to that city if the whole district is included within a city. On May 10, 2016, the City adopted a resolution requesting the County to transfer jurisdiction and the approximately $7 million in existing funds to the City. Subsequently, on October 25, 2016, the County adopted the city’s resolution establishing the Landscaping and Lighting District of the City of La Puente.

Commencing July 1, 2017, all assessments will be transferred to the City, including all reserve funds. Currently, the city only has authority to perform maintenance under the 1911 Act which does not allow for the assessment to be used for landscaping purposes. The City wants the Legislature to expand the authority of the Landscaping and Lighting District of the City of La Puente to allow it to perform maintenance under the Landscaping and Lighting Act of 1972 in addition to the district’s existing authority to perform specified maintenance under the Improvement Act of 1911.

Proposed Law

Senate Bill 361 authorizes Landscaping and Lighting District of the City of La Puente to perform maintenance and make improvements under the Act of 1972.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. According to the author, “SB 361 expands authority of the City of La Puente Landscaping and Lighting District to perform duties pursuant to the Landscaping and Lighting Act of 1972, in addition to the district’s existing authority to perform specified maintenance under the Improvement Act of 1911 (1911 Act). When the City of La Puente entered into an agreement with the County of Los Angeles to take over the administration of County Lighting Maintenance District 1744, located within their jurisdictional boundaries, the transfer granted the city the fund balance in excess of $7 million. However, given that this district was formed under the 1911 Act, the money in this account can solely be used for lighting maintenance and not landscape as intended. The account will continue to accrue unusable funds. Providing the District with the authority to utilize the 1972 Act for landscape and lighting maintenance will better allow the District to provide aesthetic improvements to the city including landscaping, parks and recreational improvements, community center acquisition, and graffiti removal. This in turn will help give residents of La Puente greater access to green space and a healthy living environment.”

2. Limitations under the 1911 Act. After the passage of Proposition 218, maintenance districts formed under the 1911 Act became a less beneficial tool for funding local infrastructure projects. Proposition 218 requires local agencies to gain property owner approval through a protest process if a new assessment is created or an existing one is increased. Because the 1911 Act requires upfront money to pay for construction, local agencies run the risk of paying for the improvements out of agency funds with no repayment if the subsequent assessment is disapproved by residents. Giving all maintenance districts that were formed under the 1911 Act the authority to also function under the 1972 Act could renew the viability of these districts throughout California. Proposition 218’s constitutional requirements would still apply, which includes resident’s ability to protest a new or increased assessment. The committee may wish to consider if all 1911 Act districts should be given the expanded authority under the 1972 Act.

3. Urgency. As an urgency statute, SB 361 must be approved by 2/3 vote of each house of the Legislature. Regular legislation takes effect on the January 1 following its passage, but urgency bills take effect as soon as they're passed, signed, and chaptered.

Support and Opposition (3/23/17)

Support: City of La Puente (Sponsor); Los Angeles County Sheriff’s Department.

Opposition: Unknown.

-- END --