(3)AR 051810 LLMD 1 - Laserfiche WebLink

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Staff Report to the Mayor and City Council Public Hearing For LLMD 1 Fiscal Year 2010/2011 May 18, 2010 Page 2 ISSUES/ANALYSIS On April 1, 2003, the City Council approved an amendment to the Colton Municipal Code increasing the powers and duties of the Community Facilities District Commission (CFD) to include review of the city's LLMDs. As the CFD Commission exists today it is not comprised of enough members to obtain a quorum. This being the case, staff was unable to present the preliminary budget and engineer's report correspondent to LLMD 1 for their review. The Preliminary Engineer's Report for FY 2010/2011 was prepared by Wildan Engineering and is available at the City Clerk's Office. The fiscal year 2010/2011 budget does not reflect any levy changes to the five zones located within the District (Zones: 2, 3, 4, 5 and 8). All assessment rates within LLMD 1, with the exception of Zone 3 Annexation which has an inflator of 3%, were established over twenty years ago and have not since been adjusted. As this District was created without an inflator to allow for inflationary increases, the rates cannot be adjusted to meet the service costs without balloting all parcels within each Zone. In 2005, staff did ballot all property owners in LLMD 1 and the ballot failed. During fiscal year 2005/2006, staff solicited bids for the maintenance of the improvements within LLMD 1 seeking to provide services for LLMD 1 at lower costs, to maintain an equal level of service. The lowest bid received was able to provide these services at a lower rate, thus no longer requiring the city's general fund to supplement the LLMD fund. The award of the maintenance agreement to the lowest bidder, resulted in annual savings to the city of over $150,000 for both districts. When the maintenance services for LLMD 1 were provided in-house, the expenditures exceeded revenues since 2003, by a total of $538,117. Staff rebid the maintenance services in March 2010. The results of the bid showed the maintenance service cost for LLMD 1 at $175,200. The average costs of salary and benefits during FY 2003-2005, to provide this service in-house, was $286,372. As the current savings to the district is still significant, staff recommends retaining the services of the maintenance contractor that submitted the lowest bid. If authorized, the resolution attached to this report will be advertised in the local newspaper to inform the community that a public hearing will be held on July 6, 2010, at 6 p.m., for the LLMD 1 Fiscal Year 2010/2011 Engineer's Report. FISCAL IMPACTS The Preliminary Engineer's Report is on file in the Office of the City Clerk as prescribed by law and identifies the LLMD 1 operating budget for 2010/2011 to be $316,586. The proposed operating budget will not have a general fund impact as LLMD 1 revenue will total $317,398.