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HomeMy WebLinkAboutAgenda Statement 1988/03/15 Item 9COUNCIL AGENDA STATEMENT • Item 9 Meeting Date 3/15/88 ITEM TITLE: Report regarding proposed Bonita-Sunnyside Reorganization Resolution /3 ~~~ Approving the negotiated Property Tax Exchange and directing staff to provide LAFCO with information needed for the proposed Bonita-Sunnyside Reorganization SUBMITTED BY: Assistant City Manager Director of Fi~anceoY~ REVIEWED BY: City Manager ~ ~ ~ ~' (4/5ths Vote: Yes No X ) In early 1987, a petition was filed with the Local Agency Formation Commission proposing annexation of the area served by the Bonita-Sunnyside Fire Protection District to Chula Vista. The territory contains approximately 7.5 square miles, 13,688 residents, 4,321 housing units and 6,919 registered voters. The City Council considered the proposed annexation last year but because staff could not generate all of the information required by LAFCO to complete • the application for reorganization in accordance with LAFCO's time schedule, the issue was deferred to a later date. If the election on the Bonita reorganization is to be held in November 1988, then certain issues must be addressed and decisions made at this time in order to meet the schedule of various public hearings and actions required leading up to a November vote. RECOMMENDATION: That Council accept this report and direct staff to provide LAFCO with information needed for consideration of the proposed reorganization. If Council concurs, then staff further recommends the following: 1. That Council adopt resolution approving the negotiated property tax exchange relating to the Bonita-Sunnyside reorganization. 2. Request the County Board of Supervisors to be the conducting authority for holding the required hearing on the reorganization. 3. That election costs be equally split between the County and the City. 4. Affirm that the Sweetwater Regional Park remain under the jurisdiction and control of the County of San Diego. • Page 2, Item 9 • Meeting Date~7T37$$ 5. Affirm that the presently constituted Sweetwater Planning Group continue to function as the Bonita Planning Committee for the City if the reorganization vote is favorable. 6. Affirm the continuation of the County Library District to serve the Bonita area. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: Discussions regarding the annexation of the Bonita-Sunnyside area to the City of Chula Vista have taken place for several gears. In 1985 the area was officially included by the Local Agency Formation Commission within the City of Chula Vista Sphere of Influence which means it is considered a logical extension of the City's physical and service boundaries. In 1987 a petition was filed with LAFCO proposing that the Bonita-Sunnyside community become part of the City of Chula Vista. There are several reasons why the proposed annexation is being considered: 1. Bonita-Sunnyside is Within the City's Sphere of Influence • Almost 60q of the Bonita-Sunnyside Community Planning Area, as defined in the Sphere of Influence document, is already within the current City of Chula Vista boundaries and the balance of the area is unincorporated but within our Sphere of Influence. The adopted Sphere of Influence is a planning tool for fostering a pattern of orderly growth, for promoting efficient provision of organized community services, and for preventing duplication of service delivery. These objectives can best be met for the Bonita-Sunnyside area if the area is actually part of the City of Chula Vista. The Sphere of Influence is intended to determine the probable ultimate boundaries of a jurisdiction. 2. Better Land Use Planning The Bonita-Sunnyside area is greatly impacted by decisions made by the City of Chula Vista currently. Traffic circulation plans and commitments to major road improvements involve the Bonita-Sunnyside Community Planning Areas. Conversely, actions by the County in the Bonita-Sunnyside area have an impact on Chula Vista roads and services. The City is equally interested in preserving the rural character of the area through its General Plan. 3. Service Boundaries The Bonita-Sunnyside Community Planning Area consists of both incorporated • and unincorporated territory that is served by a combination of agencies including the Bonita-Sunnyside Fire District, the Spring Valley Sanitation District, the County of San Diego, and the City of Chula Vista. -,~ ; Page 3, Item 9 • Meeting Date 3 5/88 Development in Eastlake, Bonita Long Canyon, and Rancho del Rey will expand the capability and level of services available to the Bonita- Sunnyside area. There is an opportunity for a logical consolidation of urban services (roads, sewers, fire and police protection, recreation and library services) as provided by the City of Chula Vista. The above presents some logical reasons for considering the proposed annexation from the City's perspective. In addition, the fiscal impact of the proposed annexation must also be considered. As indicated later in this report, if the proposed reorganization is successful, it is estimated that during the first six months of operation expenditures will exceed revenues by almost $250,000. However, projections for the first full year's operating budget FY 1989-90 indicate a little better than break even cash flow situation. Staff estimates $300,000 will be available on an annual basis to fund capital improvement projects in the Bonita-Sunnyside area. While this does not represent a great deal of funding considering the size of the area to be annexed, the area's residents have given strong indications that they wish to maintain a rural environment. Consequently, somewhat limited funding for capital projects may coincide with their desires. • PROPERTY TAX EXCHANGE Because the proposed area for annexation has a 1987/88 assessed valuation of $498 million, and because the proposal entails the dissolution of the Bonita- Sunnyside Fire Protection District, the Master Property Tax Agreement does not apply to the proposal. Therefore, pursuant to Revenue and Taxation Code Section 99, it was necessary for the County and City of Chula Vista to negotiate a property tax exchange in order to allow LAFCO to further process the proposal. Negotiations with the County regarding the property tax exchange were concluded last year and the County Board of Supervisors approved the proposed agreement on April 28, 1987. Exhibit "A", attached, summarizes the current tax distribution among the various taxing agencies, and the proposed tax distribution if the jurisdictional change occurs. As indicated in Exhibit "A", the City will receive all of the property taxes currently allocated to Lighting Districts No. 1 and No. 3, San Diego County Flood Control, and the Bonita-Sunnyside Fire Protection District. The City will receive 44% and the County will receive 56% of the pooled property tax base. This division (44%/56%) will continue to apply to the annual property tax increments. From the City standpoint, the 44%/56% exceeds the 41%/59%, City/County formula provided under the County- wide Master Property Tax Agreement. The 41%/59% formula was used in the Montgomery annexation. • Page 4, Item 9 • Meeting Date-~71T-j$$ The County Library District will continue to receive annual property tax revenues for County operation of the Bonita library, with the City contributing about $57,500 annually to meet the projected operating costs. The tentative agreement, similar to that executed with the County for providing library service in the Montgomery area, provides the City with the option of withdrawing the area from the County Library District in the future. In the event the City takes over the library services, the annual property tax amount allocated to the County Library District will be reallocated to the City of Chula Vista. FISCAL IMPACT Staff has gone through a Bonita annexation budget process in order to estimate the revenues to be received by the City as a result of the annexation and to determine what the operating costs will be and how many additional staff will be needed in order to provide City services to the area. Assuming the annexation is approved and effective as of December 31, 1988, Exhibit "B" indicates the fiscal impact to the City for the first six months of operation. With initial, one-time start-up costs, it is anticipated that expenditures will exceed revenues by approximately $247,000 in the initial six month period. • Exhibit "C" contains the estimated fiscal impact on the City for the first full fiscal year that the area would be part of the City (July 1, 1989 through June 30, 1990). Total operating revenues for that year are projected at $2,522,572 with total operating expenditures projected at $2,506,119 for a positive fiscal impact of $16,453. When looking at the operating expenditures on Exhibits B & C, it is important to know that initial equipment capital costs (excluding police vehicles) are allocated over a five year period using a lease purchase financing method. Equipment in the amount of $380,960 has been requested in the first eighteen months, however only the lease purchase financing costs of $124,750 are reflected in the operating expenditures. The purpose of financing the equipment over a five year period is to diminish the initial fiscal impact on the Bonita budget. Lease purchase financing is frequently used by government agencies when they do not have the cash needed to make an acquisition or for other reasons do not wish to make a large cash outlay all at once. As can be seen from the estimated operating revenues, property taxes would be the main source of revenue to the City if the annexation is successful. Sales taxes, a major revenue source in the ~1ontgomery annexation, play a relatively minor role in the proposed Bonita annexation. It should be pointed out, however, that most of the commercial/retail area of Bonita has previously annexed to Chula Vista. The current sales tax revenue generated in that area that is now a part of the City is estimated to be $260,000 per year. In the first full year of operation, there is approximately $300,000 in Gas • Tax and Proposition 'A' Transportation funds available for capital improvement projects in the Bonita-Sunnyside area. Staff estimates $300,000 will be i= ~ ; Page 5, Item g • Meeting Date~JT37~$ available annually on an ongoing basis to meet capital needs. Although this is a limited amount and certainly will not support as extensive a capital improvement program as planned for Montgomery, it may be adequate to meet the needs of a community area that desires to retain its rural ambience. ADDITIONAL PERSONNEL Exhibit "D" indicates the estimated number of additional staff that will be required to serve the new area. This is based on the first full year of operation and totals 49.5 full-time equivalent persons including 3 sewer maintenance staff that are funded from the Sewer Revenue Fund. The total also includes 14 Fire Department staff that will be absorbed from the Bonita Sunnyside Fire Protection District, which will be dissolved on the effective date of the annexation. CONDUCTING AUTHORITY State statute requires that a public hearing must be set within 35 days after LAFCO has held their hearing. The County Board of Supervisors or the Chula Vista City Council could conduct the hearing. Following the procedure utilized in the Montgomery reorganization, it is staff's recommendation that the County Board of Supervisors be designated as the conducting authority. • ELECTION COSTS For the election involving the Montgomery reorganization, the City and County shared the basic election costs and, in addition, the City paid the full cost for the Planning Committee election. Staff recommends that the election costs relating to Bonita be equally shared with the County and, based on this, the County has indicated a willingness to be conducting authority for the election. Election costs are estimated to total $5,000 which would mean a $2,500 share each for the City and County. As an alternative, if the City wishes to be the conducting authority, Government Code Section 57.150 provides that in the case of a reorganization (unless otherwise provided for by an agreement), the full cost of the election would be the responsibility of the City if the annexation was successful, but the responsibility of the County if the annexation was not successful. SWEETWATER. REGIONAL PARK Staff recommends that the Sweetwater Regional Park remain under the jurisdiction and control of the County of San Diego for the following reasons: 1. The Sweetwater Pegional Park is a regional facility and, as such, it is generally assumed that the development and maintenance costs of such facilities should be shared on a regional basis. The County of San Diego provides the most logical agency to spread those costs over the entire region. • -,,°~ Page 6, Item 9 • Meeting Date-~7T57$$ 2. The development and ongoing maintenance costs would in all likelihood extend beyond the financial capability of the City in the foreseeable future. While the City, like the County, could evaluate "commercialization" of some of the regional park lands to help offset development and maintenance costs, it is difficult to project that the revenue generating capabilities of the park would provide more than a small percentage of the total cost of maintenance, not to mention initial capital costs. 3. In the past Supervisor Bilbray and the County Parks and Recreation Department have indicated they would oppose transferring title to the City and it is clear that the City does not have a legal basis to require transfer of publicly owned property lying within the annexing area. A transfer can occur only through negotiation. JURISDICTIONAL CHANGES In the event that the election is favorable and the Bonita-Sunnyside area annexes to Chula Vista as of December 31, 1988, then the following jurisdictional changes will occur: - The Bonita-Sunnyside Fire Protection District will be dissolved as of December 31, 1988. • - The area will be detached from the County Lighting District and the San Diego County Flood Control District. - The area will withdraw from the Spring Valley Sanitation District as of July 1, 1989. - The Sweetwater Regional Park will remain under control of the County. - The County Library District will continue to serve the area until a future time when, by mutual agreement between the City and County, the City will assume this service. BONITA PLANNING COMMITTEE The Sweetwater Community Planning Group is an elected body consisting of 15 members and currently constitutes an in-place planning committee that could effectively continue to serve as planning committee if the community votes in favor of joining the City. The knowledge the present members have gained will be very beneficial to the City and it is staff's recommendation that they continue to serve in that capacity. LAFCO SCHEDULE LAFCO has tentatively scheduled a hearing regarding the proposed annexation for May 2, 1988, and the conducting authority hearing would need to be held • within 60 days of LAFCO's hearing. Prior to the LAFCO hearing the issue and information is also considered at the Cities and Special Districts Advisory Committee meeting which is scheduled for April 15, 1988. „, : ,,: • • by ~i:~ Ci ~,, t; ~~ ~:i! of Chula Ul;;i~, C~~lir.~rria Page 7, Item 9 Meeting Date 3 15/88 FISCAL IMPACT: If the Council accepts staff's recommendations contained in this report, there would be no direct fiscal impact on the City at this time. The fiscal impact on the City if a favorable election occurs in November has been covered earlier in this report. WPC 0504G Dated i ~' :.; ,