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Always Advocating Alan – Are Benefit Assessment Districts Really Beneficial?

| Opinion | August 1, 2019

The City of Santa Clarita was formed as a general law city. What this means is the city founders decided not to write a “City Charter,” but instead chose for our municipality to simply follow state law. One constraint placed on general law cities is they cannot impose taxes. Alternately, they establish charges for services provided to residents, and in accordance with Proposition 218, the City can propose benefit assessment districts so as to establish fees to pay for services which provide a “special benefit” to specific properties. The details are described in an engineer’s report.

But, for benefit assessment districts to be established, over 50 percent of the affected property owners must vote in favor of forming the district. Fees are then collected yearly, as a part of your property tax bill.

One of the first benefit assessment districts which really piqued my interest was the “Open Space and Parkland Preservation District,” which came into existence in 2007. While it often appears the idea for a benefit assessment district may come out of the blue, Santa Clarita had been having dialog about an open space district as far back as 2001, as described within the “Staff Presentation of Open Space Plan to Santa Clarita City Council, dated May 18, 2001.” Then in 2005, the public was made aware of a city initiative to establish the district. An engineer’s report for “Open Space and Parkland Preservation District,” prepared by Harris and Associates dated September 8, 2005, contained the details. The first attempt failed, as the proposal did not have a sunset clause and a maximum cost to the property owners was not defined.

Two years later, a new initiative to establish an “Open Space and Parkland Preservation District” was back on the front burner. This time the proposal included a 30-year sunset clause, with the ratepayer cost established at $25 per year, with a $1 per year maximum cost escalator. Council and staff committed to purchase land in order to implement a green belt around the city and included authorizing a maximum of 10% of the purchased land to be available for use as active parkland.

Councilmember Laurene Weste and Parks Director Rick Gould appeared on SCVTV’s Newsmaker of the Week on May 27, 2007 and answered various questions, taken from a transcript of the program. Leon Worden asked, “If you take this money and start buying land, what guarantee is there that some future city council won’t come along and sell it or develop it?” Councilmember Weste answered, “This is being done under Proposition 218 guidelines. For a future city council at any time to do anything to that land, they would have to go back through the same process and go to a vote to the people.” Parks Director Gould answered, “The money that would be accrued from the district would be only used for the purchase of parkland. This measure is focused very much on land acquisition, and primarily on undeveloped land, to keep it from being developed in the future by whoever might own that land. Leon Worden then asked, “So the money that is raised from this, if it passes, can only be spent on raw land? Parks Director Gould answered, “That’s correct.”

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I had high expectations. What a great concept; money only being spent on what we voted for, plus Councilmember Ender had put me on the financial accountability and audit panel. Yet my enthusiasm waned shortly after. It turned out the fee of $25 per year with a $1 addition each year thereafter, happened to correspond with the repayment cost of the City borrowing $30 million, but instead only $15 million was borrowed, making me suspect the ratepayer cost had been inflated. Yet, staff was doing an excellent job looking to buy land for open space, while joining with other agencies to share the cost, but no interest was apparent to purchase land for active parkland. Staff had been telling us for years about Santa Clarita’s deficit in parkland acreage, and without active parkland, justification for the District would not have been possible.

Then I started to notice the concept surrounding Proposition 218, giving taxpayers the right to vote on taxes, was not as pure and transparent as advertised. In 2008, the City laid out the plan to dissolve all landscape maintenance districts funding center roadway medians and reforming them, along with adding some new areas, as LMD 2008-1. Those who were already in a district vastly outnumbered the new participants, and were told they were getting a reduction. Not surprisingly, the proposal passed, dragging in other areas, which had voted no.

Shortly after I had left the FAAP, staff looked to purchase land outside the open space three mile district boundary, by claiming even if a tip of the land was within that limit, it was acceptable to do so. But, after the information became public knowledge, staff sort of fixed the problem by reallocating funds so open space money was not used outside the district.

Next came questions about the Shangri-La drainage benefit assessment district which had been operating in the red for several years. Rather than going to the community to solve the problem, staff elected to burden a nearby landscape maintenance district with the cost, while continuing to collect from the Shangri-La district in order to repay what staff had been borrowed from another.

Lastly, was the landscape and lighting district, which sounded very much like the LMD 2008-1 plan. Staff indicated a desire to combine the two lighting districts, promising homeowners in one district a reduction, and looking to redefine financing in the other by substantially increasing their fees. Fortunately, when the truth came out, the Council cancelled the election.

Currently, the city is facing a situation, where the Open Space and Parkland Preservation District Financial Accountability and Audit Panel voted three to one, to not sign off on last year’s open space expenditures. One issue is, “The recommended expenditure adjustment in the Open Space Preservation District Fund includes a $2 million funding swap for the Canyon Country Community Center land acquisition,” outlined in the December 2017 mid-year budget adjustment. In addition, in this year’s engineer’s report, staff has planned to expend $755,000 on administration of the district. An amount I feel is overly excessive.

I realize there will be mashing of teeth, and displeasure at City Hall, for my pointing these issues out. But benefit assessment districts was an area I wholeheartedly supported. I trusted staff and the City Council to keep their word and only spend funds as defined at the time we cast our ballot forming the district. It is unfortunate I must now foretell of never voting for a benefit assessment district again, until management of our districts can be brought back on the straight and narrow.

Perhaps the City of Santa Clarita needs a Financial Accountability and Audit Panel, with their scope expanded to oversee all Santa Clarita’s benefit assessment districts.

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