55B - RESO - WARNER ASSESSMENT DISTRICT

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Method of Assessment Spread Background The law requires and the statutes provide that assessments, as levied pursuant to the provisions of the Assessment Law, must be based on the special benefit that the properties receive from the works of improvement. The statute does not specify the method or formula that should be used in any special assessment district proceedings. The responsibility rests with the Assessment Engineer, who is retained for the purpose of making an analysis of the facts and determining the correct apportionment of the assessment obligation. The Assessment Engineer then makes his recommendation at the public hearing on the Assessment District, and the final authority and decision rests with the City Council of the City. After hearing all testimony and evidence presented at that public hearing, and upon conclusion of the public hearing, the City Council must make the final decision determining whether or not the assessment spread has been made in direct proportion to the special benefits received. AnalysisMeeomntended Financing Mechanism The purpose of the assessment methodology is to determine the proportionate amount of the assessment to be assessed to each parcel of land based on special benefits received by each parcel. For purposes of this study the following options, which are commonly used in the public finance industry, were considered: Street Frontage. The street frontage is defined as the length of the side of a parcel that is directly adjacent to the street. The street frontage method is a direct measure of the static utilization of each parcel and its corresponding special benefit proposed from the street improvement. A common way of apportioning costs to a parcel for assessment financing is to apply the cost based on the street frontage. However, this methodology works best when the area under consideration is comprised of parcels with mostly uniform depths, so that the parcel sizes are fairly consistent with their street frontage. Examples of the size versus frontage diversity in the Warner Industrial Community (WIC) is shown in the following examples: two properties have approximately 30 feet of frontage and one is 0.5 acres and the other is 2.8 acres; another two properties have approximately 125 feet of frontage and one is 0.4 acres and the other is 1.2 acres. Also, the WIC includes parcels that take access from private access easements and therefore have no frontage on the improved roadways, but still receive special benefit from the improvements. Another issue with this methodology is that comer properties fronting on two interior streets would carry an additional burden based on both sides of the parcel being counted. Due to the reasons above, utilizing this method is not recommended. Traffic Generation. The amount of traffic generated by each parcel is a direct measure of the special benefit received. This can be determined in terms of trips per day (average daily traffic or ADT) using industry standard factors per acre based on the land use of the parcel. A drawback to this methodology is that the actual land use of each parcel is difficult to determine and may change in the future, which is important since the bond term is anticipated to be up to 20 years. ADT does not characterize the spatial patterns of demand either. Based on the City's general plan, this area is typically industrial and /or commercial; and the ADT factors that can be utilized are typically based on employees and /or customers for industrial and commercial land use. Accurate employee counts can be generated from acreage only if specific industrial or commercial land use categories are known. Since a warehouse would generate far fewer trips than a manufacturing or retail -type use this poses potential problems (due to inequities) in determining the appropriate assessment. Due to the reasons above, utilizing this method is not recommended. Parcel Area. The size of a parcel (in square feet or acres) is a direct measure of current and future development capacity of each parcel and its corresponding special benefit received from street improvements. This methodology works well when there is a large diversity of parcel sizes, shapes and frontage within a specific area. The more a property can be developed, the more it specially benefits from the proposed improvements. There is a direct correlation between the size of a property and the extent to which a property MI.*