Coachella Valley Mosquito and Vector Control District Board of Trustees Meeting July 8, 2008

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Agenda Topic: Public Hearing

Resolution 2008-11 approves the Engineer’s Report, Confirming the Diagram and Assessment, and Ordering Levy of the Mosquito, Fire Ant and Disease Control Assessments for fiscal year 2008-09 – David I’Anson, Finance Manager

Background:

Resolution 2008-09 approves the Engineer’s Report, Confirming the Diagram and Assessment, preliminary accepted by the Coachella Valley Mosquito and Vector Control Board of Trustees (Board) on June 10, 2008, explains compliance of the benefit assessment procedures, and thus, Orders the levy of the Mosquito, Fire Ant and Disease Control Assessments for fiscal year 2008-09.

Red Imported Fire Ants arrived in the Coachella Valley in the late 1990’s – presenting the District with a new challenge to its financial resources. For several years, until October of 2003, the State of California Department of Food and Agriculture funded the District’s Red Imported Fire Ant program. However, this funding was cut by the State of California along with many other beneficial programs in 2003. That reason, along with the current explosion of growth experienced in the Coachella Valley, put a strain on levels of funding.

At the request of various Coachella Valley cities, the District conferred with the Coachella Valley Association of Governments (CVAG) in an attempt to develop an additional source of funding to provide Red Imported Fire Ant service. Since there was opposition from some of the cities, these negotiations were not fruitful. The Board then determined to place the decision to fund not only Red Imported Fire Ant services but other District services and improvements into the hands of the Coachella Valley property owners through a Benefit Assessment Measure.

The Benefit Assessment sought much needed funding for mosquito, red imported fire ant, vector, and disease control services throughout the District, as well as funding to supplement the related costs of equipment, capital improvements, services, and facilities necessary and incidental to mosquito and vector control programs.

In 2005, Coachella Valley property owners approved a yearly fee of $16.00 per residential unit for the Mosquito, Red Imported Fire Ant, Vector and Disease Control Measure by 74.19%, the highest approval rating for a similar measure in the State of California that year. Included in the voter approval was an inflation escalator allowing for a 3% per year inflationary increase to the assessment. State law requires the District to renew the base assessment and any inflationary increase each year through a public hearing process.

The District’s Board is now conducting a public hearing to consider the assessments for the 2008–2009 fiscal year to fund its programs and services. The District provides services and programs for surveillance, disease prevention, control of vectors and abatement. The mosquito abatement, vector control, and disease prevention projects and programs include, but are not limited to, source reduction such as, ground and aerial control applications, disease monitoring, public education, reporting, accountability, research and interagency cooperative activities, as well as capital costs, maintenance, and operation expenses. The cost of these services also includes capital costs, comprised of equipment, capital improvements, and facilities necessary and incidental to the vector control program. The District’s services encompass approximately 2,400 square miles and are provided to properties accommodating over 400,000 permanent residents with a seasonal influx of over 100,000 people.

The majority of the District’s funding is generated by a percentage of the 1% property tax collected from Coachella Valley property owners. Any property owner who feels that the assessment levied on the subject property is in error as a result of incorrect information being used to apply the foregoing method of assessment, may file a written appeal with the General Manager of the Coachella Valley Mosquito and Vector Control District or his or her designee. Any such appeal is limited to correction of an assessment during the then current Fiscal Year or, if before July 1, the upcoming fiscal year.

In each subsequent year for which an assessment will be levied, the Board must;

· Preliminarily approve at a public meeting a budget for the upcoming fiscal year’s costs and services;

· Preliminarily approve at a public meeting an updated annual Engineer’s Report, and;

· Provide an updated assessment roll listing all parcels and their proposed assessments for the upcoming fiscal year and;

· Call for the publication in a local newspaper of a legal notice of the intent to continue the assessments for the next fiscal year and set the date for the noticed public hearing. At the annual public hearing, members of the public can provide input to the Board prior to the Board’s decision on continuing the services and assessments for the next fiscal year.

The yearly assessment is subject to an annual adjustment tied to the Consumer Price Index-U for the Los Angeles-Riverside-Orange County Area as of December of each succeeding year (the “CPI”), with a maximum annual adjustment not to exceed 3%. The yearly assessment rate per single family equivalent benefit unit for the Mosquito, Fire Ant and Disease Control Assessment may increase in future years by an amount equal to the annual change in the CPI, not to exceed 3% per year. In the event that the annual change in the CPI exceeds 3%, any percentage change in excess of 3% can be cumulatively reserved and can be added to the annual change in the CPI for years in which the CPI change is less than 3%.

The assessments for 2007 – 2008 were levied at the yearly rate of $16.48 per single family equivalent benefit unit as described in the Engineer’s Report for fiscal year 2007 – 2008 with estimated total annual revenue of approximately $2.7 million.

The fiscal year 2008-2009 assessment budget includes:

· Outlays for West Nile Virus

· Surveillance and mosquito control

· RIFA control

· Capital equipment

· Supplies

· Disease testing programs

· Other vector programs

The annual CPI change for the Los Angeles-Riverside-Orange County Area from December 2007 to December 2008 is 4.16%, which is more than the 3% maximum allowed annual increase. Therefore, the maximum CPI increase that can be used in fiscal year 2008-09 is 3%. The remaining 1.16% will be cumulatively reserved and can be added to the annual change in the CPI for future years in which the CPI change is less than 3%.

The maximum authorized yearly assessment rate for 2008–2009 is $17.48 per single family equivalent benefit unit as described in the Engineer’s Report for fiscal year 2008 – 2009. The assessments for 2008 – 2009 were levied at the yearly rate of $10.55 per single family equivalent benefit unit as described in the Engineer’s Report for fiscal year 2008 – 2009 with estimated total annual revenue of approximately $1.8 million.

Since property owners in the assessment ballot proceeding conducted in 2005 approved the initial assessment including the CPI adjustment schedule, the assessment may be levied annually and may be adjusted by up to the maximum annual CPI adjustment without any additional assessment ballot proceeding.

Below is a listing of the special benefits provided to property owners of the Coachella Valley enabled by the Mosquito, Fire Ant and Disease Control assessment:

· Increased public safety, welfare and protection of health

· Reductions of Potential for New Diseases and Infections in Humans

· Enhanced quality of life and desirability of the area

· Increased public awareness and understanding of how to protect themselves, their property and pets and livestock from diseases carried by

Vectors

· Protection of economic activity

· Protection of the Coachella Valley’s tourism, agriculture and business industries

· Wildlife Protection

· Reduced risk of nuisance and liability

The above benefit factors, when applied to property in the District, confer special benefits to property and create specific enhancement of property values because properties are more desirable, usable and valuable in areas with improved public health, welfare, safety, quality of life and environment and reduced nuisance factors. These are special benefits to each parcel of property in much the same way that storm drainage, sewer service, water service, sidewalks and paved streets enhance the utility and attractiveness of each parcel of property providing them with more utility of use and making them safer, easier to market, and, ultimately, more valuable.

In summary, the direct special benefits described above and throughout this Staff Report ultimately enhance the economic values of all benefiting real properties in excess of the proposed assessments for these properties.

Recommendation:

Staff recommends the acceptance and adoption of Resolution #2008–11, which reduces the annual benefit assessment amount to $10.55 per single family equivalent family unit, in order to properly finalize and adopt the assessment proceedings accordingly defined in Proposition 218.

Fiscal Impact:

By ordering the levy of assessments the District will receive an additional amount approximated at $1.8 million for the fiscal year 2008-09 Budget.