3/25/2020 Update:
The City has proposed a 10-year term, instead of 25 or 30 years, to reduce interest costs to property owners over the life of the assessment. The data and post below have been updated and re-published.
Background
In this post, CivicMic shares the preliminary assessments for the Neptune Drive Shoreline Flood Protection project as presented at the 2nd community meeting on November 13, 2019. If you are new to this topic, please read the following posts for background information:
- Video of the 2nd community meeting
- Presentation slides for the 2nd community meeting
- FEMA Map Changes and Flood Insurance
- Background on the origins of the project
- The assessment ballot process
- Listen to CivicMic: The Podcast and learn about:
As reported previously by CivicMic, the City of San Leandro has proposed the formation of the Neptune Drive Assessment District to fund the construction of a levee near the intersection of Neptune Drive and Marina Boulevard.
Important: Formation of the proposed assessment district must be approved by the affected property owners. The City can't form an assessment district without property owner participation.
The Neptune Drive assessment would impact approximately 1,055 parcels that benefit from the construction of the levee because these parcels were recently re-designated by FEMA as being in the flood zone. The new flood zone designation has resulted in an update of the Flood Insurance Rate Maps and in most cases mortgage companies requiring property owners to pay for flood insurance.
The construction of the levee, in addition to another levee being built by the County, would cause FEMA to re-designate the parcels as no longer being in the flood zone resulting in another update of the Flood Insurance Rate Maps reflecting the parcels off the flood zone and mortgage companies no longer requiring flood insurance.
Preliminary Assessments
At the 2nd community meeting, CivicMic presented the preliminary assessments for the proposed assessment district. Please note the preliminary assessments are based on conservative cost estimates and are not final. However, the preliminary assessment amounts should be considered safe for estimating purposes while the City finalizes costs and the final report is processed by City Council over the next few months. Below please find excerpts from the preliminary assessment engineer's report with valuable information for your consideration.
Assessment Law for Proposed Assessment District
The assessments described in the report have been prepared pursuant to Article XIII D of the California Constitution, the Proposition 218 Omnibus Implementation Act, and the Municipal Improvement Act of 1913, Division 15 of the California Streets and Highways Code (collectively, the Assessment Law).
Municipal Bonds (Debt Service Payments)
Municipal bonds for a period not to exceed 30 years and secured by the assessments may be issued by the City in the manner provided by Division 10 of Streets and Highways Code of the State of California, the Improvement Bond Act of 1915.
3/25/2020 Update: The City has proposed a 10-year term, instead of 25 or 30 years, to reduce interest costs to property owners over the life of the assessment.
Assessment Calculation Requirements
The estimated costs and expenses of the public improvements (flood improvements) have been assessed upon the specially benefited parcels as follows:
- The proportionate special benefit derived from the Improvements by each specially benefited parcel was determined in relationship to the total special benefits derived by all specially benefited parcels;
- No assessment has been imposed on any specially benefited parcel which exceeds the reasonable cost of the proportional special benefit conferred on such parcel by the Improvements; and
- The general benefits have been separated from the special benefits and only special benefits have been assessed.
Publicly Owned Properties
Consistent with the requirements of Proposition 218, all publicly owned parcels are assessed proportionately to the special benefit they receive from the Flood Improvements. That is, public parcels are treated the same as privately owned parcels for assessment calculation purposes. Alameda County Assessor's land use codes were used to classify privately owned properties into land-use categories (e.g., residential, non-residential, golf course). For public parcels, however, the Alameda County Assessor's land-use codes only designate the type of public ownership. Therefore, to calculate assessments for these parcels, a land-use category was assigned to each public parcel based on its current use.
Flood Improvements
Assessments from the District will fund a portion of the construction of a levee to be located at 13145-13165 Neptune Drive, near the intersection of Neptune Drive and Marina Boulevard. The Neptune Drive levee is one of two City levees being constructed to provide flood protection and remove the flood zone designation from approximately 1,000 assessor's parcel impacted by the flood zone re-designation. The other levee construction project is located along the north side of San Leandro Creek. The design and construction of the levee at San Leandro Creek is being completed by the Alameda Flood Control and Water Conservation District. Further, Alameda Flood Control and Water Conservation District also bear the financial responsibility and there is no financial responsibility on the part of the City. Construction of the levee at San Leandro Creek is expected to occur in 2021.
Overhead
In addition to the actual costs of constructing the Flood Improvements mentioned above, the City will incur costs for staff time and expenses directly related to the administration and management of the District. Staff time includes the oversight and coordination of the construction projects, administration and management of debt issuance, annual reporting requirements, annual assessment roll preparations, and placing the assessment amounts onto the Alameda County tax roll, along with responding to property owner inquiries.
Special Benefits
The Flood Improvements will confer special benefits upon parcels within the District. The special benefits to be conferred by the Improvements are detailed below:
Removal of Flood Zone Designation
The Flood Improvements are being constructed as a result of FEMA's revision to FIRM panels 06001C0254H and 06001C0258H. The FIRM panel revisions increased the base flood elevation for areas within the City that front San Francisco Bay and added approximately 1,000 assessor's parcels to the flood zone. Once the Flood Improvements are complete, the parcels within the District will be removed from the flood zone, which will eliminate the need for flood zone insurance over each parcel. Therefore, the Flood Improvements will confer the removal of flood zone designation benefits to each parcel in the District.
Reduced Risk of Flooding and Damage
As a result of the Flood Improvements, District parcels will experience a reduced risk of flooding, which will also result in a reduced risk of damage to land and structures from floodwaters. Should there be a flood event, the Flood Improvements will minimize the potential for flood damage to the property's land, structures located on the property's land, and the contents within those structures. Without the Flood Improvements, the risk of flooding increases, and the usefulness and full utilization of the property potentially decreases. Therefore, the Flood Improvements will confer a reduced risk of flooding and damage benefits to each parcel in the District.
Special Benefit Distribution
Once the special benefits are identified, they must be assigned based on the estimated proportionate special benefit derived by each parcel.
The following parcel characteristics were used to determine each parcel's proportionate special benefit from the Flood Improvements:
- Lot square footage
- Building square footage
Differing levels of special benefit provided by the Flood Improvements can largely be attributed to differences in the size of a parcel and the size of the structures located upon the parcel. It is believed that parcels of similar use will experience different degrees of special benefit in relation to the differences in their lot size and building size. For example, a parcel with a larger building will experience greater special benefit than a parcel with a smaller building. Accordingly, as lot size and building size increase, parcels are considered to receive a proportionately greater special benefit. Therefore, these parcel characteristics are deemed appropriate factors for determining proportional special benefit.
In order to relate differing parcel characteristics to one another, a relative factor was determined for each.
Lot Factor Benefit Points
Each parcel's lot square footage was divided by the District's average lot square footage of 8,300 square feet to determine each parcel's Lot Factor.
Special consideration for residential attached properties: The lot square footage assigned to Residential Attached Property land uses is based upon the common area that is shared by all properties within each residential development. A Residential Attached Property's lot square footage is calculated by apportioning the common area lot square footage equally to each unit of Residential Attached Property within the development.
Building Factor Benefit Points
Each parcel's building square footage was divided by the District's average building square footage of 2,100 square feet to determine each parcel's Building Factor.
In addition to lot size and building size, a parcel's land use type will also affect the special benefits received.
Land Use Benefit Points
Each parcel within the proposed District was assigned a land-use type for purposes of determining the special benefits received. Below is a list of the land use categories within the proposed District.
- Residential Detached
- Residential Attached
- Non-Residential
- Golf Course
- Public
- Exempt (Open space, common areas, private roads)
All land-use types, other than Exempt, were assigned 2 Land Use Benefit Points since the special benefits (removal from the flood zone and reduced risk of flooding and damage) are universal benefits for all land-use types.
Total Benefit Points Calculation Summary
The calculation of total benefit points for each parcel takes into account each component of the parcel characteristics (lot square footage and building square footage) and land use types. The formula for determining each parcel's total benefit points is as follows:
A Parcel's Total Points = (Lot Factor Benefit Points + Building Factor Benefit Points) X Land Use Benefit Points
The parcel's total points are then summed to determine the District's total benefit points. The total benefit points are used to determine the assessment per benefit point.
Assessment per Benefit Point
The assessment per benefit point was calculated by applying the total Cost Estimate Balance to be Assessed by the total benefit points assigned to the parcels within the District.
Total District Benefit Points: 3,981
Preliminary Assessment per Benefit Point: $569
How to Calculate the Preliminary Assessment for a Parcel
Let's assume parcel XYZ has the following characteristics:
- Lot square footage: 5,040
- Building square footage: 1,336
- Land-use type: Residential Detached
Please read the "Special Benefit Distribution" section in this post for details on the calculation of the total benefit points for a parcel.
Step 1- Calculate the Special Benefit Distribution for the parcel.
- Lot Factor Benefit Points = 5,040/8,300 = 0.60722
- Building Factor Benefit Points = 1,336/2,100 = 0.63619
- Land Use Benefit Points = 2.0
Step 2 - Calculate the Total Benefit Points for the parcel.
A Parcel's Total Points = (Lot Factor Benefit Points + Building Factor Benefit Points) X Land Use Benefit Points
- Parcel's Total Points = (0.60722 + 0.63619) X 2.0 = 2.48682 (For exercise purposes only)
Step 3 - Calculate the Preliminary Assessment for the parcel.
- 2.48682 X $569 = $1,415.00 (For exercise purposes only)
Note: The assessment for a parcel represents the initial amount to be amortized over the life of the bond issue with annual payments due on the property tax bill. (3/25/2020 Update: The City has proposed a 10-year term, instead of 25 or 30 years, to reduce interest costs). The annual payments due would include principal, interest, and overhead (administrative costs). As discussed at the 2nd meeting there will be options to pay off the full amount upfront or at any time during the amortization period resulting in savings on interest and overhead costs.
View the Preliminary Assessment and Estimated Annual Charge per Parcel
Use our web map below to browse the area subject to the proposed assessment and click on any parcel to view benefit points, land use assignment, preliminary initial assessment, and the estimated annual charge.
Ready to view the data per parcel?
Click here to browse our web map. Zoom in and click on any parcel to view the preliminary data.