HomeMy WebLinkAboutCC AG PKT 2006-06-26 #K 9„
AGENDA REPORT
DATE: June -26, 2006
TO: Honorable Mayor and City Council
THRU: John B. Bahorski, City Manager
FROM: Lee Whittenberg, Director of Development Services
SUBJECT: APPROVAL OF COMMENT LETTER TO LOCAL
AREA FORMATION COMMISSION RE: SPHERE OF
INFLUENCE REVIEW FOR CITY OF SEAL BEACH
SUMMARY OF REQUEST:
Authorize Mayor to execute comment letter to the Local Agency Formation Commission
of Orange County regarding "Sphere of Influence Review for City of Seal Beach ".
Receive and File Staff Report.
BACKGROUND:
The Local Agency Formation Commission of Orange County ( "LAFCO ") has been
reviewing local city boundaries and unincorporated community and special district
boundaries as required by State Law through a process called the "Municipal Service
Review ". City staff has followed this process carefully over the past two years. LAFCO
initially planned to consider adoption of separate Negative Declarations for the Municipal
Service Review and Sphere of Influence Review/Update for the following
communities /special districts on March 8, 2006:
❑ City of Seal Beach;
❑ City of Los Alamitos;
❑ Rossmoor /Los Alamitos Area Sewer District; and
❑ Rossmoor Community Services District.
The proposed Negative Declaration determines that the approval of a "Sphere of
Influence" for Seal Beach that reaffirms the sphere as being conterminous with the City's
existing jurisdictional boundary could not have a significant effect on the environment.
On February 27, 2006 the City Council reviewed a Staff Report and authorized mayor
Antos to execute a letter to LAFCO indicating the position of the City of Seal Beach as:
"concurring with the determination being evaluated in the subject
Negative Declaration that "LAFCO is recommending that the City of
Agenda Item
Z:\My Documents \LAFCO \Seal Beach Sphere of Influence.CC Staff Report 2.doc\LW\06 -15 -06
Approval of Comment Letter to LAFCO re:
Proposed Negative Declaration —
City of Seal Beach Sphere oflnfluence Update
City Council Staff Report
June 26, 2006
Seal Beach sphere of influence be reaffirmed as conterminous with the
City's existing jurisdictional boundary." This position is based on our
stated letter positions of August 5 and September 8, 2005 regarding the
recent Municipal Service Review process that all of the impacted agencies
participated in with LAFCO in the early part of 2005."
At the March 8 LAFCO meeting the Commission determined to continue the sphere of
influence considerations for Seal Beach, Los Alamitos, and Rossmoor to July 12 to allow
Rossmoor to more thoroughly evaluate the alternatives available to that unincorporated
community prior to formal action by LAFCO. The "Rossmoor Planning Committee" has
released their "Preliminary Report — Rossmoor Future Governance Options ", including a
supporting report, "Rossmoor Governance Alternatives: Fiscal Impacts" prepared by Burr
Consulting. A copy of these documents is provided as Attachment 2 for the information
of the City Council.
These documents discuss the following governance options regarding Rossmoor and
include summaries of projected fiscal impacts for the various alternatives:
❑ Expanding Rossmoor Community Services District Services;
❑ Rossmoor Incorporation;
❑ Annexation to Los Alamitos;
❑ Annexation to Seal Beach; and
❑ Formation of a consolidated city encompassing Los Alamitos, Rossmoor, and
Seal Beach — this report has not been made available to Seal Beach at the time of
preparation of this Staff Report.
City staff has reviewed the subject documents and feels that many of the assumptions and
parameters regarding the projection of revenues and expenditures that would be
generated by any of the above - mentioned alternative governance scenarios are unclear
and too speculative for the City to rely heavily on in reviewing those documents.
At the February 27, 2006 City Council meeting, the City Council supported the proposed
determination by LAFCO, as discussed above. Staff, based on its review of the
referenced Rossmoor documents, recommends that the City Council re -affirm its
previous support "that the City of Seal Beach sphere of influence be reaffirmed as
conterminous with the City's existing jurisdictional boundary."
It is therefore recommended that the City Council authorize the mayor to execute a letter
to LAFCO again supporting adoption of both the proposed Negative Declaration and the
Sphere of Influence Update for Seal Beach. The draft comment letter is provided as
Attachment 1 for the review of the City Council.
Seal Beach Sphere of Influence.CC Staff Report 2 2
Approval of Comment Letter to LAFCO re:
Proposed Negative Declaration —
City of Seal Beach Sphere of Influence Update
City Council Staff Report
June 26, 2006
FISCAL IMPACT:
No impact on City. The proposed Negative Declaration evaluates environmental impacts
of determining that the "Sphere of Influence" for Seal Beach should be conterminous
with the City's existing jurisdictional boundary. City staff has reviewed the Rossmoor
governance documents and feels that many of the assumptions and parameters regarding
the projection of revenues and expenditures that would be generated by any of the above -
mentioned alternative governance scenarios are unclear and too speculative for the City
to rely heavily on in reviewing those documents.
RECOMMENDATION:
Authorize Mayor to execute comment letter to the Local Agency Formation Commission
of Orange County regarding proposed Negative Declaration for "Sphere of Influence
Review - City of Seal Beach" determining that the "Sphere of Influence" for Seal Beach
should be conterminous with the City's existing jurisdictional boundary. Receive and
File Staff Report.
^ �, APR
NOT DAP O .
1■ 4
ee Whitten erg Joe( B. Bahorski
Director of Development Services ' ity Manager
Attachments: (2)
Attachment 1: Draft Comment Letter re: Negative Declaration — Sphere of
Influence Review for City Of Seal Beach
Attachment 2: "Preliminary Report — Rossmoor Future Governance
Options ", including a supporting report, "Rossmoor
Governance Alternatives: Fiscal Impacts" prepared by Burr
Consulting, dated June 8, 2006
Seal Beach Sphere of Influence.CC Staff Report 2 3
Approval of Comment Letter to LAFCO re:
Proposed Negative Declaration —
City of Seal Beach Sphere of Influence Update
City Council Staff Report
June 26, 2006
ATTACHMENT 1
DRAFT COMMENT LETTER RE:
NEGATIVE DECLARATION - SPHERE OF
INFLUENCE REVIEW FOR CITY OF SEAL
BEACH
Seal Beach Sphere of Influence.CC Staff Report 2 4
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June 26, 2006
Orange County Local Agency Formation Commission
Attn: Joyce Crosthwaite, Executive Officer
12 Civic Center Plaza, Room 235
Santa Ana, CA 92701
Dear Ms. Crosthwaite:
SUBJECT: NEGATIVE DECLARATION - SPHERE OF
INFLUENCE UPDATE FOR CITY OF SEAL
BEACH (SOI 05 -32)
Our staff has previously reviewed the proposed Negative Declaration as referenced
above, and is in concurrence with the determination being evaluated in the subject
Negative Declaration that " LAFCO is recommending that the City of Seal Beach sphere
of influence be reaffirmed as conterminous with the City's existing jurisdictional
boundary." This position is based on our stated letter positions of August 5 and
September 8, 2005 regarding the recent Municipal Service Review process that all of the
impacted agencies participated in with LAFCO in the early part of 2005. The City
commented by letter on February 27, 2006 on the Negative Declaration matter.
The City Council has also reviewed the "Preliminary Report — Rossmoor Future
Governance Options ", including a supporting report, "Rossmoor Governance
Alternatives: Fiscal Impacts" prepared by Burr Consulting, dated June 8, 2006. It is the
opinion of the City of Seal Beach that the Rossmoor governance documents referenced
above are unclear and too speculative for the City to rely heavily on and feels that many
of the assumptions and parameters regarding .the projection of revenues and expenditures
that would be generated by any of the above - mentioned alternative governance scenarios
is insufficient to make any type of an informed decision. Therefore, Seal Beach again
wishes to support its concurrence with LAFCO staff "that the City of Seal Beach sphere
of influence be reaffirmed as conterminous with the City's existing jurisdictional
boundary."
Mr. Lee Whittenberg, Director of Development Services, will be in attendance at the July
12 Commission meeting on this matter to present the positions stated in this letter and to
be available to respond to any questions that Commission may have.
Z:\My Documents\LAFCO\Seal Beach Sphere of Influence Neg Dec.CC Letter 2.doc\LW\06 -26 -06
City of Seal Beach Comment Letter re:
Proposed Negative Declaration —
City of Seal Beach Sphere of Influence Update
June 26, 2006
If you have questions prior to the July 12 Commission meeting, please contact our City
Manager, John Bahorski, at your earliest convenience if you require additional
information. Mr. Bahorski can be reached at (562) 431 -2527, extension 300, or by e-mail
at jbahorski@ci.seal- beach.ca.us. In addition, if you have questions of Mr. Whittenberg,
he can be reached at (562) 431 -2527, extension 313, or by e -mail at
lwhittenb erg ,ci.se al-be ach. ca. us.
Sincerely,
ttO
John Larson, Mayor
City of Seal Beach
Distribution: Seal Beach City Council
Seal Beach City Manager
Seal Beach Director of Development Services
•
Seal Beach Sphere of Influence Neg Dec.CC Letter 2 2
Approval of Comment Letter to LAFCO re:
Proposed Negative Declaration —
City of Seal Beach Sphere of Influence Update
City Council Staff Report
June 26, 2006
ATTACHMENT 2
"PRELIMINARY REPORT - ROSSMOOR
FUTURE GOVERNANCE OPTIONS ",
INCLUDING A SUPPORTING REPORT,
"ROSSMOOR GOVERNANCE
ALTERNATIVES: FISCAL IMPACTS"
PREPARED BY BURR CONSULTING,
DATED JUNE 8, 2006
Seal Beach Sphere of Influence.CC Staff Report 2 7
_1( REPORT
T NAR-
OPTIONS PRELIM-
GOVERNANCE FUTURE GOVE '
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June
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Prepared by
•
Rossmoor Plann Committee
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Rossm
It ROSS MOOR TL 1 WI�1('� COJKJKI E�
smooR
Oossmoor7ComeownersAssociation
P.O. BoXS0S8
Rpssmoor, CA 90720
562.799.1401
www.rossmoor-rha.org
TricLChis @ao(com
Executive Committee
Erwin Anisman
Warren Asmus
Eric Christensen
Tom Fitzgerald
Russ Lightcap
MarkWitikman
Rpssmoor Expanded Services c< Incorporation Su6committee
Erwin Anisman, Chair
Tony De`Marco
Ronda(fECy
Brenda Gorman
yoeCttner
Gary Stewart
Consolidation Studies Subcommittee
Marktikman, Chair
Jim Bonham
Greg Breuer
R,a(ph 'varta6edian
Annexation Studies Su6committee
Tom Titzgera&,, Co -Chair
Russ Lightcap, Co -Chair
Don Broun
Mike Bullock
G&n Cook
Randy Goddard
BiOE.7fagfund
George Watts
Mike Sanders
With appreciation to Orange County, the Rossmoor Community Services District and the Rossmoor
JfomeownersAssociation for funding this study.
TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION 1
STUDY PURPOSE 1
GOVERNANCE OPTIONS 2
STUDY CREDITS 2
LAFCO OVERVIEW 2
CHAPTER 2: ROSSMOOR BASELINE 4
GOVERNANCE 4
LAW & TRAFFIC ENFORCEMENT 4
RCSD SERVICES 5
COUNTY MUNICIPAL SERVICES 5
COUNTY REGIONAL SERVICES 6
SEWER SERVICES 6
UTILITY SERVICES 6
EDUCATIONAL SERVICES 7
CHAPTER 3: EXPANDING RCSD SERVICES 8
SUMMARY 8
INTRODUCTION 8
DISCUSSION 9
ANALYSIS 9
WHAT AN EXPANDED RCSD WOULD LOOK LIKE 11
PROCESS FOR ACQUIRING LATENT POWERS 11
CHAPTER 4: ROSSMOOR INCORPORATION 14
SUMMARY 14
INTRODUCTION 14
MUNICIPAL SERVICES 15
ANALYSIS 15
WHAT A ROSSMOOR CITY WOULD LOOK LIKE 17
PROCESS FOR INCORPORATION 18
CHAPTER 5: ANNEXATION TO LOS ALAMITOS 19
EXECUTIVE SUMMARY 19
ANALYSIS 20
FINDINGS 23
FINANCIAL 23
CONCLUSIONS 24
CHAPTER 6: ANNEXATION TO SEAL BEACH 25
EXECUTIVE SUMMARY 25
ANALYSIS 26
FINDINGS 29
FINANCIAL 29
CONCLUSIONS 30
APPENDIX A: CONSULTANT REPORT 31
INTRODUCTION
CHAPTER 1• INTRODUCTION
STUDY PURPOSE
This preliminary report is intended to inform the Rossmoor community as it considers the
desirability of governance options. The Rossmoor Planning Committee (RPC) has initiated studies
of various alternatives for the future governance of Rossmoor. Governance changes for Rossmoor
are being considered for three principal reasons:
1. Rossmoor is an unincorporated area under the jurisdiction of the County of Orange. The
County has expressed a desire to get out of the business of municipal government in
unincorporated areas to concentrate on "core" countywide services, such things as the
courts, social services, regional parks, health and welfare. The County has made it clear that
it will not be able in the future to continue to provide unincorporated islands the same level
of municipal services it has in the past. The County's desire to divest itself of
unincorporated islands necessitates study of possible options for future governance of
Rossmoor.
2. Orange County Local Agency Formation Commission ( LAFCO) completed a Municipal
Services Review (MSR) for Rossmoor, Los Alamitos, Seal Beach and Sunset Beach in March
2005. As part of that process, OC LAFCO is required by State law to update the Spheres of
Influence for each city and district studied. OC LAFCO staff has proposed that Rossmoor
should be induded in the Sphere of Influence of a neighboring city (likely Los Alamitos).
OC LAFCO has agreed to delay its determination of a Sphere of Influence affecting
Rossmoor until July 2006.
3. The level of services that Rossmoor currently receives is unsatisfactory and below the level
received by our neighbors. With respect to municipal services, Rossmoor receives services
from the County that are poorer than services received by our neighbors in adjacent cities,
including law enforcement, traffic enforcement, building permitting and code enforcement.
For instance, the response time for priority one (emergency) law enforcement calls in
Rossmoor was 11.3 minutes versus 4.2 minutes for Seal Beach and 3.2 minutes for Los
Alamitos, according to a LAFCO study.' If the County further reduces the level of
municipal services, which it says it expects it will have to do, we will not even be able to
maintain the quality of community services we currently enjoy.
We feel strongly that for something as important as our future form of governance, we should
control our future and not some outside entity with no ties to our community. And, we feel it is
critical to base our decisions on real facts so that all alternatives are carefully considered and so that
we have sufficient information to make an informed choice. We have been informed that LAFCO
does not have the resources or time to conduct the detailed studies we have initiated.
Caveats
It is important to highlight that this report is preliminary. RPC welcomes comments and
additional data from the community, LAFCO and the affected agencies (the County, Los Alamitos,
1 Orange County LAFCO, Municipal Service Review Report: Los Alamitos /Seal Beach /Rossmoor /Sunset Beach, March 9, 2005.
Scott P. Bryant & Associates, Police Services Comparison Survey: Report to the Orange County Local Ageng Formation Commission,
November 2004. Note that the Sheriff disputes the study's accuracy on the Rossmoor response time and contends that
the actual response time is about 8.5 minutes. The Sheriff's estimated response time is twice the response time for Seal
Beach and nearly three times Los Alamitos' re time.
1
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
Seal Beach and the Rossmoor Community Services District). Any governance option pursued by
Rossmoor or affected agencies would require more comprehensive analysis, approval by LAFCO
and approval by the Rossmoor community.
GOVERNANCE OPTIONS
The following governance options are being considered:
• Expanded powers for the existing Rossmoor Community Services District ( "RCSD ")
• Incorporation of Rossmoor as a separate city
• Annexation to Los Alamitos
• Annexation to Seal Beach
• Formation of a consolidated city encompassing Los Alamitos, Rossmoor and Seal Beach.' STUDY CREDITS
The RPC Executive Committee members —Erwin Anisman, Warren Asmus, Eric Christensen,
Tom Fitzgerald, Russ Lightcap, and Mark Nitikman— oversaw the study and prepared the
introductory and baseline chapters.
The RPC Expanded Services & Incorporation Subcommittee members— Erwin Anisman, Tony
DeMarco, Randall Ely, Brenda Gorman, Joel Rattner, and Gary Stewart—prepared the chapters on
incorporation and expansion of RCSD powers.
The Annexation Subcommittee members —Tom Fitzgerald, Russ Lightcap, Don Broun, Mike
Bullock, Glen Cook, Randy Goddard, Bill Haglund, George Watts, and Mike Sanders — prepared the
chapters on annexation to Los Alamitos and Seal Beach.
The Consolidation Studies Subcommittee members —Mark Nitikman, Jim Bonham, Greg
Breuer, and Ralph Vartabedian — assessed the consolidation option and considered cost and
performance issues relating to city size.
LAFCO OVERVIEW
Each county in the state has a Local Agency Formation Commission (LAFCO), an independent
regulatory commission whose state - mandated purpose is to promote orderly growth and
development, discourage urban sprawl, and encourage efficient service areas for local governments.
LAFCO has the responsibility for facilitating constructive changes in governmental structure and
boundaries, including annexation, incorporation, consolidation, and establishment of Spheres of
Influence for incorporated cities and districts. For an unincorporated area of Rossmoor's size,
LAFCO cannot, on its own, initiate annexation, incorporation or consolidation under current law.
A Sphere of Influence designates the recommended future physical boundary and service area
for an incorporated city or special district for the optimal delivery of municipal and governance
services, basically defining territory that may be annexed sometime in the future. LAFCO has
described the Sphere of Influence as a "planning tool." Rossmoor is currently not within the sphere
'- The RPC report on consolidation is being delivered separately from the current report.
2
•
INTRODUCTION
of influence for any other government jurisdiction, although LAFCO staff recommends changing
that.
LAFCO says it is only encouraging Rossmoor (and other unincorporated islands) to start
considering how to provide for future services, acknowledging that the County may begin to curtail
municipal services to unincorporated areas.
3
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
CHAPTER 2: ROSSMOOR BASELINE
In order for Rossmoor residents to understand the advantages and disadvantages of various
future governance options, it is appropriate to have an accurate baseline describing the current
governance and municipal services situation in Rossmoor today.
GOVERNANCE
ROSSMOOR COMMUNITY SERVICES DISTRICT
The Rossmoor Community Services District (RCSD) is a special district established in 1987 to
provide specific municipal services authorized by the voters. The RCSD currently provides street
lighting, street sweeping, median landscaping (Rossmoor Way), aesthetic tree trimming, parks and
recreational services, and maintenance of the Rossmoor signature wall. The RCSD is governed by a
board of 5 Directors elected for staggered 4 year terms and hires a General Manager and small staff
to administer its services and policies. The RPC is currently exploring an option to add law
enforcement services to the RCSD and to contract with the Sheriff for these services.
ORANGE COUNTY
Orange County provides all other municipal services not provided by the RCSD or the
Rossmoor -Los Alamitos Sewer District. It is governed by the Board of Supervisors composed of
five Supervisors, elected by District. Rossmoor is represented by Jim Silva, Supervisor of the
Second District. The disadvantage to this system, from Rossmoor's perspective, is that we only
have at best 20% representation on the Board of Supervisors, our primary governmental agency, and
a distant bureaucratic organization for service and resolution of issues. Further, Rossmoor's voice in
County government will be potentially adversely impacted after November 2006 when the term of
our current Supervisor, Jim Silva, expires.
LAW & TRAFFIC ENFORCEMENT
LAW ENFORCEMENT SERVICES
In Rossmoor, law enforcement services are provided by the Orange County Sheriff and funded
by Orange County. Rossmoor currently has one patrol coverage, 7x24, shared with Sunset Beach
(the patrol officer is either in Rossmoor, in Sunset Beach or between the communities). As a result,
our law enforcement response time has suffered. The Municipal Service Review, dated March 2005,
reported our priority one response time was 11.3 minutes on average (compared to 3.2 and 4.2
minutes for Los Alamitos and Seal Beach, respectively). The Sheriff has reported that this response
time has been reduced. to 8.5 minutes for the last 6 months of 2005. In addition, it has been difficult
to get information from the Sheriff or provide direction for his services (since he contractually
reports to Orange County and not directly to our community).
TRAFFIC ENFORCEMENT SERVICES
In Rossmoor, the primary responsible agency for traffic and parking enforcement and traffic
accident investigation is the California Highway Patrol (CHP). The CHP has been significantly
resource - limited during the past several years and Rossmoor has received limited patrols and
significantly poorer traffic enforcement services than provided in our neighboring communities. In
January 2006, the Board of Supervisors authorized the OC Sheriff to supplement the CHP in •
4
•
ROSSMOOR BASELINE
providing traffic enforcement services to unincorporated communities. Although this has already
helped improve the situation some in Rossmoor, the Orange County Sheriff is not authorized to add
personnel and is only supplementing the CHP services.
RCSD SERVICES
The RCSD is responsible for providing the following services:
Street Lighting: No known issues.
Street Sweeping: Provided every other week. Only issue is lack of enforcement of "no
parking" regulations on street sweeping days (actually a law enforcement issue).
Median Landscaping (Rossmoor Way): No known issues.
Aesthetic Tree Trimming: Rossmoor's trees are a significant community asset. The RCSD's
responsibility is planting new or replacement trees and aesthetic tree trimming. The "RCSD identifies
diseased, dead or problem trees. The removal of these trees is currently the County's responsibility.
Parks and Recreation Services: The RCSD administers 5 "parks" (including 2 mini -parks
and the landscaped triangle on Seal Beach Blvd.) plus the Montecito Center. In addition, it provides
for the maintenance and rental of several District buildings. The total parks and recreation budget
for FY 2002 -3 was $154,000, or $14.59 per capita. In comparison, Los Alamitos administered eight
parks and open space (14 acres) with a parks and recreation budget for FY 2003 -4 of $1,182,900, or
about $107 per capita (seven times the RCSD amount).
Rossmoor Signature Wall Maintenance: No known issues.
COUNTY MUNICIPAL SERVICES
The County provides the following municipal services (which could be transferred to Rossmoor
upon incorporation or to an annexing city if Rossmoor were annexed —these are the services that
the County would like to cease providing to unincorporated areas):
Law Enforcement Services: See discussion point above.
Public Works (Street. Parkway and Sidewalk Maintenance): It should be noted that all
Rossmoor streets are residential and that, in general, there are no "through" streets in Rossmoor.
The Rossmoor elementary schools however do bring in non - Rossmoor vehicles. Due to the non-
commercial use of the streets, street maintenance requirements are lower than normal and, in
general, Rossmoor streets are in good condition. With respect to parkways and sidewalks,
Rossmoor may experience slightly higher than average maintenance due to damage caused by
parkway trees. Essentially all of Rossmoor's sidewalks /curbs have been retrofitted for wheelchair
access.
Zoning and Building Inspection: Rossmoor has very little control over or input to land use
decisions which are made in Santa Ana. Building inspectors are County -based and, therefore, there
are distance, familiarity and bureaucracy issues.
Permitting: There is a slow response to telephone calls and e- mails. Enforcement officers are
located in Laguna Hills and charges include travel time. Since they are typically out of the office, the
time available for contacting them is very limited.
5
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
Code Enforcement: In recent years, we have seen significant cuts in County enforcement
services. This was originally due to significant cuts in County code enforcement officers in this area.
Code enforcement officers based in Santa Ana have only limited familiarity with Rossmoor and have
tither areas of responsibility.
Animal Control: Animal control services are provided by Orange County Health Care Agency,
Animal Control Services located in South Orange, with shelters in Buena Park, La Habra and Santa
Ana. Only known issue is the locations of the animal control facilities and shelters are not
convenient.
Fire: Orange County Fire Authority (OCFA) serves Rossmoor. There are no known service
issues. However, we have been advised of a potential issue relating to building permits. We have
been told that the Fire Department, in approving permits for expansions in Rossmoor, has required
sprinkler installations for home expansions in excess of 3,500 sf (as opposed to 5,000 sf in the rest
of the County), unless the resident has a test done of the nearest fire hydrants to confirm sufficient
pressure.
Library Services: No known issues. Our only library is shared with Los Alamitos and is on
Seal Beach property.
COUNTY REGIONAL SERVICES
The County provides the following services to all County residents, whether or not in a city.
These services would be maintained by the County whatever future form of government that
Rossmoor selected. There are no known issues with County Regional Services.
a. Vector Control.
b. Health and Human Services.
c. Coroner /Judicial Services.
d. Other.
SEWER SERVICES
The Rossmoor -Los Alamitos Sewer District serves 24,800 people in Rossmoor, Los Alamitos,
. and parts of Long Beach, Seal Beach and Cypress. It has the lowest per capita cost of any of the
three sewer agencies in the MSR study area. It is financially in good condition with FY 2002 -3
revenues of $326,892, expenses of $302,139 and a reserve of $1,892,000. There are no known
significant service or infrastructure issues.
UTILITY SERVICES
Current utility providers in Rossmoor are the following:
a. Water: Golden State Water Company.
b. Gas: Southern California Gas Company.
c. Electric: Southern California Edison.
d. Cable: Time Warner.
e. Trash Collection: Trash is collected weekly by CR &R pursuant to a County contract.
6
ROSSMOOR BASELINE
EDUCATIONAL SERVICES
The Los Alamitos Unified School District ( LAUSD) provides first class elementary, middle and
high school education to the residents of Rossmoor, Los Alamitos and Seal Beach. Historically, the
LAUSD has been viewed as a significant community asset and major reason for new residents to
move to Rossmoor. Currently, however, there are severe funding problems that could impact the
continued high level of service in the future.
7
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
CHAPTER 3: EXPANDING RCSD
SERVICES
SUMMARY
A sub - committee of the Rossmoor Planning Committee (RPC) studied the issues related to the
Rossmoor Community Services District assuming additional municipal services for Rossmoor that
are currently provided by the County of Orange. Recent state legislation is supportive of
strengthening Community Service Districts. This governance option could be an alternative to
annexation of Rossmoor by an adjacent city or city incorporation. The criteria to consider in
acquiring services are need and affordability. Law enforcement is one service that fits the criteria
and in fact is currently being pursued by the RPC. There would be some RCSD start up costs and
staff time involved if this transfer is approved. Another candidate service for acquisition is animal
control but this needs further study. Trash removal for Rossmoor is contracted and administered by
the county and could be taken over by the RCSD if deemed advantageous. Public works by the
county is at a satisfactory level so there would seem no need to change that at this time. Desirable
services to have locally would be building and code enforcement, but these are not available to
Community Services Districts because they involve zoning powers, which only the county or a city
can have.
This study included financial and governance aspects for expansion, advantages and
disadvantages for expansion, and the procedure for applying to LAFCO for a new service.
INTRODUCTION
This report is part of the Rossmoor Planning Committee's initiative to explore governance
options for the unincorporated community of Rossmoor. It was authored by the Special Studies
Subcommittee of the RPC consisting of interested Rossmoor residents and with the assistance of
consultants retained by the RPC. The purpose of the report is to provide information to the
residents of Rossmoor and others about expanding the services of the RCSD. It is not intended to
be an advocate for or against this option. -
The motivation for the RPC studies is that the county has expressed that it desires to divest
from delivering municipal services to the unincorporated county areas and concentrate on their
regional services that they provide to the whole county such as social welfare, health, courts, jails,
harbors, etc. They are being squeezed financially and see providing municipal services as a burden
they can not sustain.
The county municipal services provided to Rossmoor are in many -cases not at levels that are
satisfactory and less than what neighboring cities provide to their citizens. Also, LAFCO is on the
verge of making a determination about the Sphere of Influence (SOI) for cities adjacent to
Rossmoor and it is no secret that LAFCO staff has recommended placing Rossmoor in the SOI of
Los Alamitos. If that occurs, it will preclude any other option Rossmoor may want to pursue for
perhaps as long as 5 years until the next MSR. It will be up to the residents to decide what direction,
if any, to take. -
A newly- revised Community Services District (CSD) Law (SB 135) went into effect on January
1, 2006. It strengthens CSDs' governance. It allows CSD's to provide some 31 services and states
8
•
EXPANDING RCSD SERVICES
that a CSD can be "A permanent form of governance that can provide locally adequate levels of
public facilities and services." Also, it can be "A transitional form of governance as the city
approaches cityhood." The legislation provides potential financing sources for its services such as
special taxes, benefit assessments, rates for utility service, etc.
DISCUSSION
Chapter 2 details the municipal and regional services currently provided to Rossmoor by the
county and the RCSD. The challenge when considering expanding RCSD services by transferring
them from the county is determining which services make sense to assume. The factors that should
go into that decision are:
• Is a particular county service deficient?
• Is there the will to acquire that service ? -
• Can the RCSD do it better?
• Is the funding available for the RCSD to administer it?
These factors were applied by the RPC in considering Rossmoor's law enforcement service. It is
a vital service and it was determined that the level of service with the current county arrangement is
less than satisfactory. There were leaders in the community who were willing to work to see if the
contracting for the Sheriff's service could be transferred to the RCSD. By having the county
transfer the approximately $1.1 million of the Sheriffs budget allocated for Rossmoor to the RCSD
and have the RCSD contract with the Sheriff, Rossmoor could have the services that would work
best for the needs of the community. In fact, this effort is already underway by the RPC working
with the County and the Sheriff and the prospects for this happening seem to be very good.
It would seem prudent when considering which services to acquire, to do so on a case -by -case
basis and not try to swallow too much. This incremental approach would allow adjustments to staff
and resources as needed and to evaluate the efficiency in delivering additional services.
Another service that may be a candidate for acquisition is Animal Control. This is a relatively
low -cost service performed by the county. But because of the distance to the county facility, it may
be beneficial to contract for that service with the Long Beach or the Seal Beach facility which are
very close to Rossmoor. The public works (roads, curbs, gutters, sidewalks) services performed by
the county are currently at a satisfactory level. There would not seem to be an urgency to take over
that function in the near term. The building, planning and code enforcement services, while perhaps
desirable, can not be assumed by a CSD because they involve zoning powers which only the county
or a city has. However, there are some options with respect to planning and code. Rossmoor could
apply for an "overlay" to the County code and also can form an area planning commission (APC) if
these are approved by the County.
ANALYSIS
Table 3 -1 shows the current costs for municipal services that Orange County and the RCSD
provide to Rossmoor. The county cost figures shown are the best available, but the true costs for
those services by the county have been difficult to obtain because the county does not separate costs
for each unincorporated community. As a result the costs are calculated on a per capita basis which
may not reflect their true costs if the RCSD were to administer that service. The exception to that is
the Sheriff's law enforcement cost which was obtained by LAFCO for the MSR report and obtained
9
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
from the Sheriff Department. If the RCSD acquires the $1.1M from the County to directly contract
with the Sheriff, it would need to set aside about $200,000 of its reserves into a restricted
contingency fund.
TABLE 3 -1
COSTS OF SERVICES
SERVICE PROVIDER COST NOTE
Sheriff County $1.14 M RCSD could contract for same
amount
Parks, Trees, Recreation, RCSD $0.66 M Budget for RCSD
Facilities, Street Sweeping
Public Works County $0.24 M Level of service by County
currently satisfactory
Animal Control County $0.06 M RCSD could contract for same
amount.
Building & Planning County $0.27 M CSDs cannot acquire this service.
Code Enforcement County $0.02 M CSDs cannot acquire this service.
Trash Removal County $0.001 M Contract could be acquired by
RCSD.
The Trash Removal cost shown in Table 3 -1 is the cost for administering the contract with the
service provider. Rossmoor residents pay $16.61 per month for the service.
As shown by its latest audit, the RCSD is in good financial shape. It has managed to meet its
budget because revenues, generated mostly by property taxes, have increased along with its
expenditures which are closely monitored. The District has built up a healthy reserve of about one
million dollars. Any new service to be assumed by the RCSD from the county should have the
county cost for that service transferred to the RCSD. Otherwise, another funding source would
need to be found.
Advantages of an Expanded RCSD
• • Services can be tailored to the needs of the community.
• Contracted services would be directly responsible to the RCSD, not the county.
• Costs can be directly linked to a particular service.
• Special Districts are more responsive to their constituents.
• It could take over new services one at a time and accommodate to the administration of the
service rather than taking on many services as would happen with incorporation. It could
start out slowly with low administrative cost services such as contracting for refuse removal
and animal control.
• It may not necessitate any new taxes or fees.
• . By contracting out for new services, additional RCSD employees may not be necessary.
Disadvantages of an Expanded RCSD
• It takes on more responsibilities and liabilities.
• It could require a larger staff.
10
EXPANDING RCSD SERVICES
• The permanence of a service district is less secure, as State and LAFCO mandates could
change in the future. Rossmoor may have to revisit the governance issue all over again.
• There is always the chance that funds may be raided by the state.
• There is no guarantee that the RCSD can deliver a service less expensively than the county.
• It could hinder the regional planning of services.
WHAT AN EXPANDED RCSD WOULD LOOK LIKE
Depending on what services the District assumes, its administrative office could remain as is or
it may have to expand. It could add space to the existing building at Rush Park or it could install a
modular building. Staff may have to be expanded as new services are added. Acquiring the funds
and the approval to contract with the Sheriff for law enforcement services will require a certain
amount of administration by staff. It will require the outfitting of an office so that deputies can have
phones and computers to file their reports. The General Manager will need to interface with the
Chief and the RPC advisory committee. Some periodic administration of the contract will be
required. The extent of his time for these tasks will be determined as it is experienced.
PROCESS FOR ACQUIRING LATENT POWERS
Once a desire for a new service is determined, the process for acquiring new services is spelled
out by LAFCO. There are basically two steps involved. The first step is for the RCSD Board to
propose and hold public hearings for a resolution applying for the service. If adopted, they file a
certified copy of the resolution with LAFCO accompanied with a plan and financial information.
The LAFCO Commission will then hold a public hearing and consider approval of the resolution.
To add services currently provided by another agency to CSD powers requests consent from the
affected agency. The affected services would include police protection, public works and animal
control. If LAFCO approves the application, it then goes into effect.
APPLICATION PROCESS IN DETAIL
This section details the application process through excerpts from the California Government
Code.
Initiated by affected CSD
56824.10. Commission proceedings for the exercise of new or different functions or classes of
services by special districts may be initiated by a resolution of application in accordance with this
article. •
Resolution of application
56654. (a) A proposal for a change of organization or a reorganization may be made by the
adoption of a resolution of application by the legislative body of an affected local agency.
(b) At least 20 days before the adoption of the resolution, the legislative body may give mailed
notice of its intention to adopt a resolution of application to the commission and to each interested
agency and each subject agency. The notice shall generally describe the proposal and the affected
territory.
11
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
(c) Except for the provisions regarding signers and signatures, a resolution of application shall
contain all of the matters specified for a petition in Section 56700 and shall be submitted with a plan
for services prepared pursuant to Section 56653.
Service Plan Requirement
56653. (a) Whenever a local agency or school district submits a resolution of application for a
change of organization or reorganization pursuant to -this part, the local agency shall submit with the
resolution of application a plan for providing services within the affected territory.
(b) The plan for providing services shall include all of the following information and any
additional information required by the commission or the executive officer:
(1) An enumeration and description of the services to be extended to the affected territory.
(2) The level and range of those services.
(3) An indication of when those services can feasibly be extended to the affected territory.
(4) An indication of any improvement or upgrading of structures, roads, sewer or water facilities,
or other conditions the local agency would impose or require within the affected territory if the
change of organization or reorganization is completed.
(5) Information with respect to how those services will be financed.
Additional requirements
56824.12. (a) A proposal by a special district to provide a new or different function or class of
services within its jurisdictional boundaries shall be made by the adoption of a resolution of
application by the legislative body of the special district and shall include all of the matters specified
for a petition in Section 56700, and be submitted with a plan for services prepared pursuant to
Section 56653. The plan for services for purposes of this article shall also include all of the following
information:
(1) The total estimated cost to provide the new or different function or class of services within
the special district's jurisdictional boundaries.
(2) The estimated cost of the new or different function or class of services to customers within
the special district's jurisdictional boundaries. The estimated costs may be identified by customer
lass.
(3) An identification of existing providers, if any, of the new or different function or class of
services proposed to be provided and the potential fiscal impact to the customers of those existing
providers.
(4) A plan for financing the establishment of the new or different function or class of services
within the special district's jurisdictional boundaries.
(5) Alternatives for the establishment of the new or different functions or class of services
within the special district's jurisdictional boundaries.
(b) The clerk of the legislative body adopting a resolution of application shall file a certified copy
of that resolution with the executive officer. Except as provided in subdivision (c), the commission
shall process resolutions of application adopted pursuant to this article in accordance with Section
56824.14.
(c) (1) Prior to submitting a resolution of application pursuant to this article to the commission,
the legislative body of the special district shall conduct a public hearing on the resolution. Notice of
12
EXPANDING RCSD SERVICES
the hearing shall be published pursuant to Sections 56153 and 56154. (2) Any affected local agency,
affected county, or any interested person who wishes to appear at the hearing shall be given an
opportunity to provide oral or written testimony on the resolution.
Form of application: contents
56652. Each application shall be in the form as the commission may prescribe and shall contain
all of the following information:
(a) A petition or resolution of application initiating the proposal.
(b) A statement of the nature of each proposal.
(c) A map and description, acceptable to the executive officer, of the boundaries of the subject
territory for each proposed change of organization or reorganization.
(d) Any data .and information as may be required by any regulation of the commission.
(e) Any additional data and information, as may be required by the executive officer, pertaining
to any of the matters or factors which may be considered by the commission.
(f) The names of the officers or persons, not to exceed three in number, who are to be furnished
with copies of the report by the executive officer and who are to be given mailed notice of the
hearing.
LAFCO Process
56824.14. (a) The commission shall review and approve or disapprove with or without
amendments, wholly, partially, or conditionally, proposals for the establishment of new or different
functions or class of services within the jurisdictional boundaries of a special district after a public
hearing called and held for that purpose.
(b) At least 21 days prior to the date of that hearing, the executive officer shall give mailed notice
of the hearing to each affected local agency or affected county, and to any interested party who has
filed a written request for notice with the executive officer. In addition, at least 21 days prior to the
date of that hearing, the executive officer shall cause notice of the hearing to be published in
accordance with Section 56153 in a newspaper of general circulation that is circulated within the
territory affected by the proposal proposed to be adopted.
(c) The commission may continue from time to time any hearing called pursuant to this section.
The commission shall hear and consider oral or written testimony presented by any affected local
agency, affected county, or any interested person who appears at any hearing called and held
pursuant to this section.
13
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
CHAPTER 4: ROSSMOOR
.INCORPORATION
SUMMARY
An analysis for Rossmoor to incorporate as a city was carried out by a subcommittee of the RPC
as part of its initiative to consider governance options for Rossmoor. The analysis considered the
delivery of municipal services and financial and governance aspects for incorporation. The results
indicate that, in spite of conventional wisdom, incorporation could be financially viable. Although a
(utility) tax would be required, it likely would be less than those of the neighboring cities. The
advantages of being a city are:
• Rossmoor could tailor municipal services and codes to match the unique needs of the
community.
• There would be control over deployment of law enforcement resources.
• Municipal services such as permits would be obtained locally instead of in Santa Ana.
• Prestige, community identification and regional influence would be enhanced.
• The present RCSD offices could be expanded to what would be required for the city
administration.
The disadvantages are the increased responsibilities and liabilities that a city assumes.
INTRODUCTION
This report is part of the Rossmoor Planning Committee's initiative to explore governance
options for the unincorporated community of Rossmoor. It is authored by an RPC subcommittee
of Rossmoor residents who researched and studied this option and incorporates financial analysis
prepared by Burr Consulting and EPS. The purpose of the report is to provide information to the
residents of the community and others about incorporating Rossmoor as a city; it is not intended to
advocate for or against this option.
The conventional wisdom has been that Rossmoor cannot become a city because it has an
insufficient sales tax base, it is too small to achieve economies of scale and funding would be
inadequate especially with cuts in the VLF for new cities. However, to our knowledge this has never
been studied and reported or documented. While it is the intention here to do just that, it must be
recognized that this report is not the final word. There may well need to be refinements with the
financial data and the governance considerations and requirements, but this report provides a
baseline from which to proceed if desired. If the community decides to petition for incorporation,
LAFCO requires that a comprehensive fiscal analysis be conducted.
The report is organized into several major sections. The first section is a discussion of the
delivery of municipal services to Rossmoor. The second section looks at the financial implications
• of a Rossmoor city; that is, what are the revenues that would be expected, what are the expenses that
would be incurred to provide a satisfactory level of municipal services and what would be the
resulting shortfall, if any. The third section considers the advantages and disadvantages of cityhood.
While this can be somewhat subjective, the goal was to make it as objective as possible but the
14
ROSSMOOR INCORPORATION
readers should make their own assessment of this. The next section attempts to describe what a
Rossmoor city would be like. The last section deals with the process'for incorporation.
MUNICIPAL SERVICES
The purpose of a governance entity is to provide services to the residents within its boundaries.
Rossmoor, as an unincorporated area, currently obtains its services from the County of Orange, the
Rossmoor Community Services District (RCSD), the Rossmoor -Los Alamitos Sewer District and
the Orange County Fire Authority. These services are categorized as regional and municipal
services. The regional services are services provided county such as the courts, jails, health,
children services and beaches. The municipal services consist of law enforcement (sheriff), public
works, animal control, planning, zoning, code enforcement, parks and recreation.
Chapter 2 details the municipal and regional services provided to Rossmoor. If Rossmoor
incorporates, the county's regional services would remain the same. Therefore, only the municipal
services need to be considered when evaluating incorporation.
Rossmoor is in a unique and desirable position with respect to the requirements that would be
placed on it as a city. Those requirements would be fewer than what most cities have to deal with.
For one, it is built out so there would not be issues related to development. Because it is a partially
walled enclave, it has no arterial thoroughfares and no traffic lights. It has only a small commercial
strip (Rossmoor Square located at its Northeast corner) and has no industry. All these factors
reduce the amount of services below what a city normally has to provide. Rossmoor has a very low
crime rate. Its sewer needs are already well provided by the Los Alamitos - Rossmoor Sewer District
so no change is needed for that. It would also remain part of the Orange County Fire Authority
without change. What is left to provide then are a limited number of municipal services. The main
ones are law and code enforcement, public works, building and planning. These services, presently
provided by the County, would be most likely contracted out but could be provided by the new city
directly. The services that the RCSD currently provides, such as maintaining the parks, recreation,
parkway trees, street sweeping and lighting, would be transferred to the city.
A Rossmoor city with a population of about 10,000 would not be the smallest city in Orange
County. That distinction belongs to Villa Park with a population about 6,000 and an area slightly
larger than Rossmoor. Villa Park does not provide such services as parks, recreation and sidewalk
maintenance, but is responsible for other services such as sewers that a Rossmoor city would not be
responsible for since those are already provided by the Rossmoor -Los Alamitos Sewer District.
Villa Park administers its services very efficiently with a city staff of ten. It contract out for its
municipal services. As such, Villa Park can serve as an administrative model for a Rossmoor city.
ANALYSIS
FINANCIAL ANALYSIS
When considering a governance option, the overriding question is usually what will be the cost
to the resident taxpayer. This analysis attempts to answer that question. Table 4 -1 summarizes the
expected revenues and expenses for a Rossmoor city. The attached consultant report shows the
details of the data that were developed by the consultants (Burr and EPS) that the RPC retained for
the governance studies. The sources for the data are noted there.
Revenues. Presently, about $0.5M of Rossmoor's property tax goes to the RCSD and about
$0.65M goes to the County. The total amounts to $1.15M or 9.6% of property taxes going to pay
15
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
for municipal and regional services provided by the County and RCSD. With incorporation, about
$0.82M would go to Rossmoor, though this is subject to negotiations. The remainder goes to the
County for its regional services. Sales tax revenues are from the Rossmoor Square businesses that
presently go to the county. The other revenues in Table 4 -1, except for the Lighting Assessment,
also presently go to the County. The vehicle license fee (VLF) revenues will depend upon whether
the state legislature reinstates the fees taken from new cities (AB 1602). If it does, it would also
include a boost for the first five years for a new city. The revenue column in Table 4 -1 shows two
revenue streams, one with the present VLF law and a 7% utility users' tax and the other with the
restored VLF and with a 3% utility tax. The two totals reflect the range of revenues that could
reasonably be expected.
Expenditures. The biggest expenditure item is for law enforcement. The law enforcement
figures for this shown in Table 4 -1 (and in the consultant report) are taken from the LAFCO MSR
report for the costs provided by the county for the services of the Orange County Sheriff. It is also
in line with contracts that Villa Park and Laguna Woods have with the Sheriff. The facilities, parks,
recreation, trees, street lighting and street sweeping are from what they presently cost the RCSD.
Public works expenditures are primarily those for maintaining roads, curbs, gutters and sidewalks
presently provided by the county. Urban Development expenditures are those for home building
and remodeling services as detailed in the consultant report. The figures used were obtained by
examining similar small cities and averaging their-costs.
The results show that a utility tax would be needed to balance a budget and to build up a surplus.
A utility tax rate of 3 %, less than charged by Los Alamitos (6 %) and Seal Beach (11 %), appears
sufficient if the VLF is restored to provide a positive operating margin.
Table 4 -1
Summary of Proposed Budget for Rossmoor City
Revenues
Taxes $1.55 M
Utility Tax $0.90 M $0.4 M (3% tax)
Licenses & Permits $0.15 M
Vehicle License Fees $0.07 M $0.59 (if AB 1602 passes)
Other Intergovernmental $0.12 M
Fines & Forfeitures $0.01 M
Service Charges $0.14 M
Misc. $0.04 M
Total Revenues $3.07 M $3.08 M (if AB 1602 passes)
Expenditures
Administration $1.00 M
Law Enforcement $1.17 M
Urban Development $0.33 M
Parks & Recreation $0.15 M
Streets & Sidewalks $0.41 M -
Total Expenditures $3.05 M
Surplus $0.02 M $0.03 M
Other costs that will need funding:
Start up costs
Capital improvements
16
•
ROSSMOOR INCORPORATION
ADVANTAGES TO INCORPORATION
• It would be a permanent form of governance. There would be no need to revisit the issue
with LAFCO or the county again in the future.
• It would provide the greatest amount of local control over services.
• Codes and ordinances could be tailored to local desires and needs.
• It would provide the greatest control of revenue streams.
• Problems could be resolved locally instead of having to go and deal with Santa Ana.
• A city would have more prestige than an unincorporated area and more influence in dealing
with regional issues.
• It could control its own zoning.
DISADVANTAGES TO INCORPORATION
• Start -up costs could be significant.
• A city takes on more liability though that is covered by insurance.
• Taxes may be needed to make up for budget shortfalls.
• It would have to take on the responsibility of dealing with state and county agencies.
• It would have to establish its own general plan and update the housing element of that plan
every 5 years.
• It would be subject to state mandates.
WHAT A ROSSMOOR CITY WOULD LOOK LIKE
The city hall for a Rossmoor city would in all probability be located where the present RCSD
office is at Rush Park. There is room to expand the building as more office space is needed. The
present services provided by the RCSD would be taken over by the city. Staff would have to be
increased, but again using Villa Park as a model, the operation of the city could be lean. Most of the
services would likely be contracted out. The reserves of the RCSD, presently about $1.4 M, would
roll over to the city which then could be used for start-up costs, capital costs and reserves. The city
council meetings could be held much like they are now for the RCSD Board of Directors at the
Rush Park auditorium. It is possible that meetings may have to be more frequent than once per
month as it is presently with the RCSD.
While "economy of scale" is often stated as a goal for providing municipal services, a small lean
operation can sometimes achieve greater economies than a larger operation because of less
bureaucracy. This can be seen by comparing Villa Park and Los Alamitos per capita costs. Villa
Park per capita cost is $446 while Los Alamitos, with twice the population, has a per capita cost of
$791. This is not a complete comparison because more services are provided by Los Alamitos;
nevertheless, it is instructive.
A Rossmoor city could in effect combine economy of scale with a lean operation. The economy
of scale is achieved in that some services such as the sewer and fire fighting services are in effect a
17
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
joint powers authority. Almost all of the services would be contracted with large providers that
already have economies of scale that Rossmoor would share, most notably the Orange County
Sheriff. The Sheriff costs for law enforcement are less than half what it would cost for Rossmoor to
contract with Los Alamitos or Seal Beach. The services presently provided by the RCSD would be
taken over by the city. These services have a track record of experience and economy by the RCSD
that should transfer over to the city. There is every reason to believe that the past strong
participation of community volunteers would continue with a Rossmoor city.
PROCESS FOR INCORPORATION
There are two ways to initiate incorporation:
1. By petition of at least 25% of the registered voters in Rossmoor.
2. By resolution of the affected local agency (RCSD).
LAFCO would then determine if a satisfactory exchange of property tax will take place (the need
to be "revenue neutral with the county") and if the city would be financially viable.
If LAFCO gives its approval, an election is then held and at least 50% of those voting is required
for passage.
The road to incorporation is not easy but it is doable. Two cities in Orange County have
incorporated over the last 5 years. It is up to the Rossmoor residents if they want to take this path.
•
18
ANNEXATION TO LOS ALAMITOS
CHAPTER 5: ANNEXATION TO LOS
ALAMITOS
EXECUTIVE SUMMARY
This is a report on the Annexation Study conducted by the Rossmoor Planning Committee
(RPC) Annexation Subcommittee. Annexation of Rossmoor to Los Alamitos is one of the
Governance options that was studied. Los Alamitos is not currently advocating Annexation. Los
Alamitos has offered to participate in a study if that is the option that Rossmoor wishes to pursue.
While the Governance options study involves finding effective ways of delivering municipal
services now provided by the County, it has a broader impact as it also involves financial, political
and quality of life issues. An inventory of regional and municipal services and utilities was developed
and reviewed to determine their impact on levels of service. Generally, there was little or no impact
on the regional services and utilities. However, there could be a significant improvement on the level
of service for municipal services now delivered by the County. The governmental structure for
delivering services was also reviewed along with the level of representation Rossmoor would have to
influence the delivery of those services. Quality of life issues such as preservation of the Rossmoor
identity, ambiance, influence over actions by. neighboring cities and influence for obtaining regional
services were reviewed.
The study revealed that the County budget is developed for the total unincorporated area, and it
is not broken down by geographical areas such as Rossmoor. Therefore, the cost of services from
county data can only be obtained on a per capita basis which can be grossly inaccurate when
comparing a built -out area such as Rossmoor to some of the recent developed areas in South
County. To get around this problem, our consultants have projected, item by item, the new
operating costs and new revenues for Los Alamitos that would be incurred if they annexed
Rossmoor. Assuming that Rossmoor would pay the same 6% utility users' tax that is now paid by
residents and businesses in Los Alamitos, there is still an estimated deficit of $0.4 million. To break
even, the city would need an increase in its tax revenue.
Rossmoor residents would have to pay not only the Los Alamitos current utility users' tax of
about $234 per home annually (based on an assumed monthly utilities cost of $325), but also a
special tax or assessment of $105, per home each year, which would be collected only in Rossmoor.
If assembly bill AB1602 passes, then some VLF funds would be returned to the cities, and the
special tax or assessment on Rossmoor homes would be unnecessary, although the 6% utility users'
tax would be necessary.
These estimates may be high because the consultants used a conservative approach to estimate
the cost burden that Los Alamitos would take on if it annexed Rossmoor. Los Alamitos may see
ways that the consultants' assumed costs could be reduced.
19
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
ANALYSIS
GOVERNANCE AND SERVICES PROVIDERS includes four categories: Governance,
Regional Services, Utilities, and Municipal Services. The items in each category are listed in Table 5-
1.
GOVERNANCE
•
Representation
As indicated in Chapter 2, currently governance is provided by RCSD and the County Board of
Supervisors. While Rossmoor residents have 100% representation on the RCSD Board of Directors,
they only have a maximum of 20% representation on the Board of Supervisors. If Rossmoor were
annexed to Los Alamitos, the City Charter requires that seven councilmanic districts be established
on the basis of population, which would provide Rossmoor with slightly less than 50%
representation.
Access
Currently, the offices of County Municipal services providers are in Santa Ana (Grading
Inspection is in Laguna Hills), requiring additional time and travel to get service or resolve issues.
Annexation to Los Alamitos would improve access and reduce travel time for services. Also, access
to decision makers would be enhanced due to reduced levels of government.
Planning /Zoning
Currently Rossmoor has very little or no influence over planning /zoning decisions of adjacent
cities that can have a significant impact on Rossmoor residents. An example is the development of
the shopping center a few years ago. If Rossmoor were part of Los Alamitos, residents could have
more influence on such decisions.
Environmental
The County as a responsible agency can comment on the impact of environmental documents,
but that seldom happens. Rossmoor residents can also comment on environmental documents, but
that has resulted in little or no influence on the approval of the documents. Cities have control over
development projects and the approval authority of environmental documents for those projects
located within the city. Rossmoor residents would have a significant voice in the type of projects
and the mitigation of environmental impacts if they were a part of the city.
Transportation
OCTA with assistance from the cities is responsible for public transportation such as busses and
rail. As traffic congestion increases and a larger segment of the residents reach the age where they
can no longer drive, public transportation becomes increasingly important. Cities can encourage
OCTA to initiate transportation studies and require the inclusion of transportation centers in new
developments as mitigation measures if appropriate. The ability of residents to get attention for their
transportation needs and to take action to satisfy those needs is greatly enhanced by being a part of a
city.
20
ANNEXATION TO LOS ALAMITOS
Identity /Ambiance
Rossmoor has a significant name identity and an ambiance such as trees and spaciousness envied
by many people. These are quality of life issues that need to be maintained, and can be, by including
them as a condition of annexation.
Table 5 -1
GOVERNANCE AND SERVICES PROVIDER
CATEGORY PROVIDER LOS ALAMITOS
Governance
Representation County /RCSD City Council
Access County /RCSD City
Planning /Zoning County City
Environmental County City
Transportation• County /OCTA City /OCTA
Identity /Ambience County /RCSD City /Rossmoor
Regional Services
Fire & Paramedic OC Fire Same
Schools LAUSD Same
Flood Control OC Flood Control Same
Sewer R -LA Sewer District Same
Vector Control Vector Control Dist. Same
Utilities
Electricity Edison Same
Gas The Gas Company Same
Water Golden State Same
Telephone Various Same
Cable Time Warner Same
Municipal Services
Law Enforcement County /CHP City
Streets & Sidewalks County City
Permits County City
Code Enforcement County City
Traffic Engineering County City
Trash Collection County (CR&R franchise) City (Briggeman Disposal)
Animal Control County City of Long Beach
Street Lighting RCSD City
Street Sweeping RCSD City
Rossmoor Way Median RCSD City
Parkway Trees RCSD City
Parks & Recreation RCSD City
Signature Wall Maintenance RCSD City
REGIONAL SERVICES
The providers of Fire & Paramedic, Schools, Flood Control, Sewer and Vector Control services
for Rossmoor will remain the same if annexed by Los Alamitos.
21
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
UTILITIES
The providers of Electricity, Gas, Water, Telephone and Cable service for Rossmoor will remain
the same if annexed by Los Alamitos.
MUNICIPAL SERVICES
As indicated in Chapter 2, there are no significant deficiencies in the services provided by the
RCSD. Except, there may be opportunities to enhance the delivery of recreational activities if
. Rossmoor were annexed. There are, however, a number of deficiencies in services provided by the
County.
Improvement in Law Enforcement services is currently under way, and should be resolved by
contracting with the Sheriff. If Rossmoor is annexed to Los Alamitos, the city would provide these
services.
Annexation would provide an opportunity to influence policy development and to improve the
delivery of most other Municipal services provided by the County. This would result through
improved political representation, more immediate access to service providers, and development of
codes more relevant to our area.
Streets & Sidewalks
Generally these are in good condition, except for repair of damage to sidewalks due to tree
roots.
Permits
The County Permit Office is in Santa Ana, which requires travel time to get a permit or deal with
permit issues. The Grading Inspection Office is in Laguna Hills, that requires even more travel time,
and the Inspectors charges include travel time. Permit service could be significantly improved by
annexing to Los Alamitos because of closer access and the elimination of most of the bureaucratic
steps and checks that are involved when dealing with the county.
Code Enforcement
There has been a backlog problem with code enforcement due to shortage of personnel.
Outside contract officers have been working on the backlog and the county expects that it will be
eliminated by the end of FY 2005 -06. The county currently does not provide any information on
complaints beyond when the cases have been opened or closed. This blanket policy is intended to
eliminate problems that might arise in the future prosecution of cases in court. The result is a
complete loss of transparency. Code enforcement would be improved by being part of a city which
would act on egregious nuisances without waiting for complaints to be filed, and ought to provide
more information to the community on the follow -up on complaints.
Traffic Engineering
The standards for traffic devices and solutions to traffic problems on arterial streets and
freeways are not always applicable for resolving problems in a city, and the process to gain approval
for deviations from those standards or adopting new standards are more complex and many times
unsuccessful. Engineering personnel in a city would be more familiar with traffic issues in the city
and could resolve problems more quickly.
22
ANNEXATION TO LOS ALAMITOS
Trash Collection
Los Alamitos contracts with Briggeman Disposal for trash removal and uses specially designed
trash containers to avoid direct man - handling of containers. Rossmoor, according to a recent survey
prefers the present arrangement with CR &R that does not require the use of special containers.
Animal Control
The animal control shelters would be closer with easier access.
FINDINGS
• Our consultants have projected, item by item, the new operating costs and new revenues for
Los Alamitos that would be incurred if the city annexed Rossmoor. Assuming that
Rossmoor would pay the same 6% utility users' tax that is now paid by residents and
businesses in Los Alamitos, there is still an estimated deficit of $0.4 million. To break even,
the city would have to increase its tax revenue. This would require Rossmoor residents to
pay a special tax or assessment of about $105 per home per year, in addition to the utility
users' tax of 6% on their gas, electric, telephone and waster bills. If assembly bill AB 1602
passes, the special tax or assessment would be unnecessary.
• Law Enforcement Services and Traffic Enforcement Services are inadequate, but will be
improved by a proposal now being developed with the sheriff.
• The level of municipal services performed by RCSD is appropriate and responsive to the
wishes of the community.
• The level of municipal services performed by the County has declined and this trend is
expected to continue.
• With annexation it is believed that the level of services will improve due to closer access to
service providers and a simpler organizational structure that enhances access to decision
makers.
• Increased representation will provide the opportunity to develop policy and codes more
appropriate for Rossmoor.
• Rossmoor will have direct influence on the planning /zoning actions of Los Alamitos.
Rossmoor will have a direct voice in determining city projects and the mitigation of negative
impacts that projects might have on Rossmoor. The combined size of Rossmoor annexed
to Los Alamitos would arguably give more influence on Seal Beach to mitigate impacts of
their projects.
FINANCIAL
Owners of single family homes in Los Alamitos and Rossmoor currently have exactly the same
property tax structure, except for bonds already approved for acquisition of Rush Park and
reconstruction of the signature brick wall. The residents of Rossmoor would continue to be
responsible for payment of tax assessments on these bonds. Thus, there would be no change for
Rossmoor residents in the property tax and the levies shown on the Property Tax Bill.
23
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
Los Alamitos does have a utility tax on telephone, electrical, gas, and water, that are shown as a
part of the monthly bills. Currently the tax rate is 6 %. At that tax rate there would be a $0.4 million
deficit. Rossmoor would have to tax itself to pay that deficit.
The current State fund allocations further discourage annexation, but that could change as there
is proposed legislation, AB 1602, to allocate more vehicle license fee revenue to the annexing city.
With this possible transfer, there would be a surplus after annexing Rossmoor and Rossmoor would
pay only the new utility users' tax.
CONCLUSIONS
• Annexation to Los Alamitos could provide the opportunity to have improved delivery of
municipal services, such as law enforcement, recreation, permitting, etc.
• With annexation by Los Alamitos, there would be a six percent utility tax that Rossmoor
residents would be required to pay.
• If AB 1602 does not pass, there would be an additional cost to Rossmoor of about $105 per
home based upon our preliminary financial analysis
• Compared with incorporation, annexation offers the potential for greater efficiencies due to
scale and for spreading out financial risk inherent in operating a city.
• There could be a possible loss of Rossmoor identity as a result of annexation by Los
Alamitos. •
• For Los Alamitos, there may be less political control since Rossmoor would be nearly 50%
of the new city's voters.
• Being part of a larger city with 20,000 plus population could provide Rossmoor with more
influence on the actions of other cities (particularly Seal Beach) who propose actions that
could have a negative impact on Rossmoor.
• As a city of 20,000 plus, Rossmoor would have a greater opportunity to get attention of
regional agencies to address needs in the community.
24
ANNEXATION TO SEAL BEACH
CHAPTER 6: ANNEXATION TO SEAL
BEACH
EXECUTIVE SUMMARY
This is a report on the Annexation Study conducted by the Rossmoor Planning Committee
(RPC) Annexation Subcommittee. Annexation of Rossmoor to Seal Beach is one of the
Governance options that was studied. Seal Beach is not currently advocating annexation and has
indicated no interest mainly because of a perceived negative financial impact on the city.
While the Governance options study involves finding effective ways of delivering municipal
services now provided by the County, it has a broader impact as it also involves financial, political
and quality of life issues. An inventory of regional and municipal services and utilities was developed
and reviewed to determine their impact on levels of service. Generally, there was little or no impact
on the regional services and utilities. However, there could be a significant improvement on the level
of service for municipal services now delivered by the County. The governmental structure for
delivering services was also reviewed along with the level of representation that Rossmoor would
have to influence the delivery of those services. Quality of life issues such as preservation of the
Rossmoor identity, ambiance, influence over actions by neighboring cities and influence for
obtaining regional services were reviewed.
The study revealed that the County budget is developed. for the total unincorporated area, and it
is not broken down by geographical areas such as Rossmoor. For this reason, the cost of services
can only be obtained from the County on a per capita basis which can be grossly inaccurate when
comparing a built -out area such as Rossmoor to some of the recently developed areas in South
County. To get around this problem, our consultants have projected, item by item, the new
operating costs and new revenues for Seal Beach that would be incurred if they annexed Rossmoor.
Assuming that Rossmoor would pay the same 11% utility use tax that is now paid by residents and
businesses in Seal Beach, there would be an estimated surplus of $0.6 million. Rossmoor residents
would have to pay the current Seal Beach utility users' tax, of about $396 per home each year (based
on an assumed combined monthly $300 cost for gas, electric and telephone service). If Assembly
bill AB 1602 passes, then some vehicle licensing fee revenue would be returned to the city and there
would be a more significant surplus for Seal Beach.
•
25
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
• , ANALYSIS
GOVERNANCE AND SERVICES PROVIDERS includes four categories: Governance,
Regional Services, Utilities, and Municipal Services. The items in each category are listed in Table 6-
1.
GOVERNANCE
Representation
As indicated in Chapter 2, currently governance is provided by RCSD and the County Board of
Supervisors. While Rossmoor residents have 100% representation on the RCSD Board of Directors,
they only have a maximum of 20% representation on the Board of Supervisors. If Rossmoor were
annexed to Seal Beach, it would account for about 30% of the voters. It is not clear how Rossmoor
would be represented on the city council, which now has five members elected from diverse council
districts. The current city manager of Seal Beach has told the RPC that the council will remain at
five members, even if annexation of Rossmoor were to take place, which he says will not happen.
Access
Currently, the offices of County Municipal services providers are in Santa Ana (Grading
Inspection is in Laguna Hills), requiring additional time and travel to get service or resolve issues.
Annexation to Seal Beach would improve access and reduce travel time for services. Also, access to
decision makers would be enhanced due to reduced levels of government.
Planning /Zoning
Currently Rossmoor has very little or no influence over planning /zoning decisions of adjacent
cities that can have a significant impact on Rossmoor residents. Examples are the shopping centers
adjacent to Rossmoor that were developed along Seal Beach Boulevard by the City of Seal Beach. If
we were part of Seal Beach, Rossmoor residents could have direct influence on future developments.
Environmental
The County as a responsible agency can comment on the impact of environmental documents,
but that seldom happens. Rossmoor residents can also comment on environmental documents, but
that has resulted in little or no influence on the approval of the documents. Cities have control over
development projects and the approval authority of environmental documents for those projects
located within the city. Rossmoor residents would have a significant voice in the type of projects
and the mitigation of environmental impacts if they were a part of the city.
Transportation •
OCTA with assistance from the cities is responsible for public transportation such as busses and
rail. As traffic congestion increases and a larger segment of the residents reach the age where they
can no longer drive, public transportation becomes increasingly important. Cities can encourage
OCTA to initiate transportation studies and require the inclusion of transportation centers in new
developments as mitigation measures if appropriate. The ability of residents to get attention for their
transportation needs and to take action to satisfy those needs is greatly enhanced by being a part of a
city.
26
ANNEXATION TO SEAL BEACH
Identity /Ambiance
Rossmoor has a"significant name identity and an ambiance such as trees and spaciousness envied
by many people. These are quality of life issues that need to be maintained, and can be, by including
them as a condition of annexation.
Table 6 -1
GOVERNANCE AND SERVICES PROVIDER
CATEGORY PROVIDER SEAL BEACH
Governance
Representation County /RCSD City Council
Access County /RCSD City
Planning /Zoning County City
Environmental County City
Transportation' County /OCTA City /OCTA
Identity /Ambience County /RCSD City /Rossmoor
Regional Services
Fire & Paramedic OC Fire Same (through City contract)
Schools LAUSD Same
Flood Control - OC Flood Control Same
Sewer Collection R -LA Sewer District City
Sewer Treatment OC Sanitation District Same
Vector Control Vector Control Dist. Same
Utilities
Electricity Edison Same
Gas The Gas Company Same
Water Golden State City
Telephone Various Same
Cable Time Warner Adelphia
Municipal Services
Law Enforcement County /CHP City
Streets & Sidewalks County City
Permits County City
Code Enforcement County City
Traffic Engineering County City
Trash Collection County (CR &R franchise) City (Consolidated Disposal)
Animal Control County City •
Street Lighting RCSD City
Street Sweeping RCSD City
Rossmoor Way Median RCSD City
Parkway Trees RCSD City
Parks & Recreation RCSD City
Signature Wall Maintenance RCSD City
REGIONAL SERVICES
The providers of Fire & Paramedic, Schools, Flood Control, Sewer Treatment, and Vector
Control services for Rossmoor will remain the same if annexed by Seal Beach. Although the city
27
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
provides sewer collection service directly, LAFCO approval would be required to change
Rossmoor's sewer collection provider from RLASD to Seal Beach.
UTILITIES
The providers of Electricity, Gas, and Telephone service for Rossmoor will remain the same if
annexed by Seal Beach. Although Seal Beach provides water service directly, it would not
•
necessarily assume water service in Rossmoor. The Cable service provider would likely be Adelphia
instead of Time Warner.
MUNICIPAL SERVICES
As indicated in Chapter 2, there are no significant deficiencies in the services provided by the
RCSD. Except, there may be opportunities to enhance the delivery of recreational activities if
Rossmoor were annexed. There are, however, a number of deficiencies in services provided by the
County.
Improvement in Law Enforcement services is currently under way, and should be resolved by
contracting with the Sheriff. If Rossmoor is annexed to Seal Beach, the city would provide these
services.
Annexation would provide an opportunity to influence policy development and to improve the
delivery of most other Municipal services provided by the County. This would result through
improved political representation, more immediate access to service providers, and development of
codes more relevant to our area.
Streets & Sidewalks
Generally these are in good condition, except for repair of damage to sidewalks due to tree roots
Permits
The County Permit Office is in Santa Ana, which requires travel time to get a permit or deal with
permit issues. The Grading Inspection Office is in Laguna Hills, that requires even more travel time,
and the Inspectors charges include travel time. Permit service could be significantly improved by
annexing to Seal Beach because of closer access and the elimination of most of the bureaucratic
steps and checks that are involved when dealing with the county.
Code Enforcement
There has been a backlog problem with code enforcement due to shortage of personnel.
Outside contract officers have been working on the backlog and the county expects that it will be
eliminated by the end of FY 2005 -06. The county currently does not provide any information on
complaints beyond when the cases have been opened or closed. This blanket policy is intended to
eliminate problems that might arise in the future prosecution of cases in court. The result is a
complete loss of transparency. Code enforcement would be improved by being part of a city which
would act on egregious nuisances without waiting for complaints to be filed, and ought to provide
more information to the community on the follow -up on complaints.
Traffic Engineering .
The standards for traffic devices and solutions to traffic problems on arterial streets and
freeways are not always applicable for resolving problems in a city, and the process to gain approval
for deviations from those standards or adopting new standards are more complex and many times
28
ANNEXATION TO SEAL BEACH
unsuccessful. Engineering personnel in a city would be more familiar with traffic issues in the city
and could resolve problems more quickly.
Trash Collection
Trash collection is provided directly by Seal Beach's franchisee— Consolidated Disposal —and is
separately billed by the city. Collection occurs at least weekly, but is more frequent in some parts of
the city.
Animal Control
The animal control shelters would be closer with easier access.
FINDINGS
• Our consultants have projected, item by item, the new operating costs and new revenues for
Seal Beach that would be incurred if they annexed Rossmoor. Assuming that Rossmoor
would pay the same 11% utility use tax that is now paid by residents and businesses in Seal
Beach, there is an estimated surplus of $0.6 million. If Assembly Bill AB 1602 were to pass,
then annexation of Rossmoor would have an even healthier effect on Seal Beach.
• Law Enforcement Services and Traffic Enforcement Services are inadequate, but will be
improved by a proposal now being developed with the sheriff.
• The level of municipal services performed by RCSD is appropriate and responsive to the
wishes of the community.
• The level of municipal services performed by the County has declined and this trend is
expected to continue.
• With annexation it is believed that the level of services will improve due to closer access to
service providers and a simpler organizational structure that enhances access to decisions
makers.
• Increased representation will provide the opportunity to develop policy and codes more
appropriate for Rossmoor.
• With annexation Rossmoor will have direct influence on the planning /zoning actions of Seal
Beach. Rossmoor will have a direct voice in determining city projects and the mitigation of
negative impacts that projects might have on Rossmoor.
FINANCIAL
Owners of single family homes in Rossmoor and in the College Park sections of Seal Beach
currently have very similar property tax structures, except for bonds already approved for acquisition
of Rush Park and reconstruction of the Rossmoor signature brick wall. The residents of Rossmoor
would continue to be responsible for payment of tax assessments on these bonds. There would be
very little change for Rossmoor residents in the property tax and the levies shown on the Property
Tax Bill.
Seal Beach does have a utility users' tax on telephone, electrical, and gas that is shown as a part
of the monthly bills. The current utility users' tax rate is 11% (except for households headed by
29
PRELIMINARY ROSSMOOR FUTURE GOVERNANCE OPTIONS
seniors with an annual income below $38,500, for which the utility use tax is waived). Annexation
of Rossmoor at the 11% tax rate would lead to an estimated surplus of $0.6 million.
CONCLUSIONS
• Annexation to Seal Beach could provide the opportunity to have improved delivery of
municipal services, such as law enforcement, permitting, animal control, etc.
• With annexation by Seal Beach, there would be an 11 percent utility • tax payable by
Rossmoor residents.
• It appears that there would be a substantial budget surplus (which would be even more
significant if AB1602 passes) based upon our preliminary financial studies.
• With annexation by Seal Beach, there may be a risk that Rossmoor residents would assume
the risk of high beach maintenance costs and aging infrastructure.
• Compared with incorporation, annexation offers the potential for greater efficiencies due to
scale and for spreading out financial risk inherent in operating a city.
• Since Rossmoor would only represent about 30% of the City, Rossmoor might not have
sufficient political control over decisions directly impacting the Rossmoor area.
• There could be a possible loss of identity as a result of annexation by Seal Beach.
• More influence on the actions of Seal Beach which in the past have had a significant impact
on Rossmoor without any ability of Rossmoor to have a say in the decision.
• As a city of over 35,000, Rossmoor would have a greater opportunity to get attention of
regional agencies to address needs in the community.
30
•
•
, ;t•
• .s.
Burr Consulting
•
Economic & Plannihg Systems, Inc.
Rossmoor Governance
Alternatives: Fiscal Impacts
Report to the Rossmoor Planning
Committee and Orange County
June 2006
Burr Consulting
612 N. Sepulveda Blvd., Suite 8
Los Angeles, CA 90049
(310) 889-0077
www.burrconsulting.com
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,;;
Table of Contents
1. PREFACE 1
Caveats 1
Acknowledgements 1
Authors 1
2. SUMMARY OF FINDINGS 2
Governance 2
Taxes 2
Service Levels 2
Feasibility 3
3. SERVICE PROVIDERS 5
Governance Impacts 6
Provider Impacts 6
Service Level Impacts 6
4. FISCAL IMPACTS 8
Revenues 8
Expenditures 14
5. DETAILED TABLES 20
Burr Consulting and EPS
Preface
1. Preface
This report provides financial and feasibility analysis of governance alternatives for the
unincorporated Rossmoor community.
Caveats
By its nature, this report scopes out likely impacts and feasibility of the various
alternatives to assist the community in considering its options. The report does not and is
not intended to provide a comprehensive analysis of these alternatives.
This report is not a substitute for the detailed financial analysis and planning required to
process proposed governance changes. Once the governance alternative of interest has
been selected and/or formally initiated, the appropriate agency(ies) would conduct a more
detailed analysis of fiscal and other impacts. California law requires the agency initiating
a governance change to submit to the Local Agency Formation Commission (LAFCO) a
service plan including service levels, timing of service extension, service financing and
any infrastructure requirements.' Additional analyses required for LAFCO to consider
governance changes include comprehensive fiscal analysis for incorporation proposals
and cost/fiscal impact analysis for expansion of special district powers. Although not
specifically required by LAFCO, annexing agencies typically conduct their own fiscal
analyses when seriously considering initiating annexations. Similarly, Orange County
would likely conduct its own fiscal analysis once a governance change is initiated.
Acknowledgements
The authors thank the Rossmoor Planning Committee (RPC) members for community -
specific information. The authors extend their gratitude to the various agencies that
provided data and information for this study, including the Orange County LAFCO,
County Executive Office, Orange County Fire Authority, Orange County Transportation
Authority, Rossmoor Community Services District, and the cities of Los Alamitos, Seal
Beach, Villa Park, Laguna Woods, Rancho Palos Verdes, and Palos Verdes Estates.
Orange County, the Rossmoor Community Services District and the Rossmoor
Homeowners Association funded this study.
Authors
This report was prepared by a consultant team —Burr Consulting and Economic &
Planning Systems, Inc. (EPS) —with expertise in municipal finance and urban economics.
Beverly Burr served as lead author. Walter Kieser and Richard Berkson of EPS served as
advisers and reviewers. Cecelia Griego of Burr Consulting provided research assistance.
1 California Government Code § 56653
2 California Government Code § 56800
3 California Government Code § 56824.12
Burr Consulting and EPS 1
•
:Rossmoor Governance Alternatives
2. Summary of Findings
This report provides financial and feasibility analysis of the following governance
alternatives for the unincorporated Rossmoor community:
• annexation of Rossmoor to the City of Los Alamitos,
• annexation of Rossmoor to the City of Seal Beach, and
• incorporation of Rossmoor as an independent city.
Governance
Rossmoor is currently governed by Orange County. Rossmoor residents vote for one of
five members of the County Board of Supervisors. Rossmoor registered voters make up
approximately two percent of registered voters in the second supervisorial district 4
The community would have the most control over governance if it were to incorporate as
a separate city. Expanded powers for the RCSD could also enhance self - governance.
Rossmoor voters would likely elect just under half of council members if annexed to Los
Alamitos, and even fewer of the council members if annexed to Seal Beach or to a
consolidated Los Alamitos -Seal Beach city.
Taxes
Residents in Rossmoor's neighboring cities pay a local tax, called a utility users' tax, on
their electric, gas and telephone bills. This tax is six percent of utility charges in Los
Alamitos, and 11 percent in Seal Beach. Rossmoor residents do not currently pay such a
tax. If the community were to become a city, Rossmoor would need to levy a utility
users' tax to support itself financially as well. The only option that does not involve a
utility users' tax is expansion of the RCSD powers.
Service Levels
The governance options have the potential to change who provides law enforcement,
street, traffic, water, solid waste, landscaping, recreation, planning, permitting, and
animal control service in Rossmoor. Many other municipal services —fire, ambulance,
sewer treatment, electric, gas, library and schools —in Rossmoor would not be affected
by potential governance changes.
Rossmoor incorporation would offer the community the greatest control over service
providers. As an independent city, Rossmoor could choose to provide any of the affected
services directly or to contract with the County, neighboring cities or private companies
4 Orange County Department of Registration and Elections, Statement of Votes, November 5, 2002 General Election,
December 3, 2002.
2 Burr Consulting and EPS
•
Summary of Findings
for those services. Los Alamitos would directly provide law enforcement, street, traffic,
landscaping, recreation, planning, and permitting if Rossmoor annexes to this city. The
solid waste hauler and animal control provider would change as well. In addition to these
changes, water and sewer collection could potentially be provided by Seal Beach if
Rossmoor were annexed to Seal Beach or to a consolidated city.
Governance changes offer potential for improvements in the level of municipal services.
Clearly, law enforcement, traffic enforcement, animal control and permitting service
levels could be improved by governance changes.
Feasibility
Annexation to Los Alamitos may not be financially feasible. This analysis indicates that
even if Rossmoor were to pay the six percent utility tax, annexation could lead to a Los
Alamitos budget deficit of $0.4 million under existing law and a modest positive impact
if proposed legislation (A.B. 1602) is approved. This study makes conservative estimates
of Los Alamitos' costs for servicing Rossmoor. It is possible that Los Alamitos may
study the matter directly and determine that it could service Rossmoor more efficiently
than we have assumed. Another option is that Rossmoor could approve a special tax or
assessment to make this option revenue - neutral for Los Alamitos. Approval by Los
Alamitos City Council and LAFCO would be required. The Rossmoor community could
defeat annexation through a protest process involving petitioning and possibly an
election. Voters in Los Alamitos could potentially be allowed by LAFCO to vote
separately on annexation as well.
Annexation to Seal Beach appears to be financially feasible. This study indicates that
Seal Beach would face a positive fiscal impact under existing law. The City of Seal
Beach has expressed a lack of interest in annexing Rossmoor; however, this could
potentially change based on the preliminary fiscal findings. Procedural hurdles for
annexation are the same as for annexation to Los Alamitos.
Rossmoor cityhood is feasible if the community approves a utility users' tax. Most
likely, such a tax would be lower if Rossmoor incorporates than if it annexes to a
neighboring city. This study indicates a tax in the range of 3 -7 percent would be needed
to fund service levels comparable to existing levels. Advantages include greater control
over service providers and levels as well as land use regulation. Disadvantages include
the potential for inefficiencies related to the small size of the city and the community
accepting financial risk currently shouldered by the County. The community would need
to complete a number of steps to form a city: petition signing, funding a comprehensive
fiscal analysis, and shepherding the proposal through the LAFCO process. Approval by
LAFCO and a majority of Rossmoor voters would also be required.
Expansion of RCSD powers is the simplest change. This option is clearly feasible from a
financial perspective. Approval by the RCSD board and LAFCO would be required.
Advantages include greater control over service and deployment. However, this
approach will not result in Rossmoor control over ordinances and regulatory functions.
Burr Consulting and EPS 3
•
• ▪ Rossmoor Governance Alternatives
•
•
Consolidation of Rossmoor, Los Alamitos and Seal Beach is the most complex option
both financially and procedurally. This option would allow the communities to enjoy
more cost - effective services due to increased scale. However, barriers to consolidation
are significant: the cities of Los Alamitos and Seal Beach have different charters, tax
structures, service configurations and compensation schemes. Procedural complexity is
highlighted by the fact that the last city consolidation in California occurred nearly 40
years ago. Ultimately, a majority of voters in each of the communities would have to
approve consolidation. The authors consider consolidation implausible. However,
functional consolidation through joint service provision is plausible and occurs outside
LAFCO processes. Indeed, Los Alamitos and Seal Beach already benefit from such
consolidation in police dispatch. Other police administrative functions and recreation are
potentially fruitful areas for cost savings through functional consolidation.
4 Burr Consulting and EPS
Service Providers
3. Service Providers
The governance options have the potential to change who provides law enforcement,
street, traffic, water, solid waste, landscaping, recreation, planning, permitting, and
animal control service in Rossmoor. Many other municipal services —fire, ambulance,
sewer treatment, electric, gas, library and schools —in Rossmoor would not be affected
by potential governance changes. -
Summary of Existing Services and Providers
Rossmoor and Vicinity
Current Providers
Service Rossmoor City of Los Alamitos City of Seal Beach
Government (including Orange County City of Los Alamitos City of Seal Beach
finance, administration,
public works, etc.)
Land Use Planning Orange County City of Los Alamitos City of Seal Beach
Water Golden State Water Company 'Golden State Water Company City of Seal Beach
Wastewater Collection Rossmoor/Los Alamitos Sewer Rossmoor/Los Alamitos Sewer City of Seal Beach
District District
Wastewater Treatment Orange County Sanitation Orange County Sanitation Orange County Sanitation
Storm Water Drainage Orange County City of Los Alamitos City of Seal Beach
Roads Maintenance Orange County City of Los Alamitos City of Seal Beach
Street Sweeping Private (Rossmoor CSD City of Los Alamitos Private (City of Seal Beach
contract) contract)
Street Lighting Southern California Edison Southem California Edison Southern California Edison
Median Landscaping Private (Rossmoor CSD City of Los Alamitos City of Seal Beach
contract)
Police Orange County Sheriff City of Los Alamitos City of Seal Beach
Califomia Highway Patrol
Police Dispatch Orange County Sheriff, West -Comm JPA —Los West -Comm JPA —Los
California Highway Patrol Alamitos, Seal Beach and Alamitos, Seal Beach and
Code Enforcement Orange County City of Los Alamitos City of Seal Beach
Animal Control Orange County City of Long Beach (contract) City of Seal Beach
Fire Orange County Fire Authority Orange County Fire Authority Orange County Fire Authority
(City of Seal Beach contract)
Solid Waste CR&R (franchise with County) Briggmann (franchise with City) Consolidated Disposal (franchise
with City)
Parks and Recreation Groundskeeping: Private City of Los Alamitos City of Seal Beach
Facilities: Rossmoor CSD
Recreation: Rossmoor CSD
Tree Landscaping Rossmoor CSD contract City of Los Alamitos City of Seal Beach
reimbursed by County (private)
Schools Los Alamitos Unified School Los Alamitos Unified School Los Alamitos Unified School
District District District
Electricity & Natural Southern California Edison Southern California Edison Southern California Edison
Gas Southem California Gas Southern California Gas Southern California Gas
Swarm LosAlamisos, Seal Beath, Omnre Conm'y, L4FCO, Rossmoor Commtmiti Semites Dirtin, BarrCoasallia, EPS
Burr Consulting and EPS 5
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:Rossmoor Governance Alternatives
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Governance Impacts
The City of Los Alamitos currently elects its five council members at large. The City has
a charter provision that City Councilmembers would be elected by district (with seven
districts) if the population grows to 18,000 or more. Annexation of Rossmoor to Los.
Alamitos would trigger this change in governance for the City. In addition, Rossmoor
would increase the population of Los Alamitos by 83 percent. Rossmoor annexation
would change the Council size, composition, and members.
The City of Seal Beach currently elects its five council members by district. Annexation
of Rossmoor would require the City to either create additional council districts or re -draw
the boundaries of the council districts. Annexation of Rossmoor to Seal Beach would
increase the Seal Beach population by 46 percent. There is significant potential for a
Rossmoor annexation to change the Council composition and members.
Provider Impacts
Los Alamitos would directly provide law enforcement, street, traffic, landscaping,
recreation, planning, and permitting if Rossmoor annexes to this city. The solid waste
hauler and animal control provider would change as well. In addition to these changes,
water and sewer collection could potentially be provided by Seal Beach if Rossmoor
were annexed to Seal Beach or to a consolidated Seal Beach -Los Alamitos city.
Rossmoor incorporation would offer the community the greatest control over service
providers. As an independent city, Rossmoor could choose to provide any of the affected
services directly or to contract with the County, neighboring cities or private companies
for those services.
Expanding RCSD powers would have the least impact on service providers in the
community. Although the community could exercise greater control over the law
enforcement service level with this option, the Sheriff would continue to provide service.
This option might lead to a shift in planning from the County and to an area planning
commission, if approved by the County.
Service Level Impacts
Law enforcement is currently provided by the County Sheriff in Rossmoor; the
neighboring cities each have independent police departments. Response times for high -
priority incidents are substantially faster in Los Alamitos and Seal Beach than in
Rossmoor due to both quicker dispatch and travel times. Clearance rates for serious
(Part I) crimes are substantially higher in Seal Beach and Los Alamitos than in
Rossmoor. If annexed to Seal Beach or Los Alamitos, response times and crime
clearance would likely improve the most. Incorporation or expansion of CSD powers
5 Scott P. Bryant & Associates. Police Services Comparison Survey: Report to the Orange County Local Agency
Formation Commission, November 2004, pages 4 and 9.
6 Burr Consulting and EPS
•
Service Providers
would also likely improve response times, as the community would have greater input
over patrol deployment by the County Sheriff.
Traffic enforcement is currently provided by the California Highway Patrol (CRP) and
supplemented by the Orange County Sheriff in Rossmoor. According to RPC members,
there is little CHP presence in the community and prevalent speeding along certain roads.
RPC members report that supplemental Sheriff enforcement initiated in January 2006 has
improved the service level; however, the Sheriff has not increased staff levels for this
purpose. Each of the governance changes would involve local control over traffic
enforcement, with related service level improvements.
Building and planning permit services are currently provided in Santa Ana, 16 miles from
Rossmoor. Los Alamitos services are more convenient, less than two miles from the
center of Rossmoor. Seal Beach services are also more convenient, 5.5 miles from the
center of Rossmoor. Incorporation would offer the most convenient services. Expansion
of RCSD powers could potentially involve establishment of an area planning commission
to handle local zoning and use permits; however, this would require County and LAFCO
approval and would not affect building permit services.
Animal control is currently provided by the County with services (dog licensing and lost
pets) provided in Orange, 13 miles from Rossmoor. The Long Beach shelter is closest,
only three miles from Rossmoor. The Seal Beach shelter is also more convenient, only
five miles from Rossmoor. Incorporation or expansion of RCSD powers would also
improve service levels if Long Beach or Seal Beach were chosen as the service provider.
Burr Consulting and EPS 7
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:Rossmoor Governance Alternatives
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4. Fiscal impacts
This report provides a preliminary analysis of the effects of the various governance
options on the general and road funds of the respective agencies: Los Alamitos, Seal
Beach and a hypothetical Rossmoor city. While these results provide a general sense of
the fiscal strength of the scenarios, all deserve a closer look by affected agencies and
stakeholders. The summary table (next page) shows estimates of the fiscal impacts of the
various scenarios assuming they had happened a) under current law b) in FY 04 -05
dollars and c) in a steady state (i.e., after short-term transition costs and revenue lags).
Revenues
Property Tax - , : : - " x. . -
Rossmoor property owners pay the property tax of one percent on assessed value.
Property tax revenue is distributed to various state, regional and local agencies.
The Orange County Auditor - Controller provided actual property tax allocations for
Rossmoor. Currently, $502,050 is distributed to the Rossmoor Community Services
District (RCSD) and $645,197 is distributed to Orange County for general purposes. The
Orange County Fire Authority (OCFA) receives $1,172,755 in property taxes from
Rossmoor.
The Orange County CEO provided estimates of the portion of the County's property tax
share that might transfer to an annexing agency. Neither Los Alamitos nor Seal Beach is
signatory to the master tax sharing agreement of the County. As a result, actual property
tax allocations would be a matter negotiated by the parties after a particular governance
change is initiated.
This analysis assumes that the RCSD would be absorbed into the annexing agency or the
new city and that related property taxes would transfer.
In the event of annexation to Seal Beach, the Rossmoor property tax amount that is
currently distributed to OCFA would transfer to Seal Beach. Seal Beach would use that
revenue to pay OCFA for contract fire and paramedic service. As the property tax
amount and service cost would be treated as identical by OCFA, there would be net fiscal
impact on OCFA.
Sales Tax';; : • ,," :: ° , .'
A portion of the sales and use tax is creditedto the local jurisdiction in which the retailer
(or point of sale) occurs.
The only commercial area, Rossmoor Village Square, is in northeast Rossmoor. This
commercial development includes 18 businesses: restaurants, a gas station, a video rental
store and several retail outlets.
The Orange County CEO provided data on existing sales tax revenue generated in the
Rossmoor community, and estimates that $212,100 was generated in Rossmoor.
8 Burr Consulting and EPS
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: Rossmoor Governance Alternatives
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Documentary Transfer Tax = • . • , , • • ' • "
Revenue and Taxation Code §11911 authorizes the County to impose a tax of $.55 per
$500 in value of property on deeds transferring property. Section 11911 permits cities
within counties that have imposed such a tax to capture half of that amount from the
county.
Charter cities are allowed to impose higher tax rates. Both Los Alamitos and Seal Beach
are charter cities, although neither of these cities currently imposes the tax at a higher
rate. As a result, documentary transfer tax implications are identical across the three
scenarios.
Bi siness License ax %;-` ; • ' •
Cities (and counties) may impose a business license tax (BLT). The BLT is levied on
businesses for the privilege of conducting business in a particular jurisdiction, and is
usually levied on home -based businesses as well as those located on commercial
properties. Most California cities with a BLT levy the tax on the basis of employees or
gross receipts; however, some cities charge a flat amount, a tax based on square footage,
or do not levy a BLT at all.
Orange County does not levy a BLT, and Rossmoor businesses do not currently pay this
tax.
Los Alamitos charges each business a flat amount of $100 for an annual business license.
The Seal Beach annual business license tax is based on number of employees. A
professional office in Seal Beach pays $50 per professional member of the staff in
addition to $4 per non - professional employee. Retailers in Seal Beach pay $50 -500
depending on the number of employees.
The hypothetical Rossmoor city is assumed to charge BLT rates comparable to Los
Alamitos and Seal Beach.
Utility Users' . " . .. :. :'r ;: •
The utility users' tax (UUT) is a general tax imposed on the use of utility services. The
tax is charged on the utility bill for electricity, gas, telephone, water, sewer and/or cable
television services. UUT is a common financing source, used by 152 California cities. A
number of neighboring cities —Los Alamitos, Seal Beach, Buena Park, Huntington
Beach, Long Beach, and others —levy this tax to finance city services.
Orange County does not impose a UUT. Residents and businesses in the unincorporated
Rossmoor area do not currently pay this tax.
In Los Alamitos, voters approved Measure Q, continuing the City's six percent UUT at
the November 2002 election. The City Council is required to review the Utility Users
Tax on an annual basis in considering the City's general fund budget for the upcoming
year. If it determines that the City's financial condition will not be adversely affected, the
10 Burr Consulting and EPS
Fiscal Impacts
City Council may temporarily reduce the tax rate, as it did for the period of February 1,
2002, through February 1, 2003. The UUT was originally established in 1991.
Seal Beach levies an 11 percent UUT with an exemption for low- income seniors. The
City adopted a six percent UUT prior to 1992, which is not subject to Proposition 218
vote requirements. The UUT rate was increased from six to 11 percent in 1992. If
annexed to Seal Beach, Rossmoor households would pay approximately $396 per year in
utility taxes.
If Rossmoor is annexed, LAFCO would include a condition that Rossmoor will pay the
UUT effective in the annexing city. Rossmoor voters would not be asked separately to
approve the UUT.
The incorporation scenario would require a UUT of 3 -7 percent in order to be fiscally
viable at existing service levels. For a typical household, a three percent tax amounts to
$273 annually and a seven percent tax amounts to $117.
Revenue estimates for the incorporation scenario assume that Rossmoor imposes a UUT
with an exemption for low- income senior households. The authors estimate that
approximately 11 percent of Rossmoor households would qualify for such an exemption
based on analysis of 2000 Census data.
Franchise Fees ` • • • .
Cities are authorized to levy franchise fees on utilities in exchange for granting the
utilities a franchise in its territory. In practice, a franchise fee is embedded into the utility
rates and paid in the pre -tax portion of the utility bill. Franchise fees are not subject to
Proposition 218 requirements.
Rossmoor residents and businesses currently pay the franchise fees that the County
imposes on utility franchisees. Estimates of the current fees paid by Rossmoor were
unavailable.
In this report, estimates of franchise fee revenues were made using a per capita approach.
First, the authors estimated the portion of franchise fees in the neighboring cities that is
paid by residents: 67 percent in Los Alamitos and 75 percent in Seal Beach. The authors
applied the per capita approach to estimate the amount that would be generated under the
annexation scenarios. The franchise fee estimates for the annexation scenarios differ
primarily due to differences between these jurisdictions in the fee magnitude and scope.
The analysis assumes that a Rossmoor city would levy franchise fees of a magnitude
comparable to the average of the two neighboring cities.
Licenses and Permits'v ; .
License and permit revenue in this analysis primarily involves building permits. Seal
Beach residents may purchase parking permits for parking convenience in the downtown
and beach areas. The cities charge property" owners for burglar alarm permits and there
are other miscellaneous license and permits.
Burr Consulting and EPS 11
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• ▪ Rossmoor Governance Alternatives
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This report estimated fiscal impacts for parking and miscellaneous permits using a per
capita approach. For building - related permits, the authors first assessed the portion of
building permits issued for residential remodel purposes in Seal Beach and Los Alamitos
in FY 04 -05 based on data provided by the Construction Industry Research Board. In
both cities, residential remodels made up 35 percent of permit values. The authors
estimated the Rossmoor fiscal impact by assuming that the only building permit revenue
originating in Rossmoor would be composed of residential remodels since the community
is built out. Focusing only on the portion of building permit revenue that is attributed to
residential remodels, the Rossmoor fiscal impact is based on aggregate home values in
the respective communities. In other words, building permit revenue is assumed to be
proportional to housing values. For the incorporation scenario, the fiscal analysis
assumes full cost recovery or, in other words, that building permits and plan check fees
recoup the costs of development - related services.
Vehicle License Fees •
Vehicle license fees (VLF) were formerly a two percent fee on the market value of motor
vehicles, with a portion of that revenue distributed to cities based on population.
Although the two percent rate has been reduced to the present 0.65 percent rate, the State
General Fund made up the difference with an offset payment. From June to October
2003, the State suspended the offset resulting in one -time revenue losses to cities, which
the State has repaid in FY 05 -06.
Proposition 1A, passed by voters in November 2004, eliminated the VLF offset and
replaced it with a like amount of property taxes. To finance the State budget deficit, the
State reduced the VLF backfill payment temporarily in FY 04 -05 and FY 05 -06. This
reduced the VLF backfill for cities. Beginning in FY 06 -07, existing cities will receive
the full VLF backfill with growth based on growth in the property tax base since the FY
04 -05 base year. However, cities annexing developed areas like Rossmoor do not
receive property tax in lieu of VLF on the value of property at the time of annexation.
The current law only provides for annexing cities to receive the population -based
component of VLF (a modest amount) and to receive the in -lieu property tax for growth
in the property tax base that occurs in the year after annexation or thereafter.
Proposed legislation (AB 1602) offers incorporating and annexing cities $50 per capita in
additional vehicle license fee revenue in FY 04 -05 dollars with the actual amount
increasing annually (by approximately seven percent in the last year). In addition, the
proposed legislation offers additional revenues to incorporating cities during the first five
years of cityhood. Specifically, a Rossmoor city would receive an additional 50 percent
in revenues (i.e., $25 per capita) in its first year; this boost would decline annually until
the new city's sixth year when it would stabilize at $50 per capita (in FY 04 -05 dollars).
The legislation is projected to be passed by August 2006. Due to an urgency clause
6 For property tax purposes, the assessed roll value on January 1 of the preceding fiscal year reflects the tax base in the
current fiscal year.
12 Burr Consulting and EPS
Fiscal Impacts
included in the current draft of the bill, the legislation would become effective
immediately after being signed by the Governor.
The revenue estimates in this study have been provided both under existing law and
under the assumption that AB 1602 is adopted.
Other Intergovernmental : 't' .. • - . -
In addition to vehicle license fees, cities receive other intergovernmental revenues. Such
revenues may include competitive grants as well as revenues received by agreement with
other agencies.
In the base year for this analysis, Los Alamitos received other intergovernmental
revenues. Seal Beach did as well, but posted these revenues as transfers. For
transparency of the results to the potential annexing agencies, the analysis has retained
these reporting differences by the two cities.
For purposes of incorporation related estimates, the authors calculated the average per
capita amount of other intergovernmental revenues received by comparison cities: Los
Alamitos, Seal Beach, Villa Park, Laguna Woods, Rancho Palos Verdes, and Palos
- Verdes Estates.
ChirgesVS'enic " • t -
Cities levy service charges and fees for a variety of purposes, including recreation
programs and plan checks.
Charges for services were estimated using various approaches depending on which was
most relevant to the particular charges. Plan check and related charges were estimated
using the same approach as was used for estimating building permit revenue. Alarm,
sweeping, tree trimming and other miscellaneous fees were estimated on a per household
basis. Recreation revenue estimates were premised on the assumption that 85 percent of
Rossmoor residents are already relying on Los Alamitos recreation programs.
Seal Beach directly collects solid waste service charges and remits them (net of an
administrative charge) to the solid waste hauler. As a result, service charge revenues
under the Seal Beach annexation scenario are relatively high .compared with the other
scenarios.
Investment ;
Investment earnings include not only interest but also rents on any City-owned
properties. In this analysis, such revenues were estimated on a per capita basis for the
annexation scenarios. This approach is most relevant since the analysis is focused on the
long-term, or steady state, impact of the governance changes rather than being a
comprehensive cash flow model. In the incorporation scenario, the analysis simply
assumes that existing RCSD interest revenues would be earned by the incorporating city.
It should be noted in all cases that the RCSD fund balance would transfer to the annexing
city or to a new Rossmoor city. At present, the unreserved fund balance is approximately
Burr Consulting and EPS 13
Fiscal Impacts
cafeteria plan of $12,000 per employee as is used by Laguna Woods), and expenses.
Detailed assumptions for compensation levels and expenses may be found in the detailed
tables at the end of this report.
Administrative Services. ;
Administrative services involve the accounting, treasury, human resources and
information technology functions.
The Los Alamitos and Seal Beach annexation scenarios assume that 50 percent of
Administrative Services expenses are fixed costs in that they do not relate to city size.
The remaining 50 percent of existing costs is assumed to relate to workload and activities
that would increase if Rossmoor were annexed and those costs were estimated using a per
capita approach.
The incorporation scenario assumes that the new city would directly provide these
services with a staff of two: an accountant and an assistant.
City Attorney ..,, ` ,j ,
City legal services include attendance at council meetings as well as handling of
litigation.
The Los Alamitos and Seal Beach annexation scenarios assume that 67 percent of legal
services are fixed costs in that they would be unaffected by annexation. The remaining
33 percent of existing costs is assumed to relate to workload and activities that would
increase if Rossmoor were annexed and those costs were estimated using a per capita
approach.
The incorporation scenario assumes that the new city would retain a law firm to provide
legal services. Estimated annual costs are $100,000. By comparison, Palos Verdes
Estates spends approximately this amount on legal services and Villa Park (somewhat
smaller in size) spends substantially less: Legal expenses for cities such as Los Alamitos
with their own police departments are not comparable as the contemplated Rossmoor city
would not be providing such services directly.
Nondepa
Nondepartmental expenses include general overhead expenses, such as building
maintenance, auto expenses, capital leases, general liability insurance, and workers'
compensation.
Los Alamitos and Seal Beach differ in the extent to which certain expenses are classified
as nondepartmental. In addition, Seal Beach makes certain- -debt payments from its
general fund that are included as nondepartmental expenses.
For the annexation scenarios, building maintenance expense impacts are expected to be
comparable to existing RCSD expenses for building maintenance. For the annexation
scenarios, most other nondepartmental expenses are assumed to increase in proportion to
Burr Consulting and EPS 15
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• Rossmoor Governance Alternatives •
$1.4 million. Clearly, under any of the scenarios, actual investment earnings would
likely be greater than has been estimated in this analysis.
Fines and Forfeitures " '
Cities receive revenues primarily from fines for moving violations and parking tickets.
In addition, Seal Beach receives fees from inmates staying in the city's jail due to a
relatively high service level in the city jail compared with other alternatives. In this
analysis, jail related revenues (and costs) are assumed to increase as a result of annexing
Rossmoor based on the percentage increase in police service calls.
Expenditures
This analysis estimates the expenditure effects of the scenarios. The annexation analysis
assumes that the existing Los Alamitos and Seal Beach service levels and cost structure
would be implemented in the annexed area, and does not assume that scale efficiencies
would be gained. The incorporation analysis assumes that the existing County and RCSD
service levels would be retained and that the County would provide contract services
(Sheriff and streets) at rates comparable to current costs.
City Council ' • . 'L..
The Los Alamitos annexation scenario assumes that council expenses would increase 40
percent as a result of annexation. The city's charter has a provision that two additional
council seats would be added in the event the city should grow in size of the magnitude
involved in annexing Rossmoor.
The Seal Beach annexation scenario assumes that council expenses would be unaffected.
The incorporation scenario assumes five council members would each receive a stipend
of $250 monthly and that council expenses (i.e., memberships and travel) would cost
$35,000.
City Manager a nd City Clerk ,. . •
City Manager and City Clerk expenses involve certain costs, such as attending and
supporting council meetings, that do not relate to city size and other costs, such as
managing employees and responding to constituent requests, that do increase with both
city size and the scope of services provided directly by the city.
The Los Alamitos and Seal Beach annexation scenarios assume that 75 percent of City
Manager and Clerk expenses are fixed costs in that they do not relate to city size. The
remaining 25 percent of existing costs is assumed to relate to workload and activities that
would increase if Rossmoor were annexed and those costs were estimated using a per
capita approach.
The incorporation scenario assumes that the new city would directly provide city
management and city clerk services with a staff of three: a city manager, a city clerk and
an assistant. The cost estimates include employer -paid taxes, employee benefits (a
14 Burr Consulting and EPS
•
• ▪ Rossmoor Governance Alternatives
•
the estimated fiscal impact of Rossmoor annexation on expense categories staffed
directly by city employees.
For the incorporation scenario, building maintenance is estimated to cost 20 percent more
than the existing RCSD expense. Insurance is estimated to cost $75,000, which is
substantially higher than the amount paid by Villa Park (a contract city); insurance costs
depend primarily on City payroll and the scope of City operations but also on litigation
history and other risk factors. The analysis provides for five vehicles to be leased by the
new city in addition to a fuel and repair budget. In addition, the analysis provides for a
$100,000 contingency fund under the nondepartmental budget; in light of the $1.4 million
fund balance that would transfer from RCSD to the new city, the new city would also
have substantial reserves to draw upon for one -time expenses.
Public Safer .. .. ';r ; =` : "` Y ..
Law enforcement is provided directly by Los Alamitos and Seal Beach. Rossmoor is
presently served by the Orange County Sheriff. Service levels vary among the providers.
All scenarios assume that each provider's service level remains the same. In other words,
annexation to Seal Beach (where response times are lower than in Rossmoor) would
involve policing expenses on a par with existing service levels in Seal Beach.
For the most part, the annexation scenarios assume that most law enforcement costs
would be affected based on the increase in police - related service calls that would result
from annexation. The incorporation scenario assumes that the Sheriff would provide by .
contract services at a rate comparable to the existing cost.
If annexed to Seal Beach, there would be no net fiscal impact for fire and paramedic
service. According to OCFA, Seal Beach would be expected to pay an increase in its
contract fee equivalent to the Rossmoor property tax amount currently distributed to
OCFA. Annexation to Seal Beach would mean that the Rossmoor property tax going to
OCFA would transfer to Seal Beach.
Seal Beach annexation is estimated to increase that city's animal control costs based on
the per capita approach. Similarly, animal control expenses for the incorporation
scenario are assumed to be comparable to the marginal fiscal impact on Seal Beach or, in
other words, that the new city would contract for service with Seal Beach.
Urban and. Community Development;. - •
Urban and community development functions include planning, building inspection and
code enforcement. Much of these service. costs are development - related. Although
Rossmoor does not have vacant land for new construction, there is substantial remodeling
activity that would require related permits and planning services.
For building and planning costs, the authors first assessed the portion of building permits
issued for residential remodel purposes in Seal Beach and Los Alamitos in FY 04 -05
based on data provided by the Construction Industry Research Board. In both cities,
residential remodels made up 35 percent of permit values. The authors estimated the
16 Burr Consulting and EPS
Fiscal Impacts
Rossmoor fiscal impact by assuming that the only building and planning cost impacts
would be composed of residential remodels since the community is built out. Focusing
only on the portion of building permit revenue that is attributed to residential remodels,
the Rossmoor fiscal impact is based on aggregate home values in the respective
communities. In other words, building and planning marginal costs are assumed to be
proportional to housing values and related permit revenue. For the incorporation
scenario, the fiscal analysis assumes that the new city directly employees a planning
administrator and retains a private firm to provide planning counter, code enforcement
and building inspection services. This approach is used in neighboring Los Alamitos
where these functions are staffed by a private company, but yet provide service from city
hall.
Public World- • •
Public works expenses include both operating costs typically paid by the general fund
and capital costs typically paid through capital funds. Operating costs include activities
such as tree trimming, street sweeping, and complying with stormwater regulatory
requirements; whereas, capital costs involve expenses such as rehabilitation of street
pavement or replacement of trees.
Because Rossmoor is a walled community and includes no arterials, there is substantially
less traffic volume (and related wear and tear) on Rossmoor roads than on average in Los
Alamitos and Seal Beach. Thus, estimated traffic volume is a significant factor in the
cost analysis.
Los Alamitos and Seal Beach differ in financing public works activities. In the
annexation scenarios, street maintenance expenses are estimated based on traffic
volumes. Street sweeping expenses are estimated based on street mileage. Engineering
expenses are estimated based on residential remodel activity. • In addition to operating
expenses, the report identifies recurring street capital expenses of the two cities based on
their respective capital improvement plans and estimates the capital costs of providing a
similar level of service in Rossmoor. Street capital estimates are based on traffic volume.
Sidewalk costs are based on street mileage with an extra 20 percent premium added to
account for the concentration of trees in Rossmoor and related effect on sidewalk repairs.
Tree - related capital cost impacts are assumed to be equivalent to the existing RCSD
expense for tree replacement.
For the incorporation scenario, the analysis assumes that the new city would directly
employ a public works administrator who would also function as the city's engineer. In
addition, the new city is assumed to contract for tree trimming, street sweeping and street
lighting at the existing RCSD operating expenses. The new city is also assumed to
contract for storm drain maintenance. The new city is assumed to contract with Orange
County for street maintenance at the existing cost of the County's services on Rossmoor
pavement. In addition, the analysis assumes the new city would contract for capital
expenses for sidewalk, curb and gutter repair at rates comparable to those paid by Los
Alamitos and Seal Beach and that the new city would continue to expend $20,000 on
Burr Consulting and EPS 17
•
• ▪ Rossmoor Governance Alternatives
•
replacement of trees. The new city's street capital revenue stream —gas tax allocations
and Measure M funds —would cover identified capital expenses without need for a
general fund contribution.
Parks and Recreation
Parks and recreation expenses involve park maintenance and recreation programming.
Annexation- related cost impacts are based on assumptions regarding existing use by
Rossmoor residents of Los Alamitos recreation programs. Although RCSD offers limited
recreation programming, neighboring Los Alamitos offers substantially more recreation
services. Based on interviews with RPC members, the report assumes 85 percent of
Rossmoor residents already rely on Los Alamitos recreation. Annexation to Los
Alamitos is assumed to increase costs only based on the remaining 15 percent of residents
who would be expected to begin using Los Alamitos recreation services. Annexation to
Seal Beach is assumed to increased costs marginally assuming that 10 percent of
Rossmoor residents already use Seal Beach recreation programs, 40 percent shift to using
Seal Beach, and the remainder continues to use Los Alamitos.
Park maintenance costs are estimated based on existing service levels. In the annexation
scenarios, the analysis assumes that the annexing city's existing expenditure per park acre
would be applicable to the 17 park acres in Rossmoor for which the new city would
become responsible. In the incorporation scenario, the new city is assumed to spend the
same amount on park maintenance as is currently spent by RCSD.
The incorporation scenario also assumes that the new city would continue to spend the
same amount on recreation programming as is spent by RCSD and that 25 percent of the
planning administrator's time would be allocated to managing park maintenance and
recreation functions.
Misce Costs ,
Miscellaneous costs include capital outlays and transfers from the general fund to other
city funds. This cost category is only applicable to the annexation scenarios.
Los Alamitos provides for capital outlays and also transfers from the general fund to a
capital fund and to support the Air Force Reserve Center pool. The analysis provides for
Rossmoor related expenditures for capital outlays using a per capita estimation method.
Annexation would not affect the transfer for the pool. Annexation would not affect
capital transfers as gas tax and Measure M revenue would cover street- related recurring
capital expenses in Rossmoor at existing Los Alamitos service levels.
Seal Beach miscellaneous expenditures include pass- through of garbage fees to the
hauler, capital outlay (vehicles), transfer to subsidize the Tidelands Beach Fund, and
transfer for capital projects. The garbage hauler payment was estimated based on per
home costs, since this service is residential. The capital outlay for vehicles was estimated
based on the percentage increase in Seal Beach costs for directly staffed functions.
Annexation would not affect subsidy needs for the Tidelands Beach Fund. The transfer
18 Burr Consulting and EPS
Fiscal Impacts
for capital projects was estimated based on the funding need for street capital projects
(i.e., the amount of street capital needs that would not be covered by gas tax and Measure
M).
•
Burr Consulting and EPS 19
• Rossmoor Governance Alternatives
5. Detailed Tables
20 Burr Consulting and EPS
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