North Richmond Annexation Fiscal Impact Analysis City of Richmond North Richmond Annexation Fiscal Impact Analysis July 11, 2017 James Edison and Carlos Villarreal MuniFinancial Standard Colors Colors should be used in the color pairs whenever possible. Do not mix and match colors, use pairs together as shown. Black, White and Gray can be used with any of the other colors. Purple Pantone 2765 R 12 G 4 B 79 Green Pantone 357 R 15 G 67 B 24 Blue Pantone 2 88 R 11 G 31 B 101 Pantone Cool Gray 6 R 158 G 158 B 158 Black Red Pantone 485 R 252 G 5 B 14 Yellow Pantone 3965 R 232 G 244 B 4 Aqua Pantone 319 R 126 G 204 B 189 White

Presentation Outline Background Land Use Scenarios Revenues Costs Preliminary Results Changes in Service Providers Cost Changes to Residents

1. Background Currently governed by Contra Costa County Board of Supervisors Almost entirely surrounded by the municipal boundaries of the City of Richmond 900 acres Approximately 3,717 residents Mostly single family residences (~765) but also multi- family and commercial and retail space Don’t know if this is needed for this crowd but I added it just in case. This provides some of the assumptions used.

Interest in Annexation   Improve government efficiency in the delivery of municipal services Improve representation for residents Improving coordination of land use planning, services and infrastructure Improve government efficiency in the delivery of municipal services to North Richmond, especially with respect to public safety and public works; Improve representation for residents of North Richmond by allowing voters to participate in the election of the Richmond Mayor and Richmond City Council members that can provide a politically accountable government closer in proximity, and thereby, more familiar with issues affecting North Richmond; Improving coordination of land use planning, services and infrastructure between North Richmond and the City of Richmond.

Service Plan and Fiscal Impact Analysis Estimates the net fiscal impact (the difference between the increase in revenues and expenditures) on the City of Richmond from the increased service demands Describes services to be provided by the City of Richmond to the annexed area Estimate costs associated with providing these services Estimate revenues Describe impacts of these costs and revenues on other affected agencies

Process: Phase 1 Complete a service plan and fiscal analysis (this analysis) Inform the Richmond City Council and residents of North Richmond whether or not to proceed with the annexation process Phase 1 Complete a service plan and fiscal analysis that will serve to inform the Richmond City Council and residents of North Richmond regarding whether or not to proceed with the annexation process Phase 2 If the decision is made to proceed with the annexation process, and if authorized by the Richmond City Council, will consist of additional work necessary to prepare a service plan and fiscal analysis that will satisfy requirements of the Government Code, and with Contra Costa LAFCO policies and procedures (Attachment B), to support the annexation proposal. It is contemplated that the deliverable work product for Phase 2 shall be sufficient to be used by LAFCO in evaluating the proposed annexation in order to render a decision to approve, modify, or deny the application.

Process: Phase 2 An annexation application is submitted to Local Agency Formation Commission (LAFCO) LAFCO will hold a public hearing to consider the annexation application LAFCO may approve (with or without conditions), modify or deny the application If LAFCO approves the annexation, and if there are any objections to the annexation, then LAFCO holds a second hearing called a “protest hearing.”  The fate of the annexation is determined as follows: If protests are filed by fewer than 25% of either landowners or registered voters within the annexation area – LAFCO orders (confirms) the annexation If protests are filed by at least 25% but less than 50% of either landowners or registered votes within the annexation area, the question of annexation goes to an election where only registered voters can vote – the vote is subject to a simple majority If protests are filed by 50% or more of the registered voters residing within the annexation, then the annexation is terminated  

Fiscal Impact Analysis Revenue Factors Total Revenue LAND USE NET IMPACT Cost Factors Total Cost

2. Development Scenarios At annexation 1993 North Richmond Shoreline Specific Plan Approved development Development pending approval 2011 North Richmond Specific Plan Break Even

Development Scenarios

3. Revenues Property tax Property transfer tax (Documentary transfer tax) Sales tax Utility user tax Miscellaneous (e.g., licenses, permits,, service charges, etc.)

Approach: Property Tax INPUTS SCENARIO RESULTS Assessed Value Property Turnover Rate Tax Revenue Tax Rates Value per Square Foot

Assumptions: Property Tax Sales Values Residential Per Unit Multifamily per Sq. Ft: $240 Single Family per Sq. Ft: $250 Non-Residential per Sq. Ft. Commercial: $250 Industrial: $175 Tax Rates City receives 10.5% of 1% base property tax Average share received Richmond TRAs City must negotiate share with County City receives $7 per $1,000 of assessed value for property transfer tax (percent of sales value)

Sales Tax Revenue Commercial taxable retail sales per square foot = $250 Assumes current sales tax revenue is de minimis Specific plan sales tax revenue estimated at $18,750 per year

Other Revenues Use per capita approach: (Current city revenue / Current city population) x service population Types of revenues: Franchise Fees Licenses & permits Charges for services Revenue from other agencies Utility User Tax Fines

4. Costs Case Studies: Police Water Resource Recovery (Storm Drain Operations) Department of Infrastructure maintenance & Operations (DIMO) Engineering & Capital Improvement Projects Per Capita Approach: General Government Library Fire Planning & Building Services Community Services Non-departmental

5. Preliminary Results

Capital Needs

6. Changes in Service Providers

7. Changes in Costs to Residents

New Taxes/Fees Utility User Tax (UUT) If PGE is $100 per month then your bill would increase by $10 per month (10% UUT) for a total monthly bill of $110 If your Comcast cable bill is $200 per month then your bill would increase by $19 per month (9.5% UUT) for a total monthly bill of $219 Property taxes Add $140 per $100,000 of assessed valuation to a homeowner’s annual property tax bill. If a home has an assessed value of $300,000, then the property taxes will increase by $420 Republic Services Residential Rates North Richmond – 35 Gallon - $94.68 (3 month rates) Richmond - 35 Gallon - $103.05 (3 month rates)

Changes in Costs to Businesses and Landlords

New Programs and Policies Rent control Eviction protections apply to all rental units Rents for rent-controlled units must reset to the “base rent”, or the rent paid on July 21, 2015 (or the first date that rent was paid after this date) Landlords may apply one Annual General Adjustment (equivalent to up to a maximum of  3.0%) rent increase with 30-days’ notice

Preliminary Results

Community Meetings & Next Steps North Richmond Municipal Advisory Council (NR MAC) Meeting Tuesday, June 13th Shields Reid Neighborhood Council Tuesday, June 27th Richmond City Council Meeting Tuesday, July 11th Special Community Meeting Spanish Translation Thursday, July 13th 6:00 PM – 8:00 PM Community Heritage Senior Apartments, 1st floor 1555 Fred Jackson Way, N. Richmond North Richmond Network Meeting Thursday, July 20th 3:00 PM -5:00 PM Verde Elementary School 2000 Giaramita Street, N. Richmond North Richmond Municipal Advisory Council (NR MAC) Meeting Tuesday, August 1st 5:00 PM – 7:00 PM 515 Silver Avenue, N. Richmond Richmond City Council Meeting Tuesday, September 26th 6:30 PM (Start Time) City Council Chambers 440 Civic Center Plaza, Richmond

Thank You Q&A