Property taxes fund a wide range of government programs and services, with the largest portion going to public schools. The City only receives about 5.2 percent of property tax revenue which goes toward funding citywide services that include public safety, road and traffic improvements, park and public facility maintenance and enhancements, and general administrative services.
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In the mid-1980s when developers were building houses in certain Diamond Bar neighborhoods, they approached the County of Los Angeles for approval and assistance with creating assessment districts, as authorized by State law, to fund the maintenance of private and public areas that afforded special benefit to nearby property owners. Three such assessment districts were formed by the County and developers, and the administration of the maintenance contracts was taken over by the City when it incorporated in 1989.
Assessments upon the benefited properties are collected by the Los Angeles County Assessor’s Office through property tax bills.
Unlike a tax which funds projects or services of benefit to the general public and may only be used for a public purpose, assessments are used to pay for services that confer a special benefit to specific property owners and are used to pay for the maintenance of both private and public property solely within the defined district boundaries.
Primarily, the City contracts with a private contractor to perform basic weekly, monthly and annual landscape work that includes the mowing of grass, the trimming shrubs and trees, the cutting back of brush from adjacent open space for fire safety, and the clearing of leaves and other debris and trash from drainage ditches (V-ditches) to prevent erosion and flooding. Some areas are also irrigated or hand-watered. In District No. 39, there are five (5) mini-parks that are also maintained. In all, work funded by assessments is aimed at keeping the neighborhoods attractive, reducing erosion, and limiting dangers from wildfires.
State law requires all assessment funds be deposited into a special account and only used to fund the maintenance of district areas as permitted by the assessment district’s original formation. No funds from these assessments can go into the City’s General Fund. Additionally, the City is required to put the maintenance contract out for competitive bidding and award the contract to the lowest responsible bidder, and assessment expenditures are subject to annual audits. Also in keeping with State law, every year an independent report must be generated to verify the assessment expenditures are aligned with the maintenance costs, and the City Council must approve the assessment during one of its regularly scheduled public meetings.
The assessments to fund the costs of maintaining the districts have not been increased above the rates in place 30 years ago. It comes as no surprise that maintenance expenses have gradually increased over the years and today exceed the revenues from the assessments. For at least the past 10 years the City has subsidized the maintenance of the districts using its General Fund. The intent of the assessment districts when they were formed was for them to be self-supporting, which is no longer the case. The General Fund subsidy has grown to a significant amount and diverts money that can be invested in other services such as law enforcement and park and street maintenance.
An independent Engineer’s Report was prepared to outline the method of apportioning the assessments which calculates an amount that is proportionate to the special benefit any given parcel will receive from the district improvements.
The proposed rates for the new District are as follows:
These assessments will replace the existing assessment, they are not combined.
For addition information and maps, visit https://www.diamondbarca.gov/870/Assessment-Districts
At one time, County and City government agencies had the authority to increase assessments as needed to keep up with expenses by a vote of their respective governing boards. This changed in 1996 when voters approved Proposition 218 which, among other things, changed the law to require that any new assessments or increases for existing assessments be approved by property owners through a mail-in ballot process. This voting process costs money and is time consuming for both the City and property owners. The City held off taking this route for more than 10 years, but has reached a point where the General Fund can no longer sustain the level of subsidy.
Several neighborhoods in Diamond Bar maintain private common areas and landscaping along streets by way of a homeowner’s association. These associations collect fees from the property owners to pay for the costs of maintenance. At least from the standpoint of common maintenance, assessment districts perform a function similar to that of a homeowner’s association.
Homeowner’s associations are common for condominiums, and the fees they collect go toward paying for the upkeep of communal areas within the complex such as swimming pools and picnic areas. Assessment revenues, on the other hand, fund maintenance of landscaped areas such as slopes and greenbelts.
Everyone who owns property within the districts’ boundaries can vote. This includes property owners who do not live in the area since they pay property taxes. As required by State law, all returned ballots will be counted and weighted according to the proportional benefit received and assessment paid by each property owner. The outcome of the ballot proceeding will depend on whether the majority of ballots returned are in favor or opposed.
The City anticipates the ballots will be mailed on May 31, 2019. You should find them in your mailbox soon afterward. You will have until July 16, 2019 to fill them out and return them to City Hall. You may mail them back, drop them off at the City Clerk’s office or bring them to the public hearing on the evening of July 16 and give them to the City Clerk. In any case, all ballots must be received prior to the time the City Council closes the public hearing on July 16.
There are several options that the City considered prior to initiating the assessment ballot proceedings to give property owners in their respective districts the opportunity to decide whether or not to approve the assessment increase to cover their district’s maintenance needs. Should the assessment not be approved, other options that may be considered include: (1) reducing the level of maintenance service; (2) detaching some of the more expensive portions of the assessment district, which would mean the property owners would have to take over the maintenance themselves; or (3) entirely dissolving the assessment districts, which typically leads to an existing or new homeowner’s association taking over maintenance of the private properties and passing along the cost to property owners through monthly or annual fees.
The assessment will provide for adjustments, based on the consumer price index (CPI) and not to exceed 3 percent per year, so that it keeps pace with maintenance costs. However, per State law, assessments will not exceed maintenance costs and the CPI adjustment will only apply if there is an increase in the cost of service. Also, the assessments, whether increased or not, will be approved annually by the City Council as part of one of its regularly scheduled public meetings.
Proposition 218 requires property owners pay their share of the maintenance costs to the extent each property owner is benefited and therefore any exemptions or discounts on assessments for seniors or low income are not allowed.