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Zones of Benefit

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1. I live on a private road that needs to be maintained. The neighbors don't agree on what needs to be done or how much each of us should pay; what can be done?

A group of citizens can form a Homeowners Association, a Road Maintenance Association, a Permanent Road Division, or a Zone of Benefit. To form a Homeowners or Road Maintenance Association, an attorney familiar with laws governing such organizations should be consulted. To establish a Zone of Benefit, residents should contact the Lake County Department of Public Works who can provide information on the Zone of Benefit program, a Formation Application, and a copy of the program Policy and Procedures Guidelines.

2. What is a zone of benefit?

A zone of benefit is a geographic area formed under County Service Area law to provide extended services not already being provided by any other entity. Some extended services that can be provided include drainage, landscaping, lighting, and road improvement and maintenance. If you live on a road not maintained by the County Department of Public Works or some other agency, a petition can be submitted to form a zone of benefit to provide the extended service of road improvement and maintenance.

3. What are the costs associated with forming a road zone of benefit? Are there other fees required once the zone is established?

A $350 non-refundable application fee is required. This deposit will be used to defray the initial costs associated with zone formation. Formation charges exceeding the initial deposit can be recovered from the zone's first-year assessment. There may be additional costs incurred in order to meet formation requirements, such as charges by an engineer to prepare a map or legal description. These charges are paid directly to the service provider. The zone must also pay a fee to the California State Board of Equalization, based on its fee schedule. If funding is to be by a special tax, election costs would be payable to the County.

Once established, a zone will be charged annually as follows:

• A negotiated fee (approximately $2.00 to $3.00 per parcel) to the Auditor for processing costs;
• A proportionate amount of the cost of a liability insurance policy covering the zone's roads based on the miles of road in each zone;

Administration fees which are specific to the work required in each zone, fees include:

• The cost of staff time spent administering the zone is paid to the Administration Division of Public Works. Administration includes such activities as processing purchase orders, preparing bid documents and contracts, and reviewing and monitoring the budget for each zone. Because this is a direct billing for time worked, this cost will vary greatly with each zone and is dependent upon the number of calls and issues requiring staff involvement;
• The cost associated with the budget preparation, monthly reconciliation, and general zone activities are spread to all zones

While there is no "average" zone, annual zone administration fees usually range from $500 to $2000 per zone per year.

Any and all road work is paid from each respective zone's account. Road work within a zone of benefit is governed by the County's Informal Bidding Procedure Ordinance and Public Works contract law. Licensing, bonding, and compliance with prevailing wage standards are required.

4. If some people don't support the formation, can they prevent the zone forming?

If a Benefit Assessment is proposed and if 50% or more of the registered voters residing within the territory proposed to be included in the area, or the owners of one-half or more of the assessed value of the territory proposed to be included in the area, file written protests against the establishment of the service area, the Board must abandon the proposal.

If a two-thirds majority of the property owners are willing to sign irrevocable offers of dedication the formation can proceed. Noticed public hearings are held by the Board of Supervisors where protests can be heard. If the zone formation is approved despite the protests of an individual parcel owner, that owner will be assessed based on the benefit received along with all other parcel owners in the zone.

5. Who sets and approves our per parcel fee?

There are two types of fees that can be levied in the zone program, a special tax or a benefit assessment.

Special Tax

A special tax requires a two-thirds majority approval of the registered voters voting within the zone boundaries. A special tax can be set at a maximum and levied each year at any amount up to the maximum; it can be established with an escalator; it can also be established with a "sunset clause". Any proposed increase exceeding the approved maximum amount would require a two-thirds majority approval in another election.

Applicants should be aware of the following conditions for special taxes:

1. Special tax elections can only be held on the following dates:
   1. The First Tuesday after the First Monday in May. (Board of Supervisors must call for elections at least 88 days ( no more than 103 days) prior to the election date, i.e., January 26.
   2. The First Tuesday after the First Monday in June of each even-numbered year.
   3. The Last Tuesday in August.
2. Applicants are responsible for mail-out election costs. (Estimated $1,000, depending on the number of ballots.)
3. Appropriation limits must be established and reaffirmed every four years by a mail-out election.

Benefit Assessment

In the case of a proposed benefit assessment, a report prepared by a registered engineer explaining the benefit received by each parcel is submitted. Parcel owners within the zone boundaries will then receive a ballot to return expressing their approval or objection to the proposed assessment. If a majority of the weighted ballots received protest the assessment, it cannot be levied.

6. If a vote is conducted for a benefit assessment and an individual has four contiguous parcels, are they entitled to four votes?

No. Upon legally merging the four parcels into a single parcel they will only be assessed for one parcel. In the benefit assessment balloting process the property owners are approving a formula i.e., improved parcels are $200.

7. If a benefit zone is formed, will the road in the zone be subject to the same regulations that the Streets and Highways Code provides for County-maintained roads?

Yes. The Resolution adopting the rules and regulations for CSA Highways specifically incorporates Division 2, Chapter 6 of the Streets and Highways Code.

8. If there are two components to the assessments, capital improvements and maintenance, and the assessment for maintenance is dependent upon whether the parcel is developed?

Annually the assessors’ records will need to be reviewed to determine if the parcel has been developed. If developed, it will be assessed at the developed rate.

9. How is approval calculated in a benefit assessment election?

If a benefit assessment election is held, the 51% approval is only calculated based on those that vote and does not require 51% of the total proposed assessment.

10. Who determines what work needs to be done? Who pays for these services?

Formation of Zone

As part of the formation, the members of the zone appoint Representatives and identify a Key Contact to act as liaison to the County.

Role of Zone

The Engineering Division of the Public Works will perform annual condition and safety inspections, give recommendations for correcting any hazards that may exist and/or pavement maintenance recommendations, and the respective costs for said recommendations.

The Public Works Department develops with input from representatives a recommended budget, including specific projects and the amount of the assessment or tax to be charged to each property within the zone. The amount of the assessment must be based on the benefit received by each property with the nexus or methodology included in the proposed budget. All members of the zone have the right to speak and vote on these issues.

Public Works staff presents the zone's proposed budgets to the Board of Supervisors for approval annually. Any zone member may appear before the Board to speak on the proposed assessment and budget. If an increase to an existing assessment or an increase above the approved maximum special tax is proposed, it would be subject to the approval process described above.

Once approved by the Board and any required landowner ballot and registered voter election, the assessment or tax is added to the property tax bill for each parcel. The funds are collected with the property taxes and deposited into an interest-bearing account for the use of the zone. All funds are administered by the Administration Division of Public Works. Monies are not placed in the General Fund and cannot be used for other purposes.

11. Are we required to bring our road up to any particular standards? Is there a requirement as to the level of maintenance and/or improvements we must provide?

At this time there are no standards established for zone roads, although compliance with Fire Safety Regulations is recommended. The members of the zone determine the level of improvements and/or maintenance for roads within their zone, subject to the approval of the Board of Supervisors.

12. What happens to the money collected from a zone of benefit?

All monies received from the zone:

• Belong to the division
• Are placed in a special account for the zone
• Earn interest on the balance
• Are never County funds

13. What happens to our money if we don't use it all during the year?

Any funds budgeted but not used within the fiscal year are carried over into the zone's account for the next year. If budgeted projects are not completed, the funds will be available for the zone's use in the next year.

Zone funds cannot be used for any other purpose other than work in the zone and costs associated with the operation and administration of the zone. An exception would be if a zone were to dissolve with a balance remaining in its account. In that case, the excess funds at the time of dissolution would revert to the County General Fund.

14. Can an existing Road Association still levy charges for private road maintenance after a zone of benefit is formed for road maintenance purposes?

Road Associations shall not levy assessments once the zone has been formed, and the County is still assessing properties within the zone.

15. What about back assessments owed to a Homeowners Association?

Back assessments collected by the Homeowners Association for road maintenance purposes are to be transferred to the affected formed zone of benefit.

16. Are there any restrictions on what can be done on our road?

One requirement of formation is that offers of dedication or easements be granted to the County. Once completed, this action establishes the road as a public road covered by the conditions and stipulations of the California Vehicle Code (CVC).

Stipulations include:

• Access to the road cannot be restricted (no gates or any other barriers).
• Signage is limited to guide/directional signs (no regulatory signs, such as speed limit signs), unless approved by the Board of Supervisors.
• No obstructions may be placed on or under the surface of the roadway which will impede the speed of the vehicles in such a way as to cause discomfort or harm to persons in a vehicle (such as speed bumps, speed dips or undulations), however, rumble strips and delineators are permitted.
• All road work must be completed by licensed, bonded contractors who comply with prevailing wage standards. All work under $125,000 is governed by the Uniform Construction Cost Accounting Procedures Ordinance and by Public Works contract law. Work projects will be put out for public bid and award made to the qualified low bidder. All work under $30,000 may be performed by County forces.

The road zone of benefit is required to contribute to the County's liability insurance policy.

17. Once a road zone of benefit is established, can it be dissolved?

A road zone of benefit can be dissolved by the initiation of the Board of Supervisors or by the initiation of the property owners or residents. A petition signed by 51% of the registered voters in the zone or property owners of 51% or more of the assessed value of the land and improvements is required to initiate a dissolution.

If the formation of a road zone was a condition of approval on a final map, a waiver of that condition must be obtained from the Planning Department before dissolution can proceed.

Fees

A filing fee of $200 is required to initiate the dissolution process. The actual costs to the County, including any fees charged by the State Board of Equalization, will be taken from the initial payment. Any costs over $200 must be paid by the zone before the dissolution will be recorded and may result in additional assessments or charges to the zone.

Remaining Funds

Any funds held in a zone account at the time of dissolution will be used for expenses related to the dissolution. If there are funds remaining once the dissolution is complete, they will revert to the County General Fund.

What Happens to the Road

Since irrevocable offers of dedication exist, the road will remain a public road. The County may choose to accept the road into the County Maintained Mileage System or the County may choose to vacate the road, returning it to private use. The residents may request that the Department of Public Works vacate the roads, however, the road will remain public unless and until the Board of Supervisors take formal action to vacate the road.

18. Will an existing Homeowners Association be eliminated when a zone of benefit for road maintenance is formed?

No, the Association would no longer levy charges for road maintenance or provide road maintenance services, so long as the zone of benefit is providing that service.

19. Is one of the benefits of being included in a zone of benefit being included in the County self-insurance program?

This insurance program is a big benefit to property owners within a zone of benefit. For approximately $250 per mile, the zone of benefit is covered for liability with respect to the maintenance of the roads within its boundaries. The liability coverage is ten million dollars.

20. If the design of a road is alleged or proven as casual or contributory to an accident will this type of liability be covered by the County's self-insurance program?

No. Under a zone of benefit, there are no plans or intent to widen, straighten, or level the roads unless provided through an improvement district formed for such purposes. The zone of benefit is for road maintenance only, and the self-insurance coverage is limited to claims arising from road maintenance work or the lack thereof.

21. Are there any programs available for senior citizens where they can defer their annual payments associated with the CSA?

There are senior programs that apply to assessments as well as property taxes. Eligibility is based on income, age, or disability. If they currently qualify for the program it will also apply to assessments. Application needs to be made to the State to determine eligibility for the programs.

22. Why were some private roads built to County standards and others were not and since we are already paying taxes for roads, why do we need to pay another tax to maintain our road?

The subdivider of your subdivision could have built the roads to a higher standard and offered the maintenance to the County. But, the subdivider chose to build the roads to a lower standard and have the property owners maintain the road(s). The charges to a permanent road division are a special tax and are not based on the value of your property.