Notwithstanding any other provision of this part, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), for all documents relating to activities of the district.
Multifamily Improvement DistrictsGovernance
Section § 36740
This law states that an owners' association must always follow the Ralph M. Brown Act and the California Public Records Act. They need to do this whenever they discuss or make decisions about matters related to the district, and for all documents related to the district's activities.
owners' association Ralph M. Brown Act public meetings
Section § 36741
Every year, an owners’ association must prepare a report about a district where assessments (fees) are collected to cover improvements and activities. This report isn't needed for the first year but starts after that. The report might suggest changes such as the district’s boundaries or how assessments are calculated.
The report is filed with the city clerk and must include details about any proposed changes in district boundaries, the planned improvements and activities, estimated costs, how the assessment fees will be calculated, and any leftover revenue from previous years. Additionally, it needs to mention any outside funding contribution.
The city council can either approve this report as-is or make changes before approving it, but they can’t make changes that would interfere with existing contracts funded by the assessments.
(a)CA Streets And Highways Code § 36741(a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used.
(b)CA Streets And Highways Code § 36741(b) The report shall be filed with the clerk and shall refer to the district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1)CA Streets And Highways Code § 36741(b)(1) Any proposed changes in the boundaries of the district or in any benefit zones or classification of property or businesses within the district.
(2)CA Streets And Highways Code § 36741(b)(2) The improvements and activities to be provided for that fiscal year.
(3)CA Streets And Highways Code § 36741(b)(3) An estimate of the cost of providing the improvements and the activities for that fiscal year.
(4)CA Streets And Highways Code § 36741(b)(4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year.
(5)CA Streets And Highways Code § 36741(b)(5) The amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6)CA Streets And Highways Code § 36741(b)(6) The amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c)CA Streets And Highways Code § 36741(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36734 and 36735.
(d)CA Streets And Highways Code § 36741(d) The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district.
owners’ association report fiscal year assessments district boundaries change
Section § 36742
This law explains that the management district plan can optionally include a statement saying that an owners' association will handle improvements or activities laid out in the plan. If it does designate an owners' association, the city must make a contract with the specific nonprofit named to provide these services.
The management district plan may, but is not required to, state that an owners’ association will provide the improvements or activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.
management district plan owners' association improvements
Section § 36743
If a district's term ends, it can be renewed by going through the same establishment process as originally required. When renewed, any leftover money from old assessments or asset sales is transferred to the new district and used to benefit the original area. If the renewed district includes new areas, old funds must still benefit only the original parts. If certain areas are excluded in the renewal, leftover funds should be refunded to original owners. Upon renewal, the district's term is limited to a maximum of 10 years, and the district can change in terms of boundaries, assessments, and activities.
(a)CA Streets And Highways Code § 36743(a) Any district previously established whose term has expired, may be renewed by following the procedures for establishment as provided in this chapter.
(b)CA Streets And Highways Code § 36743(b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or the businesses in the prior district. If the renewed district does not include parcels or the businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses.
(c)CA Streets And Highways Code § 36743(c) Upon renewal, a district shall have a term not to exceed 10 years. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.
district renewal expired term renewal procedures
Section § 36744
This law says that if there's a district with no unpaid debts, it can be shut down by a city council resolution. This can happen in two scenarios: first, if there’s wrongdoing, like stealing funds or breaking the law, the council must hold a hearing about closing the district. Second, there's a specific time each year when property or business owners who pay most of the district’s assessments can ask to dissolve it. They need to petition, and if they own at least half, the council starts the process to close the district and holds a public hearing.
The city council must prepare a plan explaining why and how they’ll close the district, including dealing with the district’s assets. This plan is shared with all affected property and business owners at least 30 days before the hearing, which must take place within 60 days of announcing the plan.
(a)CA Streets And Highways Code § 36744(a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1)CA Streets And Highways Code § 36744(a)(1) If the city council finds there has been a misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment.
(2)CA Streets And Highways Code § 36744(a)(2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30-day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners of real property or of businesses in the area who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall give notice of the public hearing on the proposed disestablishment.
(b)CA Streets And Highways Code § 36744(b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the district. The notice of the hearing on the proposed disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention.
district disestablishment city council resolution misappropriation of funds
Section § 36745
If a district is dissolved, any leftover money from assessments or asset sales, after paying debts, should be refunded to property or business owners in the district. The refunds are calculated using the same method as the assessments in the disestablishment year.
If the dissolution happens before an assessment for the fiscal year, the previous year's calculation method is used for refunds. Any outstanding assessment revenue collected after disestablishment must be used for improvements and activities outlined in the district's management plan.
(a)CA Streets And Highways Code § 36745(a) Upon the disestablishment of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan.
(b)CA Streets And Highways Code § 36745(b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.
district disestablishment refunds to property owners business owners
