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HomeMy WebLinkAboutSR - LMD-86-2 - 2015-16 ANNUAL ASSESSMENT ENGINEERS REPORT (2)AGENDA ITEM 0: June 9, 2015 TO: Honorable Mayor and Members of the City Council THRU: Rick Otto Interim City Manager FROM: Joe DeFrancesco, Public W�rks Dir ctQr Marie WnWt, `' Community Servic Direct j 1. SUBJECT ReviewedNerified B . City Manager / Finance Director To Be Presented By: Joe DeFrancesco Cons Calendar City Mgr Rpts Council Reports Legal Affairs Boards /Crates X Public Hrgs Admin Reports Plan /Environ Resolution No. 10870; A Resolution of the City Council of the City of Orange approving the Engineer's Report and providing for the Annual Assessment for Landscape Maintenance Assessment District 86 -2 (Santiago Hills). 2. SUMMARY Each year the process for setting the assessment of the Landscape Maintenance Districts is initiated. The process began on May 12, 2015 with the City Council approval of Resolution No. 10862 which approved the Preliminary Engineers Report for Landscape Maintenance Assessment District (LMD) 86 -2 and set June 9, 2015 as the date for the public hearing. This public hearing is the second step in the process and is held in accordance with the Lighting and Landscape Maintenance Act of 1972 as outlined in the "Order of Procedure ". At this time, property owners will have an opportunity to be heard on this issue. The proposed assessments are the same as last year and are at the maximum assessment previously levied in the District. The total assessment to be levied in LMD 86 -2 (Santiago Hills) for FY 2015 -16 is $533,281.00. When combined with $41,564.00 from Rancho Santiago Canyon College District, the total estimated revenues are $574,845.00, while expenses are estimated to be $640,031.00. At the April 14, 2015 meeting, the City Council approved the formation of a new district (LMD 15 -1) to exactly overlay the existing LMD 86 -2 to cover the additional funding necessary to adequately maintain the District. Ballots are due approving the assessment for LMD 15 -1 on June 9, 2015. If the ballot measure is successful the District will be fully funded at $925,904.00 between the existing LMD 86 -2, the proposed LMD 15 -1 and the agreement with Rancho Santiago Community College District. This amount will allow the District to cover the current shortfall between revenues and expenditures, as well as begin to gradually bring the maintenance in the District back to previous levels. If unsuccessful, services will continue to be reduced to keep expenditures within the funding provided by the existing LMD 86 -2 and the agreement with Rancho Santiago Community College District up to and including the elimination of some services. ITEM: I_ I ;,. .,_ _. DATE OF MEE nNGo. 4 � r ITEM 1 6/9/15 1 04Printed on Recycled Paper 3. RECOMMENDED ACTION 1. Adopt Resolution No. 10870 approving the Engineer's Report for the Annual Assessment for Landscape Maintenance Assessment District 86 -2 (Santiago Hills); and 2. Establish the assessment for fiscal year 2015/2016 for Landscape Maintenance Assessment District 86 -2 at $369.44 per single family unit per year. 4. FISCAL IMPACT The Santiago Hills Landscape Maintenance District 86 -2 pays all costs of District administration and related activities. The assessment revenue of $533,281.00 for Fiscal Year 2015/2016 will be placed in Fund Number 291. 5. STRATEGIC PLAN GOAL(S) 3a. Enhance and promote quality of life in the community — refurbish, maintain, develop and /or expand public use places and spaces. 6. GENERAL PLAN IMPLEMENTATION Land Use Element Goal 6.0 Advance development activity that is mutually beneficial to both the environment and the community. Policy 6.3 - Establish and maintain greenways, and pedestrian and bicycle connections that complement the residential, commercial and open space areas they connect. Policy 6.8 - Maximize landscaping along streetscapes and within development projects to enhance public health and environmental benefits. 7. DISCUSSION and BACKGROUND In 1987, LMD 86 -2 was established to maintain the landscape improvements constructed by Assessment District 86 -lin Santiago Hills. Annually, a detailed accounting of expenses is compiled and a new assessment is calculated for the benefiting property owners. This year's assessment for a single family detached equivalent unit is $369.44. This is the same as last year and the largest assessment currently allowed. Revenue in the District is derived from assessments paid by property owners, both residential and commercial, as well as Ranch Santiago Community College District who reimburses the District for the cost to maintain the parkways adjacent to the school. In 2005/06 the revenues received from the property owners were not keeping pace with the rising costs of maintenance. A ballot approval for a proposed increase above the maximum assessment was held in 2007 when increases in maintenance and utility costs had exceeded incoming revenue. The property owners in the District rejected the proposed increase. As a result, service reductions were imposed in the 2007/08 fiscal year and additional reductions annually thereafter to keep expenditures within the maximum assessment. In addition, reserve funds, mainly from ITEM 2 6/9/15 Q Printed on Recycled Paper LMD 86 -1, were utilized in order to be able to make the service level reductions less severe and not all at once, which is detrimental to the landscape and would have required significant future expenditures to replace damaged landscape. Some of these funds had previously been earmarked for landscape redesign of the District in order to reduce future maintenance and water costs as well as capital improvements to the aging infrastructure. However, the rising costs of maintaining the District with no increase in the assessment has caused the use of most of these reserves. On April 14, 2015, the City Council approved the formation of a new district LMD 15 -1 to exactly overlay the existing LMD 86 -2 and to provide the additional funding necessary to maintain the District. The annual assessment for the new district LMD 15 -1 must be approved by the property owners. Ballots are due approving the assessment for LMD 15 -1 on June 9, 2015 and a public hearing will be conducted on that date. If the ballot measure is successful, the District will be fully funded. If unsuccessful, further reductions will need to be imposed in the upcoming fiscal year to bring expenditures in line with revenues. FY 2015 -2016 reductions, if necessary, will include further reductions to landscape services and utilities, continued non - replacement of dead landscape, and deferred maintenance of non - safety related items. Factors leading to the need for additional service reductions include increased utility costs, and major repairs to an aging infrastructure, including electrical and lighting systems and concrete paths and trails and increased vandalism to District assets. In addition, the drought conditions these past two winters prevented the usual winter practice of decreasing the irrigation schedules and required the use of more water than is traditional during these months. Moving forward, necessary reductions to water use will also significantly impact the District landscapes. The proposed FY 2015 -16 budget for the combined LMD 86 -2 and LMD 15 -1 indicates the amount of funding required to restore service levels to the pre- service reduction levels of 2007 and a small capital budget to gradually replace aging landscaping and infrastructure over a ten year period. The existing LMD 86 -2 would stay at the maximum assessment. Additional revenues to fully fund the District would be obtained through the overlay district LMD 15 -1 and a separate agreement with Rancho Santiago Community College District. If the proposed annual assessment for LMD 15 -1 is approved by the property owners within the District and the City Council, the District would be fully funded. The maximum assessment total for LMD 86 -2 for FY 2015 -16 is $533,281.00. Expenditures in FY 2015 -16 are anticipated to be approximately $65,186.00 over revenues. The attached Final Engineer's Report contains detailed information about the assessment. 8. ATTACHMENTS • Resolution No. 10870 • Final Engineers Report FS:tal:ly N: \Public Works\ADMIN \LYoung \Council Items \C0LJNCIL\lune - 2014 \86 -2 Agenda 1415.doc ITEM 3 6/9/15 Q Printed on Recycled Paper RESOLUTION NO. 10870 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ORANGE APPROVING THE ENGINEERS REPORT AND PROVIDING FOR THE ANNUAL ASSESSMENT FOR LANDSCAPE MAINTENANCE DISTRICT 86 -2 (SANTIAGO HILLS). WHEREAS, the City Council of the City of Orange has previously formed a special maintenance district pursuant to the terms of the "Landscaping and Lighting Act of 1972" being part 2 of Division 15 of the Streets and Highways Code of the State of California, in what is known and designated as Landscape Maintenance District No. 86 -2 (hereinafter referred to as "Assessment District "); and WHEREAS, the City Council has initiated proceedings for the levy of the annual assessment for the Assessment District; and WHEREAS, at this time a public hearing has been held in the manner and form as required by law, and the City Council has considered all oral statements and written protests made or filed by all interested persons; and WHEREAS, this City Council is now satisfied with the assessment and diagram and all other matters as contained in the Engineer's Report as now submitted for final consideration and approval, and is now desirous of proceeding with the levy of the annual assessment. follows: NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Orange as Section I• That the above recitals are all true and correct. Section II• That all protests and objections of every kind and nature by, and the same hereby are, overruled and denied. Section III• That the Final Engineer's Report consisting of the final submitted assessment and diagram for the proceedings, is hereby approved and confirmed and a copy of said Report is hereby filed with the City Clerk. Section IV• That the assessments for fiscal year 2015/2016 be established as approved by the City Council, and are hereby confirmed and levied upon the respective subdivisions of land in the Assessment District in the amounts as set forth in said final approved Engineer's Report. Section V• The City Clerk shall immediately accomplish the following: A. Deliver to the City Engineer the assessment, together with the diagram attached thereto and made a part thereof, as confirmed, with a Certificate of Confirmation attached and the date thereof. Said City Engineer shall then immediately place for a record said diagram and assessment in his office in a suitable book as a permanent record and attach a Certificate of Recordation. B. Cause to be filed a certified copy of a diagram and assessment with the County Auditor, said filing to be completed no later than the 3 r Monday in August.