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RES-11551 ENGINEERS REPORT FOR LANDSCAPE MAINTENANCE DISTRICTS 86-2 (SANTIAGO HILLS) AND 15-1 (SANITAGO HILLS OVERLAY)RESOLUTION NO. 11551 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 DISTRICTS 86-2 (SANTIAGO HILLS) AND 15-1 SANTIAGO HILLS OVERLAY) 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 California Streets and Highways Code, in what is known and designated as Landscape Maintenance District Nos. 86-2 and 15-1 ("Assessment Districts"); 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 now desires proceeding with the levy of the annual assessment. NOW,THEREFORE,BE IT RESOLVED by the City Council of the City of Orange as follows: 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 2024-2025 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 3rd Monday in August. Section VI: That the above confirmed assessment shall be collected at the same time and in the same manner as County property taxes are collected, and all laws providing for the collection and enforcement of these assessments. ADOPTED this 28th day of May 2024. strifc (/ e Ser2kr— aniel R. Slater, Mayor, City of Orange ATTEST: Pamela Coleman, City Clerk, City of Orange APPROVED AS TO FORM: Mike Vigliotta, City Attorney Attachments: Engineer's Report—Landscape Maintenance District Nos. 86-2 and 15-1 Resolution No. 11551 2 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF ORANGE I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the 28th day of May 2024,by the following vote: AYES: COUNCILMEMBERS: Barrios, Dumitru,Tavoularis, Bilodeau, and Slater NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Gutierrez RECUSE: COUNCILMEMBERS: Gyllenhammer c--Veti?14/(64-0/0-6 Pamela Coleman, City Clerk, City of Orange Resolution No. 11551 3 Engineer's Report City of Orange Landscape Maintenance District No.86-2 CITY OF ORANGE FINAL ENGINEER'S REPORT FOR THE ANNUAL LEVY ASSESSMENT LANDSCAPE MAINTENANCE DISTRICT NO. 86-2 FISCAL YEAR 2024-2025 of U GORPORAT \ 441( kb 4efit C°UPITV Cr- LANDSCAPE MAINTENANCE DISTRICT NO. 86-2 SANTIAGO HILLS Intent Meeting: April 23, 2024 Public Hearing: May 28, 2024 LMD 86-2 Final ER FY 2024-25 1 Engineer's Report City of Orange Landscape Maintenance District No. 86-2 AFFIDAVIT FOR THE ENGINEER'S REPORT This Report describes the City of Orange Landscape Maintenance District No. 86-2 and proposed changes or modifications related thereto including the improvements,budgets,parcels and assessments to be levied for Fiscal Year 2024-2025,pursuant to the City's Resolution of Intention. Reference is hereby made to the Orange County Assessor's maps for a detailed description of the lines and dimensions of parcels within the District. The undersigned respectfully submits the enclosed Report/as directed by the City Council. Dated this 1 day of / r.J ,2024. e,°4 ESS/0 By O otIK So l Fr c SUn k- ti et„ Atsistant Public Works Director/City Engineer No. 52835 rn 2 Engineer's Report City of Orange Landscape Maintenance District No.86-2 TABLE OF CONTENTS AFFIDAVIT FOR THE ENGINEER'S REPORT 2 INTRODUCTION 4 PART I —PLANS AND SPECIFICATIONS 6 A. Description of the District 6 B. Improvements and Services 6 PART II—METHOD OF APPORTIONMENT 10 A. General 10 B. Benefit Analysis 10 C. Assessment Methodology 12 PART III —DISTRICT BUDGET 14 PART IV—DISTRICT DIAGRAMS 16 PART V—ASSESSMENT ROLL 18 3 Engineer's Report City of Orange Landscape Maintenance District No.86-2 INTRODUCTION Pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Part 2 of Division 15 of the California Streets and Highways Code, commencing with Section 22500 (hereafter referred to as the "1972 Act"), and in compliance with the substantive and procedural requirements of the California State Constitution Articles XIIIC and XIIID (hereafter referred to as the "California Constitution"), the City Council of the City of Orange, County of Orange, State of California (hereafter referred to as City"), in connection with the annual levy and collection of assessments of the special benefit assessment district designated as: Landscape Maintenance District No. 86-2 hereafter referred to as the "District"), which includes all lots and parcels of land that specially benefit from the improvements within the District. This Engineer's Report (hereafter referred to as Report") has been prepared in connection with the annual levy and collections of assessments for said District pursuant to Chapter 1,Article 4 of the 1972 Act. The City Council proposes to levy and collect annual assessments on the County tax rolls to provide ongoing funding for the costs and expenses required to service and maintain the landscaping improvements originally installed in connection with the development of properties within the District. The improvements to be provided by the District and the assessments described herein are made pursuant to the 1972 Act. This Report describes the District, the improvements, and the proposed assessments to be levied in Fiscal Year 2024-2025 against properties in connection with the special benefits the properties will receive from the maintenance and servicing of the District improvements. The annual assessments to be levied on properties within the District will provide a funding source for the continued operation and maintenance of local landscaping improvements installed in connection with the development of properties within the District. The assessments described in this Report are based on an estimate of the direct expenditures, incidental expenses, and fund balances that will be necessary to maintain and service the improvements. The word "parcel," for the purposes of this Report,refers to an individual property assigned its own Assessor's Parcel Number (APN) by the Orange County Assessor's Office. The Orange County Auditor/Controller uses Assessor's Parcel Numbers and specific Fund Numbers to identify properties to be assessed on the tax roll for the special benefit assessments. This Report has been prepared and presented to the City Council to address any proposed changes to the District or improvements, if any, and the proposed budget and assessments for Fiscal Year 2024-2025. The City Council will conduct a noticed public hearing to consider public testimonies, comments and written protests regarding the levy and collection of assessments for Fiscal Year 2024-2025. Upon conclusion of the public hearing, if majority protest does not exist the City Council may approve this Report (as submitted or amended) and levy the assessments for Fiscal Year 2024-2025. In such case, the assessments for fiscal year 2024-2025 shall be submitted to the Orange County Auditor/Controller for inclusion on the property tax roll for each parcel. If the proposed annual assessments for this District exceed the maximum assessment described herein (as approved by the property owners), the new or increased assessment must be confirmed through another property owner protest ballot proceeding before such an assessment may be imposed. This Report consists of five (5) parts: 4 Engineer's Report City of Orange Landscape Maintenance District No.86-2 Part I Plans and Specifications: A description of the District boundaries and the improvements associated with the District. The District is being formed as a single benefit zone encompassing all properties within the territory identified as Landscape and Maintenance District No 86-2. Part II The Method of Apportionment: A discussion of benefits the improvements and services provide to properties within the District and the method of calculating each property's proportional special benefit and annual assessment. Part III The District Budget: An estimate of the annual costs to operate, maintain and service the landscaping and appurtenant facilities installed and constructed as part of the development of properties within the District. This budget includes an estimate of anticipated direct maintenance costs and incidental expenses. The special benefit assessments are based on the overall operation costs minus any costs that are considered general benefit. The proposed assessments for Fiscal Year 2024-2025, and each subsequent year shall be based on the estimated net annual cost of operating, maintaining and servicing the improvements for that fiscal year as well as funds to be collected in installments to perform maintenance activities that cannot be reasonably collected in a single fiscal year's assessments. Part IV District Diagram: A Diagram showing the exterior boundaries of the District is provided in this Report and includes all parcels that will receive special benefits from the improvements. Reference is hereby made to the Orange County Assessor's Parcel Maps for a detailed description of the lines and dimensions of each lot and parcel of land within the District. Part V Assessment Roll: A listing of the proposed assessment amounts to be levied on Assessor's Parcel within the District for Fiscal Year 2024-2025. The proposed assessment amount for each parcel is based on the parcel's proportional special benefit as outlined in the method of apportionment. I Engineer's Report City of Orange Landscape Maintenance District No.86-2 PART I — PLANS AND SPECIFICATIONS A. Description of the District The assessment district boundary is shown on a map entitled Assessment Diagram, Landscape Maintenance District No. 86-2, City of Orange, which is on file with the City Clerk of the City of Orange.A reduced scale copy of the Diagram can be found in Part IV of this document. B. Improvements and Services Improvements and Services Permitted Pursuant to the 1972 Act As generally defined by the Landscaping and lighting Act of 1972 and applicable to this District,the improvements and associated assessments may include one or more of the following: 1) The installation or planting of landscaping; 2) The installation or construction of statuary, fountains,and other ornamental structures and facilities; 3) The installation or construction of any facilities which are appurtenant to any of the foregoing or which are necessary or convenient for the maintenance or servicing thereof; 4) The installation of park or recreational improvements,including,but not limited to, all of the following: a) Land preparation, such as grading,leveling,cutting and filling, sod,landscaping,irrigation systems, sidewalks,and drainage. b) Lights,playground equipment,play courts,and public restrooms. 5) The maintenance or servicing, of any of the foregoing including the furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement including but not limited to: a) Repair,removal,or replacement of all or any part of any improvements; b) Grading,clearing, removal of debris,the installation or construction of curbs,gutters,walls, sidewalks,or paving,or water,irrigation,drainage,or electrical facilities; c) Providing for the life,growth,health,and beauty of landscaping,including cultivation, irrigation, trimming, spraying, fertilizing,or treating for disease or injury; d) The removal of trimmings,rubbish,debris,and other solid waste; e) The cleaning, sandblasting,and painting of walls and other improvements to remove or cover graffiti; f) Electric current or energy,gas,or other illuminating agent for any public lighting facilities or for the lighting or operation of any other improvements; g) Water for the irrigation of any landscaping,the operation of any fountains, or the maintenance of any other improvements. 6) Incidental expenses associated with the improvements including,but not limited to: 6 Engineer's Report City of Orange Landscape Maintenance District No.86-2 a) The cost of preparation of the report,including plans, specifications,estimates,diagram,and assessment; b) Compensation payable to the County for collection of assessments; c) Compensation of any engineer or attorney employed to render services; d) Any other expenses incidental to the construction,installation,or maintenance and servicing of the improvements; Description of Planned Improvements The landscape improvements are generally described as follows: a) Parkway and Recreation Areas: Newport Boulevard - approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on the east side from Chapman Avenue to 312 feet south of the centerline of Skylark Place. Chapman Avenue - approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections,on south side from Newport Boulevard to Jamboree Road. Canyon View Avenue - approximately 30-foot wide zones (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections,on both sides from Newport Boulevard to Jamboree Road. White Oak Ridge — approximately 17-foot wide zones (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections,on both sides from Newport Boulevard to Canyon View Avenue. Trails End Lane - approximately 17-foot wide zone on the west side and approximately 28- to 32-foot wide zone on the east side (including the width of the sidewalks), both zones from the back of the curb to the property line, and corner cutoffs at intersections, from White Oak Ridge to Chapman Avenue. Handy Creek Corridor - from the intersection of Chapman Avenue and Newport Boulevard to White Oak Ridge and from White Oak Ridge to the intersection of Canyon View Avenue and Handy Creek Road (Lot 20, a portion of Lot 11, and Lot D of Tract No. 12417) including concrete walkways which also serve as emergency access ways. Paseo - approximately 50-foot wide zone from the Park to White Oak Ridge and from White Oak Ridge to Old Camp Road (Lots A and B of Tract No. 12417) and approximately 35-foot wide zone from the Paseo to White Oak Ridge (Lot C of Tract No. 12417) including surface and subsurface drainage facilities and concrete walkways which also serve as emergency access ways. Handy Creek Road - approximately 10-foot wide zone (including the width of the sidewalks) on south side from the back of the curb to the property line form the end of Handy Creek Corridor (Lot D, Tract No. 12417) near Canyon View Avenue to the northerly terminus of the street. 7 Engineer's Report City of Orange Landscape Maintenance District No.86-2 Fort Road - approximately 17-foot wide zones (including the width of the sidewalks) from the back of the curb to the property line on south side from White Oak Ridge to Jamboree Road. Santiago Canyon Road - approximately 18-foot wide zone (including the width of the sidewalk) from back of curb to back of sidewalk on north and south sides from Newport Boulevard to Jamboree Road. Old Camp Road - approximately 4-foot wide zones from back of curb to property line on both sides from Canyon View Avenue to the northerly terminus of the street. Skylark Place - approximately 18-foot wide zones (including the width of the sidewalk) from back of the curb to the property line on both sides from White Oak Ridge to Newport Boulevard. Jamboree Road - variable width zone (including the width of the bike trail-sidewalk) from the back of the curb to the property line on the west side from Canyon View Avenue to Chapman Avenue. Additional Areas - areas adjacent to the 18-foot wide zones along Skylark Place, Chapman Avenue, and Jamboree Road have been dedicated to the City with tracts 12672,12741,12711,15398 and PM 92-195. Such areas have been landscaped by the developers and the sprinkler systems tied into the District's. b) Medians Chapman Avenue - 14-foot wide median from Newport Boulevard to Jamboree Road. White Oak Ridge - 14-foot wide medians at Newport Boulevard and Canyon View Avenue. Trails End Lane- 14-foot wide median from White Oak Ridge to Chapman Avenue. Jamboree Road - 24-foot wide median from southerly City limits to Santiago Canyon Road. Santiago Canyon Road-Variable width from Newport Boulevard to Jamboree Road. Newport Boulevard - 22-foot wide median from Chapman Avenue to Santiago Canyon Road. c) The following items are excluded from the Maintenance District: The 8 +/- acre Santiago Hills Park is excluded from this Landscape Maintenance District. Sidewalks along all Maintenance District streets are excluded from this Landscape Maintenance District. The equestrian trail along Canyon View Avenue is excluded from this Landscape Maintenance District. 8 Engineer's Report City of Orange Landscape Maintenance District No.86-2 d) Maintenance shall include,but not be limited to: repair,removal,replacement or installation of all or any part of any included improvement such as storm drains and pedestrian walkways in the paseos; providing for the life,growth,health, and beauty of landscaping,including cultivation, irrigation, trimming, spraying, fertilizing,and treating for disease or injury;and the removal of trimmings,rubbish,debris,and other solid waste. The maintenance of the District improvements generally include,but are not limited to all materials, equipment, utilities, labor and incidental expenses including administrative expenses for annual operation of the District as well as the performance of occasional repairs,replacement and expanded maintenance activities associated with those improvements. Detailed maps and descriptions of the location and extent of the improvements to be maintained by the District are on file at the City and by reference are made part of this Report. The estimated annual cost to provide and maintain the improvements within the District shall be allocated to each property in proportion to the special benefits received. The Method of Apportionment described in this Report utilizes commonly accepted assessment engineering practices and has been established pursuant to the 1972 Act and the provisions of the California Constitution. 9 Engineer's Report City of Orange Landscape Maintenance District No.86-2 PART II — METHOD OF APPORTIONMENT A. General The 1972 Act permits the establishment of assessment districts by agencies for the purpose of providing certain public improvements, which include the construction, maintenance, and servicing of public landscaping and appurtenant facilities. The 1972 Act further requires that the cost of these improvements be levied according to benefit rather than assessed value: The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot orparcelfrom the improvements." The method of apportionment described in this Report for allocation of special benefit assessments utilizes commonly accepted engineering practices and have been established pursuant to the 1972 Act and the provisions of the California Constitution. The formula used for calculating assessments in this District reflect the composition of the parcels, and the improvements and services provided, to fairly apportion the costs based on benefit to each parcel. B. Benefit Analysis Each of the proposed improvements, the associated costs and assessments have been carefully reviewed, identified and allocated based on special benefit pursuant to the provisions of the California Constitution and 1972 Act. The improvements provided by this District and for which properties will be assessed have been identified as necessary, required and/or desired for the orderly development of the residential properties within the District to their full potential. As such, the ongoing operation, servicing and maintenance of these improvements would be the financial obligation of those properties. Therefore, the improvements and the annual costs of ensuring the maintenance and operation of the improvements are a distinct and special benefit to the residential properties within the District. Special Benefit The method of apportionment (method of assessment) established herein is based on the premise that each assessed parcel within the District receives special benefits from the improvements and the desirability and security of those properties is enhanced by the presence of well-maintained landscaping in close proximity to those properties. The special benefits associated with the landscaping and open space improvements are specifically: Enhanced desirability of properties through association with the improvements. Improved aesthetic appeal of properties providing a positive representation of the area and properties. Enhanced adaptation of the urban environment within the natural environment from adequate green space and landscaping. Environmental enhancement through improved erosion resistance,dust and debris control,and fire prevention. Increased sense of pride in ownership of property within the District resulting from well- maintained improvements associated with the properties. 10 Engineer's Report City of Orange Landscape Maintenance District No.86-2 Enhanced quality of life through well-maintained green space and landscaped areas. Reduced criminal activity and property-related crimes (especially vandalism) against properties in the District through well-maintained surroundings and amenities including abatement of graffiti. Enhanced environmental quality of the parcels by moderating temperatures, providing oxygenation and attenuating noise. The parkways and medians consist of landscaped areas along the edge of or within the middle of streets and highways in the District. The District also has landscaped corridors extending through the developed area,which provide access to Santiago Hills Park. The improvements in these areas consist of trees,shrubs,ornamental vegetation,and appurtenant improvements. The improvements extend throughout the development area and serve several purposes. The landscaped parkways along the streets and highways enhance the public walkways throughout the District and allow pedestrian access to the residents in the area. These parkways also provide passive and active recreational uses as well as the aesthetic enhancement for the total development area. Landscaped median islands also provide similar enhancements for the residents in the area. The landscaped recreation/pedestrian corridors throughout the District provide for open space and recreational uses,which connect to the park site throughout the development area. Besides contributing to the active and passive recreation use in the area, the corridors aesthetically enhance the area within the District. Maintenance of these public improvements primarily renders a people oriented benefit to the properties within the boundaries of the District and, as such, relates to the number of persons in each dwelling unit on each property.These benefits are direct and special to the properties within theDistrict. The preceding special benefits all contribute to the overall esthetic value and desirability of each of the assessed parcels within the District and thereby provide a special enhancement to these properties. Furthermore, it has been determined that the lack of funding to properly service and maintain the improvements would likely have a direct negative impact on the properties within the District. General Benefit In reviewing the District improvements,the proximity of those improvements to both properties within the District and those outside the District as well as the reasons for installing and constructing such improvements,it is evident that the improvements are solely the result of developing properties within the District and the ongoing maintenance and operation of these improvements will directly affect the properties within the District. Although the improvements are visible to the public at large, the construction and installation of these improvements were necessary for the development of properties within the District and are not required nor necessarily desired by any properties or developments outside the District boundary and any public access or use of the improvements by others is incidental. Therefore, it has been determined that the improvements and the ongoing maintenance, servicing and operation of those improvements provide no measurable general benefit to properties outside the District or to the public at large,but clearly provide distinct and special benefits to properties within the District. 11 Engineer's Report City of Orange Landscape Maintenance District No.86-2 C. Assessment Methodology The benefit formula used to determine the assessment obligation for each parcel should be based upon both the improvements that benefit the parcels as well as the use of each property as compared to other parcels that benefit from those specific improvements. The method of apportionment established for most benefit assessment districts utilizes a weighted method of apportionment known as an Equivalent Benefit Unit (EBU) methodology The Equivalent Benefit Unit method of apportionment11usesthesingle-family home site as the basic unit of assessment.A single-family residential property equals one Equivalent Benefit Unit ("EBU"). Every other land use is converted to EBUs based on an assessment formula that equates the property's specific development status, type of development (land use),and size of the property,as compared to a single-family home site. The EBU method of apportioning benefit is typically seen as the most appropriate and equitable assessment methodology for districts formed under the 1972 Act, as the benefit to each parcel from the improvements are apportioned as a function of land use type,size and development. EBU Application by Land Use: Single-Family Residential—This land use is defined as a fully subdivided residential home site with or without a structure.This land use is assessed 1.0 EBU per lot or parcel.This is the base value that the other land use types are compared and weighted against(i.e.Equivalent Benefit Unit or EBU). Multi-Family Residential— This land use is defined as a fully subdivided residential parcel that has more than one residential unit developed on the property.This land use is assessed 0.6 EBU per dwelling unit. Mixed Use Property — This land use is defined as property developed for either commercial or industrial use.This land use type is assessed at 11.0 EBUs per gross acre. Exempt Parcels —This land use identifies properties that are not assessed and are assigned 0.0 EBU. This land use classification may include, but is not limited, to lots or parcels identified as public streets and other roadways (typically not assigned an APN by the County); dedicated public easements, open space areas and right-of-ways including greenbelts and parkways; utility right-of-ways; common areas, sliver parcels and bifurcated lots or any other property that cannot be developed; park properties and other publicly owned properties that are part of the District improvements or that have little or no improvement value. These types of parcels are considered to receive little or no benefit from the improvements and are therefore exempted from assessment. Lots 9, 10, 11, 15, and 19 of Tract No. 12417 have been assigned 0.0 EBU because they have been excluded from the District. The cost of maintaining the landscape improvements on these publicly owned parcels is not paid by the District but rather from the general fund of the public agency owning the parcel.Therefore,these publicly owned parcels do not receive any special benefit from the District. The following table provides a listing of land use types, land use code designations, the Equivalent Benefit Unit factor applied to that land use type, and the multiplying factor used to calculate each parcel's individual EBU. 12 Engineer's Report City of Orange Landscape Maintenance District No.86-2 Land Use Codes and Equivalent Benefit Units Property Type Equivalent Benefit Multiplier Unit Single-family Residential 1.000 Unit/Lot/Parcel Multi-family Residential 0.600 Units/Dwelling Units Mixed Use 11.000 Acreage Exempt 0.000 Parcel The benefit formula applied to parcels within the District is based on the preceding Equivalent Benefit Unit (EBU) table. Each parcel's EBU correlates the parcel's special benefit received as compared to the other parcels benefiting from the improvements. The following formula is used to calculate each parcel's EBU (proportional benefit). Parcel Type EBU x Multiplier(Acres or Unit) = Parcel's EBU The total number of Equivalent Benefit Units (EBUs) is the sum of all individual EBUs applied to parcels that receive a special benefit from the improvement. An assessment amount per EBU (Rate) for each improvement is established by taking the total cost of the improvement and dividing that amount by the total number of EBUs of parcels benefiting from the improvement. This Rate is then applied back to each parcel's individual EBU to determine the parcel's proportionate benefit and assessment obligation for that improvement. The Maximum allowable assessment rate of $369.44 EBU (single family) generates an assessment total of$533,650.77. Total Balance to Levy/Total EBU=Assessment Rate per EBU Assessment Rate per EBU x Parcel's EBU =Parcel's Assessment I 13 Engineer's Report City of Orange Landscape Maintenance District No.86-2 PART III — DISTRICT BUDGET The following budget outlines the estimated costs to maintain the improvements for 2024-2025. ANNUAL LEVY OF ASSESSMENT LANDSCAPE MAINTENANCE DISTRICT NO. 86-2 City of Orange ESTIMATED COSTS OPERATION& MAINTENANCE FUND BALANCE FROM PRIOR YEARS Estimated Fund Balance(Includes 15-1 & 86-2)as of March 2024 1,123,760 The estimated budget necessary for the 2024-2025 Fiscal Year for the District is as follows: BUDGET ITEM COST ANNUAL MAINTENANCE Landscaping 383,562 Tree Trimming 145,870 Electrical Maintenance 40,000 Misc. Contract Services 0 Repair/Maintenance Services 82,051 Supplies 5,300 Other Professional Services 1,000 Telephone 1,000 Electricity 13,000 Water 168,000 Salaries& Benefits 51,842 City Administrative Services 46,461 Capital Replacement/Dedicated Reserves 0 TOTAL EST. LANDSCAPE MAINTENANCE EXPENDITURES 938,086 ESTIMATED REVENUE Landscape Maintenance District No. 86-2 533,651 Rancho Santiago Community College District 26,557 Proposed Benefit Assessment FY 2024/25(LMD 15-1) See LMD 15-1 Engineer's Report for specifics) 367,579 CPI Adjustment(Current Year 3.0%) 11,027 Unused CPI Adjustment(Carry over from prior years) 0 TOTAL ESTIMATED REVENUE 938,814 14 Engineer's Report City of Orange Landscape Maintenance District No.86-2 SURPLUS FUNDS TO BE ADDED TO RESERVES 728 This Budget Estimate is for the purpose of establishing an Annual Assessment. It may vary from the adopted City Budget.All assessments collected by the District may only be used for District expenditures regardless of the Budget Estimate. BALANCE TO LEVY FOR 86-2 533,651 15 Engineer's Report City of Orange Landscape Maintenance District No.86-2 PART IV - DISTRICT DIAGRAMS The parcels within the Landscape Maintenance District No 86-2 consist of all lots, parcels and subdivisions of land located in the planned residential development known as Santiago Hills. The following diagram incorporates all parcels within the District, as the same existed at the time this Report was prepared. The combination of this map and the Assessment Roll contained in this Report constitute the Assessment Diagram for the Landscape and Maintenance District No.86-2. 16 Engineer's Report City of Orange Landscape Maintenance District No.86-2 i L Total Maintained Area =1,297,585sgk Area Adjacent to Santiago Canyon College 84,53e sg t it4-• 4/7 ...• p. c 3 Ao„ PARK 0" 1r A.,,, -j . .., ',... APAr Al III f? .k -"% f/417/1,../OHtssr ` t q --:> 'Nit 11I44> 14. fir* lynom, •H l wv v,E,f1a AperAr•14.XI* 4-- \*?! A I tit". , 101.4.ft. ;4,4 4),. 1, 4.110 Air ---- e• M/ ... tl mr spa N S e2;. tillotti 'SW, om, 9 RI{ N: 1. ram ' e i. te r. N. its r 4Pita ` A. Ns.,,„..wlhtri illt 1iltir Slain ir• tr7n I 1 T7 Air CANYONVIEWAVE -..l' FEGTONAL 1( s PAS LMD 86-2 SANTIAGO HILLS I Landscape rI/f,r Maintenance Areas NA LMD Area F District Area Maintained By cDistrictFundsr/7dNog Maintained C[l By District Funds c city of 0 .30 4J0 600 800 1 000 Vrange Feet i 17 Engineer's Report City of Orange Landscape Maintenance District No.86-2 PART V - ASSESSMENT ROLL Parcel identification for each lot or parcel within the District is based on available parcel maps and property data from the Orange County Assessor's Office, as they existed at the time this Engineer's Report was prepared and the City Council adopted the Resolution of Intention. A listing of the lots and parcels to be assessed within this District along with the assessment amounts is provided herein. If any parcel submitted for collection is identified by the County Auditor/Controller to be an invalid parcel number for the fiscal year, a corrected parcel number and/or new parcel numbers will be identified and resubmitted to the County Auditor/Controller. The assessment amount to be levied and collected for the resubmitted parcel or parcels shall be based on the method of apportionment and assessment rate described in this Report as approved by the City Council. Therefore, if a single parcel is subdivided to multiple parcels, the assessment amount applied to each of the new parcels shall be recalculated and applied according to the approved method of apportionment and assessment rate rather than a proportionate share of the original assessment. The following is a list of the parcels and proposed assessment amounts for Fiscal Year 2024-2025 for each of the parcels within the District as determined by the assessment rates and method of apportionment described herein: I 18 Engineer's Report City of Orange Landscape Maintenance District No.15-1 CITY OF ORANGE FINAL ENGINEER'S REPORT FOR THE ANNUAL LEVY ASSESSMENT LANDSCAPE MAINTENANCE DISTRICT NO. 15-1 FISCAL YEAR 2024-2025 ti1iI nL6,Agittb LANDSCAPE MAINTENANCE DISTRICT NO. 15-1 SANTIAGO HILLS Intent Meeting: April 23, 2024 Public Hearing: May 28,2024 LMD 15-1 Final ER FY 2024-25 1 Engineer's Report City of Orange Landscape Maintenance District No.15-1 AFFIDAVIT FOR THE ENGINEER'S REPORT This Report describes the City of Orange Landscape Maintenance District No. 15-1 and proposed changes or modifications related thereto including the improvements,budgets,parcels and assessments to be levied for Fiscal Year 2024-2025,pursuant to the City's Resolution of Intention. Reference is hereby made to the Orange County Assessor's maps for a detailed description of the lines and dimensions of parcels within the District. The undersigned respectfully submits the enclosed Report as directed by the City Council. Dated this 2I/I/ti day of h-J ,2024. QR0 ESS/py By go olsIK shy ctiFraun Assistant Public Works Director/ City Engineer No. 52835 m I Exp ecr j> e Engineer's Report City of Orange Landscape Maintenance District No.15-1 TABLE OF CONTENTS AFFIDAVIT FOR THE ENGINEER'S REPORT 2 INTRODUCTION 4 Overview 4 District's Facilities 4 Assessment Background 4 PLANS & SPECIFICATIONS 5 FISCAL YEAR 2024-25 ESTIMATE OF COST AND BUDGET 8 Budget for Fiscal Year 2024-25 8 METHOD OF APPORTIONMENT 10 Method of Apportionment 10 Discussion of Benefit 10 Benefit Factors 11 Benefit Finding 14 Zones of Benefit 17 Method of Assessment 18 Residential Properties 19 Commercial Properties 20 Vacant/Undeveloped Properties 21 Other Properties 21 Annual Cost Indexing 22 Appeals of Assessments Levied to Property 22 Assessment Funds Must Be Expended Within the District Area 23 ASSESSMENT 24 ASSESSMENT DIAGRAM 25 ASSESSMENT ROLL 27 Engineer's Report City of Orange Landscape Maintenance District No.15-1 INTRODUCTION Overview The City of Orange (the "City") services and maintains perimeter and median landscaping,interior walkways and paseos, and other improvements ("Improvements") in the Santiago Hills neighborhoods in the eastern part of the City. This Engineer's Report ("Report") was prepared to establish the budget for the Improvements (as described below) that will be funded by the new 2024-2025 assessments, if approved, and other revenue, to determine the general and special benefits received from the Improvements by property within the Improvement District District"), and to determine the method of assessment apportionment to lots and parcels. This Report and the assessments have been made pursuant to the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the California Streets and Highways Code (the "Act") and Article XIIID of the California Constitution (the "Article"). Landscape Maintenance District (LMD) No. 15-1 was formed in 2015. This assessment district is identical to the existing Landscape Maintenance District No. 86-2 in its geographic boundaries, parcels to be assessed, Improvements to be serviced, maintained, or repaired and budgeted cost centers. The assessments collected,if approved,will be in addition to those collected for Landscape Maintenance District 86-2. District's Facilities The City's landscape facilities to be funded by assessments within this District are located in the Santiago Hills neighborhoods of the City. The Improvements generally include entrance signs, traffic islands and medians, parkways, recreation areas, paseos, lighting, and the infrastructure required to support these Improvements. Assessment Background The City formed Landscape Maintenance District No. 86-2 in 1987 to service and maintain the specific landscape facilities and improvements relevant to this report. Revenues from that district remain relatively flat, there is not an inflation adjustment provision, while the costs to maintain and service these facilities and improvements have risen steadily. In 2007 the City began to decrease service levels in an effort to contain costs within available revenues. The service levels continued to decrease to offset the effects of rising utilities, labor and materials costs until the creation of LMD No. 15-1. In order to restore service levels and make needed repairs and improvements to the District's facilities,the LMD No. 15-1 that exactly overlaid the existing assessment district,was formed. 4 Engineer's Report City of Orange Landscape Maintenance District No.15-1 PLANS & SPECIFICATIONS The City maintains landscaping and other improvements in locations within the proposed Assessment District's boundaries. The work and improvements proposed to be undertaken by the Landscape Maintenance District No. 15-1 and the cost thereof paid from the levy of the annual Assessment provide special benefit to Assessor Parcels within the District as defined in the Method of Assessment herein. In addition to the definitions provided by the Landscaping and Lighting Act of 1972, (the"Act") the work and improvements are generally described as follows: Entrance Sign The entrance signs with landscape improvements to be maintained are to be located at the following locations within the District: Chapman Avenue at Newport Boulevard (southeast corner) Newport Boulevard at Canyon View Avenue (northeast corner) Parkways and Recreation Areas The landscaped parkways and recreation areas to be maintained by the District are located as follows: Newport Boulevard— approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line,and corner cutoffs at intersections,on the east side from Santiago Canyon Road to 312 feet south of the centerline of Skylark Place. Chapman Avenue — approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on both sides from Newport Boulevard to Jamboree Road. Canyon View Avenue — approximately 30-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on both sides from Newport Boulevard to Jamboree Road. White Oak Ridge — approximately 17-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on both sides from Newport Boulevard to Canyon View Avenue. Trails End Lane — approximately 17-foot wide zone on the west side and approximately 28- to 32-foot wide zone on the east side (including the width of the sidewalk), both zones from the back of the curb to the property line, and corner cutoffs at intersections, from White Oak Ridge to Chapman Avenue. Handy Creek Corridor— from the intersection of Chapman Avenue and Newport Boulevard to White Oak Ridge, and from White Oak Ridge to the intersection of Canyon View Avenue and Aspen Street (Lot 20, a portion of Lot 11, and Lot D of Tract 12417) including concrete walkways which also serve as emergency access ways. Paseo— approximately 50-foot wide zone from Santiago Hills Park to White Oak Ridge and from White Oak Ridge to Old Camp Road (Lots A and B of tract No. 12417) and approximately 35-foot wide zone from the Paseo to White Oak Ridge (Lot C of Tract No. 12417) including surface and subsurface drainage facilities and concrete walkways which also serve as emergency access ways. Aspen Street — approximately 10-foot wide zone (including the width of the sidewalk) on south side from the back of the curb to the property line from the end of Handy Creek 5 Engineer's Report City of Orange Landscape Maintenance District No.15-1 Corridor (Lot D,Tract No. 12417) near Canyon View Avenue to the northerly terminus of the street. Fort Road — approximately 17-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line on south side from White Oak Ridge to Jamboree Road. Santiago Canyon Road — approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line on north and south sides from Newport Boulevard to Jamboree Road. Old Camp Road — approximately 4-foot wide zone from the back of the curb to the property line on both sides from Canyon View Avenue to northerly terminus of the street. Skylark Place—approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line on both sides from White Oak Ridge to Newport Boulevard. Jamboree Road—variable width zone (including width of the bike trail-sidewalk) from back of the curb to the property line on the west side from Canyon View Avenue to Santiago Canyon Road. Additional Areas — areas adjacent to the 18-foot wide zones along Skylark Place, Chapman Avenue, and Jamboree Road have been dedicated to the City with tracts 12672, 12741, 12711, 15398 and PM 92-195. Such areas have been landscaped by the developers and the sprinkler systems tied to the District's. Traffic Islands and Medians The landscaped islands and medians to be maintained by the District are located as follows: Chapman Avenue— 14-foot wide median from Newport Boulevard to Jamboree Road. White Oak Ridge— 14-foot wide medians at Newport Boulevard and Canyon View Avenue. Trails End Lane— 14-foot wide median from White Oak Ridge to Chapman Avenue. Jamboree Road—24-foot wide median from southerly City limits to Santiago Canyon road. Santiago Canyon Road—Variable width from Newport Boulevard to Jamboree Road. Newport Boulevard — 22-foot wide median from Chapman Avenue to Santiago Canyon Road. Excluded Improvements The following items are excluded from the District: The 8+/- acre Santiago Hills Park is excluded from this District The City's public safety facility on East Fort Road is excluded from this District Chapman Hills Elementary School is excluded from this District Santiago Canyon College is excluded from this District (Note that while some public improvements along the College frontage are maintained along with District Improvements, the College pays directly into the District's fund to compensate for that work) Sidewalks along all streets within the District are excluded The Equestrian trail along Canyon View Avenue is excluded from this District Definitions Installation, maintenance and servicing of Improvements,may include,but are not limited to,turf and play areas,landscaping,ground cover, shrubs and trees,irrigation systems, sidewalks,parking 6 Engineer's Report City of Orange Landscape Maintenance District No.15-1 lots, drainage systems, lighting, fencing, entry monuments, recreational facilities, security patrols to protect the Improvements, graffiti removal and repainting, and labor, materials, supplies, utilities and equipment, as applicable, at each of the locations owned, operated or maintained by the District. As applied herein, "Installation" means the construction of Improvements, including, but not limited to, land preparation (such as grading,leveling,cutting and filling), sod,landscaping,irrigation systems,walkways and drainage,lights,and recreational facilities. Maintenance" means the furnishing of services and materials for the ordinary and usual maintenance, operation and servicing of any Improvement,including repair, removal or replacement of all or any part of any Improvement; providing for the life, growth, health, and beauty of landscaping, including cultivation,irrigation, trimming, spraying, fertilizing, or treating for disease or injury; the removal of trimmings, rubbish, debris, and other solid waste, and the cleaning, sandblasting,and painting of walls and other Improvements to remove or cover graffiti. Servicing" means the furnishing of electric current, or energy, gas or other illuminating agent for any public lighting facilities or for the lighting or operation of any other Improvements; or water for the irrigation of any landscaping, the operation of any fountains, or the maintenance of any other Improvements. Incidental expenses include all of the following: (a) The costs of preparation of the report,including plans, specifications, estimates, diagram, and Assessment; (b) the costs of printing, advertising, and the giving of published, posted, and mailed notices; (c) compensation payable to the County for collection of Assessments; (d) compensation of any engineer or attorney employed to render services in proceedings pursuant to this part; (e) any other expenses incidental to the construction, installation, or maintenance and servicing of the Improvements; (f) any expenses incidental to the issuance of bonds or notes pursuant to Streets & Highways Code Section 22662.5; and (g) costs associated with any elections held for the approval of a new or increased assessment (Streets & Highways Code §22526). Modifications to the District structure could include, but are not limited to, substantial changes or expansion of the Improvements provided, substantial changes in the service provided, modifications or restructuring of the District including annexation or detachment of specific parcels, revisions in the method of apportionment,or proposed new or increased assessments. The Assessment proceeds will be exclusively used for Improvements within the District plus incidental expenses. 7 Engineer's Report City of Orange Landscape Maintenance District No.15-1 FISCAL YEAR 2024-25 ESTIMATE OF COST AND BUDGET Budget for Fiscal Year 2024-25 The following budget shows the cost of the Improvements that would be funded by the District in Fiscal Year 2024-25. This table shows the total combined expenditures associated with the Improvements for both Landscape Maintenance Districts (No. 15-1 and No. 86-2). Accordingly, revenues from both Districts are also shown. OPERATION&MAINTENANCE FUND BALANCE FROM PRIOR YEARS Estimated Fund Balance(Includes 15-1 &86-2)as of March 2024 1,123,760 The estimated budget necessary for the 2024-2025 Fiscal Year for the District is as follows: BUDGET ITEM COST ANNUAL MAINTENANCE Landscaping 383,562 Tree Trimming 145,870 Electrical Maintenance 40,000 Misc. Contract Services 0 Repair/Maintenance Services 82,051 Supplies 5,300 Other Professional Services 1,000 Telephone 1,000 Electricity 13,000 Water 168,000 Salaries& Benefits 51,842 City Administrative Services 46,461 Capital Replacement/Dedicated Reserves 0_ TOTAL EST.LANDSCAPE MAINTENANCE EXPENDITURES 938,086 ESTIMATED REVENUE Landscape Maintenance District No. 86-2 533,651 Rancho Santiago Community College District 26,557 Proposed Benefit Assessment FY 2024/25(LMD 15-1) See LMD 15-1 Engineer's Report for specifics) 367,579 CPI Adjustment(Current Year 3.0%) 11,027 Unused CPI Adjustment(Carry over from prior years) 0 TOTAL ESTIMATED REVENUE 938,814 8 Engineer's Report City of Orange Landscape Maintenance District No.15-1 SURPLUS FUNDS TO BE ADDED TO RESERVES 728 District Expenditures will be adjusted to match the maximum allowable assessment. This Budget Estimate is for the purpose of establishing an Annual Assessment.It may vary from the adopted City Budget.All assessments collected by the District may only be used for District expenditures regardless of the Budget Estimate. BALANCE TO LEVY FOR 15-1 378,606 Notes to Estimate of Costs: 1. The Act requires that proceeds from the Assessments must be deposited into a special fund that has been set up for the revenues and expenditures of the District. Moreover, funds raised by the Assessment shall be used only for the purposes stated within this Report. Any balance remaining at the end of the Fiscal Year,June 30, must be carried over to the next Fiscal Year. The District may also establish a dedicated reserve fund for contingencies and special projects as well as a dedicated capital improvement fund for accumulating funds for larger capital improvement projects or capital renovation needs. Any remaining balance would either be placed in the dedicated reserve fund, the capital improvement fund,or would be used to reduce future years'Assessments. 2. The rate shown here is for a single family home or its equivalent. For the definition of the term SFE and rates for other types of property, see the section titled, "Method of Assessment Apportionment" and the sections following it in this report. 3. The total cost of the services and Improvements is the total assessment amount of$356,873 plus the value of the general benefit contributions from the City described in the section titled, "Method of Assessment Apportionment." 4. The Assessment allows for an annual adjustment tied to the Consumer Price Index (the "CPI"), as detailed in the section titled "Method of Apportionment — Annual Cost Indexing." For Fiscal Year 2024-2025, the CPI is 3.5% for the Los Angeles-Long Beach-Anaheim area as of December 2023. Due to the remaining fund balance from Fiscal Year 2023-24, the Public Works staff recommends setting the CPI adjustment at 3.0% (maximum allowed) for Fiscal Year 2024-2025. I Engineer's Report City of Orange Landscape Maintenance District No.15-1 METHOD OF APPORTIONMENT Method of Apportionment This section of the Engineer's Report explains the benefits to be derived from the Improvements and the methodology used to apportion the total assessment to properties within the District. The method used for apportioning the Assessment is based upon the relative special benefits to be derived by the properties in the District over and above general benefits conferred on real property or to the public at large. The Assessment is apportioned to lots and parcels in proportion to the relative special benefit from the Improvements. The apportionment of special benefit is a two-step process: the first step is to identify the types of special benefit arising from the Improvements and the second step is to allocate the Assessments to property based on the estimated relative special benefit for each type of property. This section of the Engineer's report includes a discussion of the benefits to be provided by the proposed Improvements and the method of apportionment of assessments within the District. The formula below identifies the final level of service as the sum of the baseline level of service (without this proposed Assessment) and the enhanced level of service to be funded by the proposed Assessment. Final Level = Baseline Level Enhanced Level of Service of Service of Service Discussion of Benefit In summary, the Assessments can only be levied based on the special benefit to property. This benefit is received by property over and above any general benefits. With reference to the requirements for assessments, Section 22573 of the Landscaping and Lighting Act of 1972 states: The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot orparcelfrom the improvements." Proposition 218, as codified in Article XIIID of the California Constitution, has confirmed that assessments must be based on the special benefit to property and that the value of the special benefits must be equal to or exceed the cost of the assessment: No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel." The following benefit categories summarize the types of special benefit to residential, commercial, industrial and other lots and parcels resulting from the Improvements to be provided with the assessment proceeds.These types of special benefits are summarized as follows: A. Proximity to Improved Landscaped Areas and Other Public Improvements within the District. B. Access to Improved landscaped areas and Other Public Improvements within the District. 10 Engineer's Report City of Orange Landscape Maintenance District No.15-1 C. Improved Views within the District. D. Extension of a property's outdoor areas and green spaces for properties within close proximity to the Improvements. E. Creation of individual lots for residential and commercial use that, in absence of the Assessments,would not have been created. In this case,the recent Silicon Valley Taxpayers Association, Inc. v. Santa Clara County Open Space Authority SVTA) decision in 2008 provides enhanced clarity to the definitions of special benefits to properties from similar improvements in three distinct areas: Proximity Expanded or improved access Views The SVTA decision also clarifies that a special benefit is a service or improvement that provides a direct advantage to a parcel and that indirect or derivative advantages resulting from the overall public benefits from a service or improvement are general benefits. The SVTA decision also provides specific guidance that Improvements are a direct advantage and special benefit to property that is proximate to a facility that is improved by an assessment: The characterization of a benefit may depend on whether the parcel receives a direct advantage from the improvement (e.g. proximity to a park) or receives an indirect, derivative advantage resulting from the overall public benefits of the improvement(e.g.general enhancement of the district's property values). Proximity, improved access and views, in addition to the other special benefits listed herein further strengthen the basis of these Assessments. Moreover, the Dahms v. Downtown Pomona Prop. & Bus. Improvement Dist. (Dahms) decision in 2009 further clarified that certain services and Improvements funded by assessments, that are over and above what otherwise would be provided and that other property in general and the public do not share or receive are 100% special benefit. The assessment-funded services upheld by Dahms included streetscape maintenance and security services. Benefit Factors The special benefits from the Improvements are further detailed below: Proximity to Improved Landscaped Areas within the District The boundaries of the District were developed in conjunction and concurrent with the planning and design of the subdivisions and Improvements, and thus have been carefully drawn to only include the properties in the City of Orange that are proximate to the Improvements and that would materially benefit from the Improvements. In other words, the District has been narrowly drawn to include the properties that receive special benefits from the Improvements. Therefore, property in the District enjoys unique and valuable proximity to the Improvements that the public at large and property outside the District do not share. In the absence of the Assessments, the Improvements would not be provided and the public improvements funded in the District would be degraded due to insufficient funding for maintenance, upkeep and repair. Therefore, the Assessments provide Improvements that are over and above what otherwise would be provided. Improvements that are over and above what otherwise would be provided do not by themselves translate into special benefits but when 11 Engineer's Report City of Orange Landscape Maintenance District No.15-1 combined with the unique proximity and access enjoyed by parcels in the District, they provide a direct advantage and special benefit to property in the District. Access to Improved Landscaped Areas within the District Since the parcels in the District are nearly the only parcels that enjoy close access to the Improvements, they directly benefit from the unique close access to improved landscaping areas and other public improvements that are provided by the Assessments. This is a direct advantage and special benefit to property in the District. Improved Views within the Assessment Districts The City, by maintaining permanent public improvements funded by the Assessments in the District, provides improved views to properties in the District. The properties in the District enjoy close and unique proximity, access and views of the specific Improvements funded in the District; therefore, the improved and protected views provided by the Assessments are another direct and tangible advantage that is uniquely conferred upon property in the District. Extension of a Property's Outdoor Areas and Green Spaces for Properties within Close Proximity to the Improvements In large part because it is cost prohibitive to provide large open land areas on property in the District, the residential, commercial and other benefiting properties in the District do not have large outdoor areas and green spaces. The Improvements within the District provide additional outdoor areas that serve as an effective extension of the land area for proximate properties because the Improvements are uniquely proximate and accessible to property in close proximity to the Improvements. The Improvements, therefore, provide an important, valuable and desirable extension of usable land area for the direct advantage and special benefit of properties in the District because such properties have uniquely good and close proximity to the Improvements. Creation of Individual Lots for Residential and Commercial Use that, in Absence of the Assessments,Would Not Have Been Created In most of the District, the original owner/developer(s) of the property within the District agreed unanimously to the Assessments. The Assessments provide the necessary funding for public improvements that were approved as a condition of development and subdivision approval. Therefore, such Assessments allowed the original property to be subdivided and for development of the parcels to occur. As parcels were sold, new owners were informed of the Assessments through the title reports, and in some cases, through Department of Real Estate "White Paper" reports that the parcels were subject to assessment. Purchase of property was also an "agreement" to pay the Assessment. Therefore, in the absence of the Assessments, the lots within most of the District would not have been created. These parcels, and the Improvements that were constructed on the parcels,receive direct advantage and special benefit from the Assessments. 12 Engineer's Report City of Orange Landscape Maintenance District No.15-1 Summary of Relative Weight of Benefit Factors A solid argument could be made that the Creation of Individual Lots benefit comprises 100%of the benefit because the Improvements were incorporated into the original planning and design of the subdivision, and thus were deemed to be necessary and required for the development of the lot. Without those Improvements and associated benefit, the lots would not have been created in the first place. Nevertheless, four other definitive benefits accruing to the parcels within the District are identified, and an allowance should be made within the overall relative importance of benefits. The table below illustrates the relative benefit level of the five identified benefits used in this Report. Benefit Factor Relative Weight Proximity 10% Access 10% Views 10% Outdoor Area or Green Space Extension 10% Creation of Individual Lots for Development 60% Total Benefit 100% General Versus Special Benefit Article XIIIC of the California Constitution requires any local agency proposing to increase or impose a benefit assessment to "separate the general benefits from the special benefits conferred on a parcel."The rationale for separating special and general benefits is to ensure that property owners subject to the benefit assessment are not paying for general benefits. An assessment can fund special benefits but cannot fund general benefits. Accordingly, a separate estimate of the special and general benefit is given in this section. In other words: Total _ General Special Benefit — Benefit + Benefit There is no widely-accepted or statutory formula for general benefit. General benefits are benefits from improvements or services that are not special in nature, are not "particular and distinct" and are not "over and above" benefits received by other properties. SVTA provides some clarification by indicating that general benefits provide "an indirect, derivative advantage" and are not necessarily proximate to the improvements. In this Report,the general benefit is liberally estimated and described, and then budgeted so that it is funded by sources other than the Assessment. 13 Engineer's Report City of Orange Landscape Maintenance District No.15-1 The starting point for evaluating general and special benefits is the current, baseline level of service. The Assessment will fund Improvements "over and above" this general, baseline level and the general benefits estimated in this section are over and above the baseline. A formula to estimate the general benefit is listed below: Benefit to Real Benefit to Real PropertyProperty Inside Benefit General the Assessment to the Outside the District that is PublicBenefitAssessment District Indirect and at Large Derivative Special benefit, on the other hand, is defined in the state constitution as "a particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large." The ST/TA decision indicates that a special benefit is conferred to a property if it receives a direct advantage from the improvement (e.g., proximity to a park)." In these Assessments, as noted, properties in the District have close and unique proximity, views and access to the Improvements and uniquely improved desirability from the Improvements and other properties and the public at large do not receive significant benefits because they do not have proximity, access or views of the Improvements. Therefore, the overwhelming proportion of the benefits conferred to property is special, and is only minimally received by property outside the Assessment Districts or the public at large. Benefit Finding Quantification of General Benefit In this section, the general benefit from landscaping and other types of Improvements is liberally estimated and described, and then budgeted so that it is funded by sources other than the Assessment. Benefit to Property Outside the Assessment Districts Properties within the District receive almost all of the special benefits from the Improvements because properties in the District enjoy unique close proximity and access to the Improvements that are not enjoyed by other properties or the public at large. However, certain properties within the proximity/access radius of the Improvements, but outside of the boundaries of the District, may receive some benefit from the Improvements. Since this benefit is conferred to properties outside the District boundaries, it contributes to the overall general benefit calculation and will not be funded by the Assessments. The general benefit to property outside of the District is calculated with the parcel and data analysis performed by SCI Consulting Group. Since the properties outside the District but with frontage abutting the Improvements receive benefit but cannot be assessed by the District, this is a form of general benefit to other property. The primary ways that parcels outside the district benefit by the Improvements is from proximity, 14 Engineer's Report City of Orange Landscape Maintenance District No.15-1 access, views and extension of outdoor space, which account for 40% of the available benefit. Therefore, parcels that abut the landscape areas and are not separated from the Improvements by a privacy fence are counted for this general benefit. The general benefit to property outside of the District is calculated as follows. Assumptions: 47 parcel outside the District 1517 parcels in the District Calculation: General Benefit to property outside the District= 47/(47+1517) * 40% = 1.20% Benefit to Property Inside the Assessment Districts that is Indirect and Derivative The "indirect and derivative" benefit to property within the District is particularly difficult to calculate. A solid argument can be presented that all benefit within the District is special,because the Improvements are clearly "over and above" and "particular and distinct" when compared with the baseline level of service and the unique proximity,access and views of the Improvements enjoyed by benefiting properties in the District. Nevertheless, the SVTA decision indicates there may be general benefit"conferred on real property located in the district." A measure of the general benefits to property within the Assessment area is the percentage of land area within the District that is publicly owned and used for regional purposes such as major roads, rail lines and other regional facilities because such properties used for regional purposes could provide indirect benefits to the public at large. Approximately 7.15% of the land area in the District is used for such regional purposes, so this is a measure of the general benefits to property within the District. Benefit To The Public At Large The general benefit to the public at large can be estimated by the proportionate amount of time that the District's Improvements including landscaping are used and enjoyed by individuals who are not residents, employees, customers or property owners in the District. It should be noted that these Improvements do not attract the public at large in the same way as park improvements — and they confer far less benefit to the public at large than do similar park improvements. One way to measure the special benefit to the general public is by the car trips through an area with Improvements. Of the five ways benefits are conferred (proximity, access, views, extension of a property's green space, and creation of lots), the only benefit that is conferred by way of pass-by car trips is views, which accounts for 10% of the total benefits. For pass-by car trips, the benefit of views is found to be approximately half that of residents, employees, customers or property owners in the District due to the brevity of the views.Therefore the relative benefit factor is reduced to 5%. 15 Engineer's Report City of Orange Landscape Maintenance District No.15-1 Next, the views factors are weighted by the relevant number of car trips. Using the lane miles as representative of pass-by traffic, an analysis shows that 60% of the lane miles are on arterial or collector streets where the general public has views of the landscaping. Therefore (60% of 5% _) 3.0%of the benefits from the Improvements are general benefits to the public at large. Special Considerations of Improvements Outside of District The benefits are categorized into to two geographic groupings of Improvements: In-District Improvements that include parkways, medians and paseos that are either inside the district boundaries, or are traffic medians that directly abut or front the district; and Out-of-District Improvements that are parkways or medians that are both outside the District boundaries and are not abutting, fronting or lying adjacent to the District. Based on weighted square footage of the various types of Improvements, Out-of-District Improvements count for approximately 11.6% of the total benefits. These Out-of-District benefits are found to be entirely General Benefit. For example some Improvements at Santiago Canyon College are maintained, but the funding for this work comes entirely from the College as general benefit funds. The In-District Improvements, conversely, provide approximately 88.4% of the total benefits. The general benefits provided by these Improvements are discussed above. Total General Benefits Using a sum of these three measures of general benefit plus the special considerations of general benefit from Out-of-District benefits (both weighted accordingly),we find that approximately 21.6% of the benefits conferred by the Improvements may be general in nature and should be funded by sources other than the Assessment.This calculation is shown below. Relative Percent of General Overall General Benefit Benefit Benefit In-District General Benefits Outside the District 1.20% Property within the District 7.15% Public at Large 3.00% Total In-District 11.35%11.4% x 88.4% = 10.0% Out-of-District General Benefits 100.0% x 11.6% = 11.6% TOTAL GENERAL BENEFIT 21.6% Although this analysis finds that 21.6% of the Assessment may provide general benefits from the Improvements, the Assessment Engineer establishes a requirement for a minimum contribution from sources other than the Assessments of 22%. This minimum contribution above the measure of general benefits will serve to provide additional coverage for any other general benefits. 16 Engineer's Report City of Orange Landscape Maintenance District No.15-1 Final Step—Calculate the Current General Benefit Contribution from the City This general benefit cannot be funded from the Assessments; it must be funded from other sources such as the City's General Fund or other non-District funds. These contributions can also be in the form of in-lieu contributions to the installation and maintenance of the Improvements such as other City assets that support and protect the Improvements. The City of Orange will contribute both monetary and in-lieu resources to ensure that the general benefits conferred by the proposed Improvements are not funded by the District's property owners. A summary and quantification of these other contributions from the City is discussed below: The City of Orange owns, maintains, rehabilitates and replaces curb and gutter along the border of the District Improvements. This curb and gutter serves to support, contain, retain, manage irrigation flow and growth, and provide a boundary for the Improvements. The contribution from the City towards general benefit from the maintenance, rehabilitation, and replacement of the curb and gutter is conservatively estimated to be 5%. The City owns and maintains a storm drainage system along the border of the District Improvements. This system serves to prevent flooding and associated damage to the Improvements,and manage urban runoff including local pollutants loading from the Improvements. The contribution from the City towards general benefit from the maintenance, and operation of the local storm drainage system is conservatively estimated to be 5%. The City owns and maintains local public streets along the border of the District Improvements. These public streets provide access to the Improvements for residents'enjoyment as well as efficient maintenance. The contribution from the City towards general benefit from the maintenance of local public streets is conservatively estimated to be 5%. The value of the construction of the Improvements can be quantified and monetized as an annuity. Since this construction was performed and paid for by non-assessment funds, this "annuity" can be used to offset general benefit costs,and is conservatively estimated to contribute 10%. The total General Benefit is liberally quantified at 22%which is entirely offset by the conservatively quantified total non-Assessment contribution towards general benefit described above of 25%. Therefore,no additional General Benefit must be funded by the City. Zones of Benefit The boundaries of the District were developed in conjunction and concurrent with the planning and design of the subdivisions and Improvements, and thus include only the properties in the City of Orange that are proximate to the Improvements and that would materially benefit from the Improvements. Certain other properties surrounding the District were not part of the designed association between the Improvements and the assessed areas, and are generally less proximate to the Improvements. In other words, the boundaries of the District have been narrowly drawn to include only properties that will specially benefit from the Improvements, and would receive a declining level of service if the Assessments were not approved. The SVTA decision indicates: In a well-drawn district—limited to only parcels receiving special benefits from the improvement— every parcel within that district receives a shared special benefit. Under section 2, subdivision (i), these benefits can be construed as being general benefits since they are not `particular and distinct"and are not "over and above"the benefits received by other properties `located in the district" 17