SR - LMD-86-2 - 2014-15 ANNUAL ASSESSMENT ENGINEERS REPORT*� °°�* AGENDA ITEM
May 13, 2014
�Oinv�rx ��
TO: Honorable Mayor and
Members of the City Council
THRU: John W. Sibley
City Manager
FROM: Joe DeFrancesco
Public Works Dkector
Marie Knight/' V A Ci'
Community Services Direc of
1. SUBJECT
Resolution No. 10782 - A Resolution of the City Council of the City of Orange regarding
Landscape Maintenance Assessment District 86 -2 (Santiago Hills) declaring its intention to
provide for an annual levy and collection of assessments for Fiscal Year 2014 -2015; to set a time
and place for a Public Hearing to receive public testimony on the foregoing matters; and to give
preliminary approval to the Certified Engineer's Report for Landscape Maintenance Assessment
District 86 -2 (Santiago Hills).
2. SUMMARY
Each year in June the process of setting the assessment for the Landscape Maintenance Districts
is started. This is the first step in the process. The proposed assessments are to be the same as
last year and are at the maximum assessment previously levied in the District. The total
assessment to be levied in Assessment District 86 -2 (Santiago Hills) for FY 14 -15 is
$533,650.77, while expenses are estimated to be $620,000. Services, will continue to be reduced
to keep expenditures down, however if expenditures continue to exceed the revenue from the
maximum assessment, it will be necessary to completely eliminate some services or utilize
District reserve funds in FY 14 -15 and FY 15 -16
3. RECOMMENDED ACTION
Adopt Resolution No. 10782 to approve the Preliminary Engineer's Report for Landscape
Maintenance District 86 -2, declare the intent to levy an annual assessment and set June 10, 2014
as the date for the Public Hearing on the assessments.
4. FISCAL IMPACT
The Santiago Hills Maintenance District 86 -2 pays all costs of District administration and related
activities. The City is a property owner within the District and pays $5,535 annually. The
ReviewedNerified
City Manager
Finance Dire o
To Be Presen
o DeFrancesco
X Cons Calendar
City Mgr Rpts
Council Reports
_
_ Legal Affairs
Boards /Cmtes
_ Public Hrgs
Admin Reports
Plan/Environ
ITEM 3..2 1 5/13/14
��'Printed on Recycled Paper
assessment revenue of $533,650.77 for Fiscal Year 2014/2015 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. DISCUSSIONS and BACKGROUND
In 1987, Landscape Maintenance District 86 -2 was established to maintain the landscape
improvements constructed by Assessment District 86 -1 in Santiago Hills. Annually, a detailed
accounting of expenses is done and a new assessment is calculated for the benefiting property
owners.
This year's assessment for a single family detached unit is $369.44. This is the same as last year
and the largest assessment currently allowed. 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, District
reserve funds were utilized in order to be able to make the service level reductions less severe,
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 these reserves.
Further reductions will need to be imposed in the upcoming fiscal year to limit the impact to the
remaining reserve fund balance. FY 2014 -2015 reductions will include the elimination of
landscape areas, non - replacement of dead plant material, as well as reductions to landscape
services and utilities as needed. Factors leading to the need for additional service reductions
include increased utility costs (primarily water); and major repairs to an aging infrastructure,
including electrical and lighting systems and concrete paths and trails. In addition, the drought
conditions this past winter 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 significantly impact the District landscapes.
ITEM 2 5/13/14
.s
���Printed on Recycled Paper
The maximum assessment total for FY 2014 -2015 is $533,650.77. Expenditures in FY 13 -14
were $78,000 over revenues. The proposed FY 14 -15 budget will exceed revenues by $45,000,
based on budgeted expenditures of $620,000, even after significant service reductions and the
reimbursement from Santiago Canyon College of approximately $42,000. The resulting deficit
spending has caused and will continue to require the use of additional resources from the reserve
fund balance, leaving the District extremely underfunded for capital improvements or major
repairs. The remaining reserve fund balance has been targeted for use in installation of a new
irrigation control system to help better manage water use and reduce utility expenditures, and to
design and implement landscape revisions to reduce maintenance costs and water use.
See the attached Preliminary Engineer's Report for more detailed information about the
assessment. It is proposed to schedule the Public Hearing on this assessment for June 10, 2014.
Given the fact that expenditures, even at a significantly reduced and underfunded amount
continue to exceed revenues, staff plans again to put forth a ballot approval for an increase above
the maximum assessment for a vote for FY 15 -16.
It should be noted that to maintain the District at the level prior to the reductions that began in
2007, the total cost for maintenance and utilities would be approximately $732,000,
approximately $200,000 less than current incoming revenue amount.
8. ATTACHMENTS
• Resolution No. 10782
• Preliminary Engineer's Report
• Map
JD;jd;ly
N:\ADMIN \LYoung \Council Items \LMD 86 -2 Agenda Intent FY14- 15a.docx
ITEM 3 5/13/14
O .s
Printed on Recycled Paper
RESOLUTION NO. 10782
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ORANGE REGARDING LANDSCAPE MAINTENANCE
ASSESSMENT DISTRICT 86 -2 (SANTIAGO HILLS)
DECLARING IT'S INTENTION TO PROVIDE FOR AN
ANNUAL LEVY AND COLLECTION OF ASSESSMENTS FOR
FISCAL YEAR 2014 -2015; AND TO SET A TIME AND PLACE
FOR A PUBLIC HEARING TO RECEIVE PUBLIC
TESTIMONY ON THE FOREGOING MATTERS; AND TO
GIVE PRELIMINARY APPROVAL TO THE CERTIFIED
ENGINEER'S REPORT FOR LANDSCAPE MAINTENANCE
ASSESSMENT DISTRICT 86 -2 (SANTIAGO HILLS)
WHEREAS, the City Council of the City of Orange previously formed City of Orange
Landscape Maintenance District No. 86 -2 (hereinafter referred to as "Maintenance District ") and
desires to initiate proceedings for the levy of annual increased assessments in connection with the
Maintenance District, pursuant to the provisions of the Landscaping and Lighting Act of 1972,
Part 2 of Division 15 of the Streets and Highways Code of California, beginning with Section
22500 (hereinafter referred to as the "Act "), Government Code Section 53753 and the provisions
of the article 13D of the California Constitution (hereinafter referred to as the "Article 13D ") and
such constitutional provisions and statutes are referred to collectively as the "Applicable Law ";
and
WHEREAS, there has now been presented to the City Council the Certified Engineer's
Report (hereinafter "Report") as required by the Applicable Law that describes the proposed
annual levy of assessments for fiscal year 2014 -2015 to each parcel, the proposed changes to the
Maintenance District or improvements; and
WHEREAS, the City Council has carefully examined and reviewed the Report and is
satisfied with each and all of the items and documents set forth therein and has made a
preliminary determination that the assessments on each parcel have been proportioned in
accordance with the benefits received by each parcel and that such assessments are reasonable
based on the revised scope of services that will be offered; and
WHEREAS, at this time the City Council determines to commence proceedings to
provide for the annual levy of assessments for fiscal year 2014 -2015 to pay for the costs and
expenses necessary for the level of maintenance of the improvements in the Maintenance District
as afforded by the maximum assessment levied.
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.
Resolution No. 10782