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SR - RES-11008 - 2017-18 ANNUAL ASSESSMENT ENGINEERS REPORT1. SUBJECT Resolution No. 11008 - 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 9, 2017 with the City Council approval of Resolution No. 11000 which approved the Preliminary Engineers Report for Landscape Maintenance Assessment District (LMD) 86 -2 and set June 13, 2017 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 total assessment to be levied from Assessment District 86 -2 (Santiago Hills) and Assessment District 15 -1 (Santiago Hills Overlay) for Fiscal Year 2018 (FY18) are $533,281 and $341,363, respectively. Per the approved formation of LMD 15 -1 and subsequent affirmative vote of the majority of property owners in the District, the assessment includes a 2% increase which is tied to the Consumer Price Index. This is based on the Bureau of Labor Statistics CPI -U for Los Angeles - Riverside- Orange County areas as of December 2016. Revenues of $41,002 from Rancho Santiago Canyon College District are included as a reimbursement for landscape maintenance costs paid by LMD 86 -2 and 15 -1, for total FY18 revenues of $915,646 and expenses of $915,646 (including Capital Replacement/Dedicated Reserves). Approval of the LMD 15 -1 Engineer's Report is a separate Agenda item. The District is fully funded. 3. RECOMMENDED ACTION 1. Adopt Resolution No. 11008 approving the Engineer's Report for the Annual Assessment for Landscape Maintenance Assessment District 86 -2 (Santiago Hills); and 2. Establish the assessment for FY18 for Landscape Maintenance Assessment District 86 -2 at $369.44 per single family detached unit per year. 4. FISCAL IMPACT The Santiago Hills Landscape Maintenance District 86 -2 combined with LMD 15 -1 pays all costs of District administration and related activities. The FY18 assessment revenue of $533,281 for LMD 86 -2 and $341,363 for LMD 15 -1 will be placed in Fund Number 291. 5. STRATEGIC PLAN GOAL(S) 3. Enhance and promote quality of life in the community — a. 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, Landscape Maintenance District 86 -2 was established to maintain the landscape improvements constructed by Assessment District 86 -1 (LMD 86 -1) in 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 Rancho Santiago Community College District who reimburses the District for the cost to maintain the parkways adjacent to the school. 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 serve the District. The annual assessment for LMD 15 -1 was approved by the property owners on June 9, 2015. Approval of the Final Engineer's Report for LMD 15 -1 is a separate Agenda Item. The proposed FYI 8 budget for the combined LMD 86 -2 and LMD 15 -1 indicates the amount of funding required to maintain the district and provide a capital budget to gradually replace aging landscaping and infrastructure over time. The existing LMD 86 -2 would stay at the maximum assessment; however, the assessment for LMD 15 -1 includes a FY18 increase of 2% based on the CPI -U for the Los Angeles- Orange- Riverside area. An annual CPI -U adjustment with a cap of 3% was included in the formation of LMD 15 -1 in April 2015 and was approved by a majority of the property owners in June 2015. 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. The District will be fully funded. The maximum assessment total for LMD 86 -2 for FY18 is $533,281. Expenditures in FY18 are also anticipated to be approximately $533,281, which is $0 over revenues. The attached Final Engineer's Report contains detailed information about the assessment. 8. ATTACHMENTS • Resolution No. 11008 • Final Engineers Report FS:tal:cp ITEM 3 6/13/17 O Printed on Recycled Paper RESOLUTION NO. 11008 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 2017/2018 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 ` Monday in August.