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11.01 LMD 86-2 Santiago Hills FY191. SUBJECT Resolution No. 11081; 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 8, 2018 with the City Council approval of Resolution No. 11076 which approved the Preliminary Engineers Report for Landscape Maintenance Assessment District (LMD) 86 -2 and set June 12, 2018 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 FY19 are $533,281 and $341,276, respectively. There is no increase from Fiscal Year 2018 -2019. 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 FY19 revenues of $915,559 and expenses of $915,559 (including Capital Replacement/Dedicated Reserves). The District is fully funded. 3. RECOMMENDED ACTION 1. Adopt Resolution No. 11081 approving the Engineer's Report for the Annual Assessment for Landscape Maintenance Assessment District 86 -2 (Santiago Hills); and 2. Establish the assessment for FY19 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 pays all costs of District administration and related activities. The assessment revenue of $533,281 for FY19 will be placed in Fund Number 291. 5. STRATEGIC PLAN GOAL(S) 3a. Enhance and promote quality of life in the community — refurbish, maintain, develop and /or expand public use places and spaces. 6. GENERAL PLAN IMPLEMENTATION Land Use Element Goal 6.0 Advance development activity that is mutually beneficial to both the environment and the community. Policy 6.3 - Establish and maintain greenways, and pedestrian and bicycle connections that complement the residential, commercial and open space areas they connect. Policy 6.8 - Maximize landscaping along streetscapes and within development projects to enhance public health and environmental benefits. 7. DISCUSSION and BACKGROUND In 1987, 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 maximum 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 FY19 budget for the combined LMD 86 -2 and LMD 15 -1 indicates the amount of funding required to bring service levels to the pre- service reduction levels of 2007 and a small capital budget to gradually replace aging landscaping and infrastructure over time. 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 existing LMD 86- 2 will stay at the maximum assessment and the assessment for LMD 15 -1 will remain the same ITEM 2 06/12/18 as last year. Typically, the assessment for LMD 15 -1 includes an annual increase based on the Consumer Price Index (CPI) for the Los Angeles- Orange - Riverside area. This year, due to the remaining fund balance from Fiscal Year 2017/2018, the Community Services Department staff recommends setting the CPI adjustment to 0 %. The District will be fully funded. The maximum assessment total for LMD 86 -2 for FY19 is $533,281. Expenditures in FY19 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. 11081 • Final Engineers Report FS:gh:cp ITEM 3 06/12/18