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11.03 LMD 15-1 Santiago Hills Overlay1. SUBJECT Resolution No. 11083; Landscape Maintenance Assessment District 15 -1 (Santiago Hills Overlay). 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. 11078 which approved the Preliminary Engineers Report for Landscape Maintenance Assessment District (LMD) 15 -1 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 2017 -2018. 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. 11083 approving the Engineer's Report for the Annual Assessment for Landscape Maintenance Assessment District 15 -1 (Santiago Hills); and 2. Establish the assessment for FY19 for Landscape Maintenance Assessment District 15 -1 at $244.49 per single family detached unit per year. 4. FISCAL IMPACT The Santiago Hills Landscape Maintenance District 15 -1 pays all costs of District administration and related activities. The assessment revenue of $341,276 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 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. 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. The existing LMD 86 -2 would stay at the maximum assessment, however, the assessment for LMD 15 -1 allows for an annual increase based on the Consumer Price Index (CPI) for the Los Angeles - Orange- Riverside area. This annual increase 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. Revenue in the District is derived from assessments paid by property owners, both residential and commercial, as well as Rancho Santiago Community College District which reimburses the District for the cost to maintain the parkways adjacent to the college. For FY19, the CPI for the region is 3.6 %. However, due to the remaining fund balance from Fiscal Year 2017/2018, the Community Services Department staff recommends setting the CPI adjustment to 0 %. This year's assessment for a single family detached equivalent (SFE) unit is $244.49. This is the same as the Fiscal Year 2017 -2018 assessment. ITEM 2 06/12/18 The assessment total for LMD 15 -1 for FY19 is $341,276. This is the same assessment total as last year. Expenditures in FY19 are also anticipated to be approximately $341,276 (including Capital Replacement/Dedicated Reserve), which is $0 over revenues. In past years, there were no vacant properties. In October 2017, the Canyon Fire 2 destroyed a home on a single family residence in LMD 15 -1. As detailed in the Engineer's Report, the vacant property was assessed at 55% the SFE unit per the conditions of the LMD. This meant the total assessment for LMD 15 -1 decreased $87 from the previous year. The attached Final Engineer's Report contains detailed information about the assessment. 8. ATTACHMENTS • Resolution No. 11083 • Final Engineers Report FS:gh:cp ITEM 3 06/12/18 RESOLUTION NO. 11083 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 15 -1 (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. 15 -1 (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. 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.