TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, City Manager
FROM: Christopher Cash, Public Works Director
1. Subject
title
Approval of the Landscape Maintenance Districts 86-2 (Santiago Hills) and 15-1 (Santiago Hills Overlay) Preliminary Engineer’s Report for Fiscal Year 2024-2025. Resolution No. 11540.
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2. Summary
The City declares its intention to assess an annual levy, approve the Preliminary Engineer’s Report, and set a public hearing. The total assessments to be levied from Landscape Maintenance Assessment Districts 86-2 (Santiago Hills) and Landscape Maintenance Assessment District 15-1 (Santiago Hills Overlay) for Fiscal Year 2024-2025 are $533,651 and $378,606, respectively. Assessment for the Santiago Hills Overlay includes staff recommendation of an annual adjustment of 3% based on the Consumer Price Index for the Los Angeles-Long Beach-Anaheim area.
3. Recommended Action
recommendation
1. Adopt Resolution No. 11540. A Resolution of the City Council of the City of Orange regarding Landscape Maintenance Assessment Districts 86-2 (Santiago Hills), and 15-1 (Santiago Hills Overlay) declaring its intention to provide for an annual levy and collection of assessments for Fiscal Year 2024-2025; set a time and place for a public hearing to receive public testimony on the foregoing matters; and give preliminary approval of the certified Engineer’s Report for Landscape Maintenance Assessment Districts 86-2 (Santiago Hills) and 15-1 (Santiago Hills Overlay).
2. Declare the intent to levy an annual assessment, and establish May 28, 2024, at 6:00 p.m. at City Hall Council Chamber, 300 E Chapman Avenue, Orange, CA 92866, as the time and place for the Public Hearing on the assessments.
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4. Fiscal Impact
There is no direct fiscal impact to the City. The approval of the annual assessment for Fiscal Year 2024-2025 will generate $938,814 with a proposed expenditure of $938,086 in the Santiago Hills Landscape Maintenance District (291) Fund.
291.0000.40350.0000 Assessment 86-2 $533,651
291.0000.40360.0000 Assessment 15-1 $378,606
291.7026.48230.0000 Reimbursement $ 26,557
Total $938,814
5. Strategic Plan Goals
Goal 3: Enhance and promote quality of life in the community
a: Renovate, maintain, develop and/or expand public use places and spaces.
6. Discussion and Background
In 1987, Landscape Maintenance District 86-2 (LMD 86-2) was established to maintain the landscape improvements constructed by Assessment District 86-1 (District) in Santiago Hills. Annually, a detailed accounting of expenses is compiled and a new assessment is calculated for the benefitting property owners.
This year’s assessment for a single family detached unit is $369.44 and $221.66 for condos. 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 additional funding necessary to sustain standard landscape maintenance and continue capital improvement projects. The annual assessment for LMD 15-1 was approved by the property owners on June 9, 2015.
The proposed Fiscal Year 2024-2025 (FY25) budget for the combined LMD 86-2 and LMD 15-1 indicates the amount of funding required to maintain District landscape and provides a capital budget to 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; however the assessment for LMD 15-1 will include a 3.0% Consumer Price Index (CPI) increase. The Assessment for LMD 15-1 is permitted to increase annually consistent with CPI increases for the Los Angeles-Long Beach-Anaheim area. Public Works Department staff recommends assessing the CPI adjustment which for FY25 is 3%, to continue capital renovations of the aging landscape. The assessment for 15-1 for a single family detached unit will increase by $7.90 from $263.27 to $271.17. The assessment for 15-1 condominiums will increase by $5.61 from $186.92 to $192.53.
The maximum assessment total for LMD 86-2 for FY25 is $533,651. The assessment total for LMD 15-1 for FY25 is $378,606 including the 3.0% CPI adjustment. Revenues of $26,557 from Rancho Santiago Community College District are included as a reimbursement for landscape maintenance costs paid by LMD 86-2 and LMD 15-1. This totals $938,814 in revenue. Expenditures in FY25 are anticipated to be approximately $938,086 which is $728 less than revenues. The City continues to actively work with District residents on implementing a renovation plan for their 30 year old landscape that is both fiscally and environmentally sustainable. The projected year-end reserve fund balance is $523,760, which takes into account an anticipated $600,000 capital replacement project during FY24. Reserve funds will be used to supplement any potential deficit in FY25 expenditures.
The attached Preliminary Engineer’s Reports contains detailed information about the assessment. It is proposed to schedule the Public Hearing on May 28, 2024 at 6:00 p.m., at City Hall, 300 E Chapman Avenue, Orange, CA 92866.
7. ATTACHMENTS
• Resolution No. 11540
• Preliminary Engineer’s Report for the Annual Levy Assessment Landscape Maintenance District No. 86-2 Fiscal Year 2024-2025
• Preliminary Engineer’s Report for the Annual Levy Assessment Landscape Maintenance District No. 15-1 Fiscal Year 2024-2025