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Res 16-022 RESOLUTION NO. 16-022 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POWAY, CALIFORNIA, DECLARING THE INTENTION TO LEVY AND COLLECT ASSESSMENTS WITHIN POWAY LANDSCAPE MAINTENANCE DISTRICT 86-1 FOR FISCAL YEAR 2016/2017 WHEREAS, the City Council of the City of Poway desires to levy and collect assessments within Poway Landscape Maintenance District 86-1 for the purpose of maintaining, servicing, and operating public landscape facilities located within the territory comprised of said district as shown in Exhibit A of the Engineer's Report that is on file in the City Clerk's Office, pursuant to the Landscape and Lighting Act of 1972, and attached hereto; and WHEREAS, assessments will not increase from the Fiscal Year 2015/2016 assessment rate of $243.04 per benefit unit for Zone A; and WHEREAS, under Article XIII D, Section 4 of the California Constitution, a City general benefit contribution has been calculated as the average General Fund expenditure on a per square foot basis for the maintenance of landscaped medians and right-of-ways. This general benefit contribution for Zone A, has been calculated to be $44,539.92; and WHEREAS, under Article XIII D, Section 5(b) of Proposition 218 (adopted by general vote on November 5, 1996), the collection of Fiscal Year 2016/2017 assessments is exempt from the procedures and approval process set forth in Section 4 of Article XIII D, in that the assessment was imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed; and WHEREAS, the public interest and convenience require the maintenance, service, and operation of public landscaping and soundwalls within said territory. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows: Section 1: The foregoing recitals are true and correct and the City Council so finds and determines. Section 2: Proposed assessments are as detailed in the Engineer's Report for Poway Landscape Maintenance District No. 86-1 for Fiscal Year 2016/2017. Section 3: Pursuant to the Streets and Highways Code, a public hearing will be held on July 19, 2016 by the City Council to consider the levying and collection of the proposed assessments. Resolution No. 16-022 Page 2 Section 4: The City Clerk shall cause this Resolution to be published in the Poway News Chieftain, a newspaper of general circulation in the City of Poway. PASSED, ADOPTED AND APPROVED by the City Council of the City of Poway at a regular meeting this 21st day of June 2016. Steve Vaus, Mayor ATTEST: -7(/ Na feld&City Clerk Y STATE OF CALIFORNIA ) ) SS COUNTY OF SAN DIEGO ) I, Nancy Neufeld, CMC, City Clerk, of the City of Poway, do hereby certify under penalty of perjury that the foregoing Resolution No. 16-022 was duly adopted by the City Council at a meeting of said City Council held on the 21st day of June 2016, and that it was so adopted by the following vote: AYES: GROSCH, MULLIN, CUNNINGHAM NOES: NONE ABSENT: VAUS DISQUALIFIED: LEONARD N 41ncy � Y Ne feld CMC Cit Clerk City of Poway City of Poway Landscape Maintenance District 86-1 2016/2017 ENGINEER’S ANNUAL LEVY REPORT INTENT MEETING: JUNE 21, 2016 PUBLIC HEARING: JULY 19, 2016 .755.6864 F 951.587.3510 www.willdan.com/financial EXHIBIT A Resolution 16-022 Page 3 Resolution 16-022 Page 4 TABLE OF CONTENTS I.OVERVIEW ......................................................................................................... 1 A.INTRODUCTION ................................................................................................. 1 B.COMPLIANCE WITH CURRENT LEGISLATION .............................................. 1 C.IMPROVEMENTS AUTHORIZED BY THE 1972 ACT ....................................... 2 II.DESCRIPTION OF THE DISTRICT .................................................................... 3 A.BOUNDARIES OF THE DISTRICT .................................................................... 3 B.DESCRIPTION OF THE DISTRICT IMPROVEMENTS ...................................... 5 C.PROPERTIES BENEFITING FROM IMPROVEMENTS ..................................... 5 III.METHOD OF APPORTIONMENT ...................................................................... 6 A.GENERAL .......................................................................................................... 6 B.BENEFIT ANALYSIS .......................................................................................... 6 C.ASSESSMENT METHODOLOGY ...................................................................... 8 D.MAXIMUM ASSESSMENT RATE ...................................................................... 9 IV.DISTRICT BUDGETS ....................................................................................... 10 A.DESCRIPTION OF BUDGET ITEMS ................................................................ 10 B.LMD 86-1 BUDGET .......................................................................................... 11 V.APPENDIX A - DISTRICT ASSESSMENT DIAGRAM ..................................... 12 VI.APPENDIX B - 2016/2017 ASSESSMENT ROLL ............................................ 13 Resolution 16-022 Page 5 I. OVERVIEW A. INTRODUCTION The City of Poway (“City”) annually levies and collects special assessments in order to maintain the improvements within the Landscape Maintenance District 86-1 (“District”) formed June 12, 1986, pursuant to the City of Poway Resolution No. 00-034 (Policies for Landscape Maintenance Districts) and the Landscape and Lighting Act of 1972, Part 2 of Division 15 of the California Streets and Highways Code (“1972 Act”), in compliance with California Constitution Article XIIID (“Article XIIID”). The 1972 Act and Article XIIID are collectively referred to herein as “Assessment Law”. This Engineer’s Annual Levy Report (“Report”) describes the District, any annexations, or changes to the District including substantial changes to the District improvements, and the proposed assessments for Fiscal Year 2016/2017. The proposed assessments are based on the estimated cost to maintain the improvements that provide special benefits to properties within the District. The costs of improvements and the annual levy include all expenditures, deficits, surpluses, revenues, and reserves. Each parcel is assessed proportionately for only those improvements provided and for which the parcel receives benefit based on an established method of apportionment. The word “parcel,” for the purposes of this Report, refers to an individual property assigned its own Assessor’s Parcel Number by the County of San Diego (“County”) Assessor’s Office. The County Auditor/Controller uses Assessor’s Parcel Numbers and specific Fund Numbers, to identify on the tax roll, properties assessed for special district benefit assessments. Following consideration of public comments and written protests at a noticed public hearing, and review of the Report, the City Council may order amendments to the Report or confirm the Report as submitted. Following final approval of the Report, and confirmation of the assessments, the Council may order the levy and collection of assessments for Fiscal Year 2016/2017 pursuant to the 1972 Act. In such case, the assessment information will be submitted to the County Auditor/Controller, and included on the property tax roll for each benefiting parcel for Fiscal Year 2016/2017. B. COMPLIANCE WITH CURRENT LEGISLATION Pursuant to the 1972 Act, the City Council annually conducts a public hearing to accept public comments and testimony, and to approve the annual assessments to be levied on the County tax roll for the fiscal year. All assessments contained in this Report and to be approved by the City Council have been prepared in accordance with the 1972 Act and are in compliance with the provisions of Article XIIID of the Constitution of the State of California (“Proposition 218”). The City has reviewed the provisions of Article XIIID and has made the following findings and determinations: Pursuant to Article XIIID, Section 5, certain existing assessments are exempt from the substantive and procedural requirements of Article XIIID, Section 4, and property owner balloting for the assessments is not required until such time that the assessments are increased. Since the District assessments were imposed pursuant to a petition signed by Resolution 16-022 Page 6 the persons owning all of the parcels subject to the assessments at the time the assessments were initially imposed, Article XIIID Section 5 (b) exempts the existing assessment amounts (approved original assessment rates including any applicable annual escalation factor) from the procedural requirements of Article XIIID, Section 4. The provisions of Article XIIID do not alter the non-conflicting provisions of the 1972 Act. As such, the method of apportionment described in this Report utilizes commonly accepted assessment engineering practices consistent with the 1972 Act and the provisions of Article XIIID. The proposed assessments for the current fiscal year are less than or equal to the adjusted maximum assessment rate previously approved and adopted for the District. The application of this adjusted maximum assessment rate for the various land uses within the District is described in more detail in Section III D of this Report. Any proposed assessment that exceeds the adjusted maximum assessment rate is considered an increased assessment. Pursuant to the provisions of Article XIIID, all new or increased assessments (the incremental increase) are subject to both the substantive and procedural requirements of Article XIIID, Section 4. C. IMPROVEMENTS AUTHORIZED BY THE 1972 ACT As applicable or may be applicable to this proposed District, the 1972 Act defines improvements to mean one or any combination of the following: The installation or planting of landscaping. The installation or construction of statuary, fountains, and other ornamental structures and facilities. The installation or construction of public lighting facilities. The installation or construction of any facilities which are appurtenant to any of the foregoing or which are necessary or convenient for the maintenance or servicing thereof, including, but not limited to, grading, clearing, removal of debris, the installation or construction of curbs, gutters, walls, sidewalks, or paving, or water, irrigation, drainage, or electrical facilities. The maintenance or servicing, or both, of any of the foregoing. The acquisition of any existing improvement otherwise authorized pursuant to this section. Incidental expenses associated with the improvements including, but not limited to: The cost of preparation of the Report, including plans, specifications, estimates, diagram, and assessment; The costs of printing, advertising, and the publishing, posting and mailing of notices; Compensation payable to the County for collection of assessments; Compensation of any engineer or attorney employed to render services; Any other expenses incidental to the construction, installation, or maintenance and servicing of the improvements; Any expenses incidental to the issuance of bonds or notes pursuant to Section 22662.5; and, Costs associated with any elections held for the approval of a new or increased assessment. Resolution 16-022 Page 7 The 1972 Act defines "Maintain" or "maintenance" to mean furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement, including: Repair, removal, or replacement of all or any part of any improvement. Providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation, trimming, spraying, fertilizing, or treating for disease or injury. The removal of trimmings, rubbish, debris, and other solid waste. The cleaning, sandblasting, and painting of walls and other improvements to remove or cover graffiti. II. DESCRIPTION OF THE DISTRICT A. BOUNDARIES OF THE DISTRICT The District Boundary Map and Assessment Diagram, which are incorporated herein by reference and made a part of this Engineer’s Report, are on file with the Special Districts Office of the Public Works Department of the City of Poway and are available for public inspection during normal business hours. On February 25, 1992, by Council Resolution No. 92-039, Landscape Maintenance District 86-1 (“District”) was divided into two subzones: 86-1 Zone A (“Zone A”) for residential and 86-1 Zone B (“Zone B”) for commercial. Assessments for LMD 86-1 Zone A will be calculated on a per unit basis by dividing the required revenue by the total units within each district. The Church of Latter Day Saints (“LDS Poway Chapel”) is the only parcel within LMD 86-1 Zone B. By agreement, this parcel is maintained by the church for perpetuity at no cost to the District. Resolution 16-022 Page 8 District 86-1 Zone A (1,041 residential parcels assessed), includes: Tract Project Name TTMs 4090R, 4091R, 4092R, 4093R Bridlewood TTM 3545 Piedmont Park TTM 4158 Stone Canyon Ranch TTM 11442 Lakeview Developers TTM 84-08 The Grove TTM 86-01 Huntington Gate, I and II TTM 87-05 Serenata TTM 88-15 Green Valley Estates TTM 89-09 Williams Ranch TTM 89-13 Old Coach Collection TTM 89-13R The Heritage, Phase I, Unit I TTM 89-13R(3) The Heritage, Phase I, Unit II TTM 89-13R The Heritage, Phase I, Unit III TTM 89-13R The Heritage, Phase I, Unit IV TTM 97-04 Saddlebrook Estates TTM 98-02 North Point TTM 99-03 Vision Homes TPM 86-05 Liu TPM 87-05 Grimes TPM 88-02 Jemy Corporation TPM 93-06TE Liebrich TPM 98-09 Rady MDRA 99-188 Agee TTM 85-03TE, Lot 26 Attanasio TPM 02-02 Clark 888, Inc. MDRA 98-71 Kennedy Family Trust MDRA 01-38 Wells Trust MDRA 02-11 Tyce MDRA 03-11 Ricciardulli MDRA 04-031 Moreno MDRA 04-058 Gonzalez MDRA 05-59 Garczynski MDRA 04-02 Sedehi/Fard TTM 00-02 Malone MDRA 93-01R(3) Rickey MDRA 07-35 Peart TTM 02-01 BBA Partners District 86-1 Zone B (one non-residential unit) consists of: Tract Project Name TPM 90-06 LDS Poway Chapel Resolution 16-022 Page 9 B. DESCRIPTION OF THE DISTRICT IMPROVEMENTS Facilities to be maintained by Zone A of the District are defined as landscape improvements within the right-of-ways and open space areas associated with annexed subdivisions and which are adjacent to portions of Espola Road, Titan Way, Painted Desert Road, Woodland Parkway, Summer Sage Road, Lake Poway Road, Riparian Road, Sunset Drive, and Del Poniente Road. The LDS Poway Chapel facilities within Zone B of the District are defined as landscape improvements within the right-of-ways adjacent to the southeast corner of Espola and Twin Peaks Roads. Walls and fences adjacent to private property are to be maintained by the adjacent property owners. The District/City, prior to commencement of work, shall approve repairs or reconstruction of any walls or fences adjacent to the District landscape areas. Should the property owners desire to include major repairs or reconstruction within the District’s responsibilities, the property owners are required to submit a petition to initiate the balloting process set forth in Article XIIID, Section 4. Landscape maintenance performance standards and specifications have been developed by the City to assure quality maintenance of landscape assessment district properties. A recent evaluation of the level of quality has been conducted, and the current maintenance levels meet the City's landscape maintenance standards. C. PROPERTIES BENEFITING FROM IMPROVEMENTS The properties determined to receive benefit are those lots or parcels that, as a result of development or redevelopment, finance, construct, install, and/or establish landscape improvements within public right-of-ways or public easements (permanent public improvement) or adjoining lots or parcels that, as a result of development or redevelopment, receive access or are immediately adjacent to lots or parcels which contain landscape improvements maintained by a landscape maintenance district. Special benefit, as defined in the “Landscape and Lighting Act of 1972”, applicable provisions of “Proposition 218”, and provisions of the “Proposition 218 Omnibus Implementation Act” (“Assessment Law”) and in this Report, shall be assessed to those properties determined to receive special benefit from the District’s improvements. Resolution 16-022 Page 10 III. METHOD OF APPORTIONMENT A. GENERAL The 1972 Act permits the establishment of assessment districts by agencies for the purpose of providing certain public improvements that include the construction, maintenance and servicing of public lights, landscaping and appurtenant facilities. The 1972 Act further requires that the cost of these improvements be levied according to benefit rather than assessed value: The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot or parcel from the improvements. The formula used for calculating assessments in this District therefore reflects the composition of the parcels, and the improvements and services provided, to fairly apportion the costs based on benefit to each parcel. In addition, Article XIIID requires that a parcel’s assessment may not exceed the reasonable cost of the proportional special benefit conferred on that parcel. Article XIIID provides that only special benefits are assessable and the City must separate the general benefits from the special benefits. A special benefit is a particular and distinct benefit over and above general benefits conferred on the public at large, including real property within the district. The general enhancement of property value does not constitute a special benefit. B. BENEFIT ANALYSIS Each of the improvements, the associated costs and assessments within the District has been reviewed, identified and allocated based on the special benefit parcels receive from such improvements pursuant to the provisions of Article XIIID and the 1972 Act. All improvements associated with this District have been identified as necessary, required and/or desired for the orderly development of the properties within the District to their full potential, consistent with the proposed development plans. As such, these improvements would be necessary and required of individual property owners for the development of such properties, and the ongoing operation, servicing and maintenance of these improvements would be the financial obligation of those properties. Therefore, the improvements and the annual costs of maintenance and operation of the improvements are of special benefit to the properties. All the lots or parcels are established at the same time once the conditions regarding the improvements and the continued maintenance are met. As a result, each lot or parcel within the District receives a special and distinct benefit from the improvements and to the same degree. Over time, the improvements continue to confer a particular and distinct special benefit upon the lots or parcels within the District because of the nature of the improvements. The proper maintenance of the improvements and appurtenant facilities reduces property related crimes, especially vandalism, against properties in the District. All of the above mentioned factors also contribute to a specific benefit to each of the parcels within the District. Resolution 16-022 Page 11 The method of apportionment (method of assessment) is based on the premise that each assessed parcel within the District receives benefit from the improvements. However, each individual improvement element has its own distinct benefits both specific and general. The special benefits associated with the improvements within the District are as follows: Special Benefit The special benefits associated with the landscaping improvements in the District are specifically: Enhanced desirability of properties through association with the improvements; Improved aesthetic appeal of properties providing a positive representation of the area; Enhanced adaptation of the urban environment within the natural environment from adequate green space, open space areas and landscaping; Environmental enhancement through improved erosion resistance, dust and debris control, and fire prevention; Increased sense of pride in ownership of property within the District resulting from well-maintained improvements associated with the properties; Reduced criminal activity and property-related crimes (especially vandalism) against properties in the District through well-maintained surroundings and amenities including abatement of graffiti; and, Enhanced environmental quality of the parcels by moderating temperatures, providing oxygenation and attenuating noise. General Benefit Assessment Law mandates that the City assess for special benefit only, and the City shall separate general benefit from special benefit. General benefit is defined as services provided to the public-at-large. Special benefit is defined as services provided at a level greater than the services provided to the public-at-large. The City’s general benefit to the public-at-large is determined as the average expenditure from the General Fund for the maintenance of landscaped medians and right-of-ways, calculated on a per square foot basis. The City shall make a general benefit contribution to a district based on the City’s average rate of expenditure from the General Fund for the various types of improvements applied to the square footage of similar types of improvements within the District. No new improvements were added during Fiscal Year 2015/2016: LANDSCAPE ELEMENT QUANTITY Landscaped Right-of-Ways 370,369 Sq. Ft. Landscaped Right-of-Ways with Soundwall 2,275 Sq. Ft. Landscaped Median 8,929 Sq. Ft. The City shall annually conduct an audit to determine the average expenditure from the General Fund for the maintenance of landscape improvements within the public right- Resolution 16-022 Page 12 of-ways or public easements, calculated on a per square foot basis. The general benefit for Fiscal Year 2016/2017 is determined to be: $0.2696 per square foot for landscape medians, $0.1120 per square foot for landscape right-of-ways, and $0.2863 per square foot for landscape right-of-ways with soundwall As part of the audit, the City shall determine the average expenditure from the General Fund for the maintenance of District landscape improvements. Based on an increase of 1.45 percent in the San Diego Consumer Price Index (the average of All Urban Consumers and Urban Wage Earners and Clerical Workers), comparable services provided by the City of Poway staff for general landscape services, the general benefit for Fiscal Year 2016/2017 will increase from Fiscal Year 2015/2016, based on the contribution rate per square foot, at a maximum for this District: Zone A 370,369 sq. ft. landscaped R/W X $0.1120 = $41,481.33 2,275 sq. ft. landscape R/W with soundwall X $0.2863 = $651.33 8,929 sq. ft. landscaped medians X $0.2696 = $2,407.26 All other maintenance, operation, administrative, and incidental costs which exceed the City’s general benefit contribution to the public-at-large are of special benefit and assessed to the District. The City shall have an option as to how it will make the general benefit contributions to the District. The City shall make its general benefit contribution by either: providing irrigation water to the District for irrigation of LMD improvements in an amount equal to the City’s general benefit contribution, or paying directly to the District from the General Fund a dollar amount equal to the City’s general benefit contribution. C. ASSESSMENT METHODOLOGY The total cost of special benefit for maintenance of the public improvements funded by the District will be assessed to the various parcels in the District in proportion to the benefit units assigned to each parcel, in relationship to the total benefit units assigned to all parcels being assessed. Residential Land Uses All residential subdivisions shall be assessed proportional to special benefit received based on one (1) benefit unit per residential dwelling unit. Non-residential Land Uses All non-residential parcels shall be assessed proportional to special benefit received based on the average planned dwelling unit density throughout the urban areas of the City (four dwelling units per acre), the equivalent of four (4) benefit units per acre. Non-residential land uses typically provide services and/or employment opportunities for the City that benefit all lands throughout the City. Since these non-residential land uses can Resolution 16-022 Page 13 occur throughout the City, the planned, average density of residential dwelling units per acre for the urban areas of the City has been calculated. The non-residential land uses are considered to dislocate residential units. Therefore, the number of residential dwelling units dislocated, based on the average dwelling units per acre, has been assigned to non- residential lands. This method determines an equivalent benefit to residential land uses. Appendix B details the calculation of the average residential units per acre planned within the urban areas of the City. Urban areas have been defined as the parcels receiving water and sewer services. In-Lieu Assessments Under provisions of City policy, parcels may contribute in-lieu assessments by providing equivalent maintenance services for District improvements within public right-of-ways or public easements immediately adjacent to their lands. No new parcels within the District are scheduled to contribute in-lieu assessments in Fiscal Year 2016/2017. Currently the Church of Latter Day Saints is the only property within the District that has agreed to maintain the right-of-ways bordering their property for perpetuity. Non-benefiting Parcels All public and private streets, avenues, lanes, roads, drives, courts, alleys, all public easements and right-of-ways, all dedicated open space parcels, and District maintained parcels are determined to not receive special benefit from the District’s improvements and are therefore not assessed. Currently the Church of Latter Day Saints is the only property within the District that has agreed to maintain the right-of-ways bordering their property for perpetuity. Benefit Units (BUs) As described above, the number of assessable benefit units attributable to each parcel receiving special benefit has been calculated and can be found in the Assessment Roll (Appendix B). The assessment methodology utilized is as described above. Based on this methodology, the benefit units, and the Fiscal Year 2016/2017 proposed assessment for each parcel were calculated and are shown in the Assessment Roll (Appendix B). The calculated Fiscal Year 2016/2017 assessment for Zone A is proposed to remain at the Fiscal Year 2015/2016 assessment rate of $243.04 per benefit unit. Zone B’s calculated Fiscal Year 2016/2017 assessment is proposed to remain at zero dollars. D. MAXIMUM ASSESSMENT RATE The approved maximum assessment rate for the District was established and has remained at $243.04 per benefit unit for Zone A. The District currently has no approved escalation factor for increasing the maximum assessment rate for Zone A. The maximum assessment rate establishes an approved upper limit on the annual assessment; however, the assessment rate levied by the District may be less than the maximum amount in any given year if not required to meet the budgetary needs for that year. If the long term budgetary needs of the District would require an increase in the rate greater than the maximum assessment rate in order to meet those needs, then any proposed increase in the maximum Resolution 16-022 Page 14 assessment rate would require property owner balloting procedures as dictated by Article XIIID. IV. DISTRICT BUDGETS A. DESCRIPTION OF BUDGET ITEMS The 1972 Act provides that the estimated costs of the improvements shall include the total cost of the maintenance and servicing of the improvements for the entire Fiscal Year 2016/2017, commencing July 1, 2016 and ending June 30, 2017, including incidentals, which may include reserves to operate the District. The 1972 Act also provides that the amount of any surplus, deficit, or contribution be included in the estimated cost of improvements. The net amount to be assessed on the lots or parcels within the District is the total cost of maintenance and servicing with adjustments either positive or negative for reserves, surpluses, deficits, and/or contributions. Resolution 16-022 Page 15 B. LMD 86-1 BUDGET BUDGET ITEMS Fiscal Year 2014/2015(1) Fiscal Year 2015/2016(2) Fiscal Year 2016/2017(3) EXPENDITURES: Maintenance $134,658 $138,348 $173,738 Water/power 102,183 158,800 166,430 Administration(4) 41,573 41,980 40,970 Total Expenditures $278,414 $339,128 $381,138 REVENUES City General Benefit Contribution $43,029 $43,903 $44,540 Assessment Revenue 253,332 253,005 253,005 Interest Revenue 1,918 2,310 2,310 Grant Revenue 0 0 0 Capital Project Closeout 0 0 0 Miscellaneous 0 0 0 Total Revenues $298,279 $299,218 $299,855 Total Number of Parcels 1,041 Total Parcels Levied 1,041 Total EBU's 1,041 Rate per EBU (Equivalent Benefit Units) $243.04 Maximum Rate per EBU $243.04 OPERATING RESERVE Beginning Reserve Balance $153,693 $139,207 $169,564 Transfers In/Out (CIP) (34,351) 70,267 94,982 Reserve Fund Activity 19,865 (39,910) (81,283) Estimated Ending Reserve Balance $139,207 $169,564 $183,263 CAPITAL IMPROVEMENT RESERVE CIP Fund Balance $130,898 $165,249 $94,982 CIP Transfers In/Out (Operating Reserve) 34,351 (70,267) (94,982) CIP Projects 0 0 0 Estimated Ending CIP Reserve Balance $165,249 $94,982 $0 (1)Actual figures per Finance Fiscal Year 2014/2015 activity sheets. (2)Approved budget. (3)Proposed budget. (4)Includes cost allocation City staff support services. . Resolution 16-022 Page 16 APPENDIX A - DISTRICT ASSESSMENT DIAGRAM A District Diagram has been prepared for the District in the format required by the 1972 Act, and is on file with the Special Districts Office of the Public Works Department, and by reference is made part of this Report. The Assessment Diagram is available for inspection at the Special Districts Office of the Public Works Department, during normal business hours. Resolution 16-022 Page 17 V. APPENDIX B - 2016/2017 ASSESSMENT ROLL Parcel identification, for each lot or parcel within the District, shall be the parcel as shown on the County Assessor’s Map for the year in which this Report is prepared. Non-assessable lots or parcels include land principally encumbered by public or utility rights- of-way and common areas. These parcels will not be assessed. A listing of parcels assessed within the District along with the proposed assessment amounts has been identified as “Fiscal Year 2016/2017 Assessment Roll,” and is on file with the City Clerk and is by reference made a part of this Report. Resolution 16-022 Page 18 City of Poway Landscape Maintenance District 86-1 2016/2017 ENGINEER’S ANNUAL LEVY REPORT INTENT MEETING: JUNE 21, 2016 PUBLIC HEARING: JULY 19, 2016 .755.6864 F 951.587.3510 www.willdan.com/financial EXHIBIT A Resolution 16-022 Page 3 Resolution 16-022 Page 4 TABLE OF CONTENTS I.OVERVIEW ......................................................................................................... 1 A.INTRODUCTION ................................................................................................. 1 B.COMPLIANCE WITH CURRENT LEGISLATION .............................................. 1 C.IMPROVEMENTS AUTHORIZED BY THE 1972 ACT ....................................... 2 II.DESCRIPTION OF THE DISTRICT .................................................................... 3 A.BOUNDARIES OF THE DISTRICT .................................................................... 3 B.DESCRIPTION OF THE DISTRICT IMPROVEMENTS ...................................... 5 C.PROPERTIES BENEFITING FROM IMPROVEMENTS ..................................... 5 III.METHOD OF APPORTIONMENT ...................................................................... 6 A.GENERAL .......................................................................................................... 6 B.BENEFIT ANALYSIS .......................................................................................... 6 C.ASSESSMENT METHODOLOGY ...................................................................... 8 D.MAXIMUM ASSESSMENT RATE ...................................................................... 9 IV.DISTRICT BUDGETS ....................................................................................... 10 A.DESCRIPTION OF BUDGET ITEMS ................................................................ 10 B.LMD 86-1 BUDGET .......................................................................................... 11 V.APPENDIX A - DISTRICT ASSESSMENT DIAGRAM ..................................... 12 VI.APPENDIX B - 2016/2017 ASSESSMENT ROLL ............................................ 13 Resolution 16-022 Page 5 I. OVERVIEW A. INTRODUCTION The City of Poway (“City”) annually levies and collects special assessments in order to maintain the improvements within the Landscape Maintenance District 86-1 (“District”) formed June 12, 1986, pursuant to the City of Poway Resolution No. 00-034 (Policies for Landscape Maintenance Districts) and the Landscape and Lighting Act of 1972, Part 2 of Division 15 of the California Streets and Highways Code (“1972 Act”), in compliance with California Constitution Article XIIID (“Article XIIID”). The 1972 Act and Article XIIID are collectively referred to herein as “Assessment Law”. This Engineer’s Annual Levy Report (“Report”) describes the District, any annexations, or changes to the District including substantial changes to the District improvements, and the proposed assessments for Fiscal Year 2016/2017. The proposed assessments are based on the estimated cost to maintain the improvements that provide special benefits to properties within the District. The costs of improvements and the annual levy include all expenditures, deficits, surpluses, revenues, and reserves. Each parcel is assessed proportionately for only those improvements provided and for which the parcel receives benefit based on an established method of apportionment. The word “parcel,” for the purposes of this Report, refers to an individual property assigned its own Assessor’s Parcel Number by the County of San Diego (“County”) Assessor’s Office. The County Auditor/Controller uses Assessor’s Parcel Numbers and specific Fund Numbers, to identify on the tax roll, properties assessed for special district benefit assessments. Following consideration of public comments and written protests at a noticed public hearing, and review of the Report, the City Council may order amendments to the Report or confirm the Report as submitted. Following final approval of the Report, and confirmation of the assessments, the Council may order the levy and collection of assessments for Fiscal Year 2016/2017 pursuant to the 1972 Act. In such case, the assessment information will be submitted to the County Auditor/Controller, and included on the property tax roll for each benefiting parcel for Fiscal Year 2016/2017. B. COMPLIANCE WITH CURRENT LEGISLATION Pursuant to the 1972 Act, the City Council annually conducts a public hearing to accept public comments and testimony, and to approve the annual assessments to be levied on the County tax roll for the fiscal year. All assessments contained in this Report and to be approved by the City Council have been prepared in accordance with the 1972 Act and are in compliance with the provisions of Article XIIID of the Constitution of the State of California (“Proposition 218”). The City has reviewed the provisions of Article XIIID and has made the following findings and determinations: Pursuant to Article XIIID, Section 5, certain existing assessments are exempt from the substantive and procedural requirements of Article XIIID, Section 4, and property owner balloting for the assessments is not required until such time that the assessments are increased. Since the District assessments were imposed pursuant to a petition signed by Resolution 16-022 Page 6 the persons owning all of the parcels subject to the assessments at the time the assessments were initially imposed, Article XIIID Section 5 (b) exempts the existing assessment amounts (approved original assessment rates including any applicable annual escalation factor) from the procedural requirements of Article XIIID, Section 4. The provisions of Article XIIID do not alter the non-conflicting provisions of the 1972 Act. As such, the method of apportionment described in this Report utilizes commonly accepted assessment engineering practices consistent with the 1972 Act and the provisions of Article XIIID. The proposed assessments for the current fiscal year are less than or equal to the adjusted maximum assessment rate previously approved and adopted for the District. The application of this adjusted maximum assessment rate for the various land uses within the District is described in more detail in Section III D of this Report. Any proposed assessment that exceeds the adjusted maximum assessment rate is considered an increased assessment. Pursuant to the provisions of Article XIIID, all new or increased assessments (the incremental increase) are subject to both the substantive and procedural requirements of Article XIIID, Section 4. C. IMPROVEMENTS AUTHORIZED BY THE 1972 ACT As applicable or may be applicable to this proposed District, the 1972 Act defines improvements to mean one or any combination of the following: The installation or planting of landscaping. The installation or construction of statuary, fountains, and other ornamental structures and facilities. The installation or construction of public lighting facilities. The installation or construction of any facilities which are appurtenant to any of the foregoing or which are necessary or convenient for the maintenance or servicing thereof, including, but not limited to, grading, clearing, removal of debris, the installation or construction of curbs, gutters, walls, sidewalks, or paving, or water, irrigation, drainage, or electrical facilities. The maintenance or servicing, or both, of any of the foregoing. The acquisition of any existing improvement otherwise authorized pursuant to this section. Incidental expenses associated with the improvements including, but not limited to: The cost of preparation of the Report, including plans, specifications, estimates, diagram, and assessment; The costs of printing, advertising, and the publishing, posting and mailing of notices; Compensation payable to the County for collection of assessments; Compensation of any engineer or attorney employed to render services; Any other expenses incidental to the construction, installation, or maintenance and servicing of the improvements; Any expenses incidental to the issuance of bonds or notes pursuant to Section 22662.5; and, Costs associated with any elections held for the approval of a new or increased assessment. Resolution 16-022 Page 7 The 1972 Act defines "Maintain" or "maintenance" to mean furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement, including: Repair, removal, or replacement of all or any part of any improvement. Providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation, trimming, spraying, fertilizing, or treating for disease or injury. The removal of trimmings, rubbish, debris, and other solid waste. The cleaning, sandblasting, and painting of walls and other improvements to remove or cover graffiti. II. DESCRIPTION OF THE DISTRICT A. BOUNDARIES OF THE DISTRICT The District Boundary Map and Assessment Diagram, which are incorporated herein by reference and made a part of this Engineer’s Report, are on file with the Special Districts Office of the Public Works Department of the City of Poway and are available for public inspection during normal business hours. On February 25, 1992, by Council Resolution No. 92-039, Landscape Maintenance District 86-1 (“District”) was divided into two subzones: 86-1 Zone A (“Zone A”) for residential and 86-1 Zone B (“Zone B”) for commercial. Assessments for LMD 86-1 Zone A will be calculated on a per unit basis by dividing the required revenue by the total units within each district. The Church of Latter Day Saints (“LDS Poway Chapel”) is the only parcel within LMD 86-1 Zone B. By agreement, this parcel is maintained by the church for perpetuity at no cost to the District. Resolution 16-022 Page 8 District 86-1 Zone A (1,041 residential parcels assessed), includes: Tract Project Name TTMs 4090R, 4091R, 4092R, 4093R Bridlewood TTM 3545 Piedmont Park TTM 4158 Stone Canyon Ranch TTM 11442 Lakeview Developers TTM 84-08 The Grove TTM 86-01 Huntington Gate, I and II TTM 87-05 Serenata TTM 88-15 Green Valley Estates TTM 89-09 Williams Ranch TTM 89-13 Old Coach Collection TTM 89-13R The Heritage, Phase I, Unit I TTM 89-13R(3) The Heritage, Phase I, Unit II TTM 89-13R The Heritage, Phase I, Unit III TTM 89-13R The Heritage, Phase I, Unit IV TTM 97-04 Saddlebrook Estates TTM 98-02 North Point TTM 99-03 Vision Homes TPM 86-05 Liu TPM 87-05 Grimes TPM 88-02 Jemy Corporation TPM 93-06TE Liebrich TPM 98-09 Rady MDRA 99-188 Agee TTM 85-03TE, Lot 26 Attanasio TPM 02-02 Clark 888, Inc. MDRA 98-71 Kennedy Family Trust MDRA 01-38 Wells Trust MDRA 02-11 Tyce MDRA 03-11 Ricciardulli MDRA 04-031 Moreno MDRA 04-058 Gonzalez MDRA 05-59 Garczynski MDRA 04-02 Sedehi/Fard TTM 00-02 Malone MDRA 93-01R(3) Rickey MDRA 07-35 Peart TTM 02-01 BBA Partners District 86-1 Zone B (one non-residential unit) consists of: Tract Project Name TPM 90-06 LDS Poway Chapel Resolution 16-022 Page 9 B. DESCRIPTION OF THE DISTRICT IMPROVEMENTS Facilities to be maintained by Zone A of the District are defined as landscape improvements within the right-of-ways and open space areas associated with annexed subdivisions and which are adjacent to portions of Espola Road, Titan Way, Painted Desert Road, Woodland Parkway, Summer Sage Road, Lake Poway Road, Riparian Road, Sunset Drive, and Del Poniente Road. The LDS Poway Chapel facilities within Zone B of the District are defined as landscape improvements within the right-of-ways adjacent to the southeast corner of Espola and Twin Peaks Roads. Walls and fences adjacent to private property are to be maintained by the adjacent property owners. The District/City, prior to commencement of work, shall approve repairs or reconstruction of any walls or fences adjacent to the District landscape areas. Should the property owners desire to include major repairs or reconstruction within the District’s responsibilities, the property owners are required to submit a petition to initiate the balloting process set forth in Article XIIID, Section 4. Landscape maintenance performance standards and specifications have been developed by the City to assure quality maintenance of landscape assessment district properties. A recent evaluation of the level of quality has been conducted, and the current maintenance levels meet the City's landscape maintenance standards. C. PROPERTIES BENEFITING FROM IMPROVEMENTS The properties determined to receive benefit are those lots or parcels that, as a result of development or redevelopment, finance, construct, install, and/or establish landscape improvements within public right-of-ways or public easements (permanent public improvement) or adjoining lots or parcels that, as a result of development or redevelopment, receive access or are immediately adjacent to lots or parcels which contain landscape improvements maintained by a landscape maintenance district. Special benefit, as defined in the “Landscape and Lighting Act of 1972”, applicable provisions of “Proposition 218”, and provisions of the “Proposition 218 Omnibus Implementation Act” (“Assessment Law”) and in this Report, shall be assessed to those properties determined to receive special benefit from the District’s improvements. Resolution 16-022 Page 10 III. METHOD OF APPORTIONMENT A. GENERAL The 1972 Act permits the establishment of assessment districts by agencies for the purpose of providing certain public improvements that include the construction, maintenance and servicing of public lights, landscaping and appurtenant facilities. The 1972 Act further requires that the cost of these improvements be levied according to benefit rather than assessed value: The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot or parcel from the improvements. The formula used for calculating assessments in this District therefore reflects the composition of the parcels, and the improvements and services provided, to fairly apportion the costs based on benefit to each parcel. In addition, Article XIIID requires that a parcel’s assessment may not exceed the reasonable cost of the proportional special benefit conferred on that parcel. Article XIIID provides that only special benefits are assessable and the City must separate the general benefits from the special benefits. A special benefit is a particular and distinct benefit over and above general benefits conferred on the public at large, including real property within the district. The general enhancement of property value does not constitute a special benefit. B. BENEFIT ANALYSIS Each of the improvements, the associated costs and assessments within the District has been reviewed, identified and allocated based on the special benefit parcels receive from such improvements pursuant to the provisions of Article XIIID and the 1972 Act. All improvements associated with this District have been identified as necessary, required and/or desired for the orderly development of the properties within the District to their full potential, consistent with the proposed development plans. As such, these improvements would be necessary and required of individual property owners for the development of such properties, and the ongoing operation, servicing and maintenance of these improvements would be the financial obligation of those properties. Therefore, the improvements and the annual costs of maintenance and operation of the improvements are of special benefit to the properties. All the lots or parcels are established at the same time once the conditions regarding the improvements and the continued maintenance are met. As a result, each lot or parcel within the District receives a special and distinct benefit from the improvements and to the same degree. Over time, the improvements continue to confer a particular and distinct special benefit upon the lots or parcels within the District because of the nature of the improvements. The proper maintenance of the improvements and appurtenant facilities reduces property related crimes, especially vandalism, against properties in the District. All of the above mentioned factors also contribute to a specific benefit to each of the parcels within the District. Resolution 16-022 Page 11 The method of apportionment (method of assessment) is based on the premise that each assessed parcel within the District receives benefit from the improvements. However, each individual improvement element has its own distinct benefits both specific and general. The special benefits associated with the improvements within the District are as follows: Special Benefit The special benefits associated with the landscaping improvements in the District are specifically: Enhanced desirability of properties through association with the improvements; Improved aesthetic appeal of properties providing a positive representation of the area; Enhanced adaptation of the urban environment within the natural environment from adequate green space, open space areas and landscaping; Environmental enhancement through improved erosion resistance, dust and debris control, and fire prevention; Increased sense of pride in ownership of property within the District resulting from well-maintained improvements associated with the properties; Reduced criminal activity and property-related crimes (especially vandalism) against properties in the District through well-maintained surroundings and amenities including abatement of graffiti; and, Enhanced environmental quality of the parcels by moderating temperatures, providing oxygenation and attenuating noise. General Benefit Assessment Law mandates that the City assess for special benefit only, and the City shall separate general benefit from special benefit. General benefit is defined as services provided to the public-at-large. Special benefit is defined as services provided at a level greater than the services provided to the public-at-large. The City’s general benefit to the public-at-large is determined as the average expenditure from the General Fund for the maintenance of landscaped medians and right-of-ways, calculated on a per square foot basis. The City shall make a general benefit contribution to a district based on the City’s average rate of expenditure from the General Fund for the various types of improvements applied to the square footage of similar types of improvements within the District. No new improvements were added during Fiscal Year 2015/2016: LANDSCAPE ELEMENT QUANTITY Landscaped Right-of-Ways 370,369 Sq. Ft. Landscaped Right-of-Ways with Soundwall 2,275 Sq. Ft. Landscaped Median 8,929 Sq. Ft. The City shall annually conduct an audit to determine the average expenditure from the General Fund for the maintenance of landscape improvements within the public right- Resolution 16-022 Page 12 of-ways or public easements, calculated on a per square foot basis. The general benefit for Fiscal Year 2016/2017 is determined to be: $0.2696 per square foot for landscape medians, $0.1120 per square foot for landscape right-of-ways, and $0.2863 per square foot for landscape right-of-ways with soundwall As part of the audit, the City shall determine the average expenditure from the General Fund for the maintenance of District landscape improvements. Based on an increase of 1.45 percent in the San Diego Consumer Price Index (the average of All Urban Consumers and Urban Wage Earners and Clerical Workers), comparable services provided by the City of Poway staff for general landscape services, the general benefit for Fiscal Year 2016/2017 will increase from Fiscal Year 2015/2016, based on the contribution rate per square foot, at a maximum for this District: Zone A 370,369 sq. ft. landscaped R/W X $0.1120 = $41,481.33 2,275 sq. ft. landscape R/W with soundwall X $0.2863 = $651.33 8,929 sq. ft. landscaped medians X $0.2696 = $2,407.26 All other maintenance, operation, administrative, and incidental costs which exceed the City’s general benefit contribution to the public-at-large are of special benefit and assessed to the District. The City shall have an option as to how it will make the general benefit contributions to the District. The City shall make its general benefit contribution by either: providing irrigation water to the District for irrigation of LMD improvements in an amount equal to the City’s general benefit contribution, or paying directly to the District from the General Fund a dollar amount equal to the City’s general benefit contribution. C. ASSESSMENT METHODOLOGY The total cost of special benefit for maintenance of the public improvements funded by the District will be assessed to the various parcels in the District in proportion to the benefit units assigned to each parcel, in relationship to the total benefit units assigned to all parcels being assessed. Residential Land Uses All residential subdivisions shall be assessed proportional to special benefit received based on one (1) benefit unit per residential dwelling unit. Non-residential Land Uses All non-residential parcels shall be assessed proportional to special benefit received based on the average planned dwelling unit density throughout the urban areas of the City (four dwelling units per acre), the equivalent of four (4) benefit units per acre. Non-residential land uses typically provide services and/or employment opportunities for the City that benefit all lands throughout the City. Since these non-residential land uses can Resolution 16-022 Page 13 occur throughout the City, the planned, average density of residential dwelling units per acre for the urban areas of the City has been calculated. The non-residential land uses are considered to dislocate residential units. Therefore, the number of residential dwelling units dislocated, based on the average dwelling units per acre, has been assigned to non- residential lands. This method determines an equivalent benefit to residential land uses. Appendix B details the calculation of the average residential units per acre planned within the urban areas of the City. Urban areas have been defined as the parcels receiving water and sewer services. In-Lieu Assessments Under provisions of City policy, parcels may contribute in-lieu assessments by providing equivalent maintenance services for District improvements within public right-of-ways or public easements immediately adjacent to their lands. No new parcels within the District are scheduled to contribute in-lieu assessments in Fiscal Year 2016/2017. Currently the Church of Latter Day Saints is the only property within the District that has agreed to maintain the right-of-ways bordering their property for perpetuity. Non-benefiting Parcels All public and private streets, avenues, lanes, roads, drives, courts, alleys, all public easements and right-of-ways, all dedicated open space parcels, and District maintained parcels are determined to not receive special benefit from the District’s improvements and are therefore not assessed. Currently the Church of Latter Day Saints is the only property within the District that has agreed to maintain the right-of-ways bordering their property for perpetuity. Benefit Units (BUs) As described above, the number of assessable benefit units attributable to each parcel receiving special benefit has been calculated and can be found in the Assessment Roll (Appendix B). The assessment methodology utilized is as described above. Based on this methodology, the benefit units, and the Fiscal Year 2016/2017 proposed assessment for each parcel were calculated and are shown in the Assessment Roll (Appendix B). The calculated Fiscal Year 2016/2017 assessment for Zone A is proposed to remain at the Fiscal Year 2015/2016 assessment rate of $243.04 per benefit unit. Zone B’s calculated Fiscal Year 2016/2017 assessment is proposed to remain at zero dollars. D. MAXIMUM ASSESSMENT RATE The approved maximum assessment rate for the District was established and has remained at $243.04 per benefit unit for Zone A. The District currently has no approved escalation factor for increasing the maximum assessment rate for Zone A. The maximum assessment rate establishes an approved upper limit on the annual assessment; however, the assessment rate levied by the District may be less than the maximum amount in any given year if not required to meet the budgetary needs for that year. If the long term budgetary needs of the District would require an increase in the rate greater than the maximum assessment rate in order to meet those needs, then any proposed increase in the maximum Resolution 16-022 Page 14 assessment rate would require property owner balloting procedures as dictated by Article XIIID. IV. DISTRICT BUDGETS A. DESCRIPTION OF BUDGET ITEMS The 1972 Act provides that the estimated costs of the improvements shall include the total cost of the maintenance and servicing of the improvements for the entire Fiscal Year 2016/2017, commencing July 1, 2016 and ending June 30, 2017, including incidentals, which may include reserves to operate the District. The 1972 Act also provides that the amount of any surplus, deficit, or contribution be included in the estimated cost of improvements. The net amount to be assessed on the lots or parcels within the District is the total cost of maintenance and servicing with adjustments either positive or negative for reserves, surpluses, deficits, and/or contributions. Resolution 16-022 Page 15 B. LMD 86-1 BUDGET BUDGET ITEMS Fiscal Year 2014/2015(1) Fiscal Year 2015/2016(2) Fiscal Year 2016/2017(3) EXPENDITURES: Maintenance $134,658 $138,348 $173,738 Water/power 102,183 158,800 166,430 Administration(4) 41,573 41,980 40,970 Total Expenditures $278,414 $339,128 $381,138 REVENUES City General Benefit Contribution $43,029 $43,903 $44,540 Assessment Revenue 253,332 253,005 253,005 Interest Revenue 1,918 2,310 2,310 Grant Revenue 0 0 0 Capital Project Closeout 0 0 0 Miscellaneous 0 0 0 Total Revenues $298,279 $299,218 $299,855 Total Number of Parcels 1,041 Total Parcels Levied 1,041 Total EBU's 1,041 Rate per EBU (Equivalent Benefit Units) $243.04 Maximum Rate per EBU $243.04 OPERATING RESERVE Beginning Reserve Balance $153,693 $139,207 $169,564 Transfers In/Out (CIP) (34,351) 70,267 94,982 Reserve Fund Activity 19,865 (39,910) (81,283) Estimated Ending Reserve Balance $139,207 $169,564 $183,263 CAPITAL IMPROVEMENT RESERVE CIP Fund Balance $130,898 $165,249 $94,982 CIP Transfers In/Out (Operating Reserve) 34,351 (70,267) (94,982) CIP Projects 0 0 0 Estimated Ending CIP Reserve Balance $165,249 $94,982 $0 (1)Actual figures per Finance Fiscal Year 2014/2015 activity sheets. (2)Approved budget. (3)Proposed budget. (4)Includes cost allocation City staff support services. . Resolution 16-022 Page 16 APPENDIX A - DISTRICT ASSESSMENT DIAGRAM A District Diagram has been prepared for the District in the format required by the 1972 Act, and is on file with the Special Districts Office of the Public Works Department, and by reference is made part of this Report. The Assessment Diagram is available for inspection at the Special Districts Office of the Public Works Department, during normal business hours. Resolution 16-022 Page 17 V. APPENDIX B - 2016/2017 ASSESSMENT ROLL Parcel identification, for each lot or parcel within the District, shall be the parcel as shown on the County Assessor’s Map for the year in which this Report is prepared. Non-assessable lots or parcels include land principally encumbered by public or utility rights- of-way and common areas. These parcels will not be assessed. A listing of parcels assessed within the District along with the proposed assessment amounts has been identified as “Fiscal Year 2016/2017 Assessment Roll,” and is on file with the City Clerk and is by reference made a part of this Report. Resolution 16-022 Page 18