Agenda packet — Orange City Council, June 14, 2022 (part 8 of 8)

JUNE 2022

CITY OF ORANGE

REPORT ON WATER QUALITY

RELATIVE TO PUBLIC HEALTH GOALS
FOR YEARS 2019, 2020 and 2021
Purpose
Provisions of the California Health and Safety Code (Section 116470 (b)) specify that larger water utilities (>10,000 service connections) prepare a special report by July 1, 2022 if their water quality measurements have exceeded any Public Health Goals (PHGs). PHGs are nonenforceable goals established by the Cal-EPA’s Office of Environmental Health Hazard Assessment (OEHHA). The law also requires that where OEHHA has not adopted a PHG for a constituent, the water suppliers are to use the Maximum Contaminant Level Goals (MCLGs) adopted by United States Environmental Protection Agency (USEPA). Only constituents which have a California primary drinking water standard and for which either a PHG or MCLG has been set, are to be addressed. This report covers the “detection” of contaminants above both PHGs and MCLGs found in the City’s water system during calendar years 2019, 2020, and 2021.

If a constituent was detected in the City’s water supply between 2019 and 2021 at a level exceeding an applicable PHG or MCLG, this report provides the information required by law.

Included is the public health risk associated with the MCL and the PHG or MCLG, the category or type of risk to health that could be associated with each constituent, the best treatment technology available that could be used to reduce the constituent level, and an estimate of the cost to install that treatment if it is appropriate and feasible Background
The USEPA and the OEHHA established very conservative water quality standards for domestic drinking water systems. These standards are based on various risk-assessment factors and are expressed in terms of an allowable Maximum Contaminant Level (MCL) for every regulated contaminant. The MCL is the regulatory definition of what is “safe”. The MCLs are strictly 1468

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enforced. Water agencies are required to take specific actions to notify consumers and to mitigate the problem if an MCL is exceeded. The City of Orange water system consistently meets all federal and state drinking water MCL standards.

OEHHA also establishes PHGs for drinking water systems. PHGs are based solely on public health risk considerations. None of the practical risk-management factors that are considered by the USEPA or the California State Water Resources Control Board (SWRCB) in setting drinking water standards (MCLs) are considered in setting the PHGs. These factors include analytical detection capability, treatment technology available, benefits and costs. The federal equivalent to PHGs are called Maximum Contaminant Level Goals (MCLGs). PHGs and MCLGs are not enforceable standards. Water agencies are not required to take any actions regarding them.

These goals are not based on a comprehensive risk assessment analysis. Instead, they are set to only represent a contaminant level that would result in either zero health risk or “no significant” (one in a million) health risk for a lifetime of exposure. Determinations of health risks at these low levels are frequently and theoretically, based on risk assessments with many assumptions.

Many PHGs are set at zero.

California legislation requires water agencies to prepare a special report every three years, if their water exceeds any PHG or MCLG. The report must identify all contaminants in excess of a PHG/MCLG, the public health risks involved and a general estimate of the costs that would be involved in removing the contaminants in order to meet the goals. The purpose of this report is to provide consumers with additional information on the contaminant levels and to furnish information about the cost to reduce to below the PHG/MCLG level or basically eliminate even small traces of contaminants from the water supply.

Both the USEPA and SWRCB adopt what are known as BATs or Best Available Technologies, which are the best-known methods of reducing contaminant levels to the MCL. Costs can be estimated for such technologies. However, since many PHGs and all MCLGs are set much lower than the MCL, it is not always possible, nor feasible to determine what treatment is needed to further reduce a constituent downward to or near the PHG or MCLG, many of which are set at zero. Estimating the costs to reduce a constituent to zero is difficult, if not impossible because it is not possible to verify by analytical means that the level has been lowered to zero. In some cases, installing treatment to try and further reduce very low levels of one constituent may have adverse effects on other aspects of water quality.

All of the water quality data collected in 2019, 2020 and 2021, for the purposes of determining compliance with drinking water MCL standards, was considered for the purposes of this report.

Every year all water quality results are summarized in the Annual Consumer Confidence Report, which is made available to all customers and is posted online at www.cityoforange.org/ccr. As indicated previously, the City of Orange water system complies with all federal and state MCL standards. The City of Orange water supply, which includes water from wells and imported sources meets all of the PHG and MCLG standards, with only four exceptions during the last three years.
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PHG/MCLG Compliance Exceptions
During Calendar Years 2019, 2020 and 2021
 Gross (Total) Alpha Activity (Excluding Uranium) was detected in three sources water sample (wells) from not detected to 8.09 pico Curies per liter (pCi/L). The MCL is 15 pCi/L. The EPA MCLG is 0 (zero).
 (Natural) Uranium was detected in ten sources water samples (wells) from 1.05 to 9.07 pico Curies per liter (pCi/L). The MCL is 20 pCi/L. The PHG is 0.43 pCi/L. The EPA MCLG is 0 (zero).
 Hexavalent Chromium was detected in nine sources water sample (wells) from 0.24 ppb to 1.32 ppb. The MCL is 10 ppb and the PHG is 0.02 ppb.  Perchlorate was detected in one source water sample (well) from 2.4 ppb to 2.80 ppb.

The MCL is 6 ppb and the PHG is 1 ppb.

Radionuclides
Many naturally occurring substances and a few man-made ones have the potential to emit ionizing radiation, and are therefore referred to as radionuclides. Of the radionuclides that have been observed in drinking water, most are naturally occurring. The naturally occurring constituents of greatest concern in drinking water are uranium and radium-226 and radium-228.

Most of the naturally occurring radionuclides are alpha particle emitters. Contamination by manmade nuclear materials can also occur. The man-made radionuclides, which are primarily beta and photon emitters, are produced by a number of activities that involve the use of concentrated radioactive materials. These include production of electricity, nuclear medicines used in therapy and diagnosis, and various commercial products such as televisions or smoke detectors. The City of Orange is only required to monitor its ground water and surface water supplies for naturally occurring radionuclides. Exposure to radionuclides from drinking water results in an increased risk of cancer. In addition to cancer, exposure to uranium has the potential to cause kidney damage. In California, the radionuclides currently regulated in drinking water are gross alpha particle activity, radium-226 and radium-228, uranium; and beta and photon emitters. Of those radionuclides, gross alpha particle activity and uranium were detected in ground water sources serving the City of Orange below the MCL but above the PHG/MCLG.

Gross (Total) Alpha
Gross or total alpha particle activity is used as a screening tool to possibly avoid testing for other radionuclides. There is no PHG for gross alpha particle activity but the MCLG set by the USEPA is 0 (zero) pico Curies per liter (pCi/L). The MCL for drinking water standard is 15 pCi/L. Orange is required to monitor each of its drinking water wells for gross alpha particle activity at least once every four years. During the three-year period (2019-2021) covered by this report, gross alpha particle activity was measured in 3 of the City’s wells in amounts ranging from not-detected to 8.09 pCi/L. Gross Alpha particle was NOT detected in any import water sources. The levels detected were below the MCL at all times. The City water system is in full compliance with federal and state rules for gross alpha particle activity. 1470

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The category of health risk associated with gross alpha particle activity is carcinogenicity.

People who drink water containing gross alpha particle activity above the MCL throughout their lifetime could experience an increased risk of getting cancer. The Best Available Treatment Technologies (BAT) to lower the level of alpha particles to the MCLG is reverse osmosis, while ion exchange is also a possible treatment option. It is not known if either technology is feasible of achieving the MCLG level of zero pCi/L. In studies conducted to remove contaminant via Reverse Osmosis by CH2M Hill for City of Scottsdale, AZ, the annualized capital and O&M costs ranged from $1.82 to $6.65 per 1,000 gallons treated. To treat the affected well, it is estimated that it would cost approximately $11 million per year to reduce the level of alpha particle activity. While three wells are currently affected, with the randomly occurring nature of how total alpha particle activity is being detected in the wells, successful reduction treatment for total alpha particle activity over time may include more wells, which in turn, would considerably raise the cost. In addition, since there is little data readily available to estimate cost of treatment to achieve absolute zero, installation of treatment may not necessarily achieve the MCLG and the costs may be significantly higher to do so.

Uranium
Uranium is the heaviest naturally occurring element. It is a mixture of three radioactive isotopes:

U-238, U-235, and U-234. The isotope U-238 comprises over 99% of naturally occurring uranium. A Public Health Goal (PHG) for uranium was first established in 2001. The MCL for Uranium is 20 pico-Curies per liter (pCi/l). The PHG for uranium is 0.43 pCi/l. The EPA MCLG is 0 (zero). The category of health risk for uranium is cancer and possible kidney toxicity.

Uranium test results for the City for the period 2019-2021 from all groundwater and import sources had a range of 1.05 to 9.07 pCi/l. Uranium was found to occur in ten groundwater wells.

Uranium was also detected in import water sources in amounts ranging from not detected to 3.0 pCi/L. The levels detected were below the MCL at all times. The City water system is in full compliance with federal and state rules for uranium.

Treatment considerations would again focus on the five affected groundwater (well) sources and import connections. Treatment options include reverse osmosis or ion exchange. As similarly discussed for gross alpha particle activity, costs to remove uranium are estimated to run upwards of $40 million annually. It is to be noted that in treating (for removal) of any one of the above contaminants, would effectively remove all the noted contaminates in this report. Efficiencies in excess of 95% removal would be necessary to achieve PHG levels for uranium and could likely be more costly than referenced due to the variable removal rate. Likewise and similar to gross alpha, the randomly occurring nature of uranium may necessitate further treatment at differing wells which could raise the cost significantly.

Hexavalent Chromium (Chromium VI)
Hexavalent chromium (or Chromium-6), is a highly toxic form of the naturally occurring metal chromium. It is an odorless and tasteless metallic element. Chromium is found naturally in 1471

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rocks, plants, soil and volcanic dust, and animals. The most common forms of chromium that occur in natural waters in the environment are:

Trivalent chromium (chromium-3)
Hexavalent chromium (chromium-6)
Chromium-3 is an essential human dietary element. It is found in many vegetables, fruits, meats, grains and yeast. Chromium-6 occurs naturally in the environment from the erosion of natural chromium deposits. It can also be produced by industrial processes. There are demonstrated instances of chromium being released to the environment by leakage, poor storage, or inadequate industrial waste disposal practices.

Chromium-6 is recognized as a human carcinogen via inhalation, which can increase the risk of lung cancer. Exposure to hexavalent chromium from breathing dust or fumes is considered to have a much higher risk than exposure from drinking water. Research data collected from China found increased rates of stomach cancer in people who may have been exposed to very high levels of hexavalent chromium in drinking water.

In 2010, the USEPA released a draft human health assessment proposing to classify hexavalent chromium as a likely to be carcinogenic via ingestion. USEPA was advised by a peer review panel in 2012 to consider the results from research funded through the American Chemistry Council. The new research replicates the earlier National Toxicology Program (NTP) study at lower doses of hexavalent chromium and seeks to identify the underlying cause for carcinogenicity from oral exposure. The completion of the USEPA human risk assessment and final determination of human carcinogenicity of hexavalent chromium via oral ingestion is still pending. In 2012, the USEPA finalized the third Unregulated Contaminant Monitoring Rule (UCMR3) which requires water systems serving greater than 10,000 persons to monitor for hexavalent chromium and total chromium.

In July 2011, California finalized its Public Health Goal at 0.02 ug/L in drinking water.

California found sufficient evidence that hexavalent chromium is carcinogenic by oral exposure, based on the NTP long term animal study. The California PHG is based solely on health effects and is set at a level determined to not pose any significant risk to health.

Hexavalent chromium test results for the City for the period (2019-2021) from all groundwater sources had a range of 0.24 to 1.32 ppb. Hexavalent chromium was found to occur in nine groundwater wells. Hexavalent chromium was NOT detected in any import water sources. The level detected was below the MCL of 10 ppb at all times. The City water system is in full compliance with federal and state rules for hexavalent chromium.

The treatment consideration for hexavalent chromium would focus on a single affected groundwater (well) source. Treatment options include reverse osmosis or ion exchange. As similarly discussed for gross alpha particle activity and uranium above, costs to remove hexavalent chromium are estimated to run upwards of $11 million annually.

Perchlorate
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Perchlorate is a chemical that can occur naturally in the environment and also may be released by fireworks, improper handling or disposal of rocket fuel, and various industrial processes.

Perchlorate is known to block the thyroid’s ability to take in and process iodide, which is a nutrient essential to brain development, growth, heart function, and other systems. Studies conducted by OEHHA scientists and others have revealed that perchlorate can harm the health of infants at lower levels than the levels that are harmful to healthy adults.

In February 2015, California updated its Public Health Goal for Perchlorate in drinking water.

The updated PHG is one part-per-billion (1 ppb) based on the inhibition of iodide uptake into the thyroid gland and the consequent disruption of thyroid hormone production. The update considers recent toxicological and epidemiological literature providing new information on exposures to and possible effects of perchlorate, focuses on infants as a susceptible population, and, pursuant to California Health and Safety Code Section 116365.2, incorporates updated drinking water ingestion rates for infants. These considerations have resulted in a decrease of the perchlorate PHG from 6 ppb to 1 ppb. There is no current federal standard for perchlorate in drinking water. The current state standard, officially known as a maximum contaminant level (MCL), is set at 6 ppb.

Perchlorate test results for the City for the period (2019-2021) from all groundwater sources had a range of 2.4 to 2.8 ppb. Perchlorate was found to occur in one groundwater well. The level detected was below the MCL of 6 ppb at all times. The City water system is in full compliance with federal and state rules for Perchlorate.

The treatment consideration for perchlorate would focus on a single affected groundwater (well) source. Perchlorate can be removed from drinking water or groundwater by treatment processes such as ion exchange or reverse osmosis, but these processes produce waste brine that can be challenging to manage. As similarly discussed for gross alpha particle and uranium above, costs to remove perchlorate are estimated to run upwards of $11 million annually.

Other Discussion (Lead & Copper)
There is no MCL for Lead or Copper. Instead, the 90th percentile value of all samples from household taps in the distribution system cannot exceed an Action Level (AL) of 0.015 mg/l for lead and 1.3 mg/l for copper. The PHG for lead is 0.0002 mg/l. The PHG for copper is 0.3 mg/l.

The category of health risk for exposure to lead is potential damage to the brain, red blood cells, and kidneys especially in young children or pregnant women. The risk of exposure for copper is stomach and intestinal distress, liver or kidney damage, and complications of Wilson’s disease in genetically predisposed people
Lead and copper test results were not detected for all samples taken from imported water sources. Lead and copper tests results for wells were none detected for lead and 0.0022 to

0.0038 mg/L for copper over the test period. Based upon extensive sampling of our distribution system from customer’s internal taps, our 90th percentile for lead was 0.0023 mg/L (one home above the AL) and the 90th percentile for copper was 0.20 mg/L (no homes above the AL).

Therefore, Orange remains under the AL for lead and copper and are deemed to have “optimized corrosion control” for our system.
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In general, optimizing corrosion control is considered to be the best available technology to deal with corrosion issues and with any lead or copper findings. We continue to monitor our water quality parameters related to corrosivity, such as pH, hardness, alkalinity, and total dissolved solids. The Langelier Index (LI) is another indicator of corrosivity. A positive LI indicates noncorrosive water. All City water sources have positive LI’s and are therefore considered noncorrosive.

Conclusion
PHGs and MCLGs are not enforceable and are not required to be met by any public water system. They are set based upon “zero” or “no significant” risks without consideration of practical risk management factors such as analytical detection ability to test at PHG or MCLG threshold levels, available treatment technologies, benefits, and costs. Public water systems are held accountable to Maximum Contaminant Levels (MCLs) for compliance with water quality standards. The City of Orange water system continues to meet all federal and state drinking water standards to protect public health.
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Agenda Item
City Council
Item #: 10.2. 6/14/2022 File #: 22-0273
TO: Honorable Mayor and Members of the City Council
THRU: Rob Houston, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Public Hearing to consider approval of the Landscape Maintenance District 94-1 (Sycamore Crossing) Final Engineer’s Report for Fiscal Year 2022-2023. Resolution No. 11395.

2. SUMMARY
Resolution 11395 is the second step and will complete the process of the annual assessment for Landscape Maintenance Assessment District 94-1 (Sycamore Crossing). Staff recommends no increase in the assessments for Fiscal Year 2022-2023 and that they remain $293.08 per unit. The total assessment to be levied in Landscape Maintenance Assessment District 94-1 (Sycamore Crossing) will be $47,877.

3. RECOMMENDED ACTION

1. Adopt Resolution No. 11395. A Resolution of the City Council of the City of Orange approving the Engineer’s Report and providing for the annual assessment for Landscape Maintenance District 94-1 (Sycamore Crossing).

2. Establish the assessment for Fiscal Year 2022-2023 for Landscape Maintenance Assessment District 94-1 at $293.08 per single family unit per year.

4. FISCAL IMPACT
The total expenditure for this assessment is $47,864 and will be funded through Sycamore Crossing Landscape Maintenance District (293).

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 1995, Landscape Maintenance District No. 94-1 (LMD 94-1) was established to maintain the landscape and flood control improvements along Santiago Creek that were constructed by Tract No. 14752 (Sycamore Crossing). Resolution No. 8462 approved Conditional Use Permit 2088-94 for Tentative Tract 15053 (Sycamore Crossing) and Resolution No. 8463 approved Tentative Tract Map 15053, which is part of Tract 14751.

Annually, staff performs a detailed accounting of expenses and calculates a new assessment for the benefiting property owners. All assessments are recommended to remain the same for Fiscal Year 2022-2023 (FY23) as they are for the current fiscal year. The 124 units in the interior of the Tract are City of Orange Page 1 of 2 Printed on 6/9/2022
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Item #: 10.2. 6/14/2022 File #: 22-0273
2022-2023 (FY23) as they are for the current fiscal year. The 124 units in the interior of the Tract are currently assessed at $293.08. The 36 units adjacent to the landscape improvement have a 2% premium and are currently assessed at $298.94 per unit. The senior housing site (Harmony Creek) is currently assessed at $597.88 per year. In addition, the City owns two lots within the district that pay into the District. The larger lot which remains as open space is assessed at $117.23 per year and the smaller lot for a future water well is $58.62 per year.

The total expenditure for FY23 is estimated to be $47,864. The proposed assessment will generate $47,877 in revenue. The projected year-end Reserve fund balance is $98,522 and the District is funded entirely by annual assessment revenue. The surplus revenue is $13 and will contribute to the fund balance to be used for future repairs and replacement of infrastructure such as fences, irrigation and landscape.

The attached Final Engineer’s Report contains detailed information about the assessment.

Each year, the process for setting the assessment of the Landscape Maintenance Districts is initiated. The process began on May 10, 2022 with the City Council Approval of Resolution No. 11391 which approved the Preliminary Engineer’s Report for LMD 94-1 and set June 14, 2022 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.

7. ATTACHMENTS
· Resolution No. 11395
· Final Engineer’s Report for the Annual Levy - Assessment Landscape Maintenance District No. 94-1 - Fiscal Year 2022-2023
City of Orange Page 2 of 2 Printed on 6/9/2022
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Agenda Item
City Council
Item #: 10.2. 6/14/2022 File #: 22-0273
TO: Honorable Mayor and Members of the City Council
THRU: Rob Houston, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Public Hearing to consider approval of the Landscape Maintenance District 94-1 (Sycamore Crossing) Final Engineer’s Report for Fiscal Year 2022-2023. Resolution No. 11395.

3. RECOMMENDED ACTION

2. Establish the assessment for Fiscal Year 2022-2023 for Landscape Maintenance Assessment District 94-1 at $293.08 per single family unit per year.

4. FISCAL IMPACT
The total expenditure for this assessment is $47,864 and will be funded through Sycamore Crossing Landscape Maintenance District (293).

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.

Annually, staff performs a detailed accounting of expenses and calculates a new assessment for the benefiting property owners. All assessments are recommended to remain the same for Fiscal Year 2022-2023 (FY23) as they are for the current fiscal year. The 124 units in the interior of the Tract are City of Orange Page 1 of 2 Printed on 6/9/2022
powered by Legistar™1477
Item #: 10.2. 6/14/2022 File #: 22-0273
2022-2023 (FY23) as they are for the current fiscal year. The 124 units in the interior of the Tract are currently assessed at $293.08. The 36 units adjacent to the landscape improvement have a 2% premium and are currently assessed at $298.94 per unit. The senior housing site (Harmony Creek) is currently assessed at $597.88 per year. In addition, the City owns two lots within the district that pay into the District. The larger lot which remains as open space is assessed at $117.23 per year and the smaller lot for a future water well is $58.62 per year.

The attached Final Engineer’s Report contains detailed information about the assessment.

A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF ORANGE APPROVING THE
ENGINEER’S REPORT AND PROVIDING FOR

THE ANNUAL ASSESSMENT FOR LANDSCAPE
MAINTENANCE DISTRICT 94-1 (SYCAMORE

CROSSING)
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 California Streets and Highways Code, in what is known and designated as Landscape Maintenance District No. 94-1 (“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 desires to proceed 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 be, 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.
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2 Section IV:

That the assessments for Fiscal Year 2022-2023 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:

That 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 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 3rd Monday in August.

Section VI:

That the above confirmed assessment shall be collected at the same time and in the same manner as County property taxes are collected, and all laws providing for the collection and enforcement of these assessments.

ADOPTED this ____ day of ____________________, 2022
Mark A. Murphy, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
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3 STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the day of , 2022 by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
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Engineer’s Report
City of Orange
Landscape Maintenance District No. 94-1
1 CITY OF ORANGE
FINAL ENGINEER’S REPORT

FOR THE ANNUAL LEVY

ASSESSMENT LANDSCAPE MAINTENANCE
DISTRICT NO. 94-1
FISCAL YEAR 2022-2023
LANDSCAPE MAINTENANCE DISTRICT NO. 94-1

SYCAMORE CROSSING
Intent Meeting: May 10, 2022
Public Hearing: June 14, 2022
LMD 94-1 Final ER FY 2022-23
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Engineer’s Report
City of Orange
Landscape Maintenance District No. 94-1
3 TABLE OF CONTENTS
AFFIDAVIT FOR THE ENGINEER’S REPORT ..................................................... 2 INTRODUCTION ........................................................................................................ 4 PART I — PLANS AND SPECIFICATIONS .............................................................. 6 A. Description of the District ................................................................................................ 6 B. Improvements and Services.............................................................................................. 6 PART II — METHOD OF APPORTIONMENT ....................................................... 7 A. Background ......................................................................................................................... 7 B. Method of Assessment ...................................................................................................... 7 C. Financial Analysis ............................................................................................................... 9 PART III — DISTRICT BUDGET ............................................................................ 10 PART IV — DISTRICT DIAGRAMS ......................................................................... 12 PART V — ASSESSMENT ROLL .............................................................................. 14 1484
Engineer’s Report
City of Orange
Landscape Maintenance District No. 94-1
4 INTRODUCTION
Pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Part 2 of Division 15 of the California Streets and Highways Code, commencing with Section 22500 (hereafter referred to as the “1972 Act”), and in compliance with the substantive and procedural requirements of the California State Constitution Articles XIIIC and XIIID (hereafter referred to as the “California Constitution”), the City Council of the City of Orange, County of Orange, State of California (hereafter referred to as “City”), in connection with the annual levy and collection of assessments of the special benefit assessment district designated as:

Landscape Maintenance District No. 94-1
(hereafter referred to as the “District”), which includes all lots and parcels of land that specially benefit from the improvements within the District. This Engineer’s Report (hereafter referred to as “Report”) has been prepared in connection with the annual levy and collections of assessments for said District pursuant to Chapter 1, Article 4 of the 1972 Act.

The City Council proposes to levy and collect annual assessments on the County tax rolls to provide ongoing funding for the costs and expenses required to service and maintain the landscaping improvements originally installed in connection with the development of properties within the District. The improvements to be provided by the District and the assessments described herein are made pursuant to the 1972 Act.

This Report describes the District, the improvements, and the proposed assessments to be levied in Fiscal Year 2022-2023 against properties in connection with the special benefits the properties will receive from the maintenance and servicing of the District improvements. The annual assessments to be levied on properties within the District will provide a funding source for the continued operation and maintenance of local landscaping improvements installed in connection with the development of properties within the District. The assessments described in this Report are based on an estimate of the direct expenditures, incidental expenses, and fund balances that will be necessary to maintain and service the improvements.

The word “parcel,” for the purposes of this Report, refers to an individual property assigned its own Assessor’s Parcel Number (APN) by the Orange County Assessor’s Office. The Orange County Auditor/Controller uses Assessor’s Parcel Numbers and specific Fund Numbers to identify properties to be assessed on the tax roll for the special benefit assessments.

This Report has been prepared and presented to the City Council to address any proposed changes to the District or improvements, if any, and the proposed budget and assessments for Fiscal Year 2022- 2023. The City Council will conduct a noticed public hearing to consider public testimonies, comments and written protests regarding the levy and collection of assessments for Fiscal Year 2022-2023. Upon conclusion of the public hearing, if majority protest does not exist the City Council may approve this Report (as submitted or amended) and levy the assessments for Fiscal Year 2022-2023. In such case, the assessments for fiscal year 2022-2023 shall be submitted to the Orange County Auditor/Controller for inclusion on the property tax roll for each parcel. If the proposed annual assessments for this District exceed the maximum assessment described herein (as approved by the property owners), the new or increased assessment must be confirmed through another property owner protest ballot proceeding before such an assessment may be imposed.
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Engineer’s Report
City of Orange
Landscape Maintenance District No. 94-1
5 This Report consists of five (5) parts:

Part I
Plans and Specifications: A description of the District boundaries and the improvements associated with the District. The District has been formed as a single benefit zone encompassing all properties within the territory identified as Landscape and Maintenance District No 94-1.

Part II
The Method of Apportionment: A discussion of benefits the improvements and services provide to properties within the District and the method of calculating each property’s proportional special benefit and annual assessment.

Part III
The District Budget: An estimate of the annual costs to operate, maintain and service the landscaping and appurtenant facilities installed and constructed as part of the development of properties within the District. This budget includes an estimate of anticipated direct maintenance costs and incidental expenses. The special benefit assessments are based on the overall operation costs minus any costs that are considered general benefit. The proposed assessments for Fiscal Year 2022- 2023, and each subsequent year shall be based on the estimated net annual cost of operating, maintaining and servicing the improvements for that fiscal year as well as funds to be collected in installments to perform maintenance activities that cannot be reasonably collected in a single fiscal year’s assessments.

Part IV
District Diagram: A Diagram showing the exterior boundaries of the District is provided in this Report and includes all parcels that will receive special benefits from the improvements. Reference is hereby made to the Orange County Assessor’s Parcel Maps for a detailed description of the lines and dimensions of each lot and parcel of land within the District.

Part V
Assessment Roll: A listing of the proposed assessment amounts to be levied on Assessor’s Parcel within the District for Fiscal Year 2022-2023. The proposed assessment amount for each parcel is based on the parcel’s proportional special benefit as outlined in the method of apportionment. 1486
Engineer’s Report
City of Orange
Landscape Maintenance District No. 94-1
6 PART I — PLANS AND SPECIFICATIONS
A. Description of the District
The assessment district boundary is shown on a map entitled Assessment Diagram, Landscape Maintenance District No. 94-1, City of Orange, which is on file with the City Clerk of the City of Orange.

A reduced scale copy of the Diagram can be found in Part IV of this document.

All parcels of real property affected are more particularly described in maps prepared in accordance with Section 327 of the Revenue and Taxation Code, which are on file in the Office of the Orange County Assessor, and which are made a part of this report by reference.

B. Improvements and Services
Improvements and Services Permitted Pursuant to the 1972 Act The location of the works of improvement to be maintained under these proceedings is described as follows:

A. Lot E Tract 14752 - Generally a 23-foot wide strip of land along the northerly upper banks of Santiago Creek within Tract 14752;
B. Lot F Tract 14752 - Generally a 55-foot wide strip of land along the southerly upper banks of Santiago Creek with Tract 14752;
C. Lot C Tract 14752 - Generally an irregular shaped parcel adjacent to Lot F Tract 14752.

A general description of the works of improvement to be maintained under these proceedings are those generally described as follows:

A. Ornamental shrubs, trees, and ground cover
B. Habitat area including natural shrubs, trees, and ground cover C. Complete irrigation system including pipes, valves, sprinkler heads, and controller D. Soil cement erosion protection
The following items are excluded from the Maintenance District:

A. The center low flow channel of Santiago Creek.

B. Complete recreation trail/maintenance road including asphalt, signing, striping, and lighting.

Maintenance shall include, but not be limited to:

A. Repair, removal, or replacement of all or any part of any included improvement; B. Providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation, trimming, spraying, fertilizing, and treating for disease or injury; and C. The removal of trimmings, rubbish, debris, and other solid waste.

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7 PART II — METHOD OF APPORTIONMENT
A. Background
The Landscaping and Lighting Act of 1972 provides that assessments may be apportioned by any formula or method, which fairly distributes costs among all lots or parcels within the district in proportion to the estimated benefits received. It is necessary to identify the special benefit that the Works of Improvement will render to the properties within the Assessment District. It is also necessary that the properties receive a special and direct benefit as distinguished from benefit to the general public.

B. Method of Assessment
Identify the Special Benefit
First of all, it is necessary to identify the special benefit that the public improvement will render to the properties within the boundaries of Landscape Maintenance District No. 94-1. The improvements consist of landscaping and a recreation trail/maintenance road along the upper banks of Santiago Creek. The creek was a natural flood control channel running through Tentative Tract 14752. As a condition for developing the tract, it was necessary to improve the creek to provide 100-year flood protection consistent with the National Flood Insurance Program. Alternative designs were looked at ranging from a concrete lined channel to a multi-use natural looking channel. The later was chosen to provide a visually pleasing channel with landscaping along both banks, erosion control bank protection, a useful recreation trail and a maintenance road. An interesting biotic habitat was added to fulfill 404 & 401 permit requirements.

The Orange County Flood Control District owns and maintains the center 96-foot wide low flow channel. The City of Orange owns and LMD 94-1 maintains 23 feet on the north side and 55 feet on the south side of the channel.

The special and direct benefits that each property owner will receive are:
• The Landscape Maintenance District fulfills the financial obligation of the property owners to maintain the improvements in Santiago Creek installed by the Tract development and as required by Conditional Use Permit 2088-94, condition of approval of Tract 15053 and the Development Agreement for Sycamore Crossing.
• A pleasing landscape visible at the entrance to the tract. • Enhanced desirability of district properties through association with the improvements. • Enhancement of the urban environment by providing open space and landscaping. • Necessary flood protection provided by the improvements. • Improved erosion resistance, dust control and fire prevention. • There are many homes in the District that back up to Santiago Creek and the landscape improvement. Their back fences are made of wrought iron so they can enjoy the beauty and spaciousness of the landscape improvement.
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8 Prior to 2011, the recreation trail, which begins within the Tract boundary and provides direct access to Hart Park, a City park with numerous recreation facilities, was considered as a special benefit. The recreation trail has been extended through the District and is now incorporated into the City regional trail system. This altered the special benefit of the recreation trail within the District. District funds are no longer used for the maintenance of the trail pavement, stripping and rail safety fence.

Apportionment of Cost
In further making the analysis, it is necessary that the property owners receive a special and direct benefit distinguished from that of the general public. In this case, an in-depth analysis was made, and several factors are being used in the final method and spread of assessments. In analyzing the overall district, it is noted that there are two types of development. There are 160 single family detached residential units on the north side of Santiago Creek and a 1.385 acre commercial site on the south side recently developed with senior housing.

All 160 residential units are relatively the same except for the fact that 36 units back up to the landscape improvement. The developer has placed an approximate 2% lot premium on these lots. This same differential was used in determining the assessment. A unit cost factor of 1.02 is assigned to these 36 units and the remaining 124 units have a cost factor of 1.0. The commercial site has been developed as low income housing for senior citizens.

The unit cost for the current FY 2021-2022 is $293.08 per unit for a total levy of $47,877.49. No increase is recommended for fiscal year 2022-2023. The levy will remain at $293.08. Therefore, the assessment levied on the 124 interior residential units will be $293.08, and for the 36 residential units along the channel it will be $298.94. In analyzing the special benefit to the senior citizen housing site we recognize the fact that seniors are generally not mobile enough to use the bike and pedestrian trail and therefore have limited access to the landscape improvement. The special benefit is limited to the visibility of the landscaping from the north facing units. With this in mind, a unit cost factor of 2.04 was assigned to the seniors housing site and the assessment levied will be $597.88. Since the enactment of Prop 218, publicly owned property within the District is no longer exempt from assessment. There are two lots within the boundaries of the District that are owned by the City of Orange. One is a small lot to be used in the future for a domestic water well. The other is a larger lot that will someday be used for recreation purposes. The special benefit to these lots is minimal at this time. A unit cost factor of 0.20 is assigned to the well site and a unit cost factor of 0.40 to the recreation site. The City will be levied $58.62 and $117.23 respectively. The total of the assessments levied on all the parcels will be $47,877.49.

Currently, the budget shows the District appears to be operating in a deficit. However, remaining fund balances from previous years are available for use during the current Fiscal Year. The intention of this higher maintenance budget is to use remaining fund balances from prior years to address larger improvement and repair needs of District infrastructure and/or landscape. Once the leftover fund balance is depleted, the budgeted annual expenditures for the District will be adjusted to align with the collected assessment.
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9 C. Financial Analysis
The facilities, which are to be maintained by this landscape maintenance district, were installed by the developer of Tract No. 14752. The estimated costs of maintenance, operation, and administration of the facilities are shown in Part III.

Resolution 8462 approved Condition Use permit 2088-94 for Tentative Tract 15053 and Resolution 8463 approved Tentative Tract Map 15053, which is a part of Tract 14751. Both resolutions contain the following condition:
“To the satisfaction of the City of Orange’s Public Works Department and City Engineer, prior to the recordation of Final Tract Map 15053, the City shall form a landscape maintenance district which shall include the project for the purpose of levying and collecting an assessment to maintain the open space dedicated to the City by Tentative Tract 14752 and defining in Exhibit E-1 of the development agreement for this project. Said assessment shall not exceed the sum of $28.00 per month per residential unit in the project but may increase annually in accordance with the applicable increase maintenance cost index as provided in the Engineering News Record or such other comparable index as the parties shall agree. The future homeowner’s contributions (financial payments) towards the maintenance of Santiago Creek open space shall be included in the disclosure requirement to future buyers.” The individual 2022-2023 assessments, tabulated by Assessor's Parcel Number, are on file with the City Clerk of the City of Orange, and can be found in Part V, Assessment Roll.

The 1972 Act permits carrying forward surpluses or recovering deficits in subsequent fiscal years.

Costs for the District are reviewed annually and subsequent year's assessments will be credited or debited, as necessary.

The total assessment to be levied for fiscal year 2022-2023 by the district is recommended to be $47,877. This assessment is the same as fiscal year 2021-2022.

The assessments for Landscape Maintenance District No. 94-1, City of Orange, have been apportioned in direct accordance with the special and direct benefits that each parcel receives from the maintenance, operation, and administration of the Works of Improvement. 1490
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10 PART III — DISTRICT BUDGET
The following budget outlines the estimated costs to maintain the improvements for 2022-2023.

ANNUAL LEVY OF ASSESSMENT
LANDSCAPE MAINTENANCE DISTRICT NO. 94-1
City of Orange

ESTIMATED COSTS

OPERATION & MAINTENANCE FUND BALANCE FROM PRIOR YEARS
Estimated Fund Balance as of March 2022 $98,522
The estimated budget necessary for the 2022-2023 Fiscal Year for the District is as follows:

BUDGET ITEM COST

ANNUAL MAINTENANCE
Salaries & Benefits $6,795
Telephone $0
Water $7,500
Electricity $400
Landscape Maintenance $16,917
Landscape Maintenance, Irrigation Repairs $2,500
Landscape Maintenance, Landscape Repairs $0
Other Professional & Consulting $500
Contractual Services, Tree Trimming Contract $5,240
Contractual Services, Electrical Maintenance $0
Contractual Services, Misc. Contract Services $5,900
Office Supplies & Operating Expenses $0
City Administrative Services $2,112
TOTAL LANDSCAPE MAINTENANCE EXPENSES $47,864

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11 SURPLUS FUNDS TO BE ADDED TO RESERVE $13

●This Budget Estimate is for the purpose of establishing an Annual Assessment. It may vary from the adopted City Budget. All assessments collected by the District may only be used for District expenditures regardless of the Budget Estimate.

BALANCE TO LEVY (maximum assessment) $47,877

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12 PART IV — DISTRICT DIAGRAMS
The following diagram incorporates all parcels within the District, as the same existed at the time this Report was prepared. The combination of this map and the Assessment Roll contained in this Report constitute the Assessment Diagram for the Landscape and Maintenance District No. 94-1, also known as Sycamore Crossing.

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14 PART V — ASSESSMENT ROLL
Parcel identification for each lot or parcel within the District is based on available parcel maps and property data from the Orange County Assessor’s Office, as they existed at the time this Engineer’s Report was prepared and the City Council adopted the Resolution of Intention. A listing of the lots and parcels to be assessed within this District along with the assessment amounts is provided herein.

If any parcel submitted for collection is identified by the County Auditor/Controller to be an invalid parcel number for the fiscal year, a corrected parcel number and/or new parcel numbers will be identified and resubmitted to the County Auditor/Controller. The assessment amount to be levied and collected for the resubmitted parcel or parcels shall be based on the method of apportionment and assessment rate described in this Report as approved by the City Council. Therefore, if a single parcel is subdivided to multiple parcels, the assessment amount applied to each of the new parcels shall be recalculated and applied according to the approved method of apportionment and assessment rate rather than a proportionate share of the original assessment for the parcel.

The following is a list of the parcels and proposed assessment amounts for Fiscal Year 2022-2023 for each of the parcels within the District as determined by the assessment rates and method of apportionment described herein:
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Agenda Item
City Council
Item #: 10.3. 6/14/2022 File #: 22-0275
TO: Honorable Mayor and Members of the City Council
THRU: Rob Houston, City Manager
FROM: Christopher Cash, Public Works Director

1. SUBJECT
Public Hearing to consider approval of the Landscape Maintenance Assessment Districts 86-2 (Santiago Hills), and 15-1 (Santiago Hills Overlay) Final Engineer’s Reports for Fiscal Year 2022- 2023. Resolution No. 11394.

2. SUMMARY
Resolution 11394 is the second step and will complete the process of the annual assessment for Landscape Maintenance Assessment Districts 86-2 (Santiago Hills) and 15-1 (Santiago Hills Overlay). The total assessments to be levied from 86-2 and 15-1 for Fiscal Year 2022-2023 are $533,651 and $356,873, respectively. The assessment per unit for 86-2 will remain at $369.44 for a single family detached unit and $221.66 for a condominium. For 15-1, staff recommends a 3.0% CPI adjustment, the maximum allowed, which slightly increases per unit assessment from $248.16 to $255.60 for a single family detached unit and from $176.19 to $181.48 for condominiums.

3. RECOMMENDED ACTION

1. Adopt Resolution No. 11394. A Resolution of the City Council of the City of Orange approving the Engineer’s Reports and providing for the annual assessment for Landscape Maintenance Districts 86-2 (Santiago Hills) and 15-1 (Santiago Hills Overlay).

2. Establish the assessment per single family detached unit per year for Fiscal Year 2022-2023 for Landscape Maintenance Districts 86-2 (Santiago Hills) and 15-1 (Santiago Hills Overlay) at $369.44 and $255.60, respectively and $221.66 and $181.48 respectively for condominiums.

4. FISCAL IMPACT
The total expenditure for this assessment is $917,642 and will be funded through Santiago Hills and Santiago Hills Overlay Landscape Maintenance Districts (291).

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 in Santiago Hills. Annually, a detailed accounting of expenses is compiled and a new assessment is calculated for the benefitting property City of Orange Page 1 of 3 Printed on 6/9/2022
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Item #: 10.3. 6/14/2022 File #: 22-0275
owners.

This year’s assessment for a single family detached unit is $369.44. The assessment for a condominium is $221.66. 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 serve the District. The annual assessment for LMD 15-1 was approved by the property owners on June 9, 2015.

The proposed Fiscal Year 2022-2023 (FY23) 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, with a maximum of 3.0%. Community Services Department staff recommended assessing the CPI adjustment, which is 6.6%. For FY23 the maximum 3.0% will be used, to continue capital renovations of the aging landscape. The assessment for 15-1 for a single family detached unit will slightly increase by $7.44 from $248.16 to $255.60. The assessment for 15-1 condominiums will increase by $5.29 from $176.19 to $181.48.

The maximum assessment total for LMD 86-2 for FY23 is $533,651. The assessment total for LMD 15-1 for FY23 is $356,873 including the 3.0% CPI adjustment. Revenues of $30,191 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 $920,715 in revenue. Expenditures in FY23 are anticipated to be approximately $917,642 which is $3,073 under revenues. Excess funds will be used to supplement the reserve fund balance. The City continues to actively work with District residents on developing a renovation plan for their 30 year old landscape that is both fiscally and environmentally sustainable. The projected year-end reserve fund balance is $375,279.

The attached Final Engineer’s Report contains detailed information about the assessment.

Each year, the process for setting the assessment of the Landscape Maintenance Districts is initiated. The process began on May 10, 2022 with the City Council Approval of Resolution No. 11390 which approved the Preliminary Engineer’s Reports for LMD 86-2 and 15-1, and set June 14, 2022 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.

7. ATTACHMENTS
· Resolution No. 11394 - Landscape Maintenance Assessment District 86-2 (Santiago Hills) and 15-1 (Santiago Hills Overlay)
· Final Engineer’s Report for the Annual Levy - Assessment Landscape Maintenance District No. 86-2 - Fiscal Year 2022-2023
· Final Engineer’s Report for the Annual Levy - Assessment Landscape Maintenance City of Orange Page 2 of 3 Printed on 6/9/2022
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Item #: 10.3. 6/14/2022 File #: 22-0275
District No. 15-1 - Fiscal Year 2022-2023
City of Orange Page 3 of 3 Printed on 6/9/2022
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Agenda Item
City Council
Item #: 10.3. 6/14/2022 File #: 22-0275
TO: Honorable Mayor and Members of the City Council
THRU: Rob Houston, City Manager
FROM: Christopher Cash, Public Works Director

3. RECOMMENDED ACTION

4. FISCAL IMPACT
The total expenditure for this assessment is $917,642 and will be funded through Santiago Hills and Santiago Hills Overlay Landscape Maintenance Districts (291).

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.

This year’s assessment for a single family detached unit is $369.44. The assessment for a condominium is $221.66. This is the same as last year and the largest assessment currently allowed.

The attached Final Engineer’s Report contains detailed information about the assessment.

Each year, the process for setting the assessment of the Landscape Maintenance Districts is initiated. The process began on May 10, 2022 with the City Council Approval of Resolution No. 11390 which approved the Preliminary Engineer’s Reports for LMD 86-2 and 15-1, and set June 14, 2022 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.

7. ATTACHMENTS
· Resolution No. 11394 - Landscape Maintenance Assessment District 86-2 (Santiago Hills) and 15-1 (Santiago Hills Overlay)
· Final Engineer’s Report for the Annual Levy - Assessment Landscape Maintenance District No. 86-2 - Fiscal Year 2022-2023
· Final Engineer’s Report for the Annual Levy - Assessment Landscape Maintenance City of Orange Page 2 of 3 Printed on 6/9/2022
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Item #: 10.3. 6/14/2022 File #: 22-0275
District No. 15-1 - Fiscal Year 2022-2023
City of Orange Page 3 of 3 Printed on 6/9/2022
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RESOLUTION NO. 11394

A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF ORANGE APPROVING THE ENGINEER’S

REPORT AND PROVIDING FOR THE ANNUAL

ASSESSMENT FOR LANDSCAPE MAINTENANCE
DISTRICTS 86-2 (SANTIAGO HILLS), AND 15-1
(SANTIAGO HILLS OVERLAY)
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 California Streets and Highways Code, in what is known and designated as Landscape Maintenance District Nos. 86-2 and 15-1 (“Assessment Districts”); 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 desires to proceed 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 be, 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.
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2 Section IV:

That the assessments for Fiscal Year 2022-2023 be established as approved by the City Council, and are hereby confirmed and levied upon the respective subdivisions of land in the Assessment Districts in the amounts as set forth in said final approved Engineer’s Report.

Section V:

That the City Clerk shall immediately accomplish the following:

A. Deliver to the City Engineer the assessments, together with the diagrams 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 a record said diagrams and assessments 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 the diagrams and assessments with the County Auditor, said filing to be completed no later than the 3rd Monday in August.

Section VI:

That the above confirmed assessments shall be collected at the same time and in the same manner as County property taxes are collected, and all laws providing for the collection and enforcement of these assessments.

ADOPTED this ____ day of ____________________, 2022
Mark A. Murphy, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
1503
3 STATE OF CALIFORNIA )

COUNTY OF ORANGE )

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
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Landscape Maintenance District No. 86-2
1 CITY OF ORANGE
FINAL ENGINEER’S REPORT

FOR THE ANNUAL LEVY

ASSESSMENT LANDSCAPE MAINTENANCE
DISTRICT NO. 86-2
FISCAL YEAR 2022-2023
LANDSCAPE MAINTENANCE DISTRICT NO. 86-2

SANTIAGO HILLS
Intent Meeting: May 10, 2022
Public Hearing: June 14, 2022
LMD 86-2 Final ER FY 2022-23
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3 TABLE OF CONTENTS
AFFIDAVIT FOR THE ENGINEER’S REPORT ..................................................... 2 INTRODUCTION ........................................................................................................ 4 PART I — PLANS AND SPECIFICATIONS .............................................................. 6 A. Description of the District ................................................................................................ 6 B. Improvements and Services.............................................................................................. 6 PART II — METHOD OF APPORTIONMENT ..................................................... 10 A. General .............................................................................................................................. 10 B. Benefit Analysis ................................................................................................................ 10 C. Assessment Methodology ............................................................................................... 12 PART III — DISTRICT BUDGET ............................................................................ 14 PART IV — DISTRICT DIAGRAMS ......................................................................... 16 PART V — ASSESSMENT ROLL .............................................................................. 18 1507
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4 INTRODUCTION
Pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Part 2 of Division 15 of the California Streets and Highways Code, commencing with Section 22500 (hereafter referred to as the “1972 Act”), and in compliance with the substantive and procedural requirements of the California State Constitution Articles XIIIC and XIIID (hereafter referred to as the “California Constitution”), the City Council of the City of Orange, County of Orange, State of California (hereafter referred to as “City”), in connection with the annual levy and collection of assessments of the special benefit assessment district designated as:

Landscape Maintenance District No. 86-2
(hereafter referred to as the “District”), which includes all lots and parcels of land that specially benefit from the improvements within the District. This Engineer’s Report (hereafter referred to as “Report”) has been prepared in connection with the annual levy and collections of assessments for said District pursuant to Chapter 1, Article 4 of the 1972 Act.

This Report has been prepared and presented to the City Council to address any proposed changes to the District or improvements, if any, and the proposed budget and assessments for Fiscal Year 2022-2023. The City Council will conduct a noticed public hearing to consider public testimonies, comments and written protests regarding the levy and collection of assessments for Fiscal Year 2022-2023. Upon conclusion of the public hearing, if majority protest does not exist the City Council may approve this Report (as submitted or amended) and levy the assessments for Fiscal Year 2022-2023. In such case, the assessments for fiscal year 2022-2023 shall be submitted to the Orange County Auditor/Controller for inclusion on the property tax roll for each parcel. If the proposed annual assessments for this District exceed the maximum assessment described herein (as approved by the property owners), the new or increased assessment must be confirmed through another property owner protest ballot proceeding before such an assessment may be imposed.

This Report consists of five (5) parts:
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5 Part I
Plans and Specifications: A description of the District boundaries and the improvements associated with the District. The District is being formed as a single benefit zone encompassing all properties within the territory identified as Landscape and Maintenance District No 86-2.

Part III
The District Budget: An estimate of the annual costs to operate, maintain and service the landscaping and appurtenant facilities installed and constructed as part of the development of properties within the District. This budget includes an estimate of anticipated direct maintenance costs and incidental expenses. The special benefit assessments are based on the overall operation costs minus any costs that are considered general benefit. The proposed assessments for Fiscal Year 2022-2023, and each subsequent year shall be based on the estimated net annual cost of operating, maintaining and servicing the improvements for that fiscal year as well as funds to be collected in installments to perform maintenance activities that cannot be reasonably collected in a single fiscal year’s assessments.

Part V
Assessment Roll: A listing of the proposed assessment amounts to be levied on Assessor’s Parcel within the District for Fiscal Year 2022-2023. The proposed assessment amount for each parcel is based on the parcel’s proportional special benefit as outlined in the method of apportionment. 1509
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6 PART I — PLANS AND SPECIFICATIONS
A. Description of the District
The assessment district boundary is shown on a map entitled Assessment Diagram, Landscape Maintenance District No. 86-2, City of Orange, which is on file with the City Clerk of the City of Orange. A reduced scale copy of the Diagram can be found in Part IV of this document.

B. Improvements and Services
Improvements and Services Permitted Pursuant to the 1972 Act As generally defined by the Landscaping and Lighting Act of 1972 and applicable to this District, the improvements and associated assessments may include one or more of the following:
1) The installation or planting of landscaping;
2) The installation or construction of statuary, fountains, and other ornamental structures and facilities;
3) 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; 4) The installation of park or recreational improvements, including, but not limited to, all of the following:
a) Land preparation, such as grading, leveling, cutting and filling, sod, landscaping, irrigation systems, sidewalks, and drainage.
b) Lights, playground equipment, play courts, and public restrooms. 5) The maintenance or servicing, of any of the foregoing including the furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement including but not limited to:
a) Repair, removal, or replacement of all or any part of any improvements; b) Grading, clearing, removal of debris, the installation or construction of curbs, gutters, walls, sidewalks, or paving, or water, irrigation, drainage, or electrical facilities; c) Providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation, trimming, spraying, fertilizing, or treating for disease or injury; d) The removal of trimmings, rubbish, debris, and other solid waste; e) The cleaning, sandblasting, and painting of walls and other improvements to remove or cover graffiti;
f) Electric current or energy, gas, or other illuminating agent for any public lighting facilities or for the lighting or operation of any other improvements; g) Water for the irrigation of any landscaping, the operation of any fountains, or the maintenance of any other improvements.
6) Incidental expenses associated with the improvements including, but not limited to:
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7 a) The cost of preparation of the report, including plans, specifications, estimates, diagram, and assessment;
b) Compensation payable to the County for collection of assessments; c) Compensation of any engineer or attorney employed to render services; d) Any other expenses incidental to the construction, installation, or maintenance and servicing of the improvements;
Description of Planned Improvements
The landscape improvements are generally described as follows:
a) Parkway and Recreation Areas:
• Newport Boulevard - approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on the east side from Chapman Avenue to 312 feet south of the centerline of Skylark Place.
• Chapman Avenue - approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on south side from Newport Boulevard to Jamboree Road. • Canyon View Avenue - approximately 30-foot wide zones (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on both sides from Newport Boulevard to Jamboree Road. • White Oak Ridge – approximately 17-foot wide zones (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on both sides from Newport Boulevard to Canyon View Avenue. • Trails End Lane - approximately 17-foot wide zone on the west side and approximately 28- to 32-foot wide zone on the east side (including the width of the sidewalks), both zones from the back of the curb to the property line, and corner cutoffs at intersections, from White Oak Ridge to Chapman Avenue.
• Handy Creek Corridor - from the intersection of Chapman Avenue and Newport Boulevard to White Oak Ridge and from White Oak Ridge to the intersection of Canyon View Avenue and Handy Creek Road (Lot 20, a portion of Lot 11, and Lot D of Tract No. 12417) including concrete walkways which also serve as emergency access ways. • Paseo - approximately 50-foot wide zone from the Park to White Oak Ridge and from White Oak Ridge to Old Camp Road (Lots A and B of Tract No. 12417) and approximately 35-foot wide zone from the Paseo to White Oak Ridge (Lot C of Tract No. 12417) including surface and subsurface drainage facilities and concrete walkways which also serve as emergency access ways.
• Handy Creek Road - approximately 10-foot wide zone (including the width of the sidewalks) on south side from the back of the curb to the property line form the end of Handy Creek Corridor (Lot D, Tract No. 12417) near Canyon View Avenue to the northerly terminus of the street.
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8 • Fort Road - approximately 17-foot wide zones (including the width of the sidewalks) from the back of the curb to the property line on south side from White Oak Ridge to Jamboree Road.
• Santiago Canyon Road - approximately 18-foot wide zone (including the width of the sidewalk) from back of curb to back of sidewalk on north and south sides from Newport Boulevard to Jamboree Road.
• Old Camp Road - approximately 4-foot wide zones from back of curb to property line on both sides from Canyon View Avenue to the northerly terminus of the street. • Skylark Place - approximately 18-foot wide zones (including the width of the sidewalk) from back of the curb to the property line on both sides from White Oak Ridge to Newport Boulevard.
• Jamboree Road - variable width zone (including the width of the bike trail-sidewalk) from the back of the curb to the property line on the west side from Canyon View Avenue to Chapman Avenue.
• Additional Areas - areas adjacent to the 18-foot wide zones along Skylark Place, Chapman Avenue, and Jamboree Road have been dedicated to the City with tracts 12672,12741,12711,15398 and PM 92-195. Such areas have been landscaped by the developers and the sprinkler systems tied into the District's. b) Medians
• Chapman Avenue - 14-foot wide median from Newport Boulevard to Jamboree Road. • White Oak Ridge - 14-foot wide medians at Newport Boulevard and Canyon View Avenue.
• Trails End Lane - 14-foot wide median from White Oak Ridge to Chapman Avenue. • Jamboree Road - 24-foot wide median from southerly City limits to Santiago Canyon Road.
• Santiago Canyon Road - Variable width from Newport Boulevard to Jamboree Road. • Newport Boulevard - 22-foot wide median from Chapman Avenue to Santiago Canyon Road.
c) The following items are excluded from the Maintenance District:
• The 8 +/- acre park is excluded from this Landscape Maintenance District. • Sidewalks along all Maintenance District streets are excluded from this Landscape Maintenance District.
• The equestrian trail along Canyon View Avenue is excluded from this Landscape Maintenance District.
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9 d) Maintenance shall include, but not be limited to:
• repair, removal, replacement or installation of all or any part of any included improvement such as storm drains and pedestrian walkways in the paseos; • providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation, trimming, spraying, fertilizing, and treating for disease or injury; and • the removal of trimmings, rubbish, debris, and other solid waste.

The maintenance of the District improvements generally include, but are not limited to all materials, equipment, utilities, labor and incidental expenses including administrative expenses for annual operation of the District as well as the performance of occasional repairs, replacement and expanded maintenance activities associated with those improvements. Detailed maps and descriptions of the location and extent of the improvements to be maintained by the District are on file at the City and by reference are made part of this Report.

The estimated annual cost to provide and maintain the improvements within the District shall be allocated to each property in proportion to the special benefits received. The Method of Apportionment described in this Report utilizes commonly accepted assessment engineering practices and has been established pursuant to the 1972 Act and the provisions of the California Constitution. 1513
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10 PART II — METHOD OF APPORTIONMENT
A. General
The 1972 Act permits the establishment of assessment districts by agencies for the purpose of providing certain public improvements, which include the construction, maintenance, and servicing of public 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 method of apportionment described in this Report for allocation of special benefit assessments utilizes commonly accepted engineering practices and have been established pursuant to the 1972 Act and the provisions of the California Constitution. The formula used for calculating assessments in this District reflect the composition of the parcels, and the improvements and services provided, to fairly apportion the costs based on benefit to each parcel.

B. Benefit Analysis
Each of the proposed improvements, the associated costs and assessments have been carefully reviewed, identified and allocated based on special benefit pursuant to the provisions of the California Constitution and 1972 Act. The improvements provided by this District and for which properties will be assessed have been identified as necessary, required and/or desired for the orderly development of the residential properties within the District to their full potential. As such, 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 ensuring the maintenance and operation of the improvements are a distinct and special benefit to the residential properties within the District.

Special Benefit
The method of apportionment (method of assessment) established herein is based on the premise that each assessed parcel within the District receives special benefits from the improvements and the desirability and security of those properties is enhanced by the presence of well-maintained landscaping in close proximity to those properties.

The special benefits associated with the landscaping and open space improvements are specifically:
• Enhanced desirability of properties through association with the improvements. • Improved aesthetic appeal of properties providing a positive representation of the area and properties.
• Enhanced adaptation of the urban environment within the natural environment from adequate green space 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 wellmaintained improvements associated with the properties. 1514
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11 • Enhanced quality of life through well-maintained green space and landscaped areas. • Reduced criminal activity and property-related crimes (especially vandalism) against properties in the District through well-maintained surroundings and amenities including abatement of graffiti.
• Enhanced environmental quality of the parcels by moderating temperatures, providing oxygenation and attenuating noise.

The parkways and medians consist of landscaped areas along the edge of or within the middle of streets and highways in the District. The District also has landscaped corridors extending through the developed area, which provide access to Santiago Hills Park. The improvements in these areas consist of trees, shrubs, ornamental vegetation, and appurtenant improvements.

The improvements extend throughout the development area and serve several purposes. The landscaped parkways along the streets and highways enhance the public walkways throughout the District and allow pedestrian access to the residents in the area. These parkways also provide passive and active recreational uses as well as the aesthetic enhancement for the total development area.

Landscaped median islands also provide similar enhancements for the residents in the area.

The landscaped recreation/pedestrian corridors throughout the District provide for open space and recreational uses, which connect to the park site throughout the development area. Besides contributing to the active and passive recreation use in the area, the corridors aesthetically enhance the area within the District.

Maintenance of these public improvements primarily renders a people oriented benefit to the properties within the boundaries of the District and, as such, relates to the number of persons in each dwelling unit on each property. These benefits are direct and special to the properties within the District.

The preceding special benefits all contribute to the overall esthetic value and desirability of each of the assessed parcels within the District and thereby provide a special enhancement to these properties.

Furthermore, it has been determined that the lack of funding to properly service and maintain the improvements would likely have a direct negative impact on the properties within the District.

General Benefit
In reviewing the District improvements, the proximity of those improvements to both properties within the District and those outside the District as well as the reasons for installing and constructing such improvements, it is evident that the improvements are solely the result of developing properties within the District and the ongoing maintenance and operation of these improvements will directly affect the properties within the District. Although the improvements are visible to the public at large, the construction and installation of these improvements were necessary for the development of properties within the District and are not required nor necessarily desired by any properties or developments outside the District boundary and any public access or use of the improvements by others is incidental.

Therefore, it has been determined that the improvements and the ongoing maintenance, servicing and operation of those improvements provide no measurable general benefit to properties outside the District or to the public at large, but clearly provide distinct and special benefits to properties within the District.

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12 C. Assessment Methodology
The benefit formula used to determine the assessment obligation for each parcel should be based upon both the improvements that benefit the parcels as well as the use of each property as compared to other parcels that benefit from those specific improvements. The method of apportionment established for most benefit assessment districts utilizes a weighted method of apportionment known as an Equivalent Benefit Unit (EBU) methodology The Equivalent Benefit Unit method of apportionment uses the single-family home site as the basic unit of assessment. A single-family residential property equals one Equivalent Benefit Unit (“EBU”). Every other land use is converted to EBUs based on an assessment formula that equates the property’s specific development status, type of development (land use), and size of the property, as compared to a single-family home site.

The EBU method of apportioning benefit is typically seen as the most appropriate and equitable assessment methodology for districts formed under the 1972 Act, as the benefit to each parcel from the improvements are apportioned as a function of land use type, size and development.

EBU Application by Land Use:

Single-Family Residential — This land use is defined as a fully subdivided residential home site with or without a structure. This land use is assessed 1.0 EBU per lot or parcel. This is the base value that the other land use types are compared and weighted against (i.e. Equivalent Benefit Unit or EBU).

Multi-Family Residential — This land use is defined as a fully subdivided residential parcel that has more than one residential unit developed on the property. This land use is assessed 0.6 EBU per dwelling unit.

Mixed Use Property — This land use is defined as property developed for either commercial or industrial use. This land use type is assessed at 11.0 EBUs per gross acre.

Exempt Parcels — This land use identifies properties that are not assessed and are assigned 0.0 EBU.

This land use classification may include, but is not limited, to lots or parcels identified as public streets and other roadways (typically not assigned an APN by the County); dedicated public easements, open space areas and right-of-ways including greenbelts and parkways; utility right-of-ways; common areas, sliver parcels and bifurcated lots or any other property that cannot be developed; park properties and other publicly owned properties that are part of the District improvements or that have little or no improvement value. These types of parcels are considered to receive little or no benefit from the improvements and are therefore exempted from assessment.

Lots 9, 10, 11, 15, and 19 of Tract No. 12417 have been assigned 0.0 EBU because they have been excluded from the District. The cost of maintaining the landscape improvements on these publicly owned parcels is not paid by the District but rather from the general fund of the public agency owning the parcel. Therefore, these publicly owned parcels do not receive any special benefit from the District.

The following table provides a listing of land use types, land use code designations, the Equivalent Benefit Unit factor applied to that land use type, and the multiplying factor used to calculate each parcel’s individual EBU.
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13 Land Use Codes and Equivalent Benefit Units
Property Type Equivalent Benefit
Unit
Multiplier
Single-family Residential 1.000 Unit/Lot/Parcel
Multi-family Residential 0.600 Units/Dwelling Units
Mixed Use 11.000 Acreage
Exempt 0.000 Parcel
The benefit formula applied to parcels within the District is based on the preceding Equivalent Benefit Unit (EBU) table. Each parcel's EBU correlates the parcel’s special benefit received as compared to the other parcels benefiting from the improvements.

The following formula is used to calculate each parcel’s EBU (proportional benefit).

Parcel Type EBU x Multiplier (Acres or Unit) = Parcel’s EBU The total number of Equivalent Benefit Units (EBUs) is the sum of all individual EBUs applied to parcels that receive a special benefit from the improvement. An assessment amount per EBU (Rate) for each improvement is established by taking the total cost of the improvement and dividing that amount by the total number of EBUs of parcels benefiting from the improvement. This Rate is then applied back to each parcel’s individual EBU to determine the parcel’s proportionate benefit and assessment obligation for that improvement.

The Maximum allowable assessment rate of $369.44 EBU (single family) generates an assessment total of $533,650.77.

Total Balance to Levy / Total EBU = Assessment Rate per EBU Assessment Rate per EBU x Parcel’s EBU = Parcel’s Assessment 1517
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14 PART III — DISTRICT BUDGET
The following budget outlines the estimated costs to maintain the improvements for 2022-2023.

ANNUAL LEVY OF ASSESSMENT
LANDSCAPE MAINTENANCE DISTRICT NO. 86-2
City of Orange

ESTIMATED COSTS

OPERATION & MAINTENANCE FUND BALANCE FROM PRIOR YEARS
Estimated Fund Balance (Includes 15-1 & 86-2) as of March 2022 $375,279 The estimated budget necessary for the 2022-2023 Fiscal Year for the District is as follows:

BUDGET ITEM COST

ANNUAL MAINTENANCE
Landscaping $391,321
Tree Trimming $165,000
Electrical Maintenance $40,000
Misc. Contract Services $0
Repair/ Maintenance Services $57,051
Supplies $8,500
Other Professional Services $1,000
Telephone $1,000
Electricity $20,000
Water $168,000
Salaries & Benefits $40,770
City Administrative Services $25,000
Capital Replacement/ Dedicated Reserves $0
TOTAL EST. LANDSCAPE MAINTENANCE EXPENTITURES $917,642

ESTIMATED REVENUE
Landscape Maintenance District No. 86-2 $533,651
Rancho Santiago Community College District $30,191
Proposed Benefit Assessment FY 2022/23 (LMD 15-1)
(See LMD 15-1 Engineer’s Report for specifics)
• CPI Adjustment (Current Year 3.0%)
• Unused CPI Adjustment (Carry over from prior years)
$346,478
$10,395
$0
TOTAL ESTIMATED REVENUE $920,715
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15 SURPLUS FUNDS TO BE ADDED TO RESERVES $3,073
●This Budget Estimate is for the purpose of establishing an Annual Assessment. It may vary from the adopted City Budget. All assessments collected by the District may only be used for District expenditures regardless of the Budget Estimate.

BALANCE TO LEVY $533,651
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16 PART IV — DISTRICT DIAGRAMS
The parcels within the Landscape Maintenance District No 86-2 consist of all lots, parcels and subdivisions of land located in the planned residential development known as Santiago Hills.

The following diagram incorporates all parcels within the District, as the same existed at the time this Report was prepared. The combination of this map and the Assessment Roll contained in this Report constitute the Assessment Diagram for the Landscape and Maintenance District No. 86-2. 1520
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18 PART V — ASSESSMENT ROLL
Parcel identification for each lot or parcel within the District is based on available parcel maps and property data from the Orange County Assessor’s Office, as they existed at the time this Engineer’s Report was prepared and the City Council adopted the Resolution of Intention. A listing of the lots and parcels to be assessed within this District along with the assessment amounts is provided herein.

The following is a list of the parcels and proposed assessment amounts for Fiscal Year 2022-2023 for each of the parcels within the District as determined by the assessment rates and method of apportionment described herein:
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1 CITY OF ORANGE
FINAL ENGINEER’S REPORT

FOR THE ANNUAL LEVY

ASSESSMENT LANDSCAPE MAINTENANCE
DISTRICT NO. 15-1
FISCAL YEAR 2022-2023
LANDSCAPE MAINTENANCE DISTRICT NO. 15-1

SANTIAGO HILLS
Intent Meeting: May 10, 2022
Public Hearing: June 14, 2022
LMD 15-1 Final ER FY 2022-23

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3 TABLE OF CONTENTS
AFFIDAVIT FOR THE ENGINEER’S REPORT ..................................................... 2 INTRODUCTION ........................................................................................................ 4 Overview ......................................................................................................................................... 4 District’s Facilities ......................................................................................................................... 4 Assessment Background ............................................................................................................... 4 PLANS & SPECIFICATIONS ...................................................................................... 5 FISCAL YEAR 2022-23 ESTIMATE OF COST AND BUDGET ................................ 8 Budget for Fiscal Year 2022-23 ................................................................................................... 8 METHOD OF APPORTIONMENT ......................................................................... 10 Method of Apportionment ........................................................................................................ 10 Discussion of Benefit .................................................................................................................. 10 Benefit Factors ............................................................................................................................. 11 Benefit Finding ............................................................................................................................ 14 Zones of Benefit .......................................................................................................................... 17 Method of Assessment ............................................................................................................... 18 Residential Properties ................................................................................................................. 19 Commercial Properties ............................................................................................................... 20 Vacant/Undeveloped Properties .............................................................................................. 21 Other Properties .......................................................................................................................... 21 Annual Cost Indexing ................................................................................................................. 22 Appeals of Assessments Levied to Property ........................................................................... 22 Assessment Funds Must Be Expended Within the District Area ........................................ 23 ASSESSMENT ............................................................................................................. 24 ASSESSMENT DIAGRAM ......................................................................................... 25 ASSESSMENT ROLL ................................................................................................. 27 1525
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4 INTRODUCTION
Overview
The City of Orange (the “City”) services and maintains perimeter and median landscaping, interior walkways and paseos, and other improvements (“Improvements”) in the Santiago Hills neighborhoods in the eastern part of the City. This Engineer’s Report ("Report") was prepared to establish the budget for the Improvements (as described below) that will be funded by the new 2022-2023 assessments, if approved, and other revenue, to determine the general and special benefits received from the Improvements by property within the Improvement District (“District”), and to determine the method of assessment apportionment to lots and parcels. This Report and the assessments have been made pursuant to the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the California Streets and Highways Code (the "Act") and Article XIIID of the California Constitution (the “Article”).

Landscape Maintenance District (LMD) No. 15-1 was formed in 2015. This assessment district is identical to the existing Landscape Maintenance District No. 86-2 in its geographic boundaries, parcels to be assessed, Improvements to be serviced, maintained, or repaired and budgeted cost centers. The assessments collected, if approved, will be in addition to those collected for Landscape Maintenance District 86-2.

District’s Facilities
The City’s landscape facilities to be funded by assessments within this District are located in the Santiago Hills neighborhoods of the City. The Improvements generally include entrance signs, traffic islands and medians, parkways, recreation areas, paseos, lighting, and the infrastructure required to support these Improvements.

Assessment Background
The City formed Landscape Maintenance District No. 86-2 in 1987 to service and maintain the specific landscape facilities and improvements relevant to this report. Revenues from that district remain relatively flat, there is not an inflation adjustment provision, while the costs to maintain and service these facilities and improvements have risen steadily. In 2007 the City began to decrease service levels in an effort to contain costs within available revenues. The service levels continued to decrease to offset the effects of rising utilities, labor and materials costs until the creation of LMD No. 15-1.

In order to restore service levels and make needed repairs and improvements to the District’s facilities, the LMD No. 15-1 that exactly overlaid the existing assessment district, was formed. 1526
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5 PLANS & SPECIFICATIONS
The City maintains landscaping and other improvements in locations within the proposed Assessment District’s boundaries. The work and improvements proposed to be undertaken by the Landscape Maintenance District No. 15-1 and the cost thereof paid from the levy of the annual Assessment provide special benefit to Assessor Parcels within the District as defined in the Method of Assessment herein. In addition to the definitions provided by the Landscaping and Lighting Act of 1972, (the “Act”) the work and improvements are generally described as follows:

Entrance Sign
The entrance signs with landscape improvements to be maintained are to be located at the following locations within the District:
• Chapman Avenue at Newport Boulevard (southeast corner) • Newport Boulevard at Canyon View Avenue (northeast corner) Parkways and Recreation Areas
The landscaped parkways and recreation areas to be maintained by the District are located as follows:
• Newport Boulevard – approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on the east side from Santiago Canyon Road to 312 feet south of the centerline of Skylark Place. • Chapman Avenue – approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on both sides from Newport Boulevard to Jamboree Road.
• Canyon View Avenue – approximately 30-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on both sides from Newport Boulevard to Jamboree Road.
• White Oak Ridge – approximately 17-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line, and corner cutoffs at intersections, on both sides from Newport Boulevard to Canyon View Avenue.
• Trails End Lane – approximately 17-foot wide zone on the west side and approximately 28- to 32-foot wide zone on the east side (including the width of the sidewalk), both zones from the back of the curb to the property line, and corner cutoffs at intersections, from White Oak Ridge to Chapman Avenue.
• Handy Creek Corridor – from the intersection of Chapman Avenue and Newport Boulevard to White Oak Ridge, and from White Oak Ridge to the intersection of Canyon View Avenue and Aspen Street (Lot 20, a portion of Lot 11, and Lot D of Tract 12417) including concrete walkways which also serve as emergency access ways.
• Paseo – approximately 50-foot wide zone from Santiago Hills Park to White Oak Ridge and from White Oak Ridge to Old Camp Road (Lots A and B of tract No. 12417) and approximately 35-foot wide zone from the Paseo to White Oak Ridge (Lot C of Tract No. 12417) including surface and subsurface drainage facilities and concrete walkways which also serve as emergency access ways.
• Aspen Street – approximately 10-foot wide zone (including the width of the sidewalk) on south side from the back of the curb to the property line from the end of Handy Creek 1527
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6 Corridor (Lot D, Tract No. 12417) near Canyon View Avenue to the northerly terminus of the street.
• Fort Road – approximately 17-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line on south side from White Oak Ridge to Jamboree Road.
• Santiago Canyon Road – approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line on north and south sides from Newport Boulevard to Jamboree Road.
• Old Camp Road – approximately 4-foot wide zone from the back of the curb to the property line on both sides from Canyon View Avenue to northerly terminus of the street. • Skylark Place – approximately 18-foot wide zone (including the width of the sidewalk) from the back of the curb to the property line on both sides from White Oak Ridge to Newport Boulevard.
• Jamboree Road – variable width zone (including width of the bike trail-sidewalk) from back of the curb to the property line on the west side from Canyon View Avenue to Santiago Canyon Road.
• Additional Areas – areas adjacent to the 18-foot wide zones along Skylark Place, Chapman Avenue, and Jamboree Road have been dedicated to the City with tracts 12672, 12741, 12711, 15398 and PM 92-195. Such areas have been landscaped by the developers and the sprinkler systems tied to the District’s.

Traffic Islands and Medians
• The landscaped islands and medians to be maintained by the District are located as follows:
• Chapman Avenue – 14-foot wide median from Newport Boulevard to Jamboree Road. • White Oak Ridge – 14-foot wide medians at Newport Boulevard and Canyon View Avenue. • Trails End Lane – 14-foot wide median from White Oak Ridge to Chapman Avenue. • Jamboree Road – 24-foot wide median from southerly City limits to Santiago Canyon road. • Santiago Canyon Road – Variable width from Newport Boulevard to Jamboree Road. • Newport Boulevard – 22-foot wide median from Chapman Avenue to Santiago Canyon Road.

Excluded Improvements
The following items are excluded from the District:
• The 8+/- acre park is excluded from this District
• The City’s public safety facility on East Fort Road is excluded from this District • Chapman Hills Elementary School is excluded from this District • Santiago Canyon College is excluded from this District (Note that while some public improvements along the College frontage are maintained along with District Improvements, the College pays directly into the District’s fund to compensate for that work) • Sidewalks along all streets within the District are excluded • The Equestrian trail along Canyon View Avenue is excluded from this District Definitions
Installation, maintenance and servicing of Improvements, may include, but are not limited to, turf and play areas, landscaping, ground cover, shrubs and trees, irrigation systems, sidewalks, parking 1528
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7 lots, drainage systems, lighting, fencing, entry monuments, recreational facilities, security patrols to protect the Improvements, graffiti removal and repainting, and labor, materials, supplies, utilities and equipment, as applicable, at each of the locations owned, operated or maintained by the District.

As applied herein, “Installation” means the construction of Improvements, including, but not limited to, land preparation (such as grading, leveling, cutting and filling), sod, landscaping, irrigation systems, walkways and drainage, lights, and recreational facilities. “Maintenance” means the 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, and the cleaning, sandblasting, and painting of walls and other Improvements to remove or cover graffiti. “Servicing” means the furnishing of electric current, or energy, gas or other illuminating agent for any public lighting facilities or for the lighting or operation of any other Improvements; or water for the irrigation of any landscaping, the operation of any fountains, or the maintenance of any other Improvements.

Incidental expenses include all of the following: (a) The costs of preparation of the report, including plans, specifications, estimates, diagram, and Assessment; (b) the costs of printing, advertising, and the giving of published, posted, and mailed notices; (c) compensation payable to the County for collection of Assessments; (d) compensation of any engineer or attorney employed to render services in proceedings pursuant to this part; (e) any other expenses incidental to the construction, installation, or maintenance and servicing of the Improvements; (f) any expenses incidental to the issuance of bonds or notes pursuant to Streets & Highways Code Section 22662.5; and (g) costs associated with any elections held for the approval of a new or increased assessment (Streets & Highways Code §22526).

Modifications to the District structure could include, but are not limited to, substantial changes or expansion of the Improvements provided, substantial changes in the service provided, modifications or restructuring of the District including annexation or detachment of specific parcels, revisions in the method of apportionment, or proposed new or increased assessments.

The Assessment proceeds will be exclusively used for Improvements within the District plus incidental expenses.
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8 FISCAL YEAR 2022-23 ESTIMATE OF COST AND BUDGET
Budget for Fiscal Year 2022-23
The following budget shows the cost of the Improvements that would be funded by the District in Fiscal Year 2022-23. This table shows the total combined expenditures associated with the Improvements for both Landscape Maintenance Districts (No. 15-1 and No. 86-2). Accordingly, revenues from both Districts are also shown.

BUDGET ITEM COST

ESTIMATED REVENUE
Landscape Maintenance District No. 86-2
(See LMD 86-2 Engineer’s Report for specifics)
$533,651
Rancho Santiago Community College District $30,191
Proposed Benefit Assessment FY 2022-23 (LMD 15-1)
(See LMD 15-1 Engineer’s Report for specifics)
• CPI Adjustment (Current Year 3.0%)4
• Unused CPI Adjustment (Carry over from prior years)
$346,478
$10,395
$0
TOTAL ESTIMATED REVENUE $920,715
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9 SURPLUS FUNDS TO BE ADDED TO RESERVES

District Expenditures will be adjusted to match the maximum allowable assessment.
$3,073
●This Budget Estimate is for the purpose of establishing an Annual Assessment. It may vary from the adopted City Budget. All assessments collected by the District may only be used for District expenditures regardless of the Budget Estimate.

BALANCE TO LEVY $356,873
Notes to Estimate of Costs:

1. The Act requires that proceeds from the Assessments must be deposited into a special fund that has been set up for the revenues and expenditures of the District. Moreover, funds raised by the Assessment shall be used only for the purposes stated within this Report. Any balance remaining at the end of the Fiscal Year, June 30, must be carried over to the next Fiscal Year. The District may also establish a dedicated reserve fund for contingencies and special projects as well as a dedicated capital improvement fund for accumulating funds for larger capital improvement projects or capital renovation needs. Any remaining balance would either be placed in the dedicated reserve fund, the capital improvement fund, or would be used to reduce future years' Assessments.

2. The rate shown here is for a single family home or its equivalent. For the definition of the term SFE and rates for other types of property, see the section titled, “Method of Assessment Apportionment” and the sections following it in this report.

3. The total cost of the services and Improvements is the total assessment amount of $346,478 plus the value of the general benefit contributions from the City described in the section titled, “Method of Assessment Apportionment.”

4. The Assessment allows for an annual adjustment tied to the Consumer Price Index (the “CPI”), as detailed in the section titled “Method of Apportionment – Annual Cost Indexing.” For Fiscal Year 2022-2023, the CPI is 6.6% for the Los Angeles-Long Beach-Anaheim area as of December 2021. Due to the remaining fund balance from Fiscal Year 2021-22, the Community Services Department staff recommends setting the CPI adjustment at 3.0% (maximum allowed) for Fiscal Year 2022-2023.
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10 METHOD OF APPORTIONMENT
Method of Apportionment
This section of the Engineer's Report explains the benefits to be derived from the Improvements and the methodology used to apportion the total assessment to properties within the District.

The method used for apportioning the Assessment is based upon the relative special benefits to be derived by the properties in the District over and above general benefits conferred on real property or to the public at large. The Assessment is apportioned to lots and parcels in proportion to the relative special benefit from the Improvements. The apportionment of special benefit is a two-step process: the first step is to identify the types of special benefit arising from the Improvements and the second step is to allocate the Assessments to property based on the estimated relative special benefit for each type of property.

This section of the Engineer’s report includes a discussion of the benefits to be provided by the proposed Improvements and the method of apportionment of assessments within the District. The formula below identifies the final level of service as the sum of the baseline level of service (without this proposed Assessment) and the enhanced level of service to be funded by the proposed Assessment.

Final Level
of Service =
Baseline Level
of Service +
Enhanced Level
of Service
Discussion of Benefit
In summary, the Assessments can only be levied based on the special benefit to property. This benefit is received by property over and above any general benefits. With reference to the requirements for assessments, Section 22573 of the Landscaping and Lighting Act of 1972 states:
"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." Proposition 218, as codified in Article XIIID of the California Constitution, has confirmed that assessments must be based on the special benefit to property and that the value of the special benefits must be equal to or exceed the cost of the assessment:
"No assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel."
The following benefit categories summarize the types of special benefit to residential, commercial, industrial and other lots and parcels resulting from the Improvements to be provided with the assessment proceeds. These types of special benefits are summarized as follows:

A. Proximity to Improved Landscaped Areas and Other Public Improvements within the District.

B. Access to Improved landscaped areas and Other Public Improvements within the District. 1532
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11 C. Improved Views within the District.

D. Extension of a property’s outdoor areas and green spaces for properties within close proximity to the Improvements.

E. Creation of individual lots for residential and commercial use that, in absence of the Assessments, would not have been created.

In this case, the recent Silicon Valley Taxpayers Association, Inc. v. Santa Clara County Open Space Authority (SVTA) decision in 2008 provides enhanced clarity to the definitions of special benefits to properties from similar improvements in three distinct areas:
• Proximity
• Expanded or improved access
• Views
The SVTA decision also clarifies that a special benefit is a service or improvement that provides a direct advantage to a parcel and that indirect or derivative advantages resulting from the overall public benefits from a service or improvement are general benefits. The SVTA decision also provides specific guidance that Improvements are a direct advantage and special benefit to property that is proximate to a facility that is improved by an assessment:

The characterization of a benefit may depend on whether the parcel receives a direct advantage from the improvement (e.g. proximity to a park) or receives an indirect, derivative advantage resulting from the overall public benefits of the improvement (e.g. general enhancement of the district’s property values).

Proximity, improved access and views, in addition to the other special benefits listed herein further strengthen the basis of these Assessments.

Moreover, the Dahms v. Downtown Pomona Prop. & Bus. Improvement Dist. (Dahms) decision in 2009 further clarified that certain services and Improvements funded by assessments, that are over and above what otherwise would be provided and that other property in general and the public do not share or receive are 100% special benefit. The assessment-funded services upheld by Dahms included streetscape maintenance and security services.

Benefit Factors
The special benefits from the Improvements are further detailed below:

Proximity to Improved Landscaped Areas within the District The boundaries of the District were developed in conjunction and concurrent with the planning and design of the subdivisions and Improvements, and thus have been carefully drawn to only include the properties in the City of Orange that are proximate to the Improvements and that would materially benefit from the Improvements. In other words, the District has been narrowly drawn to include the properties that receive special benefits from the Improvements. Therefore, property in the District enjoys unique and valuable proximity to the Improvements that the public at large and property outside the District do not share.

In the absence of the Assessments, the Improvements would not be provided and the public improvements funded in the District would be degraded due to insufficient funding for maintenance, upkeep and repair. Therefore, the Assessments provide Improvements that are over and above what otherwise would be provided. Improvements that are over and above what otherwise would be provided do not by themselves translate into special benefits but when 1533
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12 combined with the unique proximity and access enjoyed by parcels in the District, they provide a direct advantage and special benefit to property in the District.

Access to Improved Landscaped Areas within the District Since the parcels in the District are nearly the only parcels that enjoy close access to the Improvements, they directly benefit from the unique close access to improved landscaping areas and other public improvements that are provided by the Assessments. This is a direct advantage and special benefit to property in the District.

Improved Views within the Assessment Districts
The City, by maintaining permanent public improvements funded by the Assessments in the District, provides improved views to properties in the District. The properties in the District enjoy close and unique proximity, access and views of the specific Improvements funded in the District; therefore, the improved and protected views provided by the Assessments are another direct and tangible advantage that is uniquely conferred upon property in the District.

Extension of a Property’s Outdoor Areas and Green Spaces for Properties within Close Proximity to the Improvements
In large part because it is cost prohibitive to provide large open land areas on property in the District, the residential, commercial and other benefiting properties in the District do not have large outdoor areas and green spaces. The Improvements within the District provide additional outdoor areas that serve as an effective extension of the land area for proximate properties because the Improvements are uniquely proximate and accessible to property in close proximity to the Improvements. The Improvements, therefore, provide an important, valuable and desirable extension of usable land area for the direct advantage and special benefit of properties in the District because such properties have uniquely good and close proximity to the Improvements.

Creation of Individual Lots for Residential and Commercial Use that, in Absence of the Assessments, Would Not Have Been Created
In most of the District, the original owner/developer(s) of the property within the District agreed unanimously to the Assessments. The Assessments provide the necessary funding for public improvements that were approved as a condition of development and subdivision approval.

Therefore, such Assessments allowed the original property to be subdivided and for development of the parcels to occur. As parcels were sold, new owners were informed of the Assessments through the title reports, and in some cases, through Department of Real Estate “White Paper” reports that the parcels were subject to assessment. Purchase of property was also an “agreement” to pay the Assessment. Therefore, in the absence of the Assessments, the lots within most of the District would not have been created. These parcels, and the Improvements that were constructed on the parcels, receive direct advantage and special benefit from the Assessments. 1534
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13 Summary of Relative Weight of Benefit Factors
A solid argument could be made that the Creation of Individual Lots benefit comprises 100% of the benefit because the Improvements were incorporated into the original planning and design of the subdivision, and thus were deemed to be necessary and required for the development of the lot.

Without those Improvements and associated benefit, the lots would not have been created in the first place. Nevertheless, four other definitive benefits accruing to the parcels within the District are identified, and an allowance should be made within the overall relative importance of benefits. The table below illustrates the relative benefit level of the five identified benefits used in this Report.

General Versus Special Benefit
Article XIIIC of the California Constitution requires any local agency proposing to increase or impose a benefit assessment to “separate the general benefits from the special benefits conferred on a parcel.” The rationale for separating special and general benefits is to ensure that property owners subject to the benefit assessment are not paying for general benefits. An assessment can fund special benefits but cannot fund general benefits. Accordingly, a separate estimate of the special and general benefit is given in this section.

In other words:

There is no widely-accepted or statutory formula for general benefit. General benefits are benefits from improvements or services that are not special in nature, are not “particular and distinct” and are not “over and above” benefits received by other properties. SVTA provides some clarification by indicating that general benefits provide “an indirect, derivative advantage” and are not necessarily proximate to the improvements.

In this Report, the general benefit is liberally estimated and described, and then budgeted so that it is funded by sources other than the Assessment.

Total
Benefit =
General
Benefit + Special Benefit
Benefit Factor Relative Weight
Proximity 10%
Access 10%
Views 10%
Outdoor Area or Green Space Extension 10%
Creation of Individual Lots for Development 60%
Total Benefit 100%
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14 The starting point for evaluating general and special benefits is the current, baseline level of service.

The Assessment will fund Improvements “over and above” this general, baseline level and the general benefits estimated in this section are over and above the baseline.

A formula to estimate the general benefit is listed below:

General
Benefit
=
Benefit to Real
Property
Outside the
Assessment
District
+
Benefit to Real
Property Inside
the Assessment
District that is
Indirect and
Derivative
+
Benefit
to the
Public
at Large
Special benefit, on the other hand, is defined in the state constitution as “a particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public at large.” The SVTA decision indicates that a special benefit is conferred to a property if it “receives a direct advantage from the improvement (e.g., proximity to a park).” In these Assessments, as noted, properties in the District have close and unique proximity, views and access to the Improvements and uniquely improved desirability from the Improvements and other properties and the public at large do not receive significant benefits because they do not have proximity, access or views of the Improvements. Therefore, the overwhelming proportion of the benefits conferred to property is special, and is only minimally received by property outside the Assessment Districts or the public at large.

Benefit Finding
Quantification of General Benefit
In this section, the general benefit from landscaping and other types of Improvements is liberally estimated and described, and then budgeted so that it is funded by sources other than the Assessment.

Benefit to Property Outside the Assessment Districts
Properties within the District receive almost all of the special benefits from the Improvements because properties in the District enjoy unique close proximity and access to the Improvements that are not enjoyed by other properties or the public at large. However, certain properties within the proximity/access radius of the Improvements, but outside of the boundaries of the District, may receive some benefit from the Improvements. Since this benefit is conferred to properties outside the District boundaries, it contributes to the overall general benefit calculation and will not be funded by the Assessments. The general benefit to property outside of the District is calculated with the parcel and data analysis performed by SCI Consulting Group.

Since the properties outside the District but with frontage abutting the Improvements receive benefit but cannot be assessed by the District, this is a form of general benefit to other property.

The primary ways that parcels outside the district benefit by the Improvements is from proximity, 1536
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15 access, views and extension of outdoor space, which account for 40% of the available benefit.

Therefore, parcels that abut the landscape areas and are not separated from the Improvements by a privacy fence are counted for this general benefit. The general benefit to property outside of the District is calculated as follows.

Assumptions:
47 parcel outside the District
1517 parcels in the District
Calculation:

General Benefit to property outside the
District =
47/(47+1517) * 40% = 1.20%
Benefit to Property Inside the Assessment Districts that is Indirect and Derivative The “indirect and derivative” benefit to property within the District is particularly difficult to calculate. A solid argument can be presented that all benefit within the District is special, because the Improvements are clearly “over and above” and “particular and distinct” when compared with the baseline level of service and the unique proximity, access and views of the Improvements enjoyed by benefiting properties in the District.

Nevertheless, the SVTA decision indicates there may be general benefit “conferred on real property located in the district.” A measure of the general benefits to property within the Assessment area is the percentage of land area within the District that is publicly owned and used for regional purposes such as major roads, rail lines and other regional facilities because such properties used for regional purposes could provide indirect benefits to the public at large. Approximately 7.15% of the land area in the District is used for such regional purposes, so this is a measure of the general benefits to property within the District.

Benefit To The Public At Large
The general benefit to the public at large can be estimated by the proportionate amount of time that the District’s Improvements including landscaping are used and enjoyed by individuals who are not residents, employees, customers or property owners in the District. It should be noted that these Improvements do not attract the public at large in the same way as park improvements – and they confer far less benefit to the public at large than do similar park improvements.

One way to measure the special benefit to the general public is by the car trips through an area with Improvements. Of the five ways benefits are conferred (proximity, access, views, extension of a property’s green space, and creation of lots), the only benefit that is conferred by way of pass-by car trips is views, which accounts for 10% of the total benefits. For pass-by car trips, the benefit of views is found to be approximately half that of residents, employees, customers or property owners in the District due to the brevity of the views. Therefore the relative benefit factor is reduced to 5%. 1537
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16 Next, the views factors are weighted by the relevant number of car trips. Using the lane miles as representative of pass-by traffic, an analysis shows that 60% of the lane miles are on arterial or collector streets where the general public has views of the landscaping. Therefore (60% of 5% =)

3.0% of the benefits from the Improvements are general benefits to the public at large.

Special Considerations of Improvements Outside of District The benefits are categorized into to two geographic groupings of Improvements: In-District Improvements that include parkways, medians and paseos that are either inside the district boundaries, or are traffic medians that directly abut or front the district; and Out-of-District Improvements that are parkways or medians that are both outside the District boundaries and are not abutting, fronting or lying adjacent to the District. Based on weighted square footage of the various types of Improvements, Out-of-District Improvements count for approximately 11.6% of the total benefits. These Out-of-District benefits are found to be entirely General Benefit. For example some Improvements at Santiago Canyon College are maintained, but the funding for this work comes entirely from the College as general benefit funds.

The In-District Improvements, conversely, provide approximately 88.4% of the total benefits. The general benefits provided by these Improvements are discussed above.

Total General Benefits
Using a sum of these three measures of general benefit plus the special considerations of general benefit from Out-of-District benefits (both weighted accordingly), we find that approximately 21.6% of the benefits conferred by the Improvements may be general in nature and should be funded by sources other than the Assessment. This calculation is shown below.

Although this analysis finds that 21.6% of the Assessment may provide general benefits from the Improvements, the Assessment Engineer establishes a requirement for a minimum contribution from sources other than the Assessments of 22%. This minimum contribution above the measure of general benefits will serve to provide additional coverage for any other general benefits.

Final Step – Calculate the Current General Benefit Contribution from the City Relative
General
Benefit
Percent of
Overall
Benefit
General
Benefit
In-District General Benefits
Outside the District 1.16%
Property within the District 7.15%
Public at Large 3.00%
Total In-District 11.31% 11.3% x 88.4% = 10.0%
Out-of-District General Benefits 100.0% x 11.6% = 11.6% TOTAL GENERAL BENEFIT 21.6%

1.20%

11.35% 11.4%
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17 This general benefit cannot be funded from the Assessments; it must be funded from other sources such as the City’s General Fund or other non-District funds. These contributions can also be in the form of in-lieu contributions to the installation and maintenance of the Improvements such as other City assets that support and protect the Improvements. The City of Orange will contribute both monetary and in-lieu resources to ensure that the general benefits conferred by the proposed Improvements are not funded by the District’s property owners.

A summary and quantification of these other contributions from the City is discussed below:

The City of Orange owns, maintains, rehabilitates and replaces curb and gutter along the border of the District Improvements. This curb and gutter serves to support, contain, retain, manage irrigation flow and growth, and provide a boundary for the Improvements. The contribution from the City towards general benefit from the maintenance, rehabilitation, and replacement of the curb and gutter is conservatively estimated to be 5%.

The City owns and maintains a storm drainage system along the border of the District Improvements. This system serves to prevent flooding and associated damage to the Improvements, and manage urban runoff including local pollutants loading from the Improvements.

The contribution from the City towards general benefit from the maintenance, and operation of the local storm drainage system is conservatively estimated to be 5%.

The City owns and maintains local public streets along the border of the District Improvements.

These public streets provide access to the Improvements for residents’ enjoyment as well as efficient maintenance. The contribution from the City towards general benefit from the maintenance of local public streets is conservatively estimated to be 5%.

The value of the construction of the Improvements can be quantified and monetized as an annuity.

Since this construction was performed and paid for by non-assessment funds, this “annuity” can be used to offset general benefit costs, and is conservatively estimated to contribute 10%.

The total General Benefit is liberally quantified at 22% which is entirely offset by the conservatively quantified total non-Assessment contribution towards general benefit described above of 25%.

Therefore, no additional General Benefit must be funded by the City.

Zones of Benefit
The boundaries of the District were developed in conjunction and concurrent with the planning and design of the subdivisions and Improvements, and thus include only the properties in the City of Orange that are proximate to the Improvements and that would materially benefit from the Improvements. Certain other properties surrounding the District were not part of the designed association between the Improvements and the assessed areas, and are generally less proximate to the Improvements. In other words, the boundaries of the District have been narrowly drawn to include only properties that will specially benefit from the Improvements, and would receive a declining level of service if the Assessments were not approved.

The SVTA decision indicates:

In a well-drawn district — limited to only parcels receiving special benefits from the improvement — every parcel within that district receives a shared special benefit. Under section 2, subdivision (i), these benefits can be construed as being general benefits since they are not “particular and distinct” and are not “over and above” the benefits received by other properties “located in the district.” 1539
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18 We do not believe that the voters intended to invalidate an assessment district that is narrowly drawn to include only properties directly benefiting from an improvement. Indeed, the ballot materials reflect otherwise. Thus, if an assessment district is narrowly drawn, the fact that a benefit is conferred throughout the district does not make it general rather than special. In that circumstance, the characterization of a benefit may depend on whether the parcel receives a direct advantage from the improvement (e.g., proximity to park) or receives an indirect, derivative advantage resulting from the overall public benefits of the improvement (e.g., general enhancement of the district’s property values).

In the District, the advantage that each parcel receives from the Improvements is direct, and the boundaries are narrowly drawn to include only parcels that benefit from the Assessment. Therefore, the even spread of Assessment throughout the narrowly drawn district is indeed consistent with the SVTA decision. For the most part, the benefits from the Improvements within the District do not vary further based on proximity of the parcels to the Improvements because the increased benefits of greater proximity to the Improvements are generally offset by a parallel increase in negative factors such as higher levels of traffic, noise, etc. that comes with increased proximity.

There are two distinct neighborhoods within the District: Santiago Hills and Hillsdale. Santiago Hills is a complex neighborhood with arterial and collector streets traversing the residential areas and a commercial area on the northeast portion. In addition, Santiago Hills has a system of walking paths, or paseos, that provide additional benefits not found in the Hillsdale neighborhood. Hillsdale is a relatively small neighborhood, linear in shape centered on one residential street (Hillsdale Drive) with Improvements along only one exterior frontage (Santiago Canyon Road).

In order to most conservatively assure that Assessments are proportional to the relative level of special benefits in the District, two zones have been created. Zone of Benefit A (or “Zone A”) consists of all of the parcels that lie within the Santiago Hills neighborhood bounded generally by Chapman Avenue, Jamboree Road, Canyon View Avenue, Skylark Lane and Newport Boulevard.

Zone A receives the full complement of special benefits.

Zone of Benefit B (“Zone B”) consists of all the parcels that lie within the Hillsdale neighborhood lying generally north of Santiago Canyon Road. A detailed analysis of the proportionate benefits received by the Hillsdale neighborhood as compared to the Santiago Hills neighborhood based on the weighted areas of parkways, paseos, and traffic medians within or proximate to the two zones shows that the Hillsdale neighborhood (Zone B) receives approximately 75% as much special benefit as the Santiago neighborhood (Zone A). Therefore Assessments for parcels in Zone B are reduced approximately 20% from the rates for Zone A (see Assessment Diagram).

Method of Assessment
As previously discussed, the proposed Assessments will provide comprehensive Improvements that will clearly confer special benefits to properties in the District. The allocation of special benefits to property is partially based on the type of property and the size of property. These benefits can also partially be measured by the occupants on property in the District because such parcel population density is a measure of the relative benefit a parcel receives from the Improvements. It should be noted that many other types of “traditional” assessments also use parcel population densities to apportion the Assessments. For example, the assessments for sewer systems, roads and water systems are typically allocated based on the population density of the parcels assessed. Therefore, the apportionment of benefit is reasonably based on the type of parcel, the size of parcels and the population density of parcels.
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19 The next step in apportioning Assessments is to determine the relative special benefit for each property. This process involves determining the relative benefit received by each property in relation to a single family home, or, in other words, on the basis of Single Family Equivalents (SFE). This SFE methodology is commonly used to distribute Assessments in proportion to estimated special benefit and is generally recognized as providing the basis for a fair and appropriate distribution of Assessments. For the purposes of this Engineer’s Report, all properties are designated a SFE value, which is each property’s relative benefit in relation to a single family home on one parcel. In this case, the "benchmark" property is the single family detached dwelling which is one Single Family Equivalent or one SFE.

Not only residential improved property will be assessed, because commercial and other properties may also receive direct benefits from the Improvements, and will be assessed.

A fixed or flat Assessment is proposed for all single family residential properties regardless of occupancy or parcel size. Assessments on multi-family residential parcels vary based on the number of dwelling units. Assessments on commercial property are levied on an acreage basis because larger properties generally support larger buildings and have higher numbers of employees, customers and guests who would benefit from proximity and improved access to well-maintained and improved landscaping.

Finally, the special benefits to be derived from the proposed Assessments will be conferred on property and are not based on a specific property owner’s use of the improvements, a specific property owner’s occupancy of property, or the property owner’s demographic status such as age or number of dependents. The benefits conferred to property are related to the average number of people who could potentially live on, work at, or otherwise could occupy a property, not how the property is currently used by the present owner. Therefore, the number of people who could or potentially live on, work at or otherwise occupy a property is one indicator of the relative level of benefit received by a property.

In conclusion, the Assessment Engineer determined that the appropriate method of assessment apportionment should be based on the type of property, the relative size of the property, property location, its relative population and its proximity to Improvements. This method is further described below.

Residential Properties
Certain residential properties in the District that contain a single residential dwelling unit are assigned one Single Family Equivalent or 1.0 SFE. Detached or attached houses and zero-lot line houses are included in this category of single family residential property. If there is more than one single family detached dwelling on a parcel, it will be charged one SFE per single family detached dwelling.

Properties with more than one residential unit (other than parcels with more than one detached single family dwelling as described above) are designated as multi-family residential properties. These properties benefit from the Improvements in proportion to the number of dwelling units that occupy each property, the average number of people who reside in multi-family residential units versus the average number of people who reside in a single family home (Population Density Factor) and the relative size of each type of residential dwelling unit (Square Foot Factor). The population density factors for the area in Orange County encompassing the District, as depicted in the following table, provide the basis for determining the SFE factors for residential properties. Using the total population in a certain property type in the area of the District from the 2010 Census and 1541
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20 dividing it by the total number of such households, finds that approximately 3.21 persons occupy each single family residence, whereas an average of 2.93 persons occupy each condominium. The ratio of 3.21 people on average for a single family residence and 2.93 people per dwelling unit in a condominium unit results in a population density equivalent of 0.91 for condominiums. Next, the relative building areas are factored into the analysis because special benefits are related to the average size of a property, in addition to average population densities. For a condominium, this calculation results in an SFE factor of 0.71 per dwelling unit.

Table 1 – Residential Density and Assessment Factors
There are no other multi-family property types (e.g., duplex, triplex, fourplex, apartments) in the District, and none are foreseen in the future. Therefore no SFE-based assessment rate is calculated.

Commercial Properties
SFE values for commercial land uses are based on the equivalence of special benefit on a land area basis between single family residential property and the average commercial property. The SFE values for various commercial land uses are further defined by using average employee densities because the special benefit factors described previously can be measured by the average number of people who work at commercial properties.

In order to determine employee density factors, the findings from the San Diego Association of Governments Traffic Generators Study (the “SANDAG Study”) are used because these findings were approved by the State Legislature as being a good representation of the average number of employees per acre of land area for commercial properties. As determined by the SANDAG Study, the average number of employees per acre for general commercial property is 24.

In comparison, the average number of people residing in a single family home in the area is 3.21.

Since the average lot size for a single family home in the District is approximately 0.12 acres, the average number of residents per acre of residential property is 26.8.

The employee density per acre is roughly equal to (or 0.9 times) the population density of single family residential property per acre (24 employees per acre / 26.8 residents per acre). However, the benefit derived by employees on commercial properties is less than that derived by a resident on residential property, generally due to less time of use of services and Improvements. The Assessment Engineer determines that this factor is 0.5 for commercial to 1 for residential. Table 2 below shows the average employees per acre of land area or portion thereof for various types of commercial properties and lists the relative SFE factors per 0.12 acre for properties in each land use category.

Pop. Density SqFt SFE
Type of Residential Property Equivalent Factor Factor
Single Family Residential 1.00 1.00 1.00
Condominium 0.91 0.78 0.71
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21 Commercial properties in excess of 5 acres generally involve uses that are more land intensive relative to building areas and number of employees (lower coverage ratios). As a result, the benefit factors for commercial property land area in excess of 5 acres is determined to be the SFE rate per

0.12 acre for the first 5 acres and the relevant SFE rate per each additional acre over 5 acres.

Table 2 – Commercial Density and Assessment Factors

1. Source: San Diego Association of Governments Traffic Generators Study.

2. The SFE factors for commercial and industrial parcels are applied by the 0.12 acre of land area or portion thereof. (Therefore, the minimum assessment for any assessable parcel in these categories is the SFE Units listed herein.) The rates apply up to first 5 acres of parcel size. Additional acreage is benefited at the rate shown above per acre or portion thereof.

3. Currently there are no parcels in the District in the Office category. This rate is included in the event General Commercial space is converted to Office space.

Vacant/Undeveloped Properties
The benefit to undeveloped properties is determined to be proportional to the corresponding benefits for similar type developed properties, but at a lower rate due to the lack of improvements on the property. A measure of the benefits accruing to the underlying land is the average value of land in relation to Improvements for developed property. An analysis of the assessed valuation data from the County of Orange found that approximately 55% of the assessed value of improved properties is classified as the land value. It is reasonable to assume, therefore, that approximately 55% of the benefits are related to the underlying land and 45% are related to the improvements and the day-to-day use of the property. Using this ratio, the SFE factor for vacant/undeveloped parcels is 0.55 per parcel.

Other Properties
Article XIIID stipulates that publicly owned properties must be assessed unless there is clear and convincing evidence that those properties receive no special benefit from the Assessment.

All properties that are specially benefited are assessed. Certain other publicly owned property that lie within the District boundaries, including Santiago Canyon College, Chapman Hills Elementary School, Santiago Hills Park, and City of Orange public safety facility on East Fort Road, are not assessed. These are discussed below.

Santiago Canyon College: The College lies within the District and certain Improvements lie on their property. Although the College is not assessed in this District, the College pays for any special Average SFE Units
Type of Commercial Land Use Employees per
per Acre 10.12 Acre 2
General Commercial 24 0.500
Office368 1.420
Shopping Center 24 0.500
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22 benefit through a separate agreement with the City, and that monetary contribution is shown in Table 1. In addition, all benefit attributable for the College property is included in the General Benefit calculation shown above.

Chapman Hills Elementary School: Any special benefit attributable to the School buildings and parking lots are entirely offset by the benefit provided to the neighborhood by the outdoor fields.

This facility was also included in the list of regional facilities in the calculation of general benefit to properties inside the district that is indirect and derivative above.

Santiago Hills Park: Any special benefit attributable to the Park is entirely offset by the benefit provided to the neighborhoods by park facilities. This facility was also included in the list of regional facilities in the calculation of general benefit to properties inside the district that is indirect and derivative above.

City of Orange Public Safety Facility on East Fort Road: Any special benefit received by this facility is entirely offset by the benefit provided back to the neighborhood similar to other in-lieu contributions to the General Benefit contributions that are funded by the City’s General Fund or other non-District funds.

Miscellaneous, small and other parcels such as roads, right-of-way parcels, and common areas typically do not generate significant numbers of employees, residents, customers or guests, and have limited economic value. These miscellaneous parcels receive minimal, if any, benefit from the Improvements and are assessed an SFE benefit factor of zero SFEs.

Annual Cost Indexing
The Assessment is subject to an annual adjustment tied to the Consumer Price Index-U for the Los Angeles-Long Beach-Anaheim area as of December of each succeeding year (the “CPI”), with a maximum annual adjustment not to exceed 3%. Any change in the CPI in excess of 3% shall be cumulatively reserved as the “Unused CPI” and shall be used to increase the maximum authorized assessment rate in years in which the CPI is less than 3%. The maximum authorized assessment rate is equal to the maximum assessment rate in the first fiscal year the Assessment was levied adjusted annually by the minimum of either 3% or the change in the CPI plus any Unused CPI as described above.

Appeals of Assessments Levied to Property
Any property owner who feels that the Assessment levied on the subject property is in error as a result of incorrect information being used to apply the foregoing method of assessment may file a written appeal with the City of Orange City Manager or his or her designee. Any such appeal is limited to correction of an Assessment during the then-current Fiscal Year and applicable law. Upon the filing of any such appeal, the City Manager or his or her designee will promptly review the appeal and any information provided by the property owner. If the City Manager or his or her designee finds that the Assessment should be modified, the appropriate changes shall be made to the Assessment Roll. If any such changes are approved after the Assessment Roll has been filed with the County for collection, the City Manager or his or her designee is authorized to refund to the property owner the amount of any approved reduction. Any dispute over the decision of the City Manager or his or her designee shall be referred to the Orange City Council, and the decision of the City Council shall be final.
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Engineer’s Report
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Landscape Maintenance District No. 15-1
23 Assessment Funds Must Be Expended Within the District Area The net available Assessment funds, after incidental, administrative, financing and other costs shall be expended exclusively for Improvements within the boundaries of the District or as described herein, and appropriate incidental and administrative costs as defined in the Plans and Specifications section.
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Landscape Maintenance District No. 15-1
24 ASSESSMENT
The amount to be paid for said Improvements and the expense incidental thereto, to be paid by the District for the Fiscal Year 2022-23 is generally as follows:

Table 3 – Summary Cost Estimate
For Landscape Maintenance District No. 15 -1
For Fiscal Year 2022-23

BUDGET ITEM COST

ANNUAL MAINTENANCE
Operating Expenses $851,872
Salaries & Benefits $40,770
Administration and Project Management $25,000
Capital Expenses/ Revenues $0
Total for Services $917,642
Less Other Revenue ($563,842)
Reserve Funds $3,073
Net Amount of Assessment $356,873
As required by the Act, an Assessment Diagram showing the exterior boundaries of the Improvement District is hereto attached and incorporated herein by reference. The distinctive number of each parcel or lot of land in the District is its Assessor Parcel Number appearing on the Assessment Roll.
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25 ASSESSMENT DIAGRAM
The parcels proposed to be assessed in Landscape Maintenance District No. 15-1 are shown on the Assessment Diagram, which is on file with the City Clerk of the City of Orange, and includes all those properties included in the original formation of LMD No. 86-2. The following Assessment Diagram is for general location only and is not to be considered the official boundary map. The lines and dimensions of each lot or parcel within the District are those lines and dimensions as shown on the maps of the Assessor of the County of Orange, for Fiscal Year 2022-23, and are incorporated herein by reference, and made a part of this Diagram and this Report. 1547
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26 1548
Engineer’s Report
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Landscape Maintenance District No. 15-1
27 ASSESSMENT ROLL
An Assessment Roll (a listing of all parcels assessed within the Assessment District and the amount of the Assessment) will be filed with the City Clerk and is, by reference, made part of this Report and is available for public inspection during normal office hours at the City Hall at 300 East Chapman Avenue, Orange, California 92866.

Each lot or parcel listed on the Assessment Roll is shown and illustrated on the latest County Assessor records and these records are, by reference made part of this Report. These records shall govern for all details concerning the description of the lots or parcels. 1549
Agenda Item
City Council
Item #: 10.4. 6/14/2022 File #: 22-0343
TO: Honorable Mayor and Members of the City Council
THRU: Rob Houston, City Manager
FROM: Susan Galvan, Interim Community Development Director

1. SUBJECT
Public Hearing to consider the Fiscal Year 2022-2023 Community Development and Block Grant and HOME Investment Partnerships Programs Annual Action Plan.

2. SUMMARY
Request to approve funding for proposed projects, services, and non-profit agency programs under the Community Development Block Grant and HOME Investment Partnerships Programs.

3. RECOMMENDED ACTION

1. Approve the draft Fiscal Year 2022-2023 Annual Action Plan and authorize the City Manager or his designee to execute the Fiscal Year 2022-2023 Memorandum of Understanding with City departments, subrecipient agreements with non-profit agencies, and all related U.S. Department of Housing and Urban Development (HUD) documents.

2. If the Department of Housing and Community Development adjusts the entitlement amount during the Fiscal Year by less than 10% of original entitlement, authorize the following:
a. City Staff to make adjustments to funding amounts for city departments and subrecipients based on the recommendations of the CDBG Committee. b. City Manager to execute all amended related documents required by the adjustment in the entitlement amount, including those with City departments, non-profits, and all related HUD documents;
c. Authorize the Finance Department to make adjustments to the funding amounts for each City department and sub-recipient based on the amended allocations.

3. Approve transfer of $4,453 from 317.9660.56510.11210 HOME CHDO Allocation to 317.9660.56510.11250 HOME Developer Projects.

4. FISCAL IMPACT
All projects, services, programs, and administration will be fully funded by the Community Development Block Grant Fund (310) and HOME Investment Partnerships Programs (317).

5. STRATEGIC PLAN GOALS
Goal 3: Enhance and promote quality of life in the community e: Develop and strengthen collaborative partnerships to enhance and promote quality of life programs, projects, and services.

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Item #: 10.4. 6/14/2022 File #: 22-0343

6. DISCUSSION AND BACKGROUND
The City receives annual federal funds from U.S. Department of Housing and Urban Development (HUD) under the Community Development Block Grant (CDBG) and the HOME Investment Partnerships (HOME) programs for the benefit of primarily low- and moderate-income residents. The funds are allocated to projects and programs that include street improvements, handicap accessibility improvements, after-school programs, transitional housing, and supportive services.

Citizen Participation Plan Process
The City advertised the availability of CDBG funds on February 3, 2022 in the Orange City News.

Two Public Hearings and two Public Meetings were held to solicit input from nonprofit organizations and encourage residents to participate in the Fiscal Year (FY) 2022-23 Action Plan. The Action Plan is required annually by HUD and outlines the City’s plan for the use of the funds.

The first Public Hearing was held on February 17, 2022 with the CDBG Committee (Committee) to hear eligible applicant presentations. Tonight’s second Public Hearing is for the City Council to consider adopting the funding recommendations made by the Committee. Two Public Meetings were held: one on March 17, 2022 and the second on April 12, 2022. The first was held with the Committee to deliberate on the proposed funding recommendations to be presented to the City Council. The second was held at the City Council meeting in which the City Council approved the Committee’s FY 2022-23 funding recommendations of the estimated entitlements of $1,163,162 for CDBG and $457,125 for HOME. On May 15, 2022, HUD made the final determination of the City’s entitlement amounts of $1,119,937 for CDBG and $486,812 for HOME. The final amounts are different from what was originally anticipated, with CDBG receiving $43,225 less, and HOME receiving $29,687 more. This report reflects the amended amounts and is consistent with the Committee’s recommendations.

CDBG
The allocations for the CDBG categories are based on caps set by HUD and the final adjusted amounts are as follows:
· 20% or $223,987 for administration
· 15% or $167,990 for public service activities
· 65% or $727,960 for public facilities projects
The initial recommendation of the CDBG Committee estimated funding based on entitlement amounts in Fiscal Year 2021-2022. Attachment 2 of this report is a summary of the adjusted funding amounts based on the actual entitlement as recommended by the CDBG Committee. The Fair Housing Foundation is paid using administrative funds and is not impacted by the reduced entitlement.

Staff notified the CDBG Committee and subrecipients of the change in the recommended funding amount on May 16, 2022.

HOME
Allocations originally made to the three categories under HOME and the final adjusted amounts, according to the cap established by HUD, are as follows:
· 10% or $48,681 for administration
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· 15% or $73,021 for CHDO
· 75% or $365,110 for developer projects
On May 10, 2022, City Council approved the allocation of $68,568 in FY2022-2023 CHDO funds to the Katella Terrace senior affordable housing project. Historically, CHDO funds are difficult to use because a project must obtain the CHDO (Community Housing Development Organization) designation to qualify for these funds. As such, staff is recommending increasing the FY2022-2023 CHDO allocation for Katella Terrace to $73,021 to ensure timely expenditure of the entitlement and avoid recapture of the funds by HUD.

Staff is requesting approval of the adjusted funding recommendations to be incorporated into the City’s Fiscal Year 2022-2023 Annual Action Plan.

7. ATTACHMENTS
· 2022-2023 Draft Annual Action Plan
· 2022-2023 Adjusted Funding Recommendations
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Agenda Item
City Council
Item #: 10.4. 6/14/2022 File #: 22-0343
TO: Honorable Mayor and Members of the City Council
THRU: Rob Houston, City Manager
FROM: Susan Galvan, Interim Community Development Director

1. SUBJECT
Public Hearing to consider the Fiscal Year 2022-2023 Community Development and Block Grant and HOME Investment Partnerships Programs Annual Action Plan.

2. SUMMARY
Request to approve funding for proposed projects, services, and non-profit agency programs under the Community Development Block Grant and HOME Investment Partnerships Programs.

3. RECOMMENDED ACTION

3. Approve transfer of $4,453 from 317.9660.56510.11210 HOME CHDO Allocation to 317.9660.56510.11250 HOME Developer Projects.

4. FISCAL IMPACT
All projects, services, programs, and administration will be fully funded by the Community Development Block Grant Fund (310) and HOME Investment Partnerships Programs (317).

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Item #: 10.4. 6/14/2022 File #: 22-0343

Citizen Participation Plan Process
The City advertised the availability of CDBG funds on February 3, 2022 in the Orange City News.

Staff notified the CDBG Committee and subrecipients of the change in the recommended funding amount on May 16, 2022.

HOME
Allocations originally made to the three categories under HOME and the final adjusted amounts, according to the cap established by HUD, are as follows:
· 10% or $48,681 for administration
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Item #: 10.4. 6/14/2022 File #: 22-0343
· 15% or $73,021 for CHDO
· 75% or $365,110 for developer projects
On May 10, 2022, City Council approved the allocation of $68,568 in FY2022-2023 CHDO funds to the Katella Terrace senior affordable housing project. Historically, CHDO funds are difficult to use because a project must obtain the CHDO (Community Housing Development Organization) designation to qualify for these funds. As such, staff is recommending increasing the FY2022-2023 CHDO allocation for Katella Terrace to $73,021 to ensure timely expenditure of the entitlement and avoid recapture of the funds by HUD.

Staff is requesting approval of the adjusted funding recommendations to be incorporated into the City’s Fiscal Year 2022-2023 Annual Action Plan.

7. ATTACHMENTS
· 2022-2023 Draft Annual Action Plan
· 2022-2023 Adjusted Funding Recommendations
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Annual Action Plan
2022
1 OMB Control No: 2506-0117 (exp. 09/30/2021)
Executive Summary
AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b)

1. Introduction
The City of Orange qualifies as an Entitlement Jurisdiction for Community Development Block Grant (CDBG) funds and a Participating Jurisdiction for HOME Investment Partnerships (HOME) funds. The U.S.

Department of Housing and Urban Development (HUD) allocates these funds to the City annually. The FY 2022-23 Action Plan is the third Annual Action Plan of the 2020-2024 Consolidated Plan and provides a concise summary of the actions, activities, and the specific federal and other resources that will be used to address the priority needs identified by the Consolidated Plan.

2. Summarize the objectives and outcomes identified in the Plan This could be a restatement of items or a table listed elsewhere in the plan or a reference to another location. It may also contain any essential items from the housing and homeless needs assessment, the housing market analysis or the strategic plan.

The City of Orange conducted community needs assessment during the preparation of the five-year strategic plan (The 2020-2024 Consolidated Plan) and identified the following high priority needs:
• Increase the supply of affordable housing through rental assistance, new construction, and acquisition/rehabilitation projects.
• Provide fair housing for all economic segments and special needs households. • Continue to financially support homeless facilities and agencies that address service needs of the homeless and those at risk of becoming homeless.
• Improve the quality of existing community services, facilities, and infrastructure to serve lowand moderate- income neighborhoods.

The City of Orange also conducted an online community needs assessment survey from November 3, 2021 to February 16, 2022. A total of 26 respondents participated in the survey. The survey ranked how participants viewed the most important needs in the city by applying a score of 4-for the most important to 1-for the least important. The various categories included:
-Homeowner Housing Rehabilitation
-Housing Accessibility Improvements
-American with Disability Act (ADA) Improvements
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-Affordable Rental Housing
-Senior Housing
-Housing for the Disabled
-Rehabilitation of Apartment Buildings
-Down Payment Assistance
-Other (please specifiy)
The responses resulted in Affordable Rental Housing having the highest priority, followed by American Disability Act (ADA) Improvements and Senior Housing having equal ranking.

3. Evaluation of past performance
This is an evaluation of past performance that helped lead the grantee to choose its goals or projects.

The City and the CDBG program committee considered the past performance of the CDBG subrecipients when determining the allocation of CDBG funds to proposed FY 2022-23 activities. The CDBG program committee considered funding requests from nonprofit organizations based upon the proposed benefit to low- and moderate- income residents, their experience in carrying out the proposed activities and meeting the CDBG requirements. CDBG funding was allocated only to activities that address the high priority needs of the 2020-2024 Consolidated Plan.

4. Summary of Citizen Participation Process and consultation process Summary from citizen participation section of plan.

The City advertised the availability of CDBG funds on February 3, 2022, in the Orange City News and held 2 Public Hearings on February 17, 2022 (CDBG Committee), and June 14, 2022 (City Council) and two public meetings on March 17, 2022 (CDBG Committee) and April 12, 2022 to solicit input from nonprofit organizations, and encouraged residents to participate in the preparation of the FY 2022-23 Action Plan.

5. Summary of public comments
This could be a brief narrative summary or reference an attached document from the Citizen Participation section of the Con Plan.
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The 30-day public review period for the Draft Action Plan started Thursday, February 24, 2022 and ended on Thursday, March 24, 2022. However, the City continued to accept public comments up until submittal to HUD. No public comments were received during the public review period.

6. Summary of comments or views not accepted and the reasons for not accepting them No comments or views were received.

7. Summary
The City allocated the CDBG funds to primarily benefit low- and moderate- income households. The CDBG beneficiaries are either income-qualified residents that receive direct services or residents of neighborhoods where at least 51 percent of the population is low and moderate Income.

The City received the following amounts for FY 2022-23:

1. CDBG - $1,119,937

2. HOME - $486,812
See Section AP-35 Projects for a detailed description of each activity. Below is a summary of the CDBG activities and allocations:
• Program Administration - $223,987 in CDBG funds for program administration and fair housing activities.
• Public Facilities – $727,960 in CDBG funds for street improvements and public facilities projects. • Public Services –$167,990 in CDBG funds for public services activities.

On May 10,2022, the City allocated HOME funds to Katella Terrace, L.P., a 74-unit affordable housing complex for seniors, of which 11 will be HOME units for low- and- moderate income seniors. See Section AP-35 Projects for details.

Any new proposed projects for the available balance of HOME funds will be subject to CDBG Committee and City Council approval. The City is exempt from the 25% match requirement. HOME specific percentage cap requirements for the HOME Allocation of $486,812 and the amounts planned for Administration, and caps are calculated as follows:

ADMINISTRATION 10%: $486,812 x 10% = $48,681
CHDO SET -ASIDE 15%: $486,812 x 15% = $73,021
AFFORDABLE HOUSING DEVELOPMENT = $365,110
.

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PR-05 Lead & Responsible Agencies – 91.200(b)

1. Agency/entity responsible for preparing/administering the Consolidated Plan Describe the agency/entity responsible for preparing the Consolidated Plan and those responsible for administration of each grant program and funding source.

Agency Role Name Department/Agency
CDBG Administrator ORANGE Community Development
Department
HOME Administrator ORANGE Community Development
Department
Table 1 – Responsible Agencies
Narrative (optional)
Consolidated Plan Public Contact Information
Jessica Herrera
Administrative Analyst
Community Development Department
300 East Chapman Avenue, Orange, California 92866
Telephone: (714) 744-7270 Fax: (714) 744-7222
E-Mail: [email protected]
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AP-10 Consultation – 91.100, 91.200(b), 91.215(l)

1. Introduction
The City advertised the availability of CDBG funds, solicited input from nonprofit agencies, and encouraged residents to participate in the development of the FY 2022-23 Action Plan through a variety of methods. This included publishing an ad in the Orange City News, announcing it’s availability on the City’s website and social media platforms, and notifying local nonprofit agencies by email.

Provide a concise summary of the jurisdiction’s activities to enhance coordination between public and assisted housing providers and private and governmental health, mental health and service agencies (91.215(l))
Staff maintains a close working relationship with the Orange County Housing Authority. The City is home to regional hospitals including UC Irvine Medical Center, Children's Hospital of Orange County (CHOC), and St. Joseph Hospital of Orange. Ensuring access to quality medical care is an important priority for our assisted housing providers. The City also supported the Orange County’s Mental Health Agency efforts in setting up a mental health facility in Orange to serve low- income populations faced with mental health issues.

Describe coordination with the Continuum of Care and efforts to address the needs of homeless persons (particularly chronically homeless individuals and families, families with children, veterans, and unaccompanied youth) and persons at risk of homelessness.

The County of Orange is the lead agency coordinating Continuum of Care for the entire county. The City of Orange supports the County of Orange's efforts to develop effective programs to address the needs of homeless persons, including the 10-Year Plan to end Homelessness. The City supports the Orange County Housing Authority’s (OCHA’s) applications for a variety of programs to address needs of the homeless and those at risk of homelessness.

Describe consultation with the Continuum(s) of Care that serves the jurisdiction's area in determining how to allocate ESG funds, develop performance standards for and evaluate outcomes of projects and activities assisted by ESG funds, and develop funding, policies and procedures for the operation and administration of HMIS The City of Orange is not a recipient of ESG funds.

2. Describe Agencies, groups, organizations and others who participated in the process and describe the jurisdiction’s consultations with housing, social service agencies and other entities
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Table 2 – Agencies, groups, organizations who participated 1 Agency/Group/Organization Assistance League of Orange Agency/Group/Organization Type Services-Children
Services-Health
What section of the Plan was addressed by
Consultation?
Non-Homeless Special Needs
Briefly describe how the Agency/Group/Organization
was consulted. What are the anticipated outcomes of
the consultation or areas for improved coordination?
The City consulted the appropriate agencies for the development of the FY 2022-23 Action Plan through holding a series of meetings and public hearings before the CDBG Committee and the City Council. The outcome of these consultations is the result of the proposed activities for funding with FY2022- 23 CDBG funds.
2 Agency/Group/Organization Friendly Center, Inc.

Agency/Group/Organization Type Services-Children
Services-Elderly Persons
Services-Persons with Disabilities
Services-Health
What section of the Plan was addressed by
Consultation?
Anti-poverty Strategy
Briefly describe how the Agency/Group/Organization
was consulted. What are the anticipated outcomes of
the consultation or areas for improved coordination?
The City consulted the appropriate agencies for the development of the FY 2022-23 Action Plan through holding a series of meetings and public hearings before the CDBG Committee and the City Council. The outcome of these consultations is the result of the proposed activities for funding with FY2022- 23 CDBG funds.
3 Agency/Group/Organization Fair Housing Foundation
Agency/Group/Organization Type Housing
Service-Fair Housing
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What section of the Plan was addressed by
Consultation?
Housing Need Assessment
Briefly describe how the Agency/Group/Organization
was consulted. What are the anticipated outcomes of
the consultation or areas for improved coordination?
The City consulted the appropriate agencies for the development of the FY 2022-23 Action Plan through holding a series of meetings and public hearings before the CDBG Committee and the City Council. The outcome of these consultations is the result of the proposed activities for funding with FY2022- 23 CDBG funds.

Identify any Agency Types not consulted and provide rationale for not consulting The City issued a Notice of Funding Availability inviting all agencies to participate.

Other local/regional/state/federal planning efforts considered when preparing the Plan Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan? Continuum of Care County of Orange
The City collaborates with the County of Orange to implement strategic goals and policies under the Continuum of Care.

Table 3 – Other local / regional / federal planning efforts Narrative (optional)
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AP-12 Participation – 91.105, 91.200(c)

1. Summary of citizen participation process/Efforts made to broaden citizen participation Summarize citizen participation process and how it impacted goal-setting The City advertised the availability of CDBG and HOME funds, held public meetings, solicited input from nonprofit agencies, and encouraged residents to participate in the development of the FY 2022-23 Action Plan through a variety of methods. The feedback received through this process was considered when setting program goals.
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Citizen Participation Outreach
Sort Orde
r
Mode of Outreac
h
Target of Outreach Summary of
response/attendanc
e
Summary of
comments receive
d
Summary of comment
s not accepted
and reasons
URL (If
applicable
)
1 Newspaper Ad
Non-targeted/broad
community
nonprofits and city
departments
Notice of Funding
Availability was
published in Orange
City News and the
City's web site and
announced on the
City's social media
platforms. N/A N/A N/A
2 Email
nonprofits and city
departments
Notices for the
February 17, 2022
CDBG public hearing
were emailed to
nonprofit agencies on
the City' CDBG
Program interest list
and those who
expressed interest.

N/A N/A N/A
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Sort Orde
r
Mode of Outreac
h
Target of Outreach Summary of
response/attendanc
e
Summary of
comments receive
d
Summary of comment
s not accepted
and reasons
URL (If
applicable
)
3 Public Hearing
Non-targeted/broad
community
nonprofit agencies
and city
departments
The CDBG Committee
held a public hearing
on February 17, 2022
with representatives
from nonprofit
agencies to receive
presentations on the
project/program
proposals by
nonprofit agencies
and various city
departments.

Agencies in
attendance
discussed
programs, projects,
and community
needs.

N/A N/A
4 Public Meeting
Non-targeted/broad
community
nonprofit agencies
and city
departments
The CDBG Program
Committee held a
public meeting on
March 17, 2022
discuss funding
recommendations on
the project/program
proposals by
nonprofit agencies
and various city
departments.

The CDBG
committee
discussed programs
and projects and
developed funding
recommendations
with contingencies
for the final
allocation
announcement.

N/A N/A
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Sort Orde
r
Mode of Outreac
h
Target of Outreach Summary of
response/attendanc
e
Summary of
comments receive
d
Summary of comment
s not accepted
and reasons
URL (If
applicable
)
5 Public Meeting
Non-targeted/broad
community
nonprofit agencies
and city
departments
The City Council met
on April 11, 2022 to
receive the FY2022-
23 draft funding
recommendations.

No public
comments were
received at the
public hearing.

N/A N/A
6 Public Hearing
Non-targeted/broad
community
nonprofit agencies
and city
departments
The City Council held
a public hearing on
June 14, 2022 to
review and approve
the FY2022-23 AAP
draft funding
recommendations.

No public
comments were
received at the
public hearing.

N/A N/A
Table 4 – Citizen Participation Outreach
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Expected Resources
AP-15 Expected Resources – 91.220(c)(1,2)
Introduction
The primary objective of the CDBG program is to develop viable urban communities by providing decent housing, a suitable living environment, and economic opportunities, principally for persons of low and moderate income. The City allocates CDBG funds for a variety of activities including fair housing services, public services, and street improvements.

Eligible activities under the HOME Program include acquisition, rehabilitation, homebuyer assistance, and rental assistance. The City allocates HOME funds for the acquisition, rehabilitation, or development of affordable rental housing.

The City may access federal, State, and local resources to achieve its housing and community development priorities. Specific funding sources will be used based on the opportunities and constraints of each particular project or program. The City will focus its resources and efforts on a variety of activities, and leverage federal and local funds to maximize the number of households that can be assisted. The uses of funds shown in the following table are potential uses. The City does not allocate its CDBG or HOME funds to all of the categories listed. 1567
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Anticipated Resources
Program Source
of Funds
Uses of Funds Expected Amount Available Year 3 Expected Amount
Available
Remainder
of ConPlan
$
Narrative Description
Annual
Allocation:
$
Program
Income:
$
Prior Year
Resources: $
Total:
$
CDBG public -
federal
Acquisition
Admin and
Planning
Economic
Development
Housing
Public
Improvements
Public Services $1,119,937 0 50,797 1,170,734 2,239,874 The City allocates CDBG funds for a
variety of activities including fair
housing services, street
improvements, and public services.
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Program Source
of Funds
Uses of Funds Expected Amount Available Year 3 Expected Amount
Available
Remainder
of ConPlan
$
Narrative Description
Annual
Allocation:
$
Program
Income:
$
Prior Year
Resources: $
Total:
$
HOME public -
federal
Acquisition
Homebuyer
assistance
Homeowner rehab
Multifamily rental
new construction
Multifamily rental
rehab
New construction
for ownership
TBRA
$486,812 0 $1,033,632 $1,520,444 973,624
The City allocates HOME funds for
the acquisition, rehabilitation, or
development of affordable rental
housing. Additionally, Tenant-based
rental assistance will be a new
activity in the new program year.

Table 5 - Expected Resources – Priority Table
Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how matching requirements will be satisfied
The City's primary funding sources are CDBG and HOME funds. Other sources of competitive funding may be available to address housing and community development needs. Developers will seek additional funding sources to leverage developer HOME funds for their respective projects. The City of Orange has been exempted from the match requirement.

If appropriate, describe publicly owned land or property located within the jurisdiction that may be used to address the needs 1569
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identified in the plan
Discussion
AP-35 lists all of the FY 2022-23 Community Development Block Grant projects. 1570
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Annual Goals and Objectives
AP-20 Annual Goals and Objectives
Goals Summary Information
Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
1 Affordable
Housing
2020 2024 Affordable Housing CDBG: $0
HOME:
$486,812
Housing Units
2 Homelessness 2020 2024 Homeless CDBG: $0
HOME: $0
3 Community
Development
2020 2024 Non-Housing
Community
Development
Community
Development
CDBG:
$1,119,937
HOME: $0
Public Facility or Infrastructure
Activities for Low/Moderate Income
Housing Benefit: 61730 Households
Assisted
Public service activities other than
Low/Moderate Income Housing
Benefit: 40796 Persons Assisted
Table 6 – Goals Summary
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Goal Descriptions
1 Goal Name Affordable Housing
Goal Description No FY 22-23 CDBG funds will be allocated to the Affordable Housing goal. 2 Goal Name Homelessness
Goal Description No FY 22-23 CDBG funds will be allocated to homeless shelters. 3 Goal Name Community Development
Goal Description All of the FY 22-23 CDBG funds ($1,119,937) will be allocated to public services and public facilities. 1572
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Projects
AP-35 Projects – 91.220(d)
Introduction
The FY 2022-23 Action Plan identifies priority housing and community development activities that will be undertaken to provide community services, public facilities, and decent, affordable housing to address the needs of low and moderate income Orange residents.

Projects
# Project Name
1 CDBG Administration
2 Orange Fair Housing Program
3 ADA Wheelchair Access Ramps
4 Orange Public Works - Street Rehabilitation
5 Taft Library - Restroom Accessibility Project
6 After School Community Programs - El Camino and Grijalva Parks 7 Orange Police Department - Bike Patrol Program
8 Assistance League of Orange - Operation School Bell
9 Friendly Center - Community Food Orange
10 Katella Terrace – Senior Affordable Housing
Table 7 - Project Information
Describe the reasons for allocation priorities and any obstacles to addressing underserved needs
The City allocates CDBG funds to activities that address the priorities of the 2020-2024 Consolidated Plan and comply with CDBG regulations. The City and the CDBG Program Committee consider funding requests from nonprofit agencies based upon the proposed benefit to low and moderate income Orange residents, the agencies’ demonstrated capacity to carry out the proposed activities, the financial feasibility of the proposed activities, and the amount of funding available. 1573
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AP-38 Project Summary
Project Summary Information
1 Project Name CDBG Administration
Target Area Low and Moderate Income Areas
Goals Supported Community Development
Needs Addressed Community Development
Funding CDBG: $199,465
Description CDBG Administration
Target Date 6/30/2023
Estimate the number and
type of families that will
benefit from the proposed
activities
Not Applicable
Location Description Not Applicable
Planned Activities This activity will provide for the general management, coordination, monitoring, and evaluation of CDBG-funded activities.
2 Project Name Orange Fair Housing Program
Target Area Various City locations.

Goals Supported Community Development
Needs Addressed Community Development
Funding CDBG: $24,522
Description Providing Fair Housing Services to low and moderate income Orange residents.

Target Date 6/30/2023
Estimate the number and
type of families that will
benefit from the proposed
activities
150 low and moderate income persons
Location Description Low and moderate income areas.
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Planned Activities The Fair Housing Foundation (FHF) will provide fair housing education, counseling, and enforcement; and related housing activities to affirmatively further housing laws on behalf of the City to comply with federal regulations.
3 Project Name ADA Wheelchair Access Ramps
Target Area CDBG Eligible Areas
Goals Supported Community Development
Needs Addressed Community Development
Funding CDBG: $68,430
Description This project includes the construction of sidewalk access ramps at various locations throughout the City. These access ramps will improve accessibility for the disabled to comply with the Americans with Disabilities Act.

Target Date 12/31/2023
Estimate the number and
type of families that will
benefit from the proposed
activities
1000 low and moderate income disabled persons
Location Description Various city locations.

Planned Activities This project includes the construction of sidewalk access ramps at various locations throughout the City. These access ramps will improve accessibility for the disabled to comply with the Americans with Disabilities Act.
4 Project Name 2022-2023 Street Rehabilitation
Target Area CDBG Eligible Areas
Goals Supported Community Development
Needs Addressed Community Development
Funding CDBG: $629,530
Description The project includes street improvements.

Target Date 12/31/2023
Estimate the number and
type of families that will
benefit from the proposed
activities
1,305 low and moderate income persons
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Location Description Portions of Sycamore (Donneybrooke to Eckhoff), Ash Street (Sycamore to cul-de-sac), Holly Street (North end to Maple), Lilac Lane (Culver to Orchard), Flower (Mills to Culver), and Palmyra Avenue (Bedford to Flower).

Planned Activities Street improvement will include installing asphalt concrete overlay and adjustment of manholes and water valves to grade. 5 Project Name Taft Library Restroom ADA Accessibility Project Target Area Low and Moderate Income Areas
Goals Supported Community Development
Needs Addressed Community Development
Funding CDBG: $30,000
Description ADA Improvements to Taft Library Restrooms
Target Date 12/31/2023
Estimate the number and
type of families that will
benefit from the proposed
activities
1000 low and moderate income disabled persons
Location Description 740 E Taft Ave., Orange, CA 92865.

Planned Activities Renovating the restrooms at Taft Library to be compliant with current ADA standards.
6 Project Name After School Community Programs - El Camino, Grijalva, and Killefer Parks
Target Area CDBG Eligible Areas
Goals Supported Community Development
Needs Addressed Community Development
Funding CDBG: $42,178
Description The programs will provide supervised after-school recreation with a homework assistance component for children of ages five to 13.

Target Date 6/30/2023
Estimate the number and
type of families that will
benefit from the proposed
activities
150 low-income and at-risk youth.
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Location Description El Camino Real Park-400 North Main Street, Orange, CA 92866 Grijalva Park-368 North Prospect Street, Orange, CA 92869 Killefer Park-615 N. Lemon St., Orange, CA 92868
Planned Activities The programs will provide supervised after-school recreation with a homework assistance component for children of ages five to 13.
7 Project Name Bike Patrol Program - Community Oriented Policing Target Area Low and Moderate Income Areas
Goals Supported Community Development
Needs Addressed Community Development
Funding CDBG: $97,703
Description This program will provide a community-oriented policing strategy designed to improve the quality of life in high density housing located in Low Income areas of the City.

Target Date 6/30/2023
Estimate the number and
type of families that will
benefit from the proposed
activities
47,260 low income persons
Location Description City Parks in CDBG areas
Planned Activities This program will provide a community-oriented policing strategy designed to improve the quality of life in high density housing located in Low Income areas of the City.
8 Project Name Assistance League of Orange - Operation School Bell Target Area CDBG Eligible Areas
Goals Supported Community Development
Needs Addressed Community Development
Funding CDBG: $13,454
Description This program will provide school clothing/uniforms, undergarments, shoe vouchers, and hygiene kits to Low Income elementary school (Kindergarten to Sixth Grade) students in the Orange Unified School District (OUSD).

Target Date 6/30/2023
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Estimate the number and
type of families that will
benefit from the proposed
activities
189 low and moderate income students
Location Description 124 South Orange Street
Orange, CA 92866
Planned Activities The program will provide school clothing and hygiene kits to Low Income OUSD elementary school (Kindergarten to Sixth Grade) students.
9 Project Name Friendly Center - Community Food Orange
Target Area CDBG Eligible Areas
Goals Supported Community Development
Needs Addressed Community Development
Funding CDBG: $14,655
Description This program will provide free food to low income residents.

Target Date 6/30/2023
Estimate the number and
type of families that will
benefit from the proposed
activities
500 low and moderate income persons
Location Description 147 West Rose Avenue
Orange, CA 92867
1820 North Meats Avenue
Orange, CA 92865
Planned Activities Food will be distributed on a weekly basis at two Friendly Center sites.
10 Project Name Katella Terrace - HOME
Target Area CDBG Eligible Area
Goals Supported Community Development
Needs Addressed Community Development
Funding HOME - $780,000
Description Gap funding for 6 of 74-Affordable Senior Housing Units 1578
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Target Date 6/30/2023
Estimate the number and
type of families that will
benefit from the proposed
activities
11 low and moderate income persons
Location Description 1249 East Katella Avenue, Orange, CA 92867 Planned Activities Gap loan to construct a new senior affordable housing project. 1579
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AP-50 Geographic Distribution – 91.220(f)
Description of the geographic areas of the entitlement (including areas of low-income and minority concentration) where assistance will be directed The City selected projects for funding that benefit low and moderate income neighborhoods. Activities that provide direct/individual benefit will also be offered on a citywide basis to low and moderate income households.

Geographic Distribution
Target Area Percentage of Funds
Low and Moderate Income Areas 100
Table 8 - Geographic Distribution
Rationale for the priorities for allocating investments geographically Funds are targeted to meet the National Objective of benefitting low and moderate income persons.

Discussion
The City allocates its CDBG funds to public facilities projects such as street improvements, as well as public services that benefit low and moderate income persons. 1580
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Affordable Housing
AP-55 Affordable Housing – 91.220(g)
Introduction
During the needs assessment process, the City identified affordable housing as a priority need. The City takes every opportunity to allocate CDBG and HOME funds to affordable housing projects. The City received applications for the FY2022-23 CDBG and HOME funds to provide affordable housing. The Orange County Housing Authority will continue providing Section 8 Rental Assistance/Housing Choice Vouchers to approximately 438 low income households.

One Year Goals for the Number of Households to be Supported Homeless 0
Non-Homeless 0
Special-Needs 0
Total 0
Table 9 - One Year Goals for Affordable Housing by Support Requirement One Year Goals for the Number of Households Supported Through Rental Assistance 438
The Production of New Units 0
Rehab of Existing Units 0
Acquisition of Existing Units 0
Total 438
Table 10 - One Year Goals for Affordable Housing by Support Type Discussion
See the previous portions of this section for discussion. 1581
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AP-60 Public Housing – 91.220(h)
Introduction
There is no public housing in the City of Orange.

Actions planned during the next year to address the needs to public housing Not Applicable
Actions to encourage public housing residents to become more involved in management and participate in homeownership
Not Applicable
If the PHA is designated as troubled, describe the manner in which financial assistance will be provided or other assistance
Not Applicable
Discussion
Not Applicable
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AP-65 Homeless and Other Special Needs Activities – 91.220(i) Introduction
The City identified unmet needs for homeless and special needs population during the needs assessment process. The City did not receive applications for homeless-related programs to allocate FY 2022-23 CDBG and HOME funds. However, the City plans to use other funding sources to provide financial assistance for the operation of the two homeless navigation centers in Buena Park and Placentia.

Describe the jurisdictions one-year goals and actions for reducing and ending homelessness including
Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs
While the City does not receive Emergency Solutions Grant (ESG) funds, the City supports the County of Orange Continuum of Care strategies to address homelessness. Additionally, the City is part of the North Orange County Service Planning Area and actively collaborates with the County of Orange and other local cities to address homeless related needs. Finally, the City gives priority and allocates CDBG funds to projects benefiting the homeless population whenever it receives applications for CDBG funds.

Addressing the emergency shelter and transitional housing needs of homeless persons The City continues to support projects related to homelessness by allocating CDBG funds to these projects.

Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again
The City collaborates with the Orange County Housing Authority to provide Section 8 rental assistance to homeless families. The City is also working on its Regional Housing Needs Assessment (RHNA) allocations mandated through the California Department of Housing and Community Development by supporting projects that create permanent housing for the homeless population (extremely low and very low income).

The City supports OCHA’s applications for Continuum of Care Program Permanent Supportive Housing 1583
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Program projects. Currently, 36 households are residing in Orange with certificates for this program.

The City also supports OCHA's applications for the Housing and Urban Development-Veterans Affairs Supportive Housing (HUD-VASH) Program vouchers, which combines rental assistance with case management and clinical services for homeless veterans. The VA Medical Center in Long Beach screens and selects veterans for participation in the Program, and refers qualified veterans to OCHA, which administers the housing component of the Program. Currently, 31 Orange households are participating in the HUD-VASH Program as of January 26, 2022.

Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); or, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs.

The City supports OCHA’s applications for the Rental Assistance for Non-Elderly Persons with Disabilities (NED) Program, which provides incremental Section 8 vouchers. The goal of the Program is to enable Non-Elderly, Disabled households to transition from health care institutions or skilled nursing care to independent living with appropriate services. As of January 26, 2022, one Orange household was participating in this Program.

The City also supports OCHA’s applications for the Family Unification Program (FUP), which provides Section 8 Rental Assistance to eligible families whose lack of adequate housing is a primary factor in the separation or threat of imminent separation of children from their families. The Program also provides vouchers for up to 18 months to emancipated youth (18 to 21 year old children that left foster care at age 16 or older and lack adequate housing). The Orange County Social Services Agency refers potential FUP participants to OCHA, which administers the housing component of the Program. As of January 26, 2022, 14 Orange households were FUP participants.

Discussion
The City supports nonprofit applications for Continuum of Care funds to provide services and housing to the homeless. The City also seeks to provide CDBG funds to nonprofit agencies that serve the homeless. The Orange Police Department has a Homeless Engagement Assistance and Resource Team (HEART) to reach out to the homeless and connect them with the services. Officers work with the Orange County Mental Health Department and the Centralized Assessment Team to address homeless issues and find long term solutions.
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AP-75 Barriers to affordable housing – 91.220(j)
Introduction:

The City has limited vacant land for residential development. Considering the high cost of land, it is challenging to develop affordable housing projects that are financially feasible. Furthermore, the City’s historic downtown area has its own zoning regulations and requirements that provide further barriers to development of affordable housing projects. While the City recognizes the importance of providing affordable housing to low and moderate income residents, the City allocates HOME funds and local funds to affordable housing projects to the extent possible.

Actions it planned to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment
The City grants regulatory incentives and concessions to housing developers through its discretionary process. Concessions such as increased density (density bonus ordinance) or deferred impact fees may be granted for a project when the project includes a certain number of long-term affordable housing units.

Discussion:

See the previous portions of this section for discussion. 1585
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AP-85 Other Actions – 91.220(k)
Introduction:

The City of Orange will undertake a variety of activities aimed at addressing the needs of the low and moderate income households. This includes providing affordable housing to the extremely low income population, addressing homelessness, and providing public services to low income children and families in need of food and shelter. Moreover, the City allocated CDBG funds to the Fair Housing Foundation to carryout fair housing activities, resolve any issues regarding fair housing, and hold workshops for tenants and landlords.

Actions planned to address obstacles to meeting underserved needs The City supports services and projects aimed at addressing homelessness, social services, and housing affordability. The City collaborates with the Orange County Housing Authority to provide Section 8 rental assistance to low income families. Furthermore, the City allocates CDBG funds to public services projects benefitting low and moderate income households. The allocation of CDBG and HOME funds is based on the high priority unmet needs that were identified during the preparation of the 2020-2024 Consolidated Plan.

Actions planned to foster and maintain affordable housing The City preserves existing affordable housing stock by help financing rehabilitation of affordable housing projects or negotiating with the new owners of affordable housing projects. The City continually supports the preservation and development of affordable housing to maintain and increase affordable housing supply.

Actions planned to reduce lead-based paint hazards
Given the limited CDBG funds, the City does not directly fund lead-based paint evaluation and reduction. The City supports the County of Orange efforts to reduce lead-based paint hazards in the City. If funding is available in the future, the City and the County plan to intensify their efforts to reduce the risk of lead poisoning for young, low income children that reside in El Modena, a lower income neighborhood.

Actions planned to reduce the number of poverty-level families Per Section 3 HUD Act of 1968, the City will encourage jobs generated through CDBG funded construction projects be advertised to low income residents where the construction project is located. Moreover, the City collaborates with the Orange County Housing Authority (OCHA) to provide Section 8 Rental Assistance/Housing Choice Voucher Program for low income residents. The Family SelfSufficiency (FSS), that is part of the Section 8 program, uses a step-by-step process that helps Section 8 1586
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participants identify and reach career goals, overcome impediments to success, locate needed resources and support services, and develop confidence. FSS advisors provide guidance and referrals to participants for services including child-care, job training and placement, education, transportation, and medical assistance. Finally, the City supports applications for CDBG funds for job training and placement for youth and adults.

Actions planned to develop institutional structure
The City’s Community Development Department includes the following Divisions: Administration, Code Enforcement, Planning, and Housing. This enables the City to effectively coordinate its housing activities. The Planning Division performs functions that directly affect the development and rehabilitation of housing including preparation of the State-mandated Housing Element. The Planning Division also oversees the permit process, regulates compliance with zoning and building codes, and administers the Density Bonus Program required by State law.

The Housing Division administers the CDBG and HOME programs and is responsible for updating the Consolidated Plan every five years, preparing Annual Action Plans, and the Consolidated Annual Performance and Evaluation Report (CAPER). This Division works with various City departments that carry out CDBG-funded projects.

The City also works with Orange Housing Development Corporation (OHDC) and other developers to develop or rehab affordable housing projects. OHDC has provided attractive, affordable housing for low and moderate income households. The City encourages nonprofit agencies to apply for CDBG funds for programs that primarily benefit low and moderate income residents.

Actions planned to enhance coordination between public and private housing and social service agencies
The City will continue to work with public and private agencies to coordinate the delivery of housing and related services. City staff sits on the Orange County Housing Authority Advisory Committee to provide input on housing issues that affect the community. The City also maintains close relationship with nonprofit organizations that provide social services to the community.

Discussion:

See the previous portions of this section for discussion. 1587
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Program Specific Requirements
AP-90 Program Specific Requirements – 91.220(l)(1,2,4)
Introduction:

Community Development Block Grant Program (CDBG)
Reference 24 CFR 91.220(l)(1)
Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use that is included in projects to be carried out.

1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed 0

2. The amount of proceeds from section 108 loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's strategic plan. 0

3. The amount of surplus funds from urban renewal settlements 0

4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan 0

5. The amount of income from float-funded activities 0
Total Program Income: 0
Other CDBG Requirements

1. The amount of urgent need activities 0

2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low and moderate income. Overall Benefit - A consecutive period of one, two or three years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low and moderate income. Specify the years covered that include this Annual Action Plan. 100.00% 1588
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HOME Investment Partnership Program (HOME)
Reference 24 CFR 91.220(l)(2)

1. A description of other forms of investment being used beyond those identified in Section 92.205 is as follows:

The City uses “Low and Moderate Income Housing Asset” funds to leverage its HOME funds.

However, this funding source is limited. The City will consider other funding sources such as federal and state tax credits in conjunction with the HOME funds to finance affordable housing projects.

2. A description of the guidelines that will be used for resale or recapture of HOME funds when used for homebuyer activities as required in 92.254, is as follows:

The City does not use HOME funds for homebuyer activities.

3. A description of the guidelines for resale or recapture that ensures the affordability of units acquired with HOME funds? See 24 CFR 92.254(a)(4) are as follows:

The City allocates HOME funds for rental affordable housing projects. Therefore, the City is not required to have guidelines for the resale or recapture of homeownership units acquired with HOME funds.

4. Plans for using HOME funds to refinance existing debt secured by multifamily housing that is rehabilitated with HOME funds along with a description of the refinancing guidelines required that will be used under 24 CFR 92.206(b), are as follows:

The City does not use HOME funds to refinance existing debt on multifamily housing projects.

None
1589
2022-2023 CDBG Program Year
Funding Recommendations
Public Services
Applicant 2021-2022
Allocation
2022-2023
Requested
CDBG Committee
Recommendation
(estimated)*
CDBG Committee
Recommendation
(adjusted)
Assistance League
Operation School
Bell
$13,770 $15,000 $15,000 $13,454
Friendly Center
Community Food
Orange
$15,000 $20,000 $16,304 $14,655
Community Services
After School
Community Program
$43,170 $43,170 $43,170 $42,178
Orange Police
Department Bike
Patrol Program
$100,000 $100,000 $100,000 $97,703
Total $174,474 $167,990
Public Services
Applicant 2021-2022
Allocation
2022-2023
Requested
CDBG Committee
Recommendation
Fair Housing Foundation** $24,522 $24,522 $24,522
Public Facilities
Applicant 2021-2022
Allocation
2022-2023
Requested
CDBG Committee
Recommendation
(estimated)*
CDBG Committee
Recommendation
(adjusted)
Public Works
ADA Wheelchair
Access Ramps
$68,430 $68,430 $68,430 $68,430
Public Works
Street Rehabilitation
$611,830 $877,350 $657,626 $629,530
Library
Taft Library
Restroom ADA
$65,000 $30,000 $30,000 $30,000
Total $756,056 $727,960
*Estimated amounts based on entitlements received in Fiscal Year 2021-2022 **Paid from CDBG Administrative budget – provides service to City 1590
HOME
Activity Cap Amount
Administration 10% $48,681
CHDO 15% $73,021
Developer Projects None $365,110
Total $486,812
1591

Orange City CouncilJune 14, 2022

Orange City Council
June 14, 2022