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Home My WebLink AboutSS2 - Assessment District Process ReviewWORM I i I , EL I • Underground Utility Assessment Districts City Council Study Session Newport Beach City Council Study Session - Aug 14, 2007 a G •efICUM�� J The Basics ❖Residents drive the process • Propose boundaries • collect petitions. •: *The City serves as the coordinator and "bank" ****The uti I ity companies' roll • Ref ine the boundaries • Control the design and • Includin 9 the schedule construction process Newport Beach City Council Study Session - Aug 14, 2007 M 2 Usual Sequence of Events **.*Property owner petition (64 % +) ❖City Council initiates AD proceeding ❖Utility companies prepare plans ❖Construction bids solicited ❖Engineer's Report prepared ❖Property owner balloting ❖Public Hearing ❖Sell bonds / start construction Newport Beach City Council Study Session - Aug 14, 2007 ne' can ZO- 3 Approx. Timeline of Events Property Owner Petition Gathering 2+ years Council Meeting - Design Funds Advanced Utility Companies Design & Bid Project 2+ years Prepare Engineer's Report Property Owner Information Meeting Council Meeting - Reso of Intention 45 -Day Noticing / Balloting Period Public Hearing / Tabulation / Reso of Formation 30 -Day Cash- Collection Sell Bonds / Construction Notice to Proceed Total time ~5 years 4�gwrog 0 o� i ° ; y U S 'f'�[IFVM1�N�P Newport Beach City Council Study Session - Aug 14, 2007 1 E 4 NgwnpR Proposition 218 (Nov. 1996) ° °p a 4 <i RIMp ❖Special Benefit Determination • Special benefits defined • Assessments proportional to benefits rec'd • General benefits defined and quantified ❖Public Property • Must be included if they receive benef it ❖Property Owner Balloting Process • 50% approval of ballots returned • Ballots weighted by assessment amount **.*Burden' of Proof • Now on public agency forming the AD Newport Bench City Council Study Session - Aug 14, 2007 E 5 About the Engineer's Report ****Key information document • Most important exhibit in a dispute ❖Must comply w/ 1913 ' Act Prop 218 ❖Must be prepared by a Registered Professional Engineer ❖Important Content: • Special benefit should be clearly def ined • General benef it should be discussed • Benef it formula should be laid out in detail • Public parcels should be discussed • Special cases should be discussed Newport Beach City Council Study Session - Aug 14, 2007 E 6 Benefit Methodology ❖Must define benefits • Improved streetscape aesthetics • Improved safety • Improved service • Other benef its is reliability .P.ntif ied by Asmt Eng'r ❖Must be fair to all properties • All benef it situations must be addressed • Looking out 20 - 30 years • Example - parcel splits should be equitable • 2 condos vs. 1 home • 1 home splits to 2 condos after formation - Resulting assessment the same after split? Newport Beach City Council Study Session - Aug 14, 2007 , 7 Balloting Procedure ****Property owners vote "yes" or "no" • Vote is weighted by Assessment Amount ❖Public Hearing - Ballots due • Before the end of the public hearing ❖Only ballots submitted are counted ❖50% approval required • Weighted by proposed assessment • If more than 50% of assessments vote "no" the district CANNOT be formed • Otherwise, Council makes f inal decision Newport Beach City Council Study Session - Aug 14, 2007 M 8 Design & Consultant Costs to Date 1(0 Approx. AD Utility Asmt Total $22,970 Petition No. of Project Design Eng'r Current Bidding AD Date Parcels Status Costs Costs Costs Jan,-04 94 May -04 37 Failed $18,060 $15,707 $33,767 99 Mar -04 265 Failed $45,000 $34,915 $79,915 92 Jan -05 49 Bidding $90,000 $22,970 $112,970 101 Sep -04 278 Bidding $91,600 $22,745 $114,345 87 Jan,-04 1,200 In Design $523,466 $3,140 $526,606 100 Jun -05 270 In Design $158,075 $27,145 $185,220 103 Apr -05 388 In Design $237,000 $30,940 $267,940 $1,320,763 Newport Beach City Council Study Session - Aug 14, 2007 9 Schedule Issues Summary Issue ❖Petition process by residents • 2+ years ❖ Des,ign process by utilities, • 2+ .years ****Formation process by City, 7 months • Engineers Report preparation + Public outreach • Noticing • Public hearing • Collection period ****Construction by utilities, 1-2 years Newport Beach City Council Study Session - Aug 14, 2007 4�6WPppA o� a, � a I Schedule Issues Petition Collection Process ❖Issues • No time limit on petition collection • Cost estimates increase over time • Formation proceeding 2 -4 years later • With time, owner interest may change, properties change hands • AD boundaries may change with f inal design ❖Alternatives • Increase % of petition required • Add "super contingency" to estimates • Require deposit to pay some up- front costs • 4 of 8 So Cal cities polled do this 00�01, Newport Beach City Council Study Session - Aug 14, 2007 M 11 Schedule Issues Design by Utilities: ❖Progressive Design, SCE followed by AT &T, &Cable (TWC or Cox) ❖Limited staffing, SCE contracts out, AT &T does not . ❖Conflicts with existing underground utilities. Newport Beach City Council Study Session - Aug 14, 2007 4 O U �gWPU$ 0 C `� �t1YUa�� 12 Schedule Issues : Formation Process c °4rowN ❖4+ Years After 1st Signature ❖After Final Design is Complete Property Owner Petition Gathering 2+ years Council Meeting - Reso of Initiation Utility Companies Design & Bid Project 2+ years Property Owner Information Meeting Council Meeting -Reso of Intention Newport Beach City Council Study Session - Aug 14, 2007 E 13 Schedule Issues Construction Process ❖Controlled by Utilities with regulatory oversight by City ****Summer work suspensions ❖Cabling by Utilities can be affected by regional emergencies. **.*Homeowners must provide connection to their homes before Utilities can remove overhead facilities. 4aBwppA� r n V 0 C'ICIKV'A�� Newport Beach City Council Study Session - Aug 14, 2007 M 14 Construction Cost Issues **.*Al) Process • Bidders must factor in the time required- between bids and actual construction start • N7 months (Ion er if work conflicts with the summer season • A conservative contingency must be used • Any increases in cost above confirmed assessments would require a new vote. ****SCE takes the lead for all utilities • Joint trench construction ❖Inflation /risin material costs • 15% ro 200 200 f m to 7 (ENR Const Cost Index) D �. O f C'�t6UM�,p Newport Beach City Council Study Session - Aug 14, 2007 0 15 Construction Cost Issues ❖ Hi her standards in maintaining street ana alley integrity ❖ ITCC Tax requirement • (25 -35/0) ❖Prevnilin Wage requirement * (5-30%? ❖Water Quality regulations ❖Homeowner connection costs • not included in the assessments Newport Beach City Council Study Session - Aug 14, 2007 M 16 Construction Cost Increases °4ewr 'l%YYtTa ❖AD 69 • 2004 formation proceeding • $8 million - construction & • 660 parce'Is • Roughly $12,100 /parcel ❖AD 99 design • 2007 formation proceeding • $5.6 million - construction &design • 265 parcels *,Roughly $21,100 /parcel ❖ ~75% increase in 3 years Newport Beach City Council Study Session - Aug 14, 2007 M 17 Construction Cost Issues ❖SCE Joint Trench Construction Lead • "Fixed guarantee price" • SCE takes risks of costs being higher - No reduction if costs come in lower - Must negotiate with other utilities *'Large contingencies, even with competitive bids • Cost estimate detail is not shared with City • Alternative - City could take lead • Additional In -house or consultant staff • May have some additional costs - Plans & specs put into City format for bidding - Prevailing wages required for City projects • More control over construction process • 4 of 8 So Cal cities polled do this Newport Beach City Council Study Session - Aug 14, 2007 4N6WP08 � P U C'�LIYVNN�O 18 Construction Cost Issues ****Street and Alley Integrity • Currently, full paving of roads / alleys • Full restoration after trenching is complete • Preserves the pavement integrity and design life • Greater aesthetic appeal • Adds to overall AD costs • Combine scheduled City pavement rehabilitation and utility replacement projects to reduce costs • Alternatives: • Pro -rate or subsidize pavement replacements • Defer full restoration and add to future CIP - Time -lag between undergrounding and restoration Newport Beach City Council Study Session - Aug 14, 2007 1 19 Income Tax Contribution Component **.*Current Process 6 • Currently included in AD costs • Adds 25% to 35% in contingency costs • IRS not currently collecting, but could • City at no risk if IRS starts collecting • Dif f icult to explain to property owners • Adds complexity to AD administration ❖Alternative - Do Not Include • Less cost and less confusion to owners • City at risk for costs if IRS collects • IRS has not collected in any previous AD's • 4 of 8 So Cal cities polled do not include in AD Newport Beach City Council Study Session - Aug 14, 2007 0 20 W Construction Cost Issues 06. Prevai I ing Wage ❖ Recent . change in SCE policy: • Not required but Contractor is responsible. ❖City's past position: • Final improvement is not a public • Paid for by the homeowners with private funds • City acts as "bank" but no public utilized • Therefore, AUs should not be be prevailing wage projects facility their money is required to Newport Beach City Council Study Session - Aug 14, 2007 M 21 Questions? ❖City Staff ❖ Assessment Engineers • Harris & Associates • Willdan / MuniFinancial • Hall & Foreman •: * Bond Counsel ❖Financial Advisor ****Utility Companies • SCE • AT &T Newport Bench City Council Study Session - Aug 14, 2007 M 22