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HomeMy WebLinkAbout14 - Assessment District 75 Balboa Business DistrictCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 14 December 9, 2003 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Public Works Department Patrick Arciniega 949 - 644 -3311 parcineiga @city.newport- beach.ca.us SUBJECT: PROPOSED ASSESSMENT DISTRICT NO. 75 - BALBOA BUSINESS DISTRICT (AREA BOUNDED BY OCEANFRONT BOULEVARD, ADAMS STREET, EDGEWATER PLACE, AND 'A' STREET) FOR UNDERGROUNDING UTILITIES RECOMMENDATIONS: Adopt the following Resolutions for Proposed Assessment District No. 75: a. Resolution No. 2003- making findings on a petition for, adopting a map showing the proposed boundaries of, and making appointments for Assessment District No. 75. b. Resolution No. 2003- declaring intention to order the construction of certain improvements in proposed Assessment District No. 75; declaring the improvements to be of special benefit; describing the district to be assessed to pay the costs and expenses thereof; providing for the issuance of bonds; and designating the area an underground utilities district. c. Resolution No. 2003- giving preliminary approval to the Report of the assessment engineer, setting the time and place for a public hearing as January 27, 2004; and ordering the intention of assessment ballot procedure for Assessment Distict No. 75. 2. Approve the Special Counsel Agreement with Mr. Robert Hessell. HISTORY: On January 23, 2001 City Council authorized $54,800.00 for the design of underground utility plans and a Professional Services Agreement with GFB Friedrich & Associates for assessment engineering services for proposed Assessment District No. 75. This action was recommended by staff prior to formally receiving petitions from property owners representing 60 percent of the land area, normally requested by City Council. At that time, authorization was recommended prior to receiving petitions so that the Utility SUBJECT: Proposed Assessment District No. 75 (Balboa Business District) for Undergrounding Utilities December 9, 2003 Page 2 Underground District could be processed concurrently with the Balboa Village redevelopment project. Petitions have not been submitted, nor does staff feel they are likely to be submitted, their absence does not legally affect the formation of this District. DISCUSSION: Proposed Assessment District No. 75 is being formed for the conversion of existing overhead utilities to underground locations. The property owners within the boundary of the proposed Assessment District will bear the cost of the improvements and their associated proceedings. The procedure being used to create the Assessment District is outlined in the Municipal Improvement Act of 1913. Bonds issued under the Improvement Bond Act of 1915, with a term of 15 years, will be issued to finance assessments that are not paid in cash within 30 days after confirmation of the assessment. The total assessment for Proposed Assessment District No. 75 is estimated as follows: ITEM ESTIMATED COST Estimated Cost of Construction $954,164.00 Estimated Incidental Costs and Expenses $108,625.00 Estimated Financing (Bond) Costs $176,601.49 Federal Income Tax Component of Contribution (ITCC) $68,768.63 Estimated Total Cost: $1,308,159.12 The estimate includes the Federal Income Tax Component of Contribution (ITCC) Tax, which is a betterment tax. However, bonds will not be sold for the ITCC Tax since underground utility districts are undertaken at the request of the community for purposes of community aesthetics and public safety, and not for the benefit of particular customers of the utility in their capacity as customer of the utility. This underground district is not required as a condition for obtaining any electrical service. In the event the Internal Revenue Service (IRS), State, City and/or local government taxing authority determines that this project is taxable, Southern California Edison (SCE) will require the City to reimburse the full amount of the determined tax liability, plus interest, penalties, fees, and related costs. In that case the City may need to sell a second issue of the bonds, if necessary, to pay SCE within 60 days after they notify the City of Newport Beach. The estimated ITCC tax amount is $68,768.63. The City Attorney's Office has reviewed SCE's request to have the preceding statement included in the Assessment District Report. It was determined that the City would not incur any tax liability. In addition to the assessment, each property owner will be responsible for converting their service connection to receive underground service. The Bond Reserve will be 5 percent for the subject district. SUBJECT: Proposed Assessment District No. 75 (Balboa Business District) for Undergrounding Utilities December 9, 2003 Page 3 Property owners who pay assessments in cash will receive a discount, which represents the cost of issuing and servicing bonds. The following is a tentative schedule for proposed Assessment District No. 75: • Resolution of Intention December 9, 2003 • Property Owner Information Meeting January 15, 2004 • Public Hearing January 27, 2004 • Public Utilities Commence Work March 2004 • City Notifies Property Owners to Install Service June 2004 Connections • Property Owners Complete Conversions October 2004 • Public Utilities Begin to Remove Overhead February 2005 Structures • Public Utilities Finish Removing Poles and March 2005 Overhead Structures The Assessment Engineer chose a 'modified front footage' method of apportioning assessments within this District based on the variety of land uses and the similarity of lot width street frontage. The parcels and lots are assessed relative to a "standard" residence (27 feet of frontage) that receives a full measure of benefit within the Assessment District. Due to the fact that there are areas within the District that have varying degrees of utilities that are overhead and underground the Assessment Basis is divided into three parts to assess properties only for the facilities necessary to underground. This three part formula takes into consideration the land use, number of facilites to underground and lot frontage. In no case has an assessment been imposed on any lot that exceeds the reasonable cost of the proportional special benefit conferred on that lot. The estimated assessment without the ITCC tax component ranges from $965.27 to $53,626.02, with the average assessment being $13,211.38. The estimated assessment with the ITCC tax componenet ranges from $1,027.73 to $57,095.93, with the average assessment being $14,066.23. Plans and specifications were prepared by SCE, SBC and Adelphia Communications. Attached is a sketch showing the boundary of the proposed Assessment District and the utilities to be undergrounded. An Agreement is necessary in order to retain Special Counsel to provide legal services in connection with processing of the assessment proceedings and bond issuance. The Special Counsel Agreement will retain Robert Hessell, Bond Counsel, to provide these legal services. The fee is approximately, $20,000 in accordance with the terms of the Agreement. This fee will be paid through the Assessment District. SUBJECT: Proposed Assessment District No. 75 (Balboa Business District) for Undergrounding Utilities December 9, 2003 Page 4 Environmental Review: A Notice of Exemption was completed October 17, 2003 and filed with the County Recorder on October 17, 2003. A Certificate of Environmental Proceedings was completed November 24, 2003. Prepared by: l 1 Patrick L. Arciniega Associate Engineer Attachments: Submitted by: Badum s Director 1. Exhibit Showing District Boundaries 2. Resolution Making Findings On Petition Adopting Proposed Boundary Map And Making Appointments 3. Resolution Of Intention 4. Resolution Passing On Report Of Assessment Engineer, Setting Public Hearing, and Ordering Initiation Of Assessment Ballot Procedures 5. Engineer's Report 6. Special Counsel Agreement �fH i�Re Sy 0 T' e o � ttr� tn r- d H U cn Q DW�1I cn cn cn cn cn W C. O F. to U f �j J N O � ti A Z w LD w J Q P7 F 0 z Q � z °x w � Q Q W O U O Q W � 4 w 0.1 0 4 ti �e CD eau q W q = W W O K = Z W N q ❑ ❑ W � O W W J f y J J g W Q a a w N j O 0 W y � 3 � D Q I 1 I 10 O I O I 1 133 a- S O J m Q O LM J m V) w 61 NIVVY Ell WlVd I 1 1 I 1 I 1 1 I 1 I 1 I 1 1 I 1 I 1 I I RESOLUTION NO. 2003 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ADOPTING A MAP SHOWING THE PROPOSED BOUNDARIES OF AND MAKING APPOINTMENTS FOR PROPOSED ASSESSMENT DISTRICT NO. 75 (BALBOA BUSINESS DISTRICT) WHEREAS, this legislative body finds it in the public interest to begin proceedings for the formation of a special assessment district designated as Assessment District No. 75 (Balboa Business District) (hereinafter referred to as the "Assessment District') to provide for the conversion of certain overhead electrical and communication facilities to underground locations within the Assessment District, together with appurtenances and appurtenant work in connection therewith, pursuant to the terms and provisions of the ordinances of the City of Newport Beach and the "Municipal Improvement Act of 1913 ", being Division 12 of the Streets and Highways Code of the State of California (the "Act "); and WHEREAS, this legislative body has been presented and has received a map (the "Map ") showing and describing the boundary of the area proposed to be assessed in the Assessment District. NOW, THEREFORE, Be It Determined, Resolved, and Ordered as follows: SECTION 1. The above recitals are all true and correct. SECTION 2. The Map is hereby approved and adopted. The original map of the boundaries of the proposed Assessment District and one copy thereof is to be filed in the Office of the City Clerk. SECTION 3. A certificate shall be endorsed on the original Map and on at least one copy of the Map evidencing the date and adoption of this Resolution, and within fifteen (15) days after the adoption of a resolution fixing the time and place of hearing on the formation or extent of the Assessment District, a copy of the Map shall be filed with the correct and proper endorsements thereon with the County Recorder, all in the manner and form provided in Section 3111 of the Streets and Highways Code of the State of California. SECTION 4. Stephen G. Badum P.E., Public Works Director of the City of Newport Beach, is hereby appointed to perform all of the duties and functions of the Superintendent of Streets for the Assessment District as said duties are specified and designated in the Act. The place for recordation of the assessment roll and diagram shall be in the office of the appointed Superintendent of Streets, and said assessment roll and diagram, upon recordation, shall be kept as a permanent record. SECTION 5. The Daily Pilot is hereby designated as the newspaper for all publications as required by law and as necessary for the Assessment District proceedings. SECTION 6. The firm of GFB- Friedrich & Assoc., Inc., is hereby appointed the Assessment Engineer for the Assessment District proceedings. SECTION 7. Robert E. Hessell, attorney at law, is hereby appointed to act as Bond Counsel for the Assessment District and the contract for services submitted is hereby approved. SECTION 8. This legislative body hereby authorizes the establishment of a special improvement fund for the Assessment District and into the improvement fund shall be placed all proceeds from the sale of Assessment District bonds and cash collections. In orderto expedite the improvementsto be made underthe Assessment District proceedings and as authorized by law, funds from any available source may be transferred into the special improvement fund. Any funds transferred into the special improvement fund (other than proceeds from the sale of Assessment District bonds and cash collections) shall be deemed a loan to the fund and shall be repaid out of the proceeds of the sale of Assessment District bonds as authorized by Section 10210 of the Streets and Highways Code of the State of California. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Newport Beach, held on the 9th day of December, 2003, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk 2 Steven Bromberg, Mayor RESOLUTION NO. 2003- RESOLUTION DECLARING INTENTION TO ORDER THE CONSTRUCTION OF CERTAIN IMPROVEMENTS IN PROPOSED ASSESSMENT DISTRICT NO. 75 (BALBOA BUSINESS DISTRICT), DECLARING THE IMPROVEMENTS TO BE OF SPECIAL BENEFIT, DESCRIBING THE DISTRICT TO BE ASSESSED TO PAY THE COSTS AND EXPENSES THEREOF, PROVIDING FOR THE ISSUANCE OF BONDS, AND TO DESIGNATE THE AREA AN UNDERGROND UTITLITES DISTRICT WHEREAS, this legislative body has instituted proceedings for the formation of a special assessment district designated as Assessment District No. 75 (Balboa Business District) (hereinafter referred to as the "Assessment District') to provide forthe conversion of certain overhead electrical and communication facilities to underground locations, togetherwith appurtenances and appurtenantwork in connection therewith, pursuantto the terms and provisions of the "Municipal Improvement Act of 1913 ", being Division 12 of the Streets and Highways Code of the State of California (the "Act'); and WHEREAS, this legislative body further desires to ascertain whether area comprising the Assessment District should be designated an underground utilities district pursuant to Chapter 15.32 of the Code of Ordinances of the City of Newport Beach (the "City ");and WHEREAS, the conversion of the overhead electrical and communication facilities to underground locations, togetherwith appurtenances and appurtenantwork in connection therewith, is to be done to further public safety and welfare and to improve aesthetics within the area of the Assessment District; and WHEREAS, this legislative body has been presented and has received a map (the "Map ") showing and describing the boundary of the area proposed to be assessed in the Assessment District; and WHEREAS, the assessment proceedings forthe Assessment Districtwere initiated by owners of the real property. NOW THEREFORE, Be it Determined, Resolved, and Ordered by the City Council of the City as follows: DECLARATION OF INTENTION SECTION 1. The public interest and convenience require, and it is the intention of this legislative body to order, pursuant to the Act, the construction of the public improvements hereinafter described in and forthe Assessment District, to assess the cost thereof against the real property specially benefited thereby, and to designate the area an underground utilities district. DESCRIPTION OF IMPROVEMENTS SECTION 2. The public improvements to be constructed and the manner of the construction are generally described as follows: A. The improvements generally consist of the conversion of existing overhead electrical and communication facilities to underground locations within the area generally described as Balboa Business District, which area is generally shown on the Map, together with appurtenances and appurtenant work thereto, all to serve and specially benefit the properties within Assessment District No. 75 (Balboa Business District). B. All rights -of -way and easements required for the improvements shall be shown upon the plans to be made a part of the Assessment Engineers Report (described below) and to be filed with these proceedings. C. All of the improvements to be constructed are to be installed at the places and in the particular locations, and to the sizes, dimensions and materials, and to the lines, grades and elevations, as shown and delineated upon the plans, profiles and specifications all to be made a part of the Assessment Engineers Report. D. The description of the improvements contained in this Resolution is general in nature, and the plans and profiles of the work as contained in the Assessment Engineer's Report shall be controlling as to the correct and detailed description thereof. DESCRIPTION OF ASSESSMENT DISTRICT SECTION 2. The improvements are of special benefit to the real property within the Assessment District, and this legislative body hereby makes the expenses of the construction of such improvements chargeable upon the Assessment District, which is described as follows: All real property and other territory in the proposed Assessment District included within the exterior boundary lines shown on the map exhibiting the property specially benefited and proposed to be assessed to pay the costs and expenses of the construction of the work and improvements described above, which map is entitled "Proposed Boundaries Assessment District No. 75 (Balboa Business District)" and was previously approved by this legislative body and is on file with the transcript of these proceedings. For all particulars as to the boundaries of the Assessment District, reference is hereby made to the boundary map. `a REPORT OF THE ASSESSMENT ENGINEER SECTION 3. The proposed improvements are hereby referred to GFB- Friedrich & Assoc., Inc. (the "Assessment Engineer'), who is hereby directed to make and file a report as required by the Improvement Act, Article MID of the Constitution of the State of California, and the Omnibus Proposition 218 Implementation Act (Government Code Section 53750), such report (the "Assessment Engineer's Report") shall be in writing and contain the following: A. Plans and specifications of the improvements proposed to be constructed; B. An estimate of the cost of the construction of the improvements proposed to be constructed, including the cost of the incidental expenses, in connection therewith; C. A diagram showing the Assessment District, which shall also show the boundaries and dimensions of the respective real property and other territory within such Assessment District, as the same existed at the time of the passage of this Resolution of Intention, each of which subdivisions shall be given a separate number upon such diagram; D. The proposed assessment of the assessable costs and expenses of the construction of the proposed improvements upon the real property in the Assessment District in proportion to the estimated special benefits to be received by the real property, respectively, from such improvements. Such assessment shall refer to such real property upon such diagram by the respective numbers thereof; E. The description of the improvements proposed to be constructed under these proceedings. When any portion or percentage of the assessable costs and expenses of the construction of the improvements is to be paid from sources other than assessments, the amount of such portion or percentage shall first be deducted from the total estimated costs and expenses of such construction, and such assessment shall include only the remainder of the estimated costs and expenses. The assessment shall refer to the subdivisions by their respective numbers as assigned pursuant to subparagraph D above. BONDS SECTION 4. Notice is hereby given that bonds to represent the unpaid assessments, and bear interest at the rate of not to exceed the current legal maximum rate of 12% per annum, will be issued hereunder in the manner provided in the Improvement Bond Act of 1915 (Streets and Highways Code Section 8500, et seq.), which bonds shall be issued for a term not to exceed the legal maximum term as authorized by law, namely, thirty -nine (39) years from the second day of September next succeeding twelve (12) months from their date. The provisions of Part 11.1 of the Act, providing an alternative procedure for the advance payment of assessments and the calling of bonds shall apply. 3 The principal amount of the bonds maturing each year shall be other than an amount equal to an even annual proportion of the aggregate principal of the bonds, and the amount of principal maturing in each year, plus the amount of interest payable in that year, will be generally an aggregate amount that is equal each year, except for the first year's adjustment. Pursuant to the provisions of the Improvement Act and specifically Streets and Highways Code Section 10603, the Treasurer is hereby designated as the officerto collect and receive the assessments during the cash collection period. CONSTRUCTION SECTION 5. Except as may otherwise be provided for in the issuance of the bonds described above, all of the improvements shall be constructed pursuant to the provisions of the Act. SURPLUS FUNDS SECTION 6. If any excess shall be realized from the assessment, it shall be used, in such amounts as the legislative body may determine, in accordance with the provisions of law for one or more of the following purposes: A. Transfer to the general fund; provided that the amount of any such transfer shall not exceed the lesser of One Thousand Dollars ($1,000,00) or five percent (5 %) of the total from the Improvement Fund; B. As a credit upon the assessment and any supplemental assessment; C. For the maintenance of the improvements; or D. To call bonds. IMPROVEMENT FUND SECTION 7. The legislative body hereby establishes a special improvement fund identified and designated by the name of this Assessment District, and into such Fund monies may be transferred at any time to expedite the construction of the authorized improvements, and any such advancement of funds is a loan and shall be repaid out of the proceeds of the sale of bonds as authorized by law. 0 PROCEEDINGS INQUIRIES SECTION 8. For any and all information relating to these proceedings, including information relating to protest procedure, your attention is directed to the person designated below: Patrick Arciniega, Project Engineer City of Newport Beach P.O. Box 1768 Newport Beach, California 92658 (949) 644 -3347 PUBLIC PROPERTY SECTION 9. All public property shall be subject to assessment in these proceedings. RIGHTS -OF -WAY SECTION 10. The public interest, convenience and necessity requires that certain land, rights -of -way or easements be obtained in order to allow the works of improvement as proposed for this Assessment District to be accomplished. The Assessment Engineers Report, upon adoption, shall provide certification that the land, rights -of -way or easements have been acquired or will be acquired as part of the construction of the improvements. NO CITY LIABILITY SECTION 11. This legislative body hereby declares the City will not obligate itself to advance available funds from the City treasury to cure any deficiency that may occur in the bond redemption fund for the Assessment District. ANNUAL ADMINISTRATIVE ASSESSMENT SECTION 12. It is hereby declared that this legislative body proposes to levy an annual assessment pursuant to Section 10204 of the Streets and Highways Code of the State of California, such annual assessment to pay costs incurred by the City and not otherwise reimbursed which result from the administration and collection of assessments and from the administration and registration of assessment bonds and the related bond funds. UTILITY IMPROVEMENTS SECTION 13. Pursuant to Section 10110 of the Streets and Highways Code of the State of California, it is also the intention of this legislative body with respect to the improvements to be owned managed or controlled by any other public agency, regulated public utility, or mutual water company, priorto ordering the construction of improvements, to enter into an agreement with each public utility company or public agency, or any 5 combination thereof with respect to the improvements to be owned, controlled or managed by the utility or agency. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Newport Beach, held on the 9th day of December, 2003, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk 2 Steven Bromberg, Mayor RESOLUTION NO. 2003- RESOLUTION GIVING PRELIMINARY APPROVAL TO THE REPORT OF THE ASSESSMENT ENGINEER FOR ASSESSMENT DISTRICT NO. 75 (BALBOA BUSINESS DISTRICT) AND AN UNDERGROUND UTILITIES DISTRICT, SETTING A TIME AND PLACE FOR A PUBLIC HEARING THEREON, AND ORDERING THE INITIATION OF ASSESSMENT BALLOT PROCEDURES WHEREAS, this legislative body has instituted proceedings for the formation of a special assessment district designated as Assessment District No. 75 (Balboa Business District) (hereinafter referred to as the "Assessment District ") to provide for the conversion of certain overhead electrical and communication facilities to underground locations, together with appurtenances and appurtenant work in connection therewith, pursuant to the terms and provisions of the "Municipal Improvement Act of 1913 ", being Division 12 of the Streets and Highways Code of the State of California (the "Act "); and WHEREAS, the Assessment District area should be designated an underground utilities district pursuant to Chapter 15.32 of the Code of Ordinances of the City of Newport Beach (the "Ordinance "); and WHEREAS, a resolution of intention (the "Resolution of Intention ") forthe formation of the Assessment District and the utility conversion was previously adopted by this legislative body; and WHEREAS, there has been prepared and filed with this legislative body for its consideration a Report of the Assessment Engineer (the "Report") as provided for in and required by the Resolution of Intention, Sections 10203 and 10204 of the Act, Article XIIID of the Constitution of the State of California ( "Article XIIID "), and the Proposition 218 Omnibus Implementation Act (commencing with Section 53750 of the Government Code) (the "Implementation Act ") (the Act, Article XIIID, and the Implementation Act are referred to herein collectively as the "Assessment Law ") and the Ordinance. NOW, THEREFORE, It is Hereby Determined, Resolved, and Ordered as follows: SECTION 1. The above recitals are all true and correct. SECTION 2. The Report is adopted, passed upon, and preliminarily approved, as follows: A. The plans and specifications for the proposed improvements to be constructed, as contained in the Report, are hereby preliminarily approved and adopted; B. The Assessment Engineer's estimate of the itemized and total costs and expenses of the construction of the improvements and of the incidental expenses in connection therewith contained in the Report, and each of them are hereby preliminarily approved and adopted; C. The diagram showing the Assessment District referred to and described in the Resolution of Intention, and also the boundaries and dimensions of the respective real property interests within the Assessment District, as the same existed at the time of the passage of said Resolution of Intention, each of which have been given a separate number upon the diagram, as contained in the Report, is hereby preliminarily approved and adopted; D. The proposed assessment upon the several property interests in the Assessment District, in proportion to the estimated special benefits to be received by such property interests, respectively, from the improvements to be constructed, and of the incidental expenses thereof, as contained in the Report, are hereby preliminarily approved and adopted; E. The descriptions of the improvements to be constructed contained in the Report are hereby preliminarily approved. SECTION 3. The Report shall stand as the Assessment Engineer's Report for the purpose of all subsequent proceedings had pursuant to the Resolution of Intention. SECTION 4. NOTICE IS HEREBY given that the City Council of the City Of Newport Beach will hold a public hearing on the assessment district, the proposed assessments, and the designation of the area as an underground utilities district at its regular meeting place, being the Council Chambers at 3300 Newport Boulevard, Newport Beach, California, on January 27, 2004 at 7:00 p.m. Pursuant to the provisions of the Assessment Law, each record owner of property that is subject to the assessment has the right to submit an assessment ballot in favor of or in opposition to the proposed assessment. Assessment ballots will be mailed to the record owner of each property interest located within the assessment district and subject to a proposed assessment. Each such owner may complete such ballot and thereby indicate their support for or opposition to the proposed assessment. All such ballots must be received by the City Clerk at the following address at or before the time set for the close of the public hearing: City Clerk City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92658 A postmark prior to such date and time will not be sufficient. At the conclusion of the public hearing, the City Council shall cause the assessment ballots timely received to be opened and tabulated. If a majority protest exists, the City Council shall not impose an assessment within the assessment district. A majority protest 2 exists if, upon the conclusion of the public hearing, assessment ballots submitted in opposition to the assessments within the assessment district exceed the ballots submitted in favor of such assessments. In tabulating the ballots, the ballots shall be weighted according to the proportional financial obligation of the affected property. SECTION 5. The City Clerk is hereby directed to mail, in the form and manner prescribed in the Assessment Law and at least 45 days prior to the date of the public hearing, notice of the public hearing and the adoption of the Resolution of Intention and of the filing of the Report, together with the assessment ballot materials, to the record owners of all real property proposed to be assessed. SECTION 6. The City Clerk is hereby further directed to file a copy of the proposed boundary map in the Office of the County Recorder within fifteen (15) days of the adoption of this resolution; said boundary map to be filed in the manner and form as set forth in Division 4.5 of the Streets and Highways Code of the State of California. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Newport Beach, held on the 9th day of December, 2003, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk 3 Steven Bromberg, Mayor ENGINEER'S REPORT for UTILITY UNDERGROUNDING ASSESSMENT DISTRICT NO. 75 (Balboa Business District) for the CITY OF NEWPORT BEACH Preliminary: December 9, 2003 Confirmed: - GFB- FRIEDRICH - & ASSOC., INC. CONSULTING CIVIL ENGINEERS ENGINEER'S REPORT for UTILITY UNDERGROUNDING ASSESSMENT DISTRICT NO. 75 (Balboa Business District) for the CITY OF NEWPORT BEACH Preliminary: December 9, 2003 Confirmed: ENGINEER'S "REPORT" CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) TABLE OF CONTENTS Citations and Contents of Report 1 PART I - PLANS AND SPECIFICATIONS 4 PART II - ESTIMATE OF COSTS 5 PART III - ASSESSMENT ROLL 7 EXHIBIT IA - 1931 ACT TABLE OF VALUES IA -1 (Follows Page 9) EXHIBIT 1B - DEBT LIMIT VALUATION 10 EXHIBIT "A" - METHOD AND FORMULA OF ASSESSMENT SPREAD 11 PART IV - ANNUAL ADMINISTRATIVE ASSESSMENT 17 PART V - BOUNDARY MAP AND ASSESSMENT DIAGRAN 18 PART VI(A) - DESCRIPTION OF WORKS OF IMPROVEMENT, TIME ESTIMATE 19 PART VI(B) - RIGHT -OF -WAY CERTIFICATE 21 PART VI(C) - CERTIFICATE OF COMPLETION OF ENVIRONMENTAL PROCEEDINGS 22 EXHIBIT II - ASSESSMENT ROLL (Follows Page 22) II -1 AGENCY: CITY OF NEWPORT BEACH PROJECT: UTILITY UNDERGROUNDING ASSESSMENT DISTRICT NO. 75 (Balboa Business District) TO: CITY COUNCIL ENGINEER'S "REPORT" PURSUANT TO THE PROVISIONS OF SECTION 10204 OF THE STREETS AND HIGHWAYS CODE Pursuant to the provisions of the "Municipal Improvement Act of 1913 ", being Division 12 of the Streets and Highways Code of the State of California, the "Special Assessment Investigation, Limitation and Majority Protest Act of 1931 ", being Division 4 of said Streets and Highways Code, and Section 4(b) of Article XHID of the Constitution of the State of California, and in accordance with the Resolution of Intention, being Resolution No. , adopted by the CITY COUNCIL of the CITY OF NEWPORT BEACH, STATE OF CALIFORNIA, in connection with the proceedings for ASSESSMENT DISTRICT NO. 75, (Balboa Business District) (hereinafter referred to as the "Assessment District "), I, JOHN A. FRIEDRICH, authorized representative of GFB- FRIEDRICH & ASSOC., INC., the duly appointed ASSESSMENT ENGINEER, submit herewith the "Report" for the Assessment District, consisting of five (5) parts as follows: PART I Plans and specifications for the proposed improvements. Said plans and specifications are hereby incorporated into and by this reference made a part of this Report. PART II An estimate of the cost of the proposed works of improvement, including capitalized interest, incidental costs and expenses in connection therewith. PART III This Part shall consist of the following information: A. A proposed assessment of the total amount of the costs and expenses of the proposed improvements upon the several subdivisions of land within the Assessment District, in proportion to the special benefits to be received by such subdivisions from said improvements. B. The total amount, as near as may be determined, of the total principal sum of all unpaid special assessments and special assessments required or proposed to be levied under any completed or pending assessment proceedings, other than that contemplated for the Assessment District. C. The total true value, as near as may be determined from the latest Assessor's roll, of the parcels of land and improvements which are proposed to be assessed. D. Exhibit IA indicates the total of the proposed assessment combined with any previously unpaid assessment on any parcel of land in the proposed district. PART IV This part contains the proposed maximum annual administrative assessment to be levied upon each subdivision or parcel of land within the Assessment District to pay the costs incurred by the City of Newport Beach, and not otherwise reimbursed, resulting from the administration and collection of assessments, from the administration and registration of any associated bonds and reserve or other related funds, or both. PART V A diagram showing the Assessment District, the boundaries and the dimensions of the subdivisions of land within said Assessment District, as the same existed at the time of the passage of the Resolution of Intention. PART VI This Part consists of the following information: A. Description of the work for the proposed improvements. B. Right -of -way certificate. C. Environmental certification. Dated this Z4 day of �^ , 20 4U . 7E,p..3/.31/06 AF c GFB- FRIEDRICH & ASSOC., INC. O,p 861 A. EDZt-H P.E. L ASSESSMENT ENGINEER 2 Preliminary Approval by the CITY COUNCIL of the CITY OF NEWPORT BEACH, California, on the day of , 20 CITY CLERK CITY OF NEWPORT BEACH STATE OF CALIFORNIA Final Approval by the CITY COUNCIL of the CITY OF NEWPORT BEACH, California, on the day of , 20 CITY CLERK CITY OF NEWPORT BEACH STATE OF CALIFORNIA 3 ENGINEER'S "REPORT" PART CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) PLANS AND SPECIFICATIONS The plans and specifications which describe the general nature, location, and extent of the improvements for this Assessment District are filed in the office of the City Clerk and in the office of the Public Works Department; and are hereby incorporated into this "Report" by reference as if attached. 4 ENGINEER'S "REPORT" PART II CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) COST ESTIMATE Preliminary Estimate Costs without with Confirmed SCE ITCC Tax SCE ITCC Tax Assessment A. CONSTRUCTION COSTS 1. Southern California Edison Structures $206,213,00 $206,213.00 Underground Cabling & Equipment $113,209.00 $113,209.00 SCE ITCC Tax (21.490* 68,768.63 Subtotal, SCE Costs w/o ITCC Tax $319,422,00 Subtotal, SCE Costs w/ ITCC Tax $388,190.63 2. SBC Rough Estimate $548,000.00 $548,000.00 Subtotal, SBC Costs $548,000.00 $548.000.00 Subtotal, Construction $867,422.00 $936,190.63 Construction Contingencies 7B6. 42.00 86.742.00 TOTAL CONSTRUCTION COSTS $954,164.00 $1,022,932.63 B. INCIDENTAL COSTS I. Design Engineering (SCE) $15,000.00 $15,000.00 2. Design Engineering (SBC) 7,400.00 7,400.00 3. Assessment Engineering 25,425.00 25,425.00 4. Construction Inspection 9,900.00 9,900.00 5. City Administration 11,400.00 11,400.00 6. Printing, Advertising, Notices 4,000.00 4,000.00 7. Bond Printing, Registration & Servicing 1,000.00 1,000.00 8. Filing Fees 500.00 500.00 9. Bond Counsel 20,000.00 20,000.00 10. Paying Agent 2,500.00 2,500.00 11. Contingencies 11_,$00.00 11.500.00 Subtotal, Incidentals $108,625.00 $108,625.00 Subtotal, Construction & Incidentals $1,062,789.00 $1,131,557.63 (Continued - Next Page) * Adelphia Cable is required to pay for undergrounding through their Franchise Agreement with the City. ** ITCC = Income Tax Component of Contribution (22.6%). [Section 18(b) of IRS Code) * ** 2nd bond issue for Federal Income Tax Component of Contribution (ITCC - 21.49 %) will only be issued if the Federal Government implements the tax. The 2nd bond issue (ITCC issue) amount is the difference between the Balance to Assessment in the "with ITCC Tax" column above and the Balance to Assessment in the "without ITCC Tax" column above. ENGINEER'S "REPORT" PART II CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) COST ESTIMATE Prelimin Estimate Costs without with Confirmed SCE ITCC Tax SCE ITCC Tax Assessment Subtotal Forward, Construction & Incidentals $1,062,789.00 $1,131,557.63 C. FINANCING COSTS 1. Bond Discount (2.5 %) $30,716.45 $32,703.98 2. Bond Reserve (5 %) 61,432.89 65,407.96 3. Capitalized Interest (6 %) 73,719.47 78,489.55 Subtotal, Financing Costs $165,868.81 $176,601.49 TOTAL DISTRICT COSTS $1,228,657.81 $1,308,159.12 D. CASH CONTRIBUTION $0.00 $0.00 E. BALANCE TO ASSESSMENT $1,228,657.81 $1,308,159.12 * Adelphia Cable is required to pay for undergrounding through their Franchise Agreement with the City. ** ITCC = Income Tax Component of Contribution (22.6%). [Section 18(b) of IRS Code) * ** 2nd bond issue for Federal Income Tax Component of Contribution (ITCC - 21.49 %) will only be issued if the Federal Government implements the tax. The 2nd bond issue (ITCC issue) amount is the difference between the Balance to Assessment in the "with ITCC Tax" column above and the Balance to Assessment in the "without ITCC Tax" column above. ENGINEER'S "REPORT" PART III CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) ASSESSMENT ROLL WHEREAS, on 20_, the CITY COUNCIL of the CITY OF NEWPORT BEACH, CALIFORNIA, did, pursuant to the provisions of the "Municipal Improvement Act of 1913 ", being Division 12 of the Streets and Highways Code of the State of California, and as amended, the "Special Assessment Investigation, Limitation and Majority Protest Act of 1931 ", being Division 4 of said Streets and Highways Code, and Article XIIID of the Constitution of the State of California, adopt its Resolution of Intention No. , for the construction of certain public improvements, together with appurtenances and appurtenant work in connection therewith, in a special assessment district known and designated as ASSESSMENT DISTRICT NO. 75 (Balboa Business District), hereinafter referred to as the "Assessment District "); and, WHEREAS, said Resolution of Intention, as required by law, did direct GFB- Friedrich & Assoc., Inc., as Assessment Engineer, to make and file a "Report ", consisting of the following: A. Plans and specifications of the improvements proposed to be constructed; B. An estimate of the cost of the construction of the improvements proposed to be constructed, including the cost of the incidental expenses, in connection therewith; C. A diagram showing the Assessment District, which shall also show the boundaries and dimensions of the respective real property and other territory within such Assessment District, as the same existed at the time of the passage of this Resolution of Intention, each of which subdivisions shall be given a separate number upon such diagram; D. The proposed assessment of the assessable costs and expenses of the construction of the proposed improvements upon the real property in the Assessment District in proportion to the estimated special benefits to be received by the real property, respectively, from such improvements. Such assessment shall refer to such real property upon such diagram by the respective numbers thereof; and E. The description of the improvements proposed to be constructed under these proceedings. Y1 For particulars, reference is made to the Resolution of Intention as previously adopted. NOW, THEREFORE, I, JOHN A. FRIEDRICH, a licensed engineer of GFB- Friedrich & Assoc., Inc., the duly appointed Assessment Engineer, pursuant to the "Municipal Improvement Act of 1913" and Article XIIID of the Constitution of the State of California, do hereby submit the following: I. I, pursuant to the provisions of law and the Resolution of Intention, have assessed the costs and expenses of the works of improvement to be performed in the Assessment District upon the parcels of land in the Assessment District specially benefited thereby in direct proportion and relation to the special benefits to be received by each of said parcels. For particulars to the identification of said parcels, reference is made to the Assessment Diagram, a copy of which is attached hereto. 2. As required by law, a Diagram is hereto attached, showing the Assessment District, as well as the boundaries and dimensions of the respective parcels and subdivisions of land within said District as the same existed at the time of the passage of said Resolution of Intention, each of which subdivisions of land or parcels or lots, respectively, have been given a separate number upon said Diagram and in said Assessment Roll. 3. The subdivisions and parcels of land with numbers therein as shown on the respective Assessment Diagram as attached hereto correspond with the numbers appearing on the Assessment Roll as contained herein. 4. NOTICE IS HEREBY GIVEN that bonds will be issued in accordance with Division 10 of the Streets and Highways Code of the State of California (the "Improvement Bond Act of 1915 "), to represent all unpaid assessments, and the last installment of said bonds shall mature a maximum of THIRTY -NINE (39) YEARS from the 2nd of September next succeeding twelve (12) months from their date. Said bonds shall bear interest at a rate not to exceed the current legal maximum rate of 12% per annum. 5. By virtue of the authority contained in said "Municipal Improvement Act of 1913" and the requirements contained in Article XIIID, and by further direction and order of the City Council, I hereby make the following assessment to cover the costs and expenses of the works of improvement for the Assessment District based on the costs and expenses as set forth below: THIS SPACE INTENTIONALLY LEFT BLANK N Estimated Cost of Construction: Estimated Incidental Costs and Expenses: Estimated Financing (Bond) Costs: Estimated Total Cost: Estimated Contribution: Balance to Assessment: AS PRELIMINARILY AS APPROVED CONFIRMED $ 1,022,932.63 $ $ 108,625.00 $ $ 176,601.49 $ $ 1,308,159.12 $ $ 0.00 $ $ 1,308,159.12 $ For particulars as to the individual assessments, reference is made to Exhibit II attached hereto. 6. The Method and Formula of Assessment Spread is as set forth in Exhibit "A ", which is attached hereto, referenced and so incorporated. 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Q F' o DD v DD v DD v DD v DD v DD v DD v DD v DD v DD v DD v DD v DD DD v DD v DD v DD v DD v DD v DD v DD v DD v W v a 0 0 0 0 0 0 0 0 0 0 0 0 g 0 0 0 0 0 0 0 0 0 0 s N r- r- n w 00 w L7a ¢ Z ° n r- N r- n 000 00 0NO 0MO 000 000 000 Vl Q \ \\ u< )j} k\ \ \ \0 \ ) wr4 a })m \)/ % § /2< a ° § < 6 \ u \�} } \ rA \ Q _ » rA u © « G [ § ] {§ Ch ON < 0 _ k /> $E °) \\} § ° 7 §5 )/ \ \ « }f \ c § Qz« G}}\ - . A \ am ~M wZ „ < \ CITY OF NEWPORT BEACH ASSESSMENT DISTRICT No. 75 (Balboa Business District) Exhibit IB DEBT LIMIT VALUATION A. Estimated Balance to Assessment $1,308,159 B. Unpaid Special Assessments 0.00 Total A & B $1,308,159 C. True Value of Parcels $60,120,094 ** Average Value to Lien Ratio 46: 1 * Unpaid Special Assessments shall consist of the total principal sum of all unpaid special assessments previously levied or proposed to be levied other than in the instant proceedings. ** True Value of Parcels means the total value of the land and improvements as estimated and shown on the last equalized roll of the County. This report does not represent a recommendation of parcel value, economic viability or financial feasibility, as that is not the responsibility of the Assessment Engineer. CERTIFICATION I, the undersigned Assessment Engineer, do hereby certify that the total amount of the principal sum of the special assessments proposed to be levied, together with the principal amount of previously levied special assessments, as set forth above, does not exceed one -half (1/2) of the true value of the parcels proposed to be assessed. GFB- FRIEDRICH & ASSOC., INC. NA FRI CH'P . . ASSESSMENT ENGINEER 10 ENGINEER'S "REPORT" EXHIBIT "A" CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Ba16oa Business District) METHOD AND FORMULA OF ASSESSMENT SPREAD Article XIIID requires and the statutes provide that assessments, as levied pursuant to the provisions of the "Municipal Improvement Act of 1913 ", must be based on the special benefit that the properties receive from the works of improvement. It is necessary that the property owners receive a special and direct benefit distinguished from that of the general public. The law does not specify the method or formula that should be used in any special assessment district proceedings, and that responsibility rests with the Assessment Engineer, who is appointed for the purpose of making the analysis of the facts and determining the correct apportionment of the assessment obligation. The goal is to apportion the assessments to each parcel in direct proportion with the special benefit that the parcel will receive from the improvements. For these proceedings, GFB- Friedrich & Assoc., Inc. has been appointed to perform the functions of Assessment Engineer. The special benefits that inure to the properties within the boundary of Assessment District No. 75 are threefold; first, the undergrounding of existing overhead electrical and telephone lines, the removal of supporting poles, and the construction of a new and improved underground electrical and telephone system will result in enhanced service, reliability and capacity; second, the improvements increase safety; and third, removal of existing poles and overhead wires will aesthetically enhance all parcels adjacent to the improvements. There are a variety of land uses within the District boundary. Because many of the parcels receiving special benefit from the proposed improvements contain residences with similar lot widths fronting on their streets, a "modified front footage" method of apportioning assessments is being used for this Assessment District. If a lot or parcel has a structure with more than one story, the formula is adjusted to reflect the benefit received by type of use on said lot or parcel with multilple residential units or commercial uses. The modified front footage method of spreading assessments generally reflects the size of the lot or parcel, which in turn reflects the level of use of the facilities, and therefore the special benefit that they receive. The modified front footage method also is a measure of the amount of utility trench crossing in front of said lot or parcel. It is reasonable and our conclusion to spread assessments using a modified front footage formula where each parcel or lot is assessed relative to a "standard" residence (27 feet of frontage) within the Assessment District that receives a full measure of benefit (all three parts of special benefit as described below). The construction cost and proportionate share of the incidental costs for bid items will, therefore, be spread on a 11 modified front footage basis to those areas or subareas of the Assessment District that benefit from the works of improvement. Because the benefit from the improvements is specific to each parcel, there is no general benefit component that is received by parcels outside of the Assessment District boundary or by the general public. The special benefit received from the above -cited works of improvement is estimated to be in proportion to the modified front footage allocated to each parcel as described below. In the Balboa Business District, there are a variety of existing conditions regarding electric, telephone and overhead utility lines with poles. For example, some lots already have underground electric service but not underground telephone service; other lots already have both underground electric and telephone services, but have overhead lines that require undergrounding; other lots require all services to be undergrounded; and still others have all of their services and utility lines undergrounded already. Apparently, some of the developers of the lots within the District paid to have the utilities undergrounded as part of the development process while others did not. Consequently, in order to assess properties only for the facilities or work necessary, the modified front footage formula used in this District is divided into 3 equal parts; 1) underground electric service (E) is required, 2) underground telephone service (T) is required, and 3) overhead utility lines (OLR) must be undergrounded. The modified front footage formula to be used throughout the Assessment District is given below with one, two, three or none of the three parts considered for each lot or condominium. Please refer to the Assessment Diagram for the location of existing overhead facilities. T.and Iice Code Land Use Assessment Basis 14 15 29 30 31 32 34 38 39 52 76 85 88 110 121 122 * 125 Recreational, Amusement Park Residential, Apartment Commercial, Commercial Building Commercial, Commercial Condominium Commercial, Commercial Lot Commercial, Miscellaneous Uses Residential, Condominium Residential, Duplex Miscellaneous, Exempted Fully Commercial, Hotel Vacant, Multi Family Acreage Commercial, Office Building Commercial, Parking Lot Commercial, Restaurant Commercial, Shopping Center - Supermarket Residential, Single Family Residential Commercial, Storage - Warehouse 12 Front Footage - 3 x # of Facilities 1.5 x Front Footage - 3 x # of Facilities Front Footage + 3 x # of Facilities Front Footage + 3 x # of Facilities Front Footage + 3 x # of Facilities Front Footage + 3 x # of Facilities 0.8 x Front Footage + 3 x # of Facilities 1.0 x SFR + 3 x # of Facilities Front Footage + 3 x # of Facilities 2.0 x Front Footage +3 x # of Facilities Front Footage +3 x # of Facilities Front Footage +3 x # of Facilities 0.5 x Front Footage +3 x # of Facilities Front Footage +3 x # of Facilities Front Footage +3 x # of Facilities Front Footage (27' min) + 3 x # of Facilities Front Footage + 3 x # of Facilities Land Use Code Land Use 126 Commercial, Store Building 127 Commercial, Store Franchise 128 Commercial, Stores & Offices 129 Commercial, Stores & Residential 133 Recreational, Theater — Walk in 135 Residential, Triplex Assessment Basis Front Footage +3 x # of Facilities Front Footage + 3 x # of Facilities Front Footage + 3 x # of Facilities 1.5 x Front Footage = 3 x # of Facilities Front Footage + 3 x # of Facilities 1.0 x Front Footage +3 x # of Facilities * Basic assessment for a 27' wide single - family residential lot A service drop is defined as an electric service line and a telephone service line constructed to the property line of a parcel or lot. A single residential service drop is based on service to a "standard" residence with 27 feet of frontage. A service drop for a multiple -unit residential /apartment complex or a larger commercial use may require larger service lines to meet user demands. A lot with buried electrical and /or telephone transmission lines on two or more of it's sides shall only be assessed for one side frontage; said side frontage shall be the same side that is used to assess other nearby parcels with similar land uses. Said side is generally the side of the parcel represented by it's address. The rationale for this is that the buried transmission lines on the non - assessed side(s) of a parcel are necessary to make the entire underground utility system functional, and therefore constitutes a measure of special benefit for each of the parcels within the assessment district boundary. The costs for the installation of said non - assessed transmission lines are therefore shared by each property owner proportionately. In anticipation that a lot or parcel that receives no assessment or a partial assessment in this Assessment District has a residence or commercial building constructed on it in the future that requires electric and telephone service, the City in conjunction with the utility companies, will charge sufficient fees and construction costs to the property owner(s) of such a lot or parcel to effect equity with the other lots or parcels that received assessments for similar facilities in this Assessment District. Some or all of said fees and construction costs may be used to pay down the assessments on the other parcels within the Assessment District on a pro -rata basis. Some of the lots and parcels, identified by their Assessor Parcel Numbers, within the boundary of the proposed assessment district require special consideration, as follows: 13 Assessor Parcel No. Land Use Description 048 - 121 -20 Residential, This parcel requires electric and telephone drops Duplex and utility line undergrounding, but will have a new pole added at is westerly property line. Therefore, it will receive a 20% reduction in its assessment due to having a pole remaining. 048 - 121 -21 Residential, This parcel requires a telephone drop and utility Duplex line undergrounding only, but will have a new guy pole and guy cable added at its southeast corner. Therefore, it will receive a 20% reduction in its assessment due to having a guy pole remaining. 048 - 121 -09 Residential, This parcel requires electric and telephone drops Triplex and utility line undergrounding, but will have a new guy pole added directly across the street. Therefore, it will receive a 20% reduction in its assessment due to having a guy pole remaining. 932 - 160 -01 Residential, This series of condominium units is in a large through Condominiums three -story building. Fifty -four feet of overhead 932 - 160 -24, utility line and two poles require undergrounding inclusive in the alley behind the building. Each condo- minium unit is being assessed for 1.80 feet of modified front footage to pay for their share of the cost of undergrounding said line and poles. 048 - 135 -02 Recreational- Theater Each of these parcels share an existing pole in the 048 - 135 -03 Commercial, Stores alley behind their buildings. Because this pole has 048 - 135 -07 Commercial, Hotel no existing utility lines, it is reasonable and our 048 -135 -11 Residential, Duplex conclusion to have each property be assessed for 9.00 equivalent front feet for the removal of the pole (OLR) and undergrounding of any equipment affixed to it (the properties identified by Assesor's Parcel No. 048 - 135 -03 and 048 -135 -11 already have undergrounded electric (E) and telephone (T) services). Furthermore, the two other properties, identified by Assessor's Parcel Nos. 048 - 135 -02 and 048 - 135 -07, also require underground tele- phone service drops (T). Therefore, the two properties which require the pole removal and telephone service drops, and which each have at least 54 feet of frontage are each being assessed for 18.00 equivalent front feet for telephone service plus the aforementioned 9.00 equivalent front feet for the pole removal. 14 Several lots that front on the north side of Balboa Boulevard have wedge shapes. The average of the lot front and back lot dimensions is used to determine the front footage used in the assessment formula. During the time that this Engineer's Report was being written, a variety of other assessment formulae were considered. Assessment units (AU) or Equivalent Dwelling Units (EDU) were considered as a method of spreading assessments. This is often a viable method of spreading assessments but was rejected because of the difficulty in assigning AU's or EDU's to the variety of land uses found on the lots and parcels within the proposed assessment district boundary. Acreage was rejected as a method of spreading assessments because of the difference in size among the lots within the District. The use of an acreage formula would not reflect the special benefit derived from undergrounded electrical and telephone improvements. In conclusion, it is my opinion that the assessments for the above- referenced Assessment District have been spread in direct proportion to the special benefits that each lot or parcel receives from the works of improvement. It is my further opinion that: a. The proportionate special benefit derived by each identified lot has been determined in relationship to the entirety of the cost of the construction of the works of improvement. b. No assessment has been imposed on any lot that exceeds the reasonable cost of the proportional special benefit conferred on that lot. c. Only special benefits have been assessed. DATED: /��/�/yJI/�`�¢, 20 p GFB- FRIEDRICH & ASSOC., INC. ASSESSMENT ENGINEER 15 I, LknL M ArKk V , as CITY CLERK of the CITY OF NEWPORT BEACH, CALIFORNIA, do hereby certify that the foregoing assessment, together with the Diagram attached thereto, was filed in my office on the .?L&A day of /Ya utmb« , 20 a3 °ye,��-4 . CITY CLERK CITY OF NEWPORT BEACH STATE OF CALIFORNIA I, , as CITY CLERK of the CITY OF NEWPORT BEACH, CALIFORNIA, do hereby certify that the foregoing assessment, together with the Diagram attached thereto, was approved and confirmed by the City Council of said City on the day of 20 CITY CLERK CITY OF NEWPORT BEACH STATE OF CALIFORNIA I, STEPHEN G. BADUM, P.E., as SUPERINTENDENT OF STREETS of the CITY OF NEWPORT BEACH, CALIFORNIA, do hereby certify that the foregoing assessment, together with the Diagram attached thereto, was recorded in my office on the day of ,20 SUPERINTENDENT OF STREETS CITY OF NEWPORT BEACH STATE OF CALIFORNIA 16 ENGINEER'S "REPORT" PART IV CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) ANNUAL ADMINISTRATIVE ASSESSMENT A proposed maximum annual administrative assessment shall be levied on each parcel of land and subdivision of land with the Assessment District to pay for necessary costs and expenses incurred by the City of Newport Beach, and not otherwise reimbursed, resulting from the administration and collection of assessments, from the administration or registration of any bonds and reserve or other related funds, or both. The maximum assessment is authorized pursuant to the provisions of Section 10204(f) of the Streets and Highways Code and shall not exceed fifty dollars ($50) per parcel per year, subject to an annual increase based on the Consumer Price Index (CPI), during the preceding year ending in January, for all Urban Consumers in the Orange, Los Angeles, and Riverside County areas, The exact amount of the administration charge will be established each year by the Superintendent of Streets. The annual administrative assessment will be collected in the same manner and in the same installments as the assessment levied to pay for the cost of the works of improvement. 17 ENGINEER'S "REPORT" PART V CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) BOUNDARY MAP AND ASSESSMENT DIAGRAM Full -sized copies of the Boundary Map and the Assessment Diagram are on file in the Office of the City Clerk of the City of Newport Beach. Please refer to the following pages for reduced copies of said maps. As required by the Act, the Assessment Diagram shows the exterior boundary of the District and the assessment number assigned to each parcel of land that appears in the 1931 Act Table of Values (Exhibit IA) and the Assessment Roll (Exhibit II). The Assessor's parcel number is also shown for each parcel or lot as they existed at the time of the adoption of the Resolution of Intention and reference is hereby made to the Assessor's Parcel Maps of the County of Orange for the boundaries and dimensions of each parcel or lot within the District m .00 Z W - - -� fail WNW cc I -4 w LL J mY V V M m < IL A li LL, i m0 N� Ny W LL, Ili o� az SO f 00 of ~3p m Fa CWW �z U.Z < r° o W Nz OLL aC aw �O Q L f LL `� O Y z V = . . H 0 H W 'O� 0 H U? g az Y p' H NO 4 �m� N O Z t z Gp- ZZt - %0 N - ^ w w Bp- Ztl - %p W N i i i i i i i . 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'0r m V 3 J t �i -ep ^"i •Nro 3 w� m m < • <o_Cy_„o •`{ ) .Or I a J Cif s W� W W 01 S 1 V t o In Ul Q Z 00 SOF 1- LL h e4 X � Q CC z LL = tW7 N3 Z o N 1- 0 i \ N�IJNINSYM _ � � W u z aW rQ ta �'A `0 V 0 S 133HS 33S _ 'A W0 & a in z 00 'Ai WU V N ax W, °.'ti z i3R u� E 4 133HS 33S N m</ N / I °3pN nr N010 NIHSYM Ib � I �C9i b j I 4i Q I n I J zz d \\ N h QI h W I o 17 8 m J Q i• � � Vii .� a g - _� ii > O _ < a ZZ a sc tc 13 C 3b1g_r. hro L W � SMYpyt�..._.: M Wm <LL L r0 mUl N N3 ~F <i m0< Q F G h R oa R3 w O W W W= U. 1 1 r Z tn. G< g } R R aR e. W Ni Q R R VR < < � O b C In a W = G iii 3er�zyy �y °y"pS�p _p ENGINEER'S REPORT PART VI(A) CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) DESCRIPTION OF WORKS OF IMPROVEMENT, TIME ESTIMATE The following improvements are proposed to be constructed and installed in streets and alleys roughly bounded by Adams Street, Ocean Front, "A" Street, and Bay Avenue in the City of Newport Beach. 1. Removal of 27 existing power and telephone poles, and addition of one utility pole and one guy pole at the periphery of the District. 2. Removal of all overhead service drops for both electric and telephone service. 3. Construction of approximately 2,308 linear feet of mainline underground power and telephone conduit, with appurtenant vaults, manholes and pullboxes. 4. Construction of underground cable television conduit with appurtenant facilities. 5. Construction of required service conduit and appurtenances to private property lines for 85 "standard" lots and 7 lots containing condominiums within the District. The improvements will be designed and constructed by the Southern California Edison Company (electric), SBC (telephone) and Adelphia (cable TV). The City of Newport Beach will inspect the work for conformance to applicable City standards and specifications. Once completed, the underground electric, telephone and cable TV facilities will become the property and responsibility of Southern California Edison, SBC and Adelphia respectively. Each owner of property located within the Assessment District will be responsible for arranging for, and paying for, work on his or her property necessary to connect facilities constructed by the public utilities in the public streets or easements to the points of connection on private property. Conversion of individual service connections on private property is not included in the work done by the Assessment District. The estimated time for completion of the undergrounding of the utilities is six (6) months after the sale of bonds. Property owners will be required to provide necessary underground connections within 120 calendar days of the completion of the underground facilities. Failure to convert individual service connections on private property may result in a recommendation to the City Council that the public utility companies be directed to discontinue service to that property. Overhead facilities cannot be removed until all overhead service has been discontinued. 19 The general locations of the existing facilities to be undergrounded are shown on the Assessment Diagram in Part V of this 'Report ". THIS SPACE INTENTIONALLY LEFT BLANK 20 ENGINEER'S "REPORT" PART VI(B) CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) RIGHT -OF -WAY CERTIFICATE CITY OF NEWPORT BEACH COUNTY OF ORANGE STATE OF CALIFORNIA The undersigned hereby CERTIFIES UNDER PENALTY OF PERJURY that the following is true and correct. At all times herein mentioned, the undersigned was, and now is, the duly appointed SUPERINTENDENT OF STREETS of the CITY OF NEWPORT BEACH, CALIFORNIA. That there have now been instituted proceedings under the provisions of the "Municipal Improvement Act of 1913 ", being Division 12 of Streets and Highways Code of the State of California, for the construction of certain public improvements in a special assessment district known and designated as ASSESSMENT DISTRICT NO. 75 (Balboa Business District) (hereinafter referred to as the "Assessment District "). THE UNDERSIGNED STATES AND CERTIFIED AS FOLLOWS: That all easements, rights -of -way or land necessary for the accomplishment of the works of improvement for the above - referenced Assessment District have been obtained and are in the possession of the City. It is further acknowledged that works of improvement as proposed to be constructed within said Assessment District must be constructed within public rights -of -way, land or easements as owned by said City at the time of the construction of the works of improvement. EXECUTED this 2z/' day of rx %T, � , 20O , at Newport Beach, California. S W H G. BADUM, P.E. UP NTENDENT OF STREETS CITY OF NEWPORT BEACH STATE OF CALIFORNIA 21 ENGINEER'S "REPORT" PART VI(C) CITY OF NEWPORT BEACH ASSESSMENT DISTRICT NO. 75 (Balboa Business District) CERTIFICATION OF COMPLETION OF ENVIRONMENTAL PROCEEDINGS CITY OF NEWPORT BEACH COUNTY OF ORANGE STATE OF CALIFORNIA The undersigned, under penalty of perjury, CERTIFIES as follows: 1. The improvements to be constructed under the proceedings in Assessment District No. 75 are categorically exempt from the provisions of the California Environmental Quality Act (CEQA) under the provisions of Paragraph 15302, Class 2 (d) of "Guidelines For Implementation of the California Environmental Quality Act ", as adopted by the Secretary for Resources of the State of California, June 1992. 2. The undergrounding to be done under Assessment District No. 75 is categorically exempt from the requirement for the preparation of environmental documents under the California Environmental Quality Act guidelines because the Secretary for Resources has found that conversion of overhead electric utility distribution system facilities to underground locations where the surface is restored to the condition prior to the undergrounding, does not have a significant effect on the environment, and are declared to be categorically exempt. 3. A Notice of Exemption has been filed in the office of the County Clerk of Orange County, California. A copy of the Notice of Exemption marked Exhibit "C" is attached to this Report and is hereby made a part of this Report. 4. All environmental evaluation proceedings necessary for the formation of Assessment District No. 75 have been completed to my satisfaction, and no further environmental proceedings are necessary. EXECUTED this Z y " day of AIC46o -weez , 20 —s , at Newport Beach, California. STVH G. BADUM, P.E. DIP >ECTOR OF PUBLIC WORKS TY OF NEWPORT BEACH STATE OF CALIFORNIA 22 Exhibit "C" l;-rXcr11'T KE;C 1e tKjcn P 0 S T E D CITY OF NEWPORT BEACH [�tO�1V[- cD� OCT % 3300 Newport Boulevard - P.O. Box 1768 f f L (� Newport Beach, CA 92658-8915 OCT- TT 1� 43 949 644 -3311 Ul.11 TOY ITALY. COaUEH � .. j TON DALY, Cilr'FY,.tiECORDE[ DE%/1Y NOTICE OF EXEMPTION By To: F-1 Office of Planning and Research 1400 Tenth Street, Room 121 Sacramento, CA 95814 County Clerk, County of Orange ❑X Public Services Division P.O. Box 238 From: City of Newport Beach Public works Department 3300 Newport Boulevard - P.O. Box 1768 Newport Beach, CA 92658 -8915 (Orange County) Date received for filing at OPR: Name of Project: Assessment District No. 75 Project Location: Balboa Village, Newport Beach, CA Specific: Area bounded by Adams St., Edgewater Plc., A St., and West Ocean Front Project Location -City: Newport Beach Project Location - County: Orange Project Description: The project consists of an assessment district to underground existing overhead utilities. Recorded in Official Records, County or Oranl Tom Daly, Clerk- Recorder Exempt Status: (check one) I111111111111111111111111IN11111111111011111111NO FEE ❑ Ministerial (Sec. 21080(b)(1);15268); 200385001348 02:39pm 10/17/0: ❑ Declared Emergency (Sec. 21080(b)(3); 15269(a)); 80 93 Z01 ❑ Emergency Project (Sec. 21080(b)(4); 15269(b)(c); 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 Categorical Exemption. State type and section number. Class 2: Replacement and reconstruction Section 15302. ❑ Statutory Exemptions. State code number: ❑ General Rule (Sec. 15061(b)(3)) Reasons why project is exempt: The Secretary for Resources has found that conversion of overhead electric utility distribution system facilities to underground locations where the surface is restored to the condition prior to undergrounding does not have a significant effect on the environment. Name of Public Agency Approving Project: City of Newport Beach Date of Approval: Name of Person or Agency Carrying Out Project: Newport Beach Public Works Department Contact Person: Patrick L. 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CONSULTING CIVIL ENGINEERS BOND COUNSEL AGREEMENT THIS AGREEMENT is made and entered into as of November 1, 2003, by and between the City of Newport Beach, California, a municipality ( "City"), and Robert E. Hessen, attomey -at -law ( "Counsel "). WITNESSETH IT IS HEREBY AGREED by and between Counsel and City as follows: SECTION 1. ObIleations of Counsel. Under this agreement, Counsel shall perform legal services for and on behalf of City in connection with the proceedings relating to the formation of an underground utilities assessment district designated Assessment District No. 75 (Balboa Business District) (the "AD "), to the establishment of an underground utilities district, and to any related bond or other debt issuance by, or for the benefit of, the AD. 1.1 Time is of the essence in the performance of services under this agreement and the services shall be performed to completion in a diligent and timely manner. SECTION 2. Scope of Services. Legal services to be provided by Counsel shall include: (a) attending negotiation sessions and otherwise assisting City staff in the negotiation with utility companies; (b) preparing all resolutions, notices, agreements, bonds, and other papers and documents required in the proceedings; (c) examining the proceedings related to the formation of the AD (d) appearing at all hearings under the proceedings, and attending any other meeting where attendance is requested by the City; (e) reviewing and examining the map showing the boundaries of the AD; (f) reviewing the method and formula utilized by the Assessment Engineer for the apportionment of the special assessment; (g) reviewing the "Report" of the Assessment Engineer; (h) participating with the City's financing team to determine the structure of any bond or similar debt issuance; (i) assisting in the review of those sections of the official statement to be disseminated in connection with the issuance of any series of bonds related to authority and security for the bonds, tax- exemption, legal opinion, litigation, summary of bond indenture, bond purchase agreement or notice of sale and other supporting documentation relating to the offering for sale of any bonds or similar indebtedness; 0) preparing or reviewing any continuing disclosure agreement required under SEC Rule 15c2 -12; (k) consulting with any underwriter, rating agency and credit enhancement provider, and their respective legal counsel, participating in the sale of, or security for, any bonds or similar indebtedness; (1) consulting with any trustee, fiscal agent or paying agent, and their respective legal counsel, participating in the sale of, or security for, any bonds or similar indebtedness; (m) assisting in any ballot proceedings; (n) subject to the completion of the proceedings to Counsel's satisfaction, issuing an approving legal opinion attesting to the validity of the proceedings and the issuance of bonds or similar indebtedness, which legal opinion will be addressed to the City and will be delivered by Counsel on the date the bonds are exchanged for their purchase price (the "Closing "); (o) providing any necessary supplemental legal opinions as to the applicability of the registration requirements of federal securities laws and other matters related to the issuance of bonds or similar indebtedness; provided, however, such opinions do not include the rendering of a 10(6)5 opinion regarding any official statement or similar document; (p) providing advice and instruction to the City and its staff in connection with any of the foregoing. SECTION 3. Obligations The City shall: A. Furnish to Counsel such maps, records, title searches, filings, reports, certificates and other documents and proceedings, or certified copies thereof, as are necessary or convenient for Counsel to provide Counsel's approving legal opinions. B. Pay Counsel for services rendered pursuant to this agreement as follows: Formation of ,4D and Debt Issuance. If the AD is formed and bonds or similar indebtedness are issued by or for the benefit of the AD, Counsel shall be paid a fee for all services provided under this agreement. The fee shall be $20,000.00. The fee for the bonds or similar indebtedness shall be due and payable upon the occurrence of the Closing. If Debt Is Not Issued. In the event that the AD is formed and debt is not issued for any reason, Counsel shall be paid a fee of $5,000 for all services rendered with respect to the formation of the AD. The fee shall be due and payable upon invoice from Counsel, which may be transmitted to the City following a determination that debt will not be issued. Costs and Expenses. In addition to the foregoing, all costs and expenses reasonably incurred in connection with the proceedings to form the AD are to be billed to, and payable by, City. Costs and expenses will be billed at cost, except the expenses stated below will be billed as follows: Photocopying: Mileage: Facsimile: Computer Research: Transcript Preparation Bond Preparation: $0.10 per page IRS Rate - (unless over one -half hour and billed hourly) $0.10 per page (sending only) Cost, plus 10% Not to exceed $75 per transcript Not to exceed $300 per series of bonds Costs and expenses incurred in connection with the proceedings to form the AD shall be due and payable at the time the fee for the services is due and payable and shall be payable solely from the proceeds of the first issuance of bonds or similar indebtedness, collections from the Assessment District, or any combination thereof. Expenses incurred in connection with the issuance of bonds or similar indebtedness shall be due and payable at the time of the Closing of the issue for which such expenses were incurred and shall be payable from the proceeds of the issue. SECTION 4. Limitation of Agreement. Counsel's services under this agreement are limited to those expressly set forth in Section 2 above. Among other things, the scope of services does not include: (a) preparing requests for tax rulings from the Internal Revenue Service, or no action letters from the Securities and Exchange Commission; (b) except as described in Section 2 above, assisting in the preparation or review of an official statement or other disclosure document with respect to any series of bonds, or performing an independent investigation to determine the accuracy, completeness or sufficiency of any such document or rendering advice that the official statement or other disclosure document does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading; (c) preparing blue sky or investment surveys with respect to any series of bonds; (d) making an investigation or expressing any view as to the creditworthiness of the bonds; (e) representing the City in Internal Revenue Service examinations or inquiries, or Securities and Exchange Commission investigations; (f) after Closing of any series of bonds, providing the City continuing advice concerning any actions necessary to assure that interest paid on the bonds will continue to be excludable from gross income for federal income tax purposes. 2 SECTION 5. Additional Services. Upon written request of the City, Counsel will provide legal services related to certain appurtenant legal matters, including, but not limited to, the following: (a) preparation of a preliminary official statement and a final official statement; (b) litigation challenging the validity of (i) the proceedings to form the AD, to authorize the levy of special assessments or to issue bonds or similar indebtedness or (ii) the bonds or similar indebtedness; (c) ongoing review and advice regarding the City's compliance with any applicable continuing disclosure agreement; and (d) such other services as the City and Counsel should agree. Counsel, if requested by the City, will prepare a preliminary official statement and a final official statement for a fee of $5,000, plus the cost of printing and delivery. Counsel will perform any other services for a fee to be mutually agreed upon before any work is actually performed. SECTION 6. Conflicts. Counsel hereby states that Counsel does not represent clients with adverse interests to the City with respect to any matter within the scope of services to be provided under this agreement. City acknowledges that Counsel represents or has represented many public agencies and, occasionally, underwriters and other entities, and City understands the possibility that during the time of this agreement, one or more of Counsel's present or future clients may have transactions with the City. City also understands the possibility that Counsel may be asked to represent, in an unrelated matter, one or more of the entities involved in the matters contemplated by this agreement. Counsel does not believe that such representation, if it occurs, will adversely affect Counsel's ability to represent the City as provided in this agreement, either because the matters will be sufficiently different from the matters contemplated by this agreement so as to make the representations not adverse to Counsel's representation of the City or because the potential for such adversity is remote or minor and outweighed by the consideration that it is unlikely that advice given to the other client will be relevant to any aspect of the matters contemplated by this agreement. Execution of this agreement signifies the City's consent to Counsel's representation of others consistent with the circumstances described in this paragraph. Counsel hereby agrees to inform City in advance of any potential representation Counsel plans to undertake on behalf of other parties or entities involved in the matters contemplated by this agreement. SECTION 7. Termination. Either party may terminate this Agreement by giving seven (7) calendar days written notice thereof to the other party. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day and year first hereinabove written. City of Newport Beach 0 Mayor, for the City of Newport Beach Robert E. Hessell 0 Approved as to form: City Attorney