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Proposed Assessment District No. 113 <br />November 27, 2018 <br />Page 2 <br />f) If desired not to form the District, adopt Resolution No. 2018-81, A Resolution of <br />the City Council of the City of Newport Beach, California, Declaring Abandonment <br />of Proceedings for City of Newport Beach Assessment District No. 113. <br />FUNDING REQUIREMENTS: <br />Funds will be provided by property owner contributions and/or bond proceeds if the <br />Assessment District is approved. If AD -113 is formed, the City will be responsible for the <br />estimated assessments for the Carol Beek Center/Balboa Island Park and the Public <br />Restroom property near the ferry in the amount of $153,336. This amount will be included <br />in a future Capital Improvement Program budget for Council approval. <br />If the district is not successfully formed following the vote, General Funds previously <br />appropriated and used for the preparation of the Engineer's Report and balloting effort, <br />including legal fees from outside bond counsel, would not be recovered from the proposed <br />district property owners. If the district is successfully formed, then these costs will be <br />recovered from the respective property owners within the district. <br />DISCUSSION: <br />AD -113 Assessment District proposed to convert existing overhead utilities to <br />underground locations. The property owners within the boundary of the proposed <br />Assessment District will bear the cost of the improvements and associated proceedings. <br />Owners of properties located in the Proposed Assessment District submitted a Petition to <br />the City requesting the formation of a special assessment district to underground <br />overhead utilities. On January 10, 2017 the assessment engineer certified that owners <br />representing more than 60 percent of the assessable property area within AD -113 had <br />signed the Petition for undergrounding overhead utilities. On February 14, 2017, the City <br />Council approved Resolution No. 2017-11 certifying the Petition for AD -113. On <br />September 25, 2018, the City Council approved the Assessment Engineer's Report, <br />declared its intention to levy assessments and to issue bonds to finance the <br />undergrounding, and set November 27, 2018 as the time and place of a Public Hearing. <br />As a result of the high construction cost escalations witnessed this past year for AD -111, <br />116, 116b and 117, staff was unable to bring the Preliminary Engineers Report for AD - <br />113 forward. During the Petition stage of this project the estimated cost per parcel was <br />$24,700. However, based on the AD -117 bids received this year, the cost is now <br />estimated at $29,070 per parcel, which also assumes the City will be managing the <br />construction instead of Southern California Edison (SCE). <br />Municipal Improvement Act of 1913 of the Streets and Highways Code governs the <br />procedures used to create assessment districts. The Improvement Bond Act of 1915 <br />provides the proceedings to issue Limited Obligation Improvement Bonds. Such bonds <br />can carry up to a 40 -year term and are issued to finance assessments not paid in cash <br />within 30 days after confirmation of the assessment. Staff is recommending a 20 -year <br />term for AD -113 bonds. <br />20-2 <br />