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Proposed Assessment District No. 117 - Area Bounded by Bayside Drive, Avocado <br />Avenue, Coast Hwy & Carnation Avenue <br />November 24, 2015 <br />Page 2 <br />No. 117, overruling protests, approving final engineer's report, levying <br />assessments without modification, approving and ordering the work and <br />improvements for the utility underground project, and authorizing and directing <br />related actions with respect to Assessment District No. 117; OR <br />e-2) If desired, adopt Resolution No. 2015-102, A Resolution of the City Council of <br />the City of Newport Beach, California, Declaring Abandonment of Proceedings <br />for City of Newport Beach Assessment District No. 117, to abandon the <br />proceedings. <br />FUNDING REQUIREMENTS: <br />Funds of $4,322,556.97 will be provided by property owner contributions and/or bond <br />proceeds if the assessment district is approved. If AD 117 is formed, the City will be <br />responsible for the estimated assessments for the Old School and Begonia Park <br />properties ($45,061.67 and $272,931.76, respectively). The funds for the City <br />expenditures will be requested in the future when the assessment district nears <br />construction and bonds are sold. <br />DISCUSSION: <br />Owners of property located in Proposed Assessment District No. 117 submitted <br />petitions to the City in Spring 2015, requesting the formation of a special assessment <br />district to underground overhead utilities. On May 29, 2015, the assessment engineer <br />certified that owners representing more than 60 percent of the assessable property area <br />within Proposed Assessment District No. 117 had signed a petition for undergrounding <br />overhead utilities. On June 9, 2015, the City Council approved Resolution No. 2015-49 <br />accepting the petition. <br />Assessment District No. 117 (AD 117) is proposed for the conversion of existing <br />overhead utilities to underground locations. The property owners within the boundary of <br />the proposed Assessment District will bear the cost of the improvements and their <br />associated proceedings. <br />The Municipal Improvement Act of 1913 governs the procedures used to create the <br />Assessment District. Bonds issued under the Improvement Bond Act of 1915 carry up <br />to a 40 -year term and are issued to finance assessments not paid in cash within thirty <br />(30) days after confirmation of the assessment. Staff is recommending a 20 -year term <br />for this District. <br />Federal Income Tax Component of Contribution Tax (ITCC) has been eliminated <br />pursuant to Council direction. The ITCC is a tax assessed whenever private party <br />contributions in aid of construction (CIAC) are made. To date, underground utility <br />districts have not been assessed this tax as underground utility districts are viewed as <br />providing public benefit by increasing community aesthetics and public safety. <br />20-2 <br />