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HomeMy WebLinkAbout2026-02-10 - AGENDA REPORTS - LMD ZONE 33 FORMATIONO Agenda Item: 1 CITY OF SANTA CLARITA .` AGENDA REPORT PUBLIC HEARINGS CITY MANAGER APPROVAL: DATE: February 10, 2026 SUBJECT: LMD ZONE 33 (SAND CANYON PLAZA) ZONE FORMATION DEPARTMENT: Administrative Services PRESENTER: Andrew Adams RECOMMENDED ACTION City Council: 1. Conduct a public hearing and open and review ballots. 2. Adopt a resolution approving the Engineer's Report for annexing parcels in Tract 53074 into the City of Santa Clarita's Landscape Maintenance District No. 1, Zone 33 (Sand Canyon Plaza), if no majority protest exists, and order levies beginning Fiscal Year 2026-27. If a majority protest exists, no action will be required. BACKGROUND On September 12, 2017, the City Council approved the Sand Canyon Plaza project, Tentative Tract Map 53074, which consists of 580 residential units, approximately 45,000 square feet of retail development, and 147,000 square feet of assisted living facilities. Pursuant to the project's conditions of approval, all landscape improvements required under these conditions and located within the public rights -of -way, or where a landscape easement exists, shall be maintained by the City of Santa Clarita's (City) Landscape Maintenance District (LMD). The applicant is therefore required to form a new City LMD zone for the maintenance and repair of these improvements. The proposed LMD Zone 33 will fund costs associated with the maintenance of landscape improvements, including but not limited to landscape maintenance and monitoring, irrigation system operation, utilities, administration, and the establishment of reserves for the future replacement of significant infrastructure located within this LMD zone. The Engineer's Report contains the proposed boundaries of LMD Zone 33, identifies the Page 1 Packet Pg. 6 O facilities and services to be funded, determines the general and special benefits received by properties within the zone, and establishes the methodology used to apportion the annual assessments. All parcels were established in accordance with the project's conditions of approval to ensure the continued maintenance of required landscape and infrastructure improvements. As a result, each parcel within LMD Zone 33 receives a special and distinct benefit from these improvements. The total annual costs associated with maintaining the landscape improvements within LMD Zone 33 are estimated to be $82,599. These costs include landscape maintenance, administration, and capital reserves necessary to support the long-term replacement of major infrastructure. The annual assessment to maintain the improvements associated with LMD Zone 33 will be $162.92 per Equivalent Benefit Unit (EBU). Multi -family residential dwellings, including apartments, condominiums, townhomes, and duplexes, will be assessed at a rate of 0.75 EBU, reflecting the proportional special benefit received by these dwelling types, which are typically smaller than single-family homes. The maximum assessment rate will adjust each year based on the annual change in the Consumer Price Index (CPI), All Urban Consumers, for the Los Angeles —Riverside —Orange County Area. The actual assessment levied in any fiscal year will be approved by the City Council and may not exceed the maximum assessment rate. Assessments will begin in Fiscal Year 2026-27. The cost to prepare the Engineer's Report to create LMD Zone 33 is estimated to be $8,500. While the City is responsible, by law, for retaining an assessment engineering firm to prepare the report, the property owner is financially responsible for all costs associated with this action. Funds deposited by the developer into a pass -through account, managed by the Finance division, will be used to cover costs incurred by the assessment engineer. At the December 9, 2025, regular meeting, the City Council adopted procedural resolutions declaring its intention to form LMD Zone 33 and set the public hearing date for February 10, 2026. Ballots were mailed to the affected property owners on December 19, 2025, in accordance with Proposition 218 ballot requirements. ALTERNATIVE ACTION 1. Do not adopt a resolution to annex Tract 53074 into Landscape Maintenance District No. 1, LMD Zone 33. 2. Other action as determined by the City Council. FISCAL IMPACT All expenses associated with the creation of this Landscape Maintenance District will be borne by the developer. If this LMD is formed, annual assessment revenue for operations and capital reserves would equal $82,599 inclusive of an annual Consumer Price Index escalator. At -large General Benefit and Special Benefits conferred to parcels outside the proposed District will be funded through non -special assessment revenues. Page 2 Packet Pg. 7 O ATTACHMENTS Public Hearing Notice LMD Zone 33 Sand Canyon Plaza Resolution Approving ER and Intent to Order Annexations (Sand Canyon Plaza 33) Engineer's Report LMD No 1 Zone 33 Sand Canyon Plaza (available in the City Clerk's Reading File) Page 3 Packet Pg. 8 1.a Notice of Public Hearing Proposed Annexation Zone 33 (Sand Canyon Plaza) within the City of Santa Clarita's Landscaping and Lighting District I. Notice This notice informs you, as a record owner of property within Zone 33 (Sand Canyon Plaza) within the City of Santa Clarita's Landscaping and Lighting District shown above, on December 9, 2025, the City Council of the City of Santa Clarita adopted a Resolution of Intention declaring its intention to annex territory into Zone 33 (Sand Canyon Plaza) within the City of Santa Clarita's Landscaping and Lighting District ("Zone" or "Zone 33"). A Public Hearing has been scheduled concerning these proceedings. If the annexation is approved by the property owners, the new assessment will be placed on the next property tax bill for each parcel in Zone 33. The Public Hearing will be held during a regular meeting of the City of Santa Clarita City Council on: February 10, 2026, at 6:00 p.m. or as soon thereafter as the matter may be heard, in the City Council Chambers located at 23920 Valencia Blvd #120, Valencia, CA 91355. All interested persons are invited to attend the Public Hearing and express opinions on the matter of the proposed assessment. Persons who wish to submit an assessment ballot should mail or personally deliver it as shown below and in accordance with the directions provided on the back of the ballot under: "Summary of Assessment Ballot Procedures." ■ Mail Delivery: If by mail, place the ballot in the mail with sufficient time to be received no later than 5:00 p.m. on February 10, 2026. If your ballot is not received by this time, the ballot will not be counted. Please mail the ballot to the City Clerk at 23920 Valencia Blvd #120, Valencia, CA 91355. Please note that postmarks cannot be accepted. ■ Personal Delivery: The ballot may also be delivered directly to the City Clerk on or before the close of the Public Hearing on February 10, 2026. II. Assessment Information 1. Name of Assessment: City of Santa Clarita Landscape and Lighting District, Zone 33 (Sand Canyon Plaza) 2. The Total Proposed Maximum Assessment for the Entire District: $82,599.03 3. Your Proposed Total Assessment: The proposed maximum assessment on your property is shown on the assessment ballot. 4. Duration of the Proposed Assessment: The assessment for the maintenance of the landscaping and streetlighting improvements will be levied annually or until such time as the City no longer maintains the landscaping and streetlighting improvements. 5. Reason for the Annexation: To fund annual maintenance and operation of the landscaping and streetlighting public facilities of Zone 33. 6. Calculation of the Assessment: The assessment will continue on all parcels that receive direct and special benefit from the maintenance and servicing of the landscaping and streetlighting improvements in Zone 33. The amount of the proposed assessment was calculated based upon the proportional special benefit received by each parcel to be assessed. The exact method and formula of spreading the assessment is set forth in the Assessment Engineer's Report for Zone 33, a copy of which is on file with the City Clerk and available for review. The assessment shown on the ballot is the maximum amount that can be charged commencing in Fiscal Year 2027/28 and can be adjusted annually based on the Consumer Price Index of the Los Angeles, Long Beach and Anaheim Area All Urban Consumers Index ("CPI-U"), published by the United States Department of Labor, Bureau of Labor Statistics, or equivalent index should the CPI-U be discontinued. Adjustments are based on the change of the CPI-U prior year/month as compared to the year/month assessments are determined. The actual assessments levied in any fiscal year will be as approved by the City Council and may not exceed the maximum assessment rate without receiving property owner approval for the increase. 7. Assessment Balloting Results: If 50% or more of the weighted assessment ballots returned support the annexation, the maximum assessment shown on the enclosed ballot may be imposed. If a majority of the ballots returned oppose the annexation, the assessment will not be imposed. Assessment Ballots are weighted proportionally by each parcel's proposed assessment amount. (Simplified, this means 1 vote for each $1 of assessment.) III. Questions Regarding These Proceedings If you have any questions about this process, please contact Andrew Adams at the City of Santa Clarita at 661-290-2210. Please leave a Q message with your name and phone number, and your call will be returned. Packet Pg. 9 1.b RESOLUTION 26- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DECLARING THE RESULTS OF THE ASSESSMENT BALLOT TABULATION, APPROVING A FINAL ENGINEER'S REPORT, ORDERING ANNEXATIONS INTO LANDSCAPE MAINTENANCE DISTRICT NO. 1, PROVIDING FOR THE LEVY AND COLLECTION OF THE ANNUAL ASSESSMENTS THEREIN, AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH WHEREAS, the City Council of the City of Santa Clarita (City) has initiated proceedings to annex properties in the City into Zone 33 (Sand Canyon Plaza) within Landscape Maintenance District (LMD) No. 1 (Annexation) pursuant to the provisions of the "Landscaping and Lighting Act of 1972," being Part 2 of Division 15 of the California Streets and Highways Code, commencing with Section 22500, and in accordance with Article XIIID of the California Constitution and the Proposition 218 Omnibus Implementation Act, commencing with Section 53750 of the California Government Code, (collectively the "Assessment Law"), to fund the costs of installation, servicing, and maintenance of landscaped improvements within public rights -of -way and dedicated landscape easements within the City; and WHEREAS, the City Council did order and subsequently receive a report prepared by Harris and Associates (Assessment Engineer), prepared in accordance with the Assessment Law; and WHEREAS, the City Council did set the time and place for a Public Hearing to consider the Annexation and to authorize the annual levy of assessments therein, and did order that notice of such Public Hearing, accompanied by assessment ballots, be given to the record owners of property within the proposed Annexation in accordance with the provisions of the Assessment Law; and WHEREAS, notice of such Public Hearing accompanied by assessment ballots were mailed to the record owners of property within the proposed Annexation in accordance with the provisions of the Assessment Law; and WHEREAS, the City Council considered all oral and written statements, protests, and communications made or filed by any interested persons; and WHEREAS, a Final Engineer's Report has been duly presented by the City Clerk for consideration and has been fully considered by the City Council; and WHEREAS, following conclusion of the Public Hearing, assessment ballots received by the City were tabulated by the City Clerk, and a majority protest did not exist. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1: Recitals: The above recitals are true and correct. Page 1 of 4 Packet Pg. 10 1.b SECTION 2: Procedures: The City Council hereby finds and determines that the procedures for the consideration of the levy of the assessments have been undertaken in accordance with the Assessment Law. SECTION 3: Assessment Ballot Procedures: Assessment ballots were mailed as required by Assessment Law to the record owners of all properties within the Annexation, which are proposed to be assessed. The assessment ballots that were completed and received by the City Clerk prior to the close of the Public Hearing have been tabulated in accordance with the procedures established by Assessment Law and the City Council, and the results of such tabulation have been submitted to the City Council. The City Council hereby finds that the assessment ballots submitted in favor of the levy of assessments, as weighted in accordance with Assessment Law, exceed the assessment ballots submitted in opposition to such levy, also as weighted in accordance with Assessment Law; therefore, no majority protest to the levy of assessments within the Annexation has been found to exist. SECTION 4: Approval of Final Engineer's Report: The Final Engineer's Report, including the plans, specifications, general descriptions, estimate of the cost of installation, servicing, and maintenance of landscaped and appurtenant improvements within public rights -of - way and dedicated landscape easements within various areas in the City (Improvements) and incidental expenses in connection therewith, the diagram and the proposed assessments, is hereby approved as filed and incorporated herein by this reference. SECTION 5: Annexation of Territory: The City Council hereby orders the Annexation SECTION 6: Creation of LMD Assessment Zones: The City Council hereby orders the creation of LMD Assessment Zone No. 33 (Sand Canyon Plaza). SECTION 7: Determination and Confirmation: Based upon the Final Engineer's Report and the testimony and other evidence presented at the Public Hearing, the City Council hereby makes the following determinations regarding the assessments proposed to be imposed commencing with Fiscal Year 2026-27 and the annual assessment proposed to be imposed to pay for the estimated costs of the maintenance of all the improvements to ultimately be maintained upon the completion and acceptance of thereof: A. The proportionate special benefit derived by each parcel assessed has been determined in relationship to the entirety of the cost of the operations and maintenance expenses. B. The assessments do not exceed the reasonable cost of the proportional special benefit conferred on each parcel. C. Only the special benefits have been assessed. The maximum assessments for the Annexation contained in the Final Engineer's Report for Fiscal Year 2026-27 are hereby confirmed. Subsequent annual assessments in Page 2 of 4 Packet Pg. 11 1.b amounts not to exceed the maximum annual assessment of the estimated costs of the maintenance of all the improvements to ultimately be maintained upon the completion and acceptance of thereof as set forth in the Final Engineer's Report may be subsequently confirmed and levied without further assessment ballot proceedings pursuant to the Assessment Law. Each fiscal year after the base year, Fiscal Year 2026-27, the maximum assessment shall be increased by the annual change in the Consumer Price Index (CPI), during the preceding year, for All Urban Consumers, for the Los Angeles, Riverside, and Orange County areas, published by the United States Department of Labor, Bureau of Labor Statistics, or a reasonably equivalent index if such index is discontinued, without further compliance with the assessment ballot procedures required under the Assessment Law. SECTION 8: Ordering of Maintenance: The public interest and convenience requires, and this legislative body does hereby order, the maintenance work to be made and performed as said maintenance work is set forth in the Final Engineer's Report. SECTION 9: Filing with Secretary: The above -referenced diagram and assessment shall be filed in the Special Districts' office. Said diagram and assessment, and the certified copy thereof, shall be open for public inspection. SECTION 10: This resolution shall take effect immediately. SECTION 11: The City Clerk shall certify to the passage and adoption of this resolution, cause the same to be entered in the book of resolutions of the City, and make a minute of the passage and adoption thereof in the records of the proceedings of the City Council in the minutes of the meeting at which the same is presented. PASSED, APPROVED, AND ADOPTED this loth day of February 2026. ATTEST: CITY CLERK DATE: MAYOR Page 3 of 4 Packet Pg. 12 1.b STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Mary Cusick, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution No. 26-, was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the loth day of February 2026, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK Page 4 of 4 Packet Pg. 13 CITY OF SANTA CLARITA ENGINEER'S REPORT FOR THE FORMATION OF ZONE 33 (SAND CANYON PLAZA) WITHIN THE CITY OF SANTA CLARITA'S LANDSCAPING AND LIGHTING DISTRICT. FISCAL YEAR 2026-27 DECEMBER 2025 PREPARED BY Harris & Associates 101 Progress, Suite 250 Irvine, CA 92618 www.weareharris.com Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris & Associates Statement of Assessment Engineer.............................................................................. i PartI - Background........................................................................................................ 1 Part II — Plans and Specifications.................................................................................. 4 Part III— Estimate of Costs............................................................................................. 6 Part IV —Quantification of Benefit................................................................................ 9 Part V — Method of Apportionment............................................................................ 10 Appendix A: Assessment Diagram/Boundary Map Appendix B: Assessment Roll Engineer's Report Zone 33 (Sand Canyon Plow) Formation AGENCY: CITY OF SANTA CLARITA PROJECT: ZONE 33 (SAND CANYON PLAZA) FORMATION TO: CITY COUNCIL CITY OF SANTA CLARITA STATE OF CALIFORNIA ENGINEER'S REPORT Harris & Associates Pursuant to the provisions of Section 22565 through 22574 of the Landscaping and Lighting Act of 1972 ("1972 Act"), said Act being Part 2 of Division 15 of the Streets and Highways Code of the State of California, Section 4 of Article XIII D of the California Constitution, and direction from the City Council of Santa Clarita, California, I submit herewith the following Engineer's Report ("Report"), consisting of five parts. This Report provides for the creation of Zone 33 (Sand Canyon Plaza) within the Santa Clarita Landscaping and Lighting District and establishes the Maximum Assessment to be levied in the Fiscal Year commencing on July 1, 2026 and ending on June 30, 2027 (2026-2027) and continuing in all subsequent Fiscal Years, for this area to be known and designated as: ZONE 33 (SAND CANYON PLAZA) (Hereinafter referred to as the "Zone" or "Zone 33") I, Tamorah J. Bryant, authorized representative of Harris & Associates, the duly appointed ASSESSMENT ENGINEER, submit herein the "Report" consisting of five (5) parts as follows: ?art Background: This part provides a general description of the Proposition 218 process. Part II Plans and Specifications: This part contains a general description of improvements being maintained in Zone 33. Plans and specifications for the improvements are on file with the City Clerk. Page i Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris & Associates Estimate of Cost: This part contains the cost estimate of the maintenance including incidental costs and expenses for Fiscal Year 2026-2027. Quantification of Benefit: This part identifies, separates and quantifies the general and special benefits received by each parcel in Zone 33, for the improvements and services provided. Method of Apportionment: This part describes the method of apportionment of assessments, based upon parcel classification of land within Zone 33. The costs and expenses of Zone 33 have been assessed upon the parcels of land within the boundaries of Zone 33 in proportion to the estimated benefits to be received by such parcels. Appendices Appendix A: Assessment Diagram/Boundary Map Appendix B: Assessment Roll In conclusion, it is my opinion that the costs and expenses of Zone 33 have been assessed to the lots and parcels within the boundaries of Zone 33 in proportion to the estimated benefits to be received by each lot or parcel from the services provided. DATED this 25t" day of November 2025 OQ�IpFESS1014Z �F R J. gAy F'yG' LU No. 67205 Tamorah J. Bryant, P.E., Assessment Engineer * Exp.9/30/LG * R.C.E. No. C67205 sT CIVIE ��P Engineer of Work ATE OF C�F State of California Page ii Engineer's Report Zone 33 (Sand Canyon Plow) Formation Harris & Associates City of Santa Clarita ("City") staff has contracted with Harris & Associates ("Harris") to prepare this Engineer's Report ("Report") in support of the formation of a new assessment zone, designated as Zone 33 (Sand Canyon Plaza), within the Santa Clarita Landscaping and Lighting District for Fiscal Year 2026/27. This report also establishes an annual escalation factor to allow for future increases to the assessment rate in accordance with the Landscaping and Lighting Act of 1972. Under the provisions of the Landscaping and Lighting Act of 1972 (Part 2 of Division 15 of the California Streets and Highways Code) and Article XIII D of the California Constitution (Proposition 218), the City levies and collects special assessments for the maintenance of improvements within its Landscape Maintenance District zones, where such improvements provide special benefit to the assessed properties. The Santa Clarita Landscaping and Lighting District currently consists of 62 Landscape Maintenance District Zones. This Report pertains solely to the creation and establishment of Zone 33 (Sand Canyon Plaza) ("Zone 33") and the proposed assessments necessary to fund the maintenance of landscaping and related improvements within its boundaries. Background of Assessments Public agencies throughout the State of California have been using benefit assessments as a tool to pay for public facilities and services that provide a special benefit to property since the beginning of the 20th century. Since that time, there have been various statutes approved by the legislature that authorize public agencies to collect an assessment to help the agency generate revenue to provide specific improvements and services. With the passage of Proposition 13 in 1978, the People's Initiative to Limit Property Taxation, the proposition successfully added a constitutional amendment to the California State Constitution. Proposition 13 essentially limited the ability of government agencies to levy ad valorem taxes on real property to one percent of the assessed value of the property and it capped annual property tax increases at two percent'. Over the years, the state legislature approved several other statutes authorizing public agencies to establish and collect benefit assessments as a way to fund public improvements and services that provide a special benefit to property. Due to the Proposition 13 property tax limitations, the use of assessments became a widely utilized tool for public agencies in California to fund various types of public improvements and services, and Santa Clarita has been no different. In 1996, California voters approved Proposition 218, the Right to Vote on Taxes Act. Proposition 218 amended the California Constitution by adding Article XIIIC and Article XIIID, which affect the ability of local government to levy and collect existing and future taxes, assessments, and property -related fees and charges. To that end, Proposition 218 was intended to bolster Proposition 13's limitations on ad valorem property taxes and special taxes by placing new restrictions on the imposition of taxes, assessments, fees, and charges. Since the adoption in 1996, Proposition 218 has been, and is likely to continue to be, the Page 1 Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris & Associates subject of ongoing litigation, judicial interpretation, constitutional amendment, and statutory clarification'. 1 Constitution of the State of California 1978 Article XIIIA. Tax Limitation Available at http://www.leginfo.ca.gov/.const/.article 13A ' Proposition 218 Guide for Special Districts. Available at http://www.csda.net/wp-content/uploads/2013/04/2013-CSDA-Prop-218-WEB.pdf Landscape & Lighting Act (Streets & Highways Code 22500) The City's District was formed under the authority of Section 22500 of the California Streets and Highway's Code (the "Act"). As defined in the Landscape and Lighting Act of 1972, an "assessment district shall consist of all territory which, as determined by the legislative body, will benefit by the improvements that are to be assessed to apportion the costs thereof" and "may consist of all or any part of the territory" within the City. The Act also states that the "assessment district may consist of contiguous or noncontiguous areas" and that the "improvements in one area need not be of benefit to other areas". The types of improvements that may be maintained and incidental expenses that may be funded using assessment revenues are defined in the Act. The intent in forming Zone 33 is to secure the long-term financial sustainability of Zone 33 and to ensure it is compliant with the Act, the requirements of Proposition 218 and the legal landscape that exists today. Zone 33 funds the maintenance of landscaping improvements, primarily located along public streets, and includes streetscapes and medians benefiting the residents and property owners within Zone 33. Proposition 218 and Recent Court Rulings Silicon Valley Taxpayers Association, Inc. v. Santa Clara County Open Space Authority In July of 2008, the California Supreme Court issued a ruling on the above titled case that provided legal guidance clarifying the requirements of Proposition 218. Some of the most important elements of the ruling are summarized below: • Benefit assessments are for special, not general benefits. • The services and/or improvements funded by assessments must be clearly defined. • Special benefits are directly received by and provide a direct advantage to property within an assessment district. • The courts will take an active role in reviewing challenges to assessments. The courts opined that Proposition 218 made any challenge to assessments a constitutional issue. Town of Tiburon v. Bonander In December of 2009, the 15T District Court of Appeal overturned an assessment approved by property owners to place overhead utility lines underground in an area of the Town of Tiburon. The court invalidated the assessment on the grounds that the assessments had been apportioned to assessed property based in part on the costs assigned to specific zones or areas within the boundaries of the district, Page 2 Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris & Associates instead of apportioning the costs based upon proportional special benefit. Meaning, the costs associated with improvements and services do not matter in relation to apportioning the costs to property owners, only benefit matters when apportioning the total costs. In addition, the court noted in their opinion that certain parcels that received special benefit were excluded from the boundaries of the district and were not assessed. Therefore, the assessments for those parcels were included in the assessments of the parcels within the boundary of the district, in violation of Proposition 218. Beutz v. County of Riverside In May of 2010, the 4t" District Court of Appeal issued a decision on an appeal to a ruling of the above titled case. This decision overturned an assessment for park maintenance, primarily because the general benefits associated with improvements and services were not clearly calculated, quantified, nor separated from the special benefits. Golden Hills Neighborhood Association v. City of San Diego In September 2011, the San Diego Court of Appeal issued a decision on the appeal of the above referenced case. This decision overturned an assessment for street and landscaping maintenance in a neighborhood in San Diego, California. The court identified two primary reasons for its decision. First, like in the Beutz case, the court found the general benefits associated with the services were not explicitly calculated, quantified, nor separated from special benefits. Second, the court found that the City had failed to record the basis for the assessment on its own parcels. Article XIIID of the California Constitution states: "Parcels within a District that are owned or used by an agency, the State of California or the United States shall not be exempt from assessment unless the agency can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit." We have reviewed the existing facilities, improvements and services being provided and the boundaries of the District at length. This Report identifies, details and addresses the pertinent items mentioned above by: • Clearly identifying and stating the special benefit received from the improvements and services (Silicon Valley Tax Payers case). • Identifying and removing from the assessments any general benefits (Beutz and Golden Hills case). • Assessing the parcels based on special benefit received from the improvements and services rather than the costs to provide those improvements and services (Tiburon case). • Identifying and accounting for assessments for all benefiting parcels (Tiburon case). Page 3 Engineer's Report Zone 33 (Sand Canyon Plozo) Formation GENERAL DESCRIPTION OF THE ZONE Harris & Associates Zone 33 is a mixed -use project on approximately 83 gross acres, located north of Soledad Canyon Road and east of Sand Canyon Road. The project is anticipated to include 580 net assessable residential units and 7.0 net assessable acres of non-residential property. The 1972 Act defines improvements to mean on or any combination of the following: • The installation or planting of landscaping. • The installation or construction of statuary, fountains, and other ornamental structures and facilities. • The installation or construction of public lighting facilities, including, but not limited to, traffic signals. • The installation or construction of any facilities which are appurtenant to any of the foregoing or which are necessary or convenient for the maintenance or servicing thereof, including, but not limited to, grading, clearing, removal of debris, the installation or construction of curbs, gutters, walls, sidewalks, or paving, or water, irrigation, drainage, or electrical facilities. • The installation of park or recreational improvements, including, but not limited to, all of the following: o Land preparation, such as grading, leveling, cutting and filling, sod, landscaping, irrigation systems, sidewalks, and drainage. o Lights, playground equipment, play courts, and public restrooms. • The maintenance or servicing, or both, of any of the foregoing, and of any improvement authorized by subdivision (i). • The acquisition of land for park, recreational, or open -space purposes. • The acquisition of any existing improvement otherwise authorized pursuant to this section. • The acquisition or construction of any community center, municipal auditorium or hall, or similar public facility for the indoor presentation of performances, shows, stage productions, fairs, conventions, exhibitions, pageants, meetings, parties, or other group events, activities, or functions, whether those events, activities, or functions are public or private. The 1972 Act defines "Maintain" or "maintenance" means the furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement, including: • Repair, removal, or replacement of all or any part of any improvement. • Providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation, trimming, spraying, fertilizing, or treating for disease or injury. • The removal of trimmings, rubbish, debris, and other solid waste. • The cleaning, sandblasting, and painting of walls and other improvements to remove or cover graffiti. Page 4 Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris &Associates IMPROVEMENTS AND SERVICES FOR THE ZONE The improvements and services to be funded by Zone 33 include landscaping and street trees along Soledad Canyon Road and Sand Canyon Road. All improvements are within the area of Zone 33 and are required as a condition of approval. The proposed improvements described in this Report are based on current development and improvement plans provided to Harris & Associates as of the date of this Report. Improvement plans include the (1) Sand Canyon Plaza LIVID Local & Area Wide Responsibility Exhibit, dated 11/16/2022; and (2) Tract Map No. 53074-01, recorded on 10/26/2023, Recording #2023-0733899, which are incorporated herein by reference. Page 5 Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris & Associates The estimated costs for the annual maintenance and servicing of the improvements and the proportionate share of administration costs for Zone 33 has been prepared based on the estimated and historical costs to provide said services. Zone 33 cost estimate is shown below and includes the proposed costs for Fiscal Year 2026/2027. Maintenance and Servicing $45,000.23 District Administration $7,500.00 Operating Reserve Contribution $22,500.12 Capital Replacement Fund Contribution $12,503.71 General Benefit Contribution 4 905.03 Total Balance to Assessment $82,599.03 Total Assessable EBUs 506.99 Estimated 2026/27 Assessment per EBU $162.92 Maximum 2026/27 Assessment per EBU $162.92 The District Reserve Fund balances are shown on the table below. TOTAL BEGINNING RESERVE FUND BALANCE $0.001 OPERATING RESERVE FUND INFORMATION Estimated Balance July 1, 2026 $0.00 Proposed Contribution/(Reduction) $22,500.12 Estimated Balance June 30, 2027 $22,500.12 CAPITAL RESERVE FUND INFORMATION Estimated Balance July 1, 2026 $0.00 Proposed Contribution/(Reduction) $12,503.71 Estimated Balance June 30, 2027 $12,503.71 TOTAL ENDING RESERVE FUND BALANCE $35,003.83� Section 22569 (a) of the 1972 Act allows the District assessments to "...include a reserve which shall not exceed the estimated costs of maintenance and servicing to December 10 of the fiscal year, or whenever the city expects to receive its apportionment of special assessments and tax collections from the county, whichever is later." Page 6 Engineer's Report Zone 33 (Sand Canyon Plaza) Formation Harris & Associates Section 22531 (a) of the 1972 Act defines maintenance to include "Repair, removal or replacement of all or any part of any improvement." This allows for a Capital Reserve Fund to collect funds over time to replace improvement items that cannot be conveniently collected in a single year. Each year, as needed and/or available, a portion of the assessment collections will be added to the Capital Reserve fund to accumulate funds to perform additional replacement/renovation projects as identified by City Staff. The Capital Replacement costs have been developed based on the current installation unit costs, assuming a useful life of 25 years, as shown in the table below. The City and will be updated each year as projects are scheduled, begun and completed. Installation Unit Total Cost for Sand Improvement Quantity Per Costs Canyon Plaza Trees 48" box 2 each $ 3,500.00 $ 7,000.00 24" box 79 each $ 750.00 $ 59,250.00 Landscaping Shrubs - 15 gallon 56 each $ 175.00 $ 9,800.00 Shrubs - 5 gallon 1,102 each $ 45.00 $ 49,590.00 Shrubs - 1 gallon 1,145 each $ 20.00 22,900.00 Mulch Areas 26,902 SF 0.40 $ 10,760.80 Native Hydro 23,310 SF $ 0.20 $ 4,662.00 Boulders 22 each $ 1,000.00 $ 22,000.00 Lodge Pole Fence 3,000 LF $ 42.21 $ 126,630.00 TOTAL $ 312,592.80 Expected Life (Years) 25.00 Annual Capital Replacement Budget $ 12,503.71 General Definition of Budget Items The following provides a definition of the line items shown in the Estimate of Costs for the benefit areas. Maintenance and Servicing: Includes all labor, materials, personnel and contract costs related the maintenance and servicing of the improvements. District Administration: City personnel costs related to the annual administration of Zone 33. This can include Finance, City Clerk, City Attorney, City Manager, City Council, etc. Operating Reserve Contributions: The Operating Reserve is provided to ensure funding of the operation and maintenance activities prior to the City receiving the assessment funds through the property tax collection process. Section 22569(a) of the Streets and Highways Code specifically permits the inclusion of a reserve for this purpose, equal to approximately half of the annual Direct and Overhead costs. Page 7 Engineer's Report Zone 33 (Sand Canyon Plow) Formation Harris & Associates Capital Reserve Fund Contribution: The Capital Reserve is provided to ensure adequate funding for the capital replacement of any facilities or maintenance items with a useful life of greater than five years. The District improvements are, in many cases, past their typical life cycle and are in need of replacement. The Capital Reserve Fund allows for the replacement of dead and dying trees, shrubs and other plant materials, along with the replacement of the irrigation systems. City staff will prioritize replacement schedules based on the areas in most immediate need. General Benefit Contribution: This is the amount contributed by the City to offset general benefits from improvements along arterials streets, which are not assessable to Zone properties. Total Balance to Assessment: This is the total amount of costs assessable to properties and is the amount sent to the County of Los Angeles ("County") for placement onto the tax roll. Total Assessable EBU's: This is the total number of assessable Equivalent Benefit Units ("EBU") in the District. Estimated 2026/27 Assessment Per EBU: This is the estimated assessment rate per EBU, as calculated. Maximum 2026/27 Assessment Per EBU: This is the Maximum Assessment rate a parcel may be assessed for a particular fiscal year. Page 8 Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris & Associates Each of the improvements have been carefully reviewed and the corresponding assessments have been proportionately spread to each parcel based on the benefit received. GENERAL BENEFIT Traffic through Zone 33 receives general benefits from the median landscaping that is funded by a separate Citywide LIVID, therefore these costs are not assessed. However, improvements along arterial roadways provide aesthetic benefits to people walking through the City. Per the 2005 Traveler Opinion and Perception Survey conducted by the Federal Highway Administration, approximately 10.90% of all trips are considered walking trips. Therefore, 10.90% of the improvements along the arterial roadways are considered general benefit, and only 89.10% of these Improvements will be used to estimate the special benefit costs. Landscaping improvements considered general benefits must come from other source and cannot be assessed to District properties. The table below shows the breakdown of general benefit and special benefit. Total General Benefit (10.9%) Special Benefit (89.1%) Maintenance and Servicing $45,000.23 $4,905.03 $40,095.20 The total cost of the improvements has been reduced by a contribution from the City, as shown on the Estimate of Costs in Part III. Maintenance costs are monitored every few years and City contributions are adjusted accordingly. SPECIAL BENEFIT The special benefits are: • Enhanced desirability of properties • Reduction of dust & debris • Improved aesthetic appeal of properties through positive representation of area. • Increased sense of pride in ownership from well -maintained improvements. These benefits impact the assessed properties in a way that is particular and distinct from their effect on other parcels not within Zone 33 and that real property in general and the public at large do not share. The improvements also were installed as a condition of development and would not have been installed otherwise. Since these improvements were installed and are maintained especially for the benefit of properties within Zone 33, all assessable properties in Zone 33 receive a special benefit and are assessed for the special benefits conferred by the improvements. Page 9 Engineer's Report Zone 33 (Sand Canyon Plozo) Formation GENERAL PROVISIONS —SPECIAL BENEFIT Pm Harris & Associates The 1972 Act permits the establishment of assessment districts by agencies for the purpose of providing certain public improvements, which include the construction, maintenance, and servicing of public lights, landscaping, dedicated easements for landscape use, and appurtenant facilities. The 1972 Act further provides that assessments may be apportioned upon all assessable lots or parcels of land within an assessment district in proportion to the estimated benefits to be received by each lot or parcel from the improvements rather than by assessed value. Section 22573 of the 1972 Act gives the following instructions for apportioning assessments to the parcels within the district: "The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot or parcel from the improvements." The formula used for calculating assessments reflects the composition of the parcels and the improvements and services provided by Sand Canyon Plaza to fairly apportion the costs based on the estimated benefit to each parcel. In addition, Article XIII D of the California Constitution ("Article") requires that a parcel's assessment may not exceed the reasonable cost of the proportional special benefit conferred on that parcel. The Article provides that only special benefits are assessable, and the County must separate the general benefits from the special benefits conferred on a parcel. A special benefit is a particular and distinct benefit over and above general benefits conferred on the public at large, including real property within the district. The general enhancement of property value does not constitute a special benefit. The proposed improvements, the associated costs, and assessments have been carefully reviewed, and allocated based on the special benefit received by the parcels to be assessed as required by the 1972 Act and Article XIII D as described in the following section. ASSESSMENT METHODOLOGY Zone 33 consists of three parcel types, single-family residential, multi -family residential, and non- residential. In order to allocate benefit fairly between the parcels, an Equivalent Benefit Unit ("EBU") methodology is applied to equate the different land uses to a single-family residential parcel, allowing a uniform method of apportionment. The special benefits must be applied by improvement and land use types. Page 10 Engineer's Report Zone 33 (Sand Canyon Plow) Formation EDU Factors by Land Use Harris & Associates Single Family Residential. Parcels zoned for single family residential ("SFR") uses, including detached condominiums, are assessed 1.00 EBU per dwelling unit. Parcels designated as SFR land -uses shall be assessed 1.00 EBU per dwelling unit, including vacant subdivided single-family residential lots and vacant land zones for single family uses with a tentative or final tract map. Multi -Family Residential. Multi -Family (including attached townhomes and apartments) land use equivalencies are determined based on the number of dwelling units on each parcel. Based on population density data from representative cities in Southern California and typical size of structure relative to the typical single-family residence, the EBU factor for multi -family residential property, including attached townhomes and apartments, is 0.75 EBU per dwelling unit. This includes vacant multi -family residential parcels zoned for multi -family residential uses with a tentative or final tract map. Non -Residential. In converting non-residential properties to EBU's, the factor used is the City's typical standard single family residential lot area and the number of lots that could be subdivided into an acre of land. All properties that are developed for non-residential uses are therefore assigned 6.00 EBU per acre. These include retail, commercial, industrial, church, school, and other non-residential uses. Exempt. Non -assessable lots or parcels include areas of public streets and other roadways (typically not assigned an APN by the County); dedicated public easements, open space areas and rights -of -way, including public greenbelts and parkways; utility rights -of -way; common areas; landlocked parcels; small parcels vacated by the County, bifurcated lots and any other property that cannot be developed or has specific development restrictions. These types of parcels are considered to receive little or no benefit from the improvements and are therefore, exempted from assessment. EBU Factors by Land Use Land Use EBU Factor Single Family Residential 1.00 EDU per dwelling unit Multi -Family Residential 0.75 EDU per dwelling unit Non-residential 6.00 EDU per acre Page 11 Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris & Associates The number of units in the case of single-family residential and multi -family residential, or acres in the case of non-residential is then multiplied by the Applied Benefit Factor to calculate the total Benefit Units. The single-family residential parcels will be assessed on the basis of 1.00 EBU per unit, the multi -family residential parcel will be assessed on the basis of 0.75 EBU per unit, and the non-residential parcel will be assessed on the basis of 6.00 EBU per acre. The table below shows the total benefit units in Zone 33. Land Use Net Assessable Units/Acres" Applied Benefit Factor Benefit Units Single -Family Residential 119.00 1.00 119.00 Multi -Family Residential 461.001 0.75 345.75 Non -Residential 7.041 6.0a 42.24 Total EBU 505.99 Balance to Assessment $82,599.03 Assessment per EBU $152.92 Notes: 'See tables below. Net Assessable Acres The total acres less Exempt Property, if any, less 20% allowance for loss to streets/right-of-way at development and loss to slopes, equals the Net Assessable Acres. Gross Acres Contigency Net Assessable Acres Single -Family Residential 31.87 (6.37) 2.5.50 Multi -Family Residential 23.51 �4.70) 18.81 Non -Residential 8.80 (1.76) 7.04 Exempt 19.19 (19.18) - Total 83.36 1 (32.01) I513s Annual Adjustment to Maximum Assessment It is generally recognized that most budgetary items will be impacted by inflation in future years. In an effort to minimize the impact this has on maintenance districts, a formula for inflationary adjustments is typically included as a part of the maximum assessment to be approved by the property owners during the formation or restructuring of a district. As part of the reassessment of the District, it is proposed that an annual inflationary adjustment for the Maximum Assessments be included. An inflationary adjustment will allow the Maximum Assessments established during the reassessment of the District to increase each year so assessment revenues can continue to fund the costs of the maintenance and services. Page 12 Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris & Associates Assessments may be adjusted annually based on the Consumer Price Index of the Los Angeles, Long Beach and Anaheim Area All Urban Consumers Index ("CPI-U"), published by the United States Department of Labor, Bureau of Labor Statistics, or equivalent index should the CPI-U be discontinued. Adjustments are based on the change of the CPI-U prior year/month as compared to the year/month assessments are determined. The actual annual assessment rate and actual assessments levied in any fiscal year shall be as approved by the City Council and may not exceed the Maximum Assessment rate for that specific fiscal year without a Proposition 218 compliant increase procedure that is approved by property owners. The Maximum Assessment rate established during the reassessment of Zone 33 will be adjusted by the following formula: • Beginning in Fiscal Year 2027/28, the increase in CPI-U shall be applied to the Maximum Assessment rate established the previous fiscal year to calculate the appropriate Adjusted Maximum Assessment rate for the current fiscal year. • If the proposed annual assessment rate for the upcoming fiscal year is less than or equal to the Adjusted Maximum Assessment rate established for that fiscal year, then the proposed annual assessment is not considered an increased assessment for purposes of Proposition 218. The Adjusted Maximum Assessment rate will be calculated independent of the annual budget and proposed assessment rate for the given fiscal year. Page 13 Engineer's Report Zone 33 (Sand Canyon Plow) Formation Harris & Associates The Assessment Diagram for Zone 33 by this reference is incorporated and made a part of this Report. Only the parcels identified within Sand Canyon Plaza Assessment Diagram are within said boundary. If any parcel submitted for collection is identified by the County Auditor Controller to be an invalid parcel number for the current fiscal year, a corrected parcel number and/or new parcel number will be identified and resubmitted to the County Auditor Controller. The assessment amount to be levied and collected for the resubmitted parcel or parcels shall be based on the method of apportionment and assessment rate approved in this Report. Therefore, if a single parcel has changed to multiple parcels, the assessment amount applied to each of the new parcels shall be according to the approved method of apportionment and assessment rate rather than a proportionate share of the original assessment. Information identified on this Assessment Diagram/Boundary Map was provided by the City of Santa Clarita. The Sand Canyon Plaza Assessment Diagram identifying the boundaries of parcels within the Santa Clarita Landscaping and Lighting District Zone 33 (Sand Canyon Plaza) is included in this Report for reference on the following page. For details concerning the lines and dimensions of the applicable Assessor's Parcel Numbers, refer to the County Assessor's Maps as of the date of this Report. i i i v Cir Sada\e 0 A� �a oc 2839-005-035 a� a� C� �e as c o a 1823 ft jc � a O Ra o� c� �a a 1785 ft �a 2839-006-052 ` v 2839-006-075 2839-006-067 i 2 L o ` 48 ft Z Z c v a c c` �A LI 2839-006-066 2839-006-074 aka a Ln a 2839-006-068 5 2839-006-071 2839-006-063 14 0 Sand Canyon Plaza Boundary Q v Parcels Source: Los Angeles County 2022. N 0 200 400 Figure 1 Harris & Associates A Sand Canyon Plaza Overview Feet A 0 200 400 Harris &Associates Feet 0 Sand Canyon Plaza Boundary Parcels Source: Los Anqeles oun V . Figure 1 Sand Canyon Plaza Overview San Canyon Plaza Engineer's Report Zone 33 (Sand Canyon Plozo) Formation Harris & Associates Parcel Identification for each lot or parcel within Zone 33 shall be based on available parcel maps and other property data from the Los Angeles County Assessor's office as they existed at the time this Report was prepared and adopted by the City. The Assessment Roll states the net amount to be assessed upon assessable parcels within Zone 33. Included in the Assessment Roll are the Benefit Factors and the 2026/27 Proposed Assessment for each parcel. If any parcel submitted for collection is identified by the County Auditor/Controller to be an invalid parcel number for the current fiscal year, a corrected parcel number and/or new parcel numbers will be identified and resubmitted to the County Auditor/Controller. The assessment amount to be levied and collected for the resubmitted parcel(s) shall be based on the method of apportionment and assessment rate approved in this Report. Therefore, if a single parcel has changed to multiple parcels, the assessment amounts applied to each of the new parcels shall be recalculated and applied according to the approved method of apportionment and assessment rate rather than a proportionate share of the original assessment. As stated in Part V, the Net Assessable Acres is equal to the total acres less a 20% allowance for loss of streets/right-of- way/slopes. FINAL ASSESSMENT ROLL Land Use Net Assessable Acres Net Assessable Units Applied EBU Total EBUs FY2026/27 Assessment 2839-005-035 Single -Family Residential 2.11 33.00 1.00 33.00 $ 5,376.37 2839-005-035 Multi -Family Residential 9.19 266.00 0.75 199.50 $ 32,502.63 2839-005-035 Exempt - - - - $ - 2839-006-052 Multi -Family Residential 1.61 78.00 0.75 58.50 $ 9,530.84 2839-006-052 Exempt - - - - $ - 2839-006-066 Non -Residential 1.95 - 6.00 11.70 $ 1,906.17 2839-006-067 Multi -Family Residential 5.29 87.00 0.75 65.25 $ 10,630.56 2839-006-068 Non -Residential 2.12 - 6.00 12.72 $ 2,072.35 2839-006-068 Exempt - - - $ - 2839-006-074 Non -Residential 2.97 6.00 17.82 $ 2,903.24 2839-006-074 Exempt - - - - $ - 2839-006-075 Single -Family Residential 23.39 86.00 1.00 86.00 $ 14,011.16 2839-006-075 Multi -Family Residential 2.71 30.00 0.75 22.50 $ 3,665.71 TOTALS 51.34 580.00 506.99 $ 82,599.03