65F - ANNEX TUSTIN AND 17TH ST ISLAND

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Direct staff to initiate process to annex 17th Street and Tustin Avenue County of Orange Unincorporated_Island June 5, 2018 Page 2 (i.e. annexation). The 3.3 -acre proposed development site is part of a much larger 24.71 -acre County of Orange unincorporated island (Island). The Island is bound by Seventeenth Street to the south, Tustin Avenue to the west and 55 Newport Freeway to the east (Island is shown on Exhibit 1). The existing land uses within the Island include an estimated 49 single-family dwellings, 32 multifamily dwellings, and a strip commercial center. Estimated population of the Island is 275. Water utility services are currently provided by the City of Tustin and a number of dwellings utilize septic tanks. Furthermore, the Island is considered an "unincorporated small island" under California Government Code Section 56375.3 and Orange County Local Agency Formation Commission (OCLAFCO) "Policy and Procedural Guidelines for Addressing Unincorporated Small Islands." Annexation of a County unincorporated island may be initiated by a municipality, agency, landowner or by registered voter. If the process is initiated by a municipality, there are benefits that may provide for a more favorable outcome such as: • OCLAFCO processing fees are waived (exception - State Board of Equalization fees) • Ability to negotiate Property Tax Exchange Agreement with the County • Negotiate cost recovery for the provision of City services (County, Owner/Developer) • Negotiate cost recovery for infrastructure improvements (County, Owner/Developer) • Resident/community protest is waived According to OCLAFCO, the 17th Street and Tustin Avenue Island is within the City of Santa Ana's "sphere of influence" and therefore the City is identified as the logical municipal service provider. Annexation Process and Proposed Schedule Due to the small size of the Island, the process to annex the Island is largely administrative. If the City Council approves moving forward with the annexation via a resolution at a future date, the City will submit a Project Application Form (Application) to LAFCO to annex the Island (Exhibit 2). Once the Application and supporting documents (City Resolution, Annexation and Cooperative Agreement, Plan of Services, Property Tax Exchange Agreement, etc.) are reviewed and deemed complete, LAFCO will set a public hearing date. A public hearing will take place and, in accordance with State law regarding small island annexations, LAFCO shall approve the action. The entire process, from initiating the annexation process to LAFCO's final action, is expected to take approximately eight (8) to ten (10) months. If the City Council approves the recommended action, Staff proposes that the initial step in the process be that LAFCO lead (in collaboration with the City and County) a community meeting to discuss the proposed annexation with the residents and other interested parties associated with the Island. 65F-2