BACKGROUND:
The City has been working with the Desert Recreation District (DRD) on efforts to bring park and recreation services to the City since 2018. The COVID-19 pandemic put initial efforts on hold in early 2020, however, in recent months work on that project has resumed. Polling was completed in early 2022 and results presented to this City Council in May. According to the poll results, there appeared to be a chance for a successful election.
To date, DRD has been leading this effort with the goal of both establishing the Community Facilities District (CFD) financing mechanism as well as annexing the City to the DRD boundary via LAFCO proceeding. It has come to the City’s attention that the LAFCO deadlines have made the current City Council decision to pursue DRD annexation and CFD approval untenable with DRD acting as the lead agency. In order for the DRD to form a CFD, they had to be able to demonstrate that the City was already annexed into the DRD or that the City had an application with LAFCO that had been deemed to be accepted. Neither of those are currently the case as of today. It is now impossible to do this before the LAFCO deadline. Alternatively, the City can take action to form the CFD and call for the CFD election (instead of the DRD) in order to ensure that election is consolidated with the November 2022 general election.
Additionally, this approach may be favorable to the City considering the biggest challenge demonstrated in the polling results was the community’s lack of experience with the DRD.
DISCUSSION:
The process to form a CFD includes the following steps:
1. City Council Meeting – Adopt Resolution of Intention to Form CFD, Adopt Resolution of Intention to Incur Bonded Indebtedness
2. Record Boundary Map, Publish Notice of Public Hearing
3. City Council Meeting – Hold Public Hearing, Adopt Resolution of Formation, Adopt Resolution to Incur Bonded Indebtedness
4. Election
5. City Council Meeting – Certify Election Results, Adopt Ordinance to Levy Special Tax
Additional steps would follow the CFD formation to authorize the issuance of bonds to finance capital projects.
Staff recommends that the City Council adopt the two (2) resolutions to begin the process of the CFD formation:
•RESOLUTION OF INTENTION TO FORM A COMMUNITY FACILITIES
DISTRICT AND LEVY A SPECIAL TAX IN THE CITY OF CATHEDRAL CITY COMMUNITY FACILITIES DISTRICT NO. 2022-1 (CATHEDRAL CITY PARK &
RECREATION SERVICES), TO FUND PUBLIC SERVICES AND FINANCE THE
DEVELOPMENT OF CERTAIN PUBLIC FACILITIES
•RESOLUTION OF INTENTION TO INCUR BONDED INDEBTEDNESS IN AMOUNT NOT TO EXCEED $39,000,000 IN AND FOR THE CITY OF CATHEDRAL CITY COMMUNITY FACILITIES DISTRICT NO. 2022-1 (CATHEDRAL CITY PARK & RECREATION SERVICES) TO FINANCE THE
DEVELOPMENT OF CERTAIN PUBLIC FACILITIES
FISCAL IMPACT:
Developed Property
The Maximum Special Tax for each Assessor’s Parcel of Developed Property is shown in Table 1.
TABLE 1
MAXIMUM SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2023/24 Property Type Maximum Special Tax Per Single Family Residential Property $0.15 Building Square Foot Accessory Dwelling Unit 123.00 Unit
Residential Condominium Property 196.00 Unit
Multi-family Residential Property 172.00 Unit
Non-residential Property 734.00 Parcel
EXEMPTIONS
No Special Tax shall be levied on Agricultural Property, Timeshare Property, Public Property and Undeveloped Property.
Depending upon interest rates at the time of bond issuance, it is anticipated the special taxes collected would support a bond issue in the amount of $38-$39 million dollars.
Annual revenue generated to support services and debt service is approximately $4.6 million dollars.