COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
Districts 505-04 4/9/2019 1OF23
ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
BACKGROUND
TheMello-RoosCommunityFacilitiesActof1982 (the “Mello-RoosAct”) andOrdinanceNo. 2730, asamendedfromtimeto timeandcodifiedinChapter3.60of theChulaVistaMunicipalCode (the CFDOrdinance”) allowsforthecreationofCommunityFacilitiesDistricts (CFDs) tofinancecertain publiccapitalfacilitiesandservices, especiallyin developingareasandareasundergoing rehabilitation. As a prerequisiteto formingCFDspursuantto theMello-RoosAct, eachlocal jurisdictionmustfirstconsiderandadoptlocalgoalsandpoliciesasdescribedtherein. TheCityfirst adoptedtheCityof ChulaVistaStatementof GoalsandPoliciesRegardingtheEstablishmentof CommunityFacilitiesDistricts (the “GoalsandPolicies”) onJanuary13, 1998, viaResolutionNo. 18860. TheGoalsandPoliciesweresubsequentlyamendedin July1998, December1998, and November2013viaResolutionNos. 19103, 19300, and2013-225, respectively. Inclusionof the GoalsandPolicies” intheCityCouncilPolicyManualisrecommendedandareapplicabletoCFDs formedundertheMello-RoosActandtheCFDOrdinance.
PURPOSE
Thepurposeof thisStatementof GoalsandPoliciesisto providetheCitystaff, theresidentsof the City, andtheownersanddevelopersof propertylocatedwithintheCitywith guidancein the applicationfor, andconsiderationof, theestablishmentof communityfacilitiesdistrictsfor the purposeof financingorassistinginfinancingtheacquisitionorconstructionof publicinfrastructure ortheprovisionofauthorizedpublicservicestobenefitandserveeitherexistingornewdevelopment oracombinationthereof. Theunderlyingprincipalsbehindthispolicyaretheprotectionofthepublic interest, assuringfairnessintheapplicationof specialtaxesto currentandfuturepropertyowners, assuringfulldisclosureof theexistenceof anyspecialtaxliens, ensuringthecreditworthinessofany communityfacilitiesdistrictspecialtaxbonds, protectingtheCity'screditratingandfinancial positionandassuringthatapplicantsforallcommunityfacilitiesdistrictproceedingsotherthanCity initiatedproceedingspayallcostsassociatedwiththeformationofanycommunityfacilitiesdistrict.
POLICY
TheCityCouncilof theCityof ChulaVista (hereafterthe “CityCouncil”) herebyestablishesand statesitsgoalsandpoliciesconcerningtheuseofChapter2.5ofPartI ofDivision2ofTitle5ofthe GovernmentCodeof theStateof California (hereafterthe “Act”) inprovidingadequatepublic infrastructureimprovementsandpublicservicesfor theCity of ChulaVista (the “City”). The followinggoalsandpoliciesshallapplyto allcommunityfacilitiesdistrictshereafterformedor proposedtobeformedbytheCity. Anypolicyorgoalstatedhereinmaybesupplementedoramended
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
Districts 505-04 4/9/2019 2OF23
ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
byresolutionoftheCityCouncil.
Thescopeof thispolicyislimitedto theproposedformationof communityfacilitiesdistrictsforthe limitedpurposeof financingor assistingin financingtheacquisitionor constructionof public infrastructureand/ortheprovisionofauthorizedpublicservices.
IntroductoryStatement
TheCitywillconsiderapplicationsinitiatedbyownersordevelopersofvacantpropertyproposedto bedeveloped, ownersof propertywithinexistingdevelopedareas, registeredvotersresidingin existingdevelopedareas, ortheCityitselffortheestablishmentof communityfacilitiesdistrictsto financeauthorizedpublicimprovementsor to provideauthorizedpublicserviceswhichbenefitor serveexistingor newdevelopmentor acombinationthereof. A communityfacilitiesdistrictor an improvementareawithinacommunityfacilitiesdistrictproposedto beestablishedto financepublic improvementsorauthorizedservicestoservenewdevelopmentmaybereferredtoasa “Development RelatedCFD.”
Eachapplicationfor theestablishmentof acommunityfacilitiesdistrictmustcomplywith the applicablegoalsandpoliciescontainedhereinunlesstheCityCouncilexpresslygrantsanexception tosuchpolicyorpoliciesastheyapplytoaspecificapplication.
FindingofPublicInterestor Benefit
TheCityCouncilmayauthorizetheinitiationofproceedingstoformacommunityfacilitiesdistrictto financeauthorizedpublicimprovementsorto provideauthorizedpublicservicesif theCityCouncil determinesthatthepublicimprovementsto befinancedor publicservicesto beprovidedor, inthe caseof aDevelopmentRelatedCFD, theattributesof thenewdevelopmentwill provide, in the opinionof theCityCouncil, apublicbenefitto thecommunityatlargeaswellasthebenefitto be derivedbythepropertieswithinthecommunityfacilitiesdistrict.
Examplesof publicbenefitto thecommunityat largemayinclude, butarenot limitedto the following:
1. Constructionof amajorpublicfacilitywhichmeetsacommunityneedincluding, but notlimitedto, amajorarterialwhichwill provideavitalroadwayfacilityto alleviatecongestion, waterstoragefacilitieswhichwill remedyinadequatefireflow, andstormdrainagefacilitieswhich areapartofthestormdrainagemasterplan.
2. Provisionof publicinfrastructuresoonerthanwouldotherwiseberequiredfor a
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CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
Districts 505-04 4/9/2019 3OF23
ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
particulardevelopmentproject.
3. Constructionof publicinfrastructuretoservecommercialorindustrialprojectswhich willexpandtheCity'semploymentand/orsalestaxbase.
4. Provisionof maintenanceor otherauthorizedpublicservicessuchaslandscaping, lighting, stormdrain, floodcontrolor openspacemaintenancenecessaryto promoteor maintain qualityoflifeandpublicsafetywithinexistingordevelopingareasoftheCity.
AuthorizedPublicFacilities
Improvementsproposedto befinancedthroughacommunityfacilitiesdistrictmustbepublic improvementswhichwill beowned, operatedormaintainedbytheCityoranotherpublicagencyor publicutilityor to whichtheCityisauthorizedto contributerevenue. Thetypesof improvements eligibleto befinancedmustserveawholeneighborhoodorcommercialorindustrialareaorgreater.
Suchimprovementsinclude:
1. Streetsandhighwayssatisfyingoneormoreofthefollowingcriteria:
A. identifiedintheCirculationElementoftheCityascollectorsorarterials; B. nodirectaccessbyabuttingproperties; or
C. minimumdailytrafficvolumeof3,500ADT.
2. Sewerlinesorothersewerfacilitiesservingaminimumof500singlefamilydwellings orequivalentdwellingunitsor suchotherareaof thecommunityastheCityManager, orhisorher designee, maydetermineto otherwisebeconsistentwiththeintentof thesegoalsandpoliciestobe locatedwithinauthorizedstreetsandhighwaysor withinotherpublicrights-of-wayshownonthe masterplanofsewerfacilities.
3. Watermainswithaminimumdiameterof 10" or otherwaterfacilitiesto belocated withinauthorizedstreetsandhighwaysorwithinotherpublicrights-of-wayshownonthemasterplan ofwaterfacilities.
4. Drainagefacilitiesservinga minimumof 100acresor suchotherareaof the communityastheCityManager, or hisor herdesignee, maydeterminetootherwisebeconsistent withtheintentofthesegoalsandpoliciesordraininganeligiblestreet.
5. Landscapingandirrigationfacilitiesmeetingoneofthefollowingcriteria:
A. Locatedwithin theright-of-way of a streetor highwayshownon the
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
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ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
CirculationElementoftheCity'sGeneralPlan;
B. Locatedadjacenttoanadoptedscenicroute; or
C. Locatedwithindedicatedopenspace.
6. Reclaimedwaterfacilitiesservinganareawhichbenefitstheareawithintheproposed communityfacilitiesdistrict.
7. Dry utilitiesservingaminimumof 500singlefamilydwellingunitsor equivalent dwellingunitsorsuchotherareaof thecommunityastheCityManager, orhisorherdesignee, may determineto otherwisebeconsistentwiththeintentof thesegoalsandpolicies; provided, however, theamountof specialtaxbondproceedsallocableto suchdryutilitiesmaynotexceedthatamount permittedunderFederaltaxlawandregulationsto ensurethetaxexemptstatusof interestonthe applicablespecialtaxbonds.
8. Gradingfor eligiblepublicstreets; provided, however, gradingfor aDevelopment RelatedCFDmustmeetoneofthefollowingcriteria:
A. Gradingwithintheverticalplanesoftheright-of-way;
B. SlopestoCity-ownedopenspaceoropenspaceeasementareas; or C. Offsiteroadwaygrading.
If thecutandfill within (A) and (B) donotbalance, thecostofexcavating, haulingand compactingfill inthestreetisauthorizedto befinanced. If thereisexcessmaterialin thestreetright-of-way, onlythecostof excavatingandhaulingto privateproperty withinthedevelopmentprojectiseligibletobefinanced. Thedeterminationofbalance willbemadeonatotaleligiblestreetgradingbasis, notonanindividualstreetbasis.
9. SuchotherimprovementsasmaybeauthorizedbylawandwhichtheCityCouncil determinesareconsistentwiththepoliciesherein.
TheCityCouncilshallhavethefinaldeterminationasto theeligibilityof anyimprovementfor financing, aswellastheprioritizationof financingof suchimprovements. Generally, “in-tract” (e.g., localstreetsor utilities) improvementswhichserveresidentialdevelopmentwill notbeconsidered eligibleto befinancedthroughacommunityfacilitiesdistrictunlessrequestedbytheownersor registeredvotersofanexistingresidentialdevelopmenttoremedyathreat, foundtoexistbytheCity Council, tothepublichealthorsafetyresultingfromanexistingdeficiencyinpublicimprovementsto servesuchexistingdevelopment.
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
Districts 505-04 4/9/2019 5OF23
ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
Anypublicimprovementsproposedto befinancedthroughacommunityfacilitiesdistrictmustmeet alldesignandconstructionrequirementsandstandardsasmaybeestablishedbytheCity. Anypublic improvement, theconstructionof whichiscompletedfollowingtheadoptionof theresolutionof formationof acommunityfacilitiesdistrict, proposedto beacquiredbytheCityfromtheowneror developerof propertywithin a DevelopmentRelatedCFD mustbeconstructedasif such improvementshadbeenconstructedunderthedirectionandsupervision, orundertheauthorityof, the City.
Publicimprovementsproposedtobeacquiredfromtheproceedsofspecialtaxbondsorspecialtaxes shallnotbeacquireduntilallimprovementsforaparticularProject (asdefinedbelow) arecompleted andacceptedbytheCityandtheCityManager, orhisorherdesignee, hascertifiedthefinalcostof suchimprovements. Forpurposesofthisparagraph, a “Project” shallbedefinedasallimprovements withinaparticularstreetor easementincludingstreetimprovements, sewer, drainage, utilitiesand gradingandwhichareauthorizedto beacquiredbythecommunityfacilitiesdistrictpursuantto an acquisitionandfinancingagreementbyandbetweentheCity, actingonbehalfof itselfandthe communityfacilitiesdistrict, andthepropertyowneror developerwhoisresponsiblefor the constructionofthepublicimprovements (the “'Acquisition/FinancingAgreement”). If improvements withinmorethanone (1) Projectareauthorizedto beacquiredthroughthecommunityfacilities district, thentheimprovementswithineachProjectmaybeacquiredseparatelyasallimprovements withinsuchProjectarecompletedandacceptedbytheCityandthefinalcostscertified. EachProject establishedfor anycommunityfacilitiesdistrictandallimprovementsincludedwithineachsuch Projectmustbedescribedin theAcquisition/FinancingAgreementfor suchcommunityfacilities district. If theAcquisition/FinancingAgreementhasestablishedmorethanone (1) Projectfor any communityfacilitiesdistrict, theAcquisition/FinancingAgreementmayauthorizethepartialrelease offundstopayfortheacquisitionofeachProjectwhensuchProjectiscompletedandacceptedbythe City.
TheCityCouncilmay, initssolediscretion, electtodeviatefromorwaivetheforegoingpolicyinits considerationof theapprovalof anAcquisition/FinancingAgreementfor acommunityfacilities districtto authorizethepaymentofthepurchasepriceforeachdiscretecomponentofaProject, i.e., anindividualimprovementwithinaProjectsuchasasewerlinewithinaProjectwhichalsoincludes street, wateranddrainageimprovements. In electingto deviatefromorwaivetheforegoingpolicy, theCityCouncilmayconditionthepaymentofthepurchasepricefordiscretecomponentsastheCity Councildeemsnecessaryto ensurethefinancialintegrityof thecommunityfacilitiesdistrict financing.
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
Districts 505-04 4/9/2019 6OF23
ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
PrioritizationofPublicImprovements
It isthepolicyoftheCityto givefirstprioritytotheprovisionofpublicimprovementsbenefitingthe CityinanycommunityfacilitiesdistrictestablishedbytheCity. It issecondarilythepolicyof the City, inanycommunityfacilitiesdistrictestablishedbytheCity, to assistintheprovisionof other publicimprovementstobeowned, operatedormaintainedbyotherpublicagenciesorpublicutilities.
AuthorizedPublicServices
Publicservicesproposedtobefinancedthroughacommunityfacilitiesdistrictmayinclude:
1. Maintenanceof parkways, mediansandopenspace, includingbutnotlimitedto, maintenanceof walls, fences, trailsystems, pedestrianaccesssystemsandotherfacilitieswithinsuch openspace, maintenanceandpreservationof habitatwithinsuchopenspace, andbiotaandother formsof monitoringof plants, wildlife, useof wildlifecorridorsandhabitatqualityasapartof any suchopenspacemaintenanceprogram.
2. Maintenanceof naturalizeddrainageandfloodcontrolfacilitiesincluding, butnot limitedto, channelsanddetentionanddesiltationbasins.
3. SuchotherservicesasmaybeauthorizedbytheMello-RoosAct orbyordinanceof theCityadoptedpursuanttothecharterauthorityoftheCityandwhichtheCityCouncildetermines areconsistentwith thegoalsandpolicieshereinandarein thebestinterestof theCityandthe residentsandpropertyownerswithinthecommunityfacilitiesdistrict.
IncidentalCosts
EligibleIncidentalCosts
Eligibleincidentalcostswhichmaybefinancedfromtheproceedsof specialtaxbondsissuedfora DevelopmentRelatedCFDor thespecialtaxleviedwithinaDevelopmentRelatedCFDshallbe limitedto thoseincidentalcostsdirectlyrelatedto theimprovementsfinancedfromtheproceedsof suchspecialtaxbondsorspecialtaxrevenuesandmayinclude:
1. Usualandcustomarydesignandengineeringcostsnotto exceedthefollowing percentages:
A. Civil engineering - 7.5% of thecostof theimprovementsfor whichthe engineeringwasperformed.
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
Districts 505-04 4/9/2019 7OF23
ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
B. Soilsengineering - 15% ofthecostoftheapplicablegrading.
C. Landscapearchitecture - 10% of thecostof theapplicablelandscapingand irrigation.
D. Surveyingandconstructionstaking - 2% of thecombinedcostof thecivil engineeringimprovementsandgradingfor theapplicablestreetandwet utilities.
E. Utilityengineering/coordination - 3% ofthecostoftheapplicabledryutilities.
2. Constructionadministrationandsupervisionnottoexceed, inaggregate, 1.75% ofthe totalconstructioncostoftheapplicablepublicimprovements.
3. Specialengineeringstudiesrelatedto "collector" or "transmission" facilities. Eligibility ofsuchstudiesmustbereviewedandapprovedbytheDirectorofDevelopmentServices, orhisorher designee.
4. Plancheckandinspectionfees (lessanyrefunds).
5. Capacityorconnectionfeesrelatedsolelyto thepublicimprovementsbeingacquired orconstructedaspermittedundertheMello-RoosAct.
6. Capitalizedinterestonanycommunityfacilitiesdistrictspecialtaxbondsasauthorized bytheCityCouncilpursuanttothesegoalsandpolicies.
7. Costsofacquisitionofoff-siterights-of-wayand/oreasementsincludingthefollowing:
A. Appraisalcosts, includingtitlereports.
B. Costsofpreparingacquisitionplats.
C. Appraisedvalueoractualcostofright-of-wayoreasement, whicheverisless.
D. Legalfeesandcostrelatedto eminentdomainproceedingsapprovedbythe CityAttorney.
8. Reimbursementof fundsadvancedbytheapplicantto payfor (i) preformationcosts and/or (ii) costsofissuanceincurredbyoronbehalfoftheCity.
9. Costsofenvironmentalreview, permittingandmitigationlimitedtothespecificpublic improvementsproposedtobefinancedthroughthecommunityfacilitiesdistrict.
Unlessspecifiedotherwiseabove, theCityManager, orhisorherdesignee, shallreviewallincidental
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
Districts 505-04 4/9/2019 8OF23
ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
coststoensurethatsuchcostsarecustomaryandreasonable.
IneligibleIncidentalCosts
Thefollowingcostsarenoteligibletobefinancedfromtheproceedsof communityfacilitiesdistrict specialtaxbonds:
1. Developmentimpactfees; provided, however, theCity Councilmay, in its sole discretion, grantcreditin anamountnotto exceedtheobligationfor thepaymentof suchfeesif improvementswhichwouldotherwisebefinancedfromtheproceedsof suchfeesarefinancedfrom theproceedsofcommunityfacilitiesdistrictspecialtaxbondsorspecialtaxes.
2. Administrativeoroverheadexpenses, financialorlegalfeesincurredbyanapplicant for theformationof acommunityfacilitiesdistrict. Thislimitationdoesnotapplyto amounts advancedbytheapplicanttotheCitypursuanttotheprovisionsofthispolicytopayforpreformation costsincurredbytheCity. (See “PreformationCostDepositsandReimbursements” below.)
3. Landuseplanningandsubdivisioncostsandenvironmentalreviewcostsrelatedto suchlanduseplanningandsubdivision.
4. PlanningStudiesunlessoff-site.
5. Environmentalimpactreportsunlessoff-site.
6. Constructionloaninterest.
7. Subdivisionfinancialanalysis.
8. Attorneys’ feesrelatedto thelanduseentitlementor subdivisionprocessunlessoff- site.
9. Onsiteright-of-wayandeasements.
10. Anycompensationpayableto theCityasconsiderationfor theCity'sagreementto providethefinancingmechanismfor thefinancingof theauthorizedimprovementsandeligible incidentalexpensesandtoacquiretheauthorizedimprovementspursuanttothetermsandconditions ofanagreementwiththeCityandthepropertyownerordeveloperasappropriate.
11. Otheroverheadexpensesincurredbytheapplicant.
RequiredValue-To-DebtRatio
It isthepolicyof theCitythatthevalue-to-debtratioforacommunityfacilitiesdistrictmustbeat
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
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ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
least4:1. Thecalculatedvalue-to-debtratioshallreflectthefullcashvalueof thepropertiessubject tothelevyofspecialtaxes, includingthevalueoftheimprovementstobefinancedfromtheproceeds of theissueor seriesof specialtaxbondsfor whichthevalue-to-debtratioisbeingcomputed, comparedto theaggregateamountofthespecialtaxlienproposedtobecreatedplusanypriorfixed assessmentliensand/or specialtaxliens. Therequiredvalue-to-debtratioshallbedeterminedwith respectto alltaxablepropertywithinthecommunityfacilitiesdistrictin theaggregateandwith respecttoeachdevelopmentareaforwhichnofinalsubdivisionmaphasbeenfiled.
A communityfacilitiesdistrictwithavalue-to-debtratioof lessthan4:1butequaltoorgreaterthan 3:1 maybeapproved, inthesolediscretionof theCityCouncil, uponadeterminationbytheCity Manager, afterconsultationwiththeFinanceDirector, thebondcounsel, theunderwriterandthe financialadvisor, thata value-to-debtratio of lessthan4:1 is financiallyprudentunderthe circumstancesof theparticularcommunityfacilitiesdistrict. Inaddition, theCityCouncilmay, inits solediscretion, acceptaformorformsofcreditenhancementsuchasaletterofcredit, bondinsurance ortheescrowofbondproceedstooffsetadeficiencyintherequiredvalue-to-debtratioasit appliesto thetaxablepropertywithinthecommunityfacilitiesdistrictintheaggregateor withrespectto any developmentarea.
Thevalue-to-debtratioshallbedeterminedbaseduponthefullcashvalueofthepropertiessubjectto thelevyof thespecialtaxasshownontheadvaloremassessmentroll or uponanappraisalof the propertiesproposedtobeassessed; provided, however, theCityManagermayrequirethatthevalue- to-debtratiobedeterminedbyanappraisalif, in hisor herjudgement, theassessedvaluesof the propertiesproposedto beassesseddonotreflectthecurrentfullcashvalueof suchproperties. The appraisalshallbe coordinatedby, doneunderthedirectionof, andaddressedto theCity. The appraisalshallbeundertakenbyastatecertifiedrealestateappraiser, asdefinedinBusinessand ProfessionsCodeSection11340. TheappraisershallbeselectedandretainedbytheCityortheCity's financialadvisor. Thecostsassociatedwiththepreparationoftheappraisalreportshallbepaidbythe applicantfor thecommunityfacilitiesdistrictandshallbesubjectto possiblereimbursementas providedfor herein. Theappraisalshallbeconductedinaccordancewithassumptionsandcriteria establishedbytheCity, basedupongenerallyacceptedappraisalstandardsor staterecommended standardsforsimilarappraisalsconductedforthesamepurpose.
TheCityreservestherighttorequireamarketabsorptionstudyforanyDevelopmentRelatedCFD. In anysuchcasetheCityshallretain, attheapplicant'ssoleexpensebutsubjectto reimbursementas providedfor herein, aconsultantto prepareareportto verifyor establishtheprojectedmarket absorptionfor andtheprojectedsalespricesof thepropertiesproposedto beincludedwithinthe
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
Districts 505-04 4/9/2019 10OF23
ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
communityfacilitiesdistrict. If amarketabsorptionstudyisconducted, theappraisershallutilizethe conclusionsof themarketabsorptionstudyinconductingtheappraisalof thepropertieswithinthe proposedcommunityfacilitiesdistrictor shalljustify, to thesatisfactionof theCityManager, why suchconclusionswerenotutilizedinconductingsuchappraisal.
Criteriafor Appraisals
DefinitionofAppraisal
Forpurposesof thesegoalsandpolicies, anappraisalshallmeanawrittenstatementindependently andimpartiallypreparedbyaqualifiedappraisersettingforthanopinionof definedvalueof an adequatelydescribedpropertyasof aspecificdate, supportedbythepresentationandanalysisof relevantmarketinformation.
ContentsoftheAppraisal
An appraisalshouldreflectnationallyrecognizedappraisalstandards, including, to theextent appropriate, theUniformStandardsof ProfessionalAppraisalPractice. Anappraisalmustcontain sufficientdocumentation, includingvaluationdataandtheappraiser'sanalysisofsuchdata, tosupport theappraiser'sopinionofvalue. At aminimum, theappraisalshallcontainthefollowing:
1. PurposeoftheAppraisal. Thisshouldincludethereasonfortheappraisal, adefinition ofallvaluesrequired, andthepropertyrightsbeingappraised.
2. Area, CityandNeighborhoodData. Thesedatashouldincludesuchinformationas directlyaffectsthe appraisedpropertytogetherwiththeappraiser'sconclusionsasto significant trends.
3. PropertyData. Thisshouldincludeadetailedphysicaldescriptionof theproperty, its size, shape, soilconditions, topography, improvements, andotherphysicalcharacteristicswhichaffect thepropertybeingappraised. Theavailability, capacityof, andproximityto, utilitiesandother infrastructureshouldalsobediscussed.
4. TitleCondition. Theconditionof titleto thepropertyappraisedshouldbediscussed basedupontheappraiser’sexaminationof atitlereportof thepropertyappraised. Theappraiser shouldanalyzeanddiscussthosetitleissueswhichareconcludedtoimpactthevalueoftheproperty beingappraised.
5. ImprovementCondition.
A. Theappraisershallvaluethepropertywithinthecommunityfacilitiesdistrict
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CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
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ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
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on an “as-is” basistakingintoconsiderationthevalueassociatedwiththe publicimprovementstobefundedfromtheproceedsoftheissueof bondsfor whichtheappraisalis beingundertaken. Thepropertyin thecommunity facilitiesdistrictshallbevaluedasif it werefreeandclearof anyspecialtaxes andassessments, if any, sothatapropercomparisonof value-to-debtcanbe determined. In determininghisor herconclusionof value, theappraisermay considerthevalueof thepropertyinthecommunityfacilitiesdistrictunder differentmarketconditions. Thismayconsistof valuingthepropertyasif it weresoldtoasinglepurchaserinbulkorsoldtoseveralpurchasersinportions orpieces.
B. Landparcelswhichhavebeendevelopedwithresidencesandsubsequentlysold shouldataminimumindicatelandparcelsize, numberoflots, density, number ofplans, squarefootage, roomcounts, yearconstructionwasinitiated, yearof completion, andwhensaleswereinitiated.
C. Landparcelswithresidentialproductunderconstructionor withstanding inventoryshouldbedescribedasin A. aboveandincludeasummaryof the stageof developmentregardingthenumberof unitscompleted, numberof models, statusofunitsunderconstruction, finishedlotsandmass-gradedorraw lots. Inaddition, acommentonthemarketabilityoftheunits (architecture, size, etc.) isappropriate.
D. Landparcelswhichhavebeendevelopedwithincome-producing (orowner- occupied) commercial/retail, industrial, hotels, apartments, offices, etc., should bedescribedasfollows:
i. Commercial-Retail - Landparcelsize; basicconstructiontype; typical tenantimprovements (andwhoisresponsiblefor theirconstruction); leasablearea, whenconstructionwasinitiated; anddateofcompletion. ii. Industrial - Landparcelsize; basicconstructiontype, whethersingleor multi-tenant; typicalofficebuild-outaspercentageof totalarea, when constructionwasinitiated; anddateofcompletion.
iii. Hotels – Landparcelsize; basicconstructiontype; numberof rooms; dining, recreation, conventionspace, meetingrooms, andother amenities.
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
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ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
iv. Apartments - Landparcelsize; basicconstructiontype; numberof stories; numberof units; unit mix; size; total rentablearea, when constructionwasinitiated; anddateofcompletion.
v. Office - Landparcelsize; basicconstructiontype; typicaltenant improvements/allowance; netrentablearea, whenconstructionwas initiated; anddateofcompletion.
6. GeneralPlanClassification. DescribetheGeneralPlanclassificationofthesubjectand comparableproperties.
7. Zoning. Describethezoningfor thesubjectandcomparableproperties. Noteany discrepancybetweenGeneralPlanclassificationandzoning. If rezoningisimminent, discussfurther underItem8below.
8. Analysisof HighestandBestUse. Thereportshouldstateandsupportthehighestand bestuseto whichapropertycanbeputandrecognizethatlandisappraisedasthoughvacantand availablefordevelopmenttoitshighestandbestuse, andtheimprovementsarebasedontheiractual contributiontothesite.
9. Statementof Value. Theappraiser'sopinionof thevalueof thespecifiedproperty rights, preparedaccordingtoallrelevantandreliableapproachestovalueconsistentwithcommonly acceptedprofessionalappraisalpractices. If adiscountedcashflow analysisisused, it shouldbe supportedbyatleastoneothervaluationmethodsuchassalescomparisonapproachutilizingsalesof propertiesthatareinthesamestageofdevelopment. If morethanonevaluationapproachisused, the appraisershallincludeananalysisandreconciliationof suchapproachesto supporttheappraiser's opinionofvalue.
10. Certification. Certificationof appraiserandpermissionto reproduceandusethe appraisalreportasrequiredforbondissuance.
MaximumAggregateTaxesandAssessments
It isthepolicyof theCitythatthemaximumannualspecialtaxinstallmentapplicableto anyparcel usedforresidentialpurposes (notincludingmotels, hotels, campsites, orothershort-termlodging, as determinedbytheCity) shallnotexceedonepercent (1%) of thesalepriceof newlydeveloped propertiessubjectto thelevyof thespecialtax (the “NewlyDevelopedProperties”) asofthedateof thecloseof escrowof theinitialsaleof anyresidentialdwellingunitto suchresidentialhomeowner.
Asadistinctandseparaterequirement, thetotalof thefollowingtaxes, assessmentsdescribedin4.
COUNCILPOLICY
CITYOFCHULAVISTA
SUBJECT: StatementofGoalsandPoliciesRegarding POLICY EFFECTIVE Establishmentof CommunityFacilities NUMBER DATE PAGE
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ADOPTEDBY: ResolutionNo. 2019-051 DATED: 4/9/2019
AMENDEDBY:
belowandspecialtaxesappearingonthepropertytaxbill, shallnotexceedtwo (2%) of suchinitial salespriceofNewlyDevelopedProperties:
1. Advalorempropertytaxes.
2. Voterapprovedadvalorempropertytaxesin excessof onepercent (1%) of the assessedvalueofthesubjectproperties.
3. Themaximumannualspecialtaxesleviedbythecommunityfacilitiesdistrictunder considerationandanyothercommunityfacilitiesdistrictorotherpublicagencyexceptingtherefrom specialtaxesleviedbyacommunityfacilitiesdistrictformedorunderconsiderationforformationfor thepurposeof providingservicessuchasopenspacemaintenance, landscapemaintenanceand preservemaintenance.
4. Theannualassessmentinstallments, includinganyadministrativesurcharge, for any existingassessmentdistrictwheresuchassessmentinstallmentsareutilizedto paydebtserviceon bondsissuedfor suchassessmentdistrict. Annualassessmentinstallmentsfor maintenanceand servicesshallnotbeincludedin theassessmentscalculatedin determiningtheaggregatetax, assessmentandspecialtaxobligationforaparcel.
Theapplicantfor theestablishmentof anyDevelopmentRelatedCFDwhichincludesresidential developmentsubjecttotheforegoinglimitationsshallberequiredtoenterintoanagreementwiththe Cityorthecommunityfacilitiesdistrictrequiringtheprepaymentbytheapplicantof thatportionof thespecialtaxobligationapplicabletoanyparcelusedforresidentialpurposesinordertoreducethe annualmaximumspecialtaxobligationsothatthemaximumannualspecialtaxinstallmentshallnot exceed1% of thesalespriceforsuchparcelandthetotaltaxes, assessmentsandspecialtaxesdoes notexceed2% ofsuchsalesprice.
SpecialTaxRequirements
Therateandmethodof apportionmentof thespecialtaxfor anycommunityfacilitiesdistrictshall adheretothefollowingrequirements:
1. Themaximumspecialtaxshallbeadequatetoincludeanamountnecessarytopayfor theexpensesincurredbysuchcommunityfacilitiesdistrictinthelevyandcollectionofthespecialtax andtheadministrationofthespecialtaxbondsandthecommunityfacilitiesdistrict.
2. Themaximumprojectedannualspecialtaxrevenuesmustequal110% oftheprojected annualgrossdebtserviceonanybondsofthecommunityfacilitiesdistrict.
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3. A backupspecialtaxshallberequiredforanyDevelopmentRelatedCFDto protect againstchangesin densityresultingin thegenerationof insufficientspecialtaxrevenuesto pay annualdebtserviceandadministrativeexpenses, unlesstheCityManager, or hisor herdesignee, basedontheadviceof thefinancialadvisor, specialtaxconsultantorunderwriterdeterminesthata backupspecialtaxisnotneededunderthespecialtaxformulaforsuchDevelopmentRelatedCFD.
TheCityCouncilmayadditionallyor alternativelyrequirethatasaconditionof approvalof the downsizingofthedevelopmentinaDevelopmentRelatedCFDattherequestof theapplicantorthe applicant'ssuccessor-in-interest, theapplicantortheapplicant'ssuccessor-in-interest, asapplicable, mayberequiredto prepaysuchportionof thespecialtaxobligationasmaybenecessaryin the determinationof theCityto ensurethatadequatedebtservicecoverageexistswithrespectto any outstandingbondsorotherwiseprovidessecurityinaformandamountdeemednecessarybytheCity Counciltoprovideforthepaymentofdebtserviceonthebonds.
4. All developedandundevelopedpropertywithinanycommunityfacilitiesdistrict whichisnototherwisestatutorilyexemptfromthelevyof specialtaxesshallbearitsappropriate shareof thecommunityfacilitiesdistrict’saggregatespecialtaxobligationfromthedateofformation ofthecommunityfacilitiesdistrictconsistentwiththeothergoalsandpoliciessetforthherein.
5. A partialand/or totalprepaymentoptionshallbeincludedinanyrateandmethodof apportionmentof specialtaxesto payfor publicfacilities. Noprepaymentshallbepermittedof a specialtaxleviedtofinanceauthorizedservicesand/ormaintenance.
6. Themaximumspecialtaxto payforpublicfacilitiesshallbeleviedagainstanyparcel usedfor privateresidentialpurposesin thefirstfiscalyearfollowingthefiscalyearin whichthe buildingpermitfor theconstructionof aresidentialdwellingunitonsuchparcelisissuedandsuch maximumspecialtaxmaynotescalateafterthefirstfiscalyearinwhichsuchspecialtaxissolevied.
7. Therateandmethodofapportionmentofaspecialtaxtopayforpublicfacilitiesshall specifyafiscalyearbeyondwhichthespecialtaxmaynotbeleviedonanyparcelusedfor private residentialpurposes. A specialtaxto payfor publicservicesand/or maintenanceshallhaveno terminationdateunlessestablishedbytheCityCouncil.
8. Therateandmethodofapportionmentofaspecialtaxtopayforpublicservicesand/or maintenanceshallincludelife-cyclereplacementcostsformaintainedfacilities, asdeterminedbythe CityManager, orhisorherdesignee.
9. Therateandmethodofapportionmentofaspecialtaxtopayforpublicservicesand/or maintenanceshallauthorizeannualinflationaryadjustmentsto themaximumspecialtax. The
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authorizedadjustmentsshallbebaseduponindustrystandardpublishedindices, orsuchotherdataas maybeapprovedbytheCityManager, orhisorherdesignee. Inallinstances, it shallbethepolicyof theCityto employthemostspecificapplicableindex. ExamplesincludeapplyingtheConsumer PriceIndexfor UrbanWageEarnersandClericalWorkersto laborcostsandapplyingthe ConstructionCostIndextoassetreplacementcosts.
TermsandConditionsofSpecialTaxBonds
All termsandconditionsof anyspecialtaxbondsissuedbytheCityfor anycommunityfacilities district, including, withoutlimitation, thesizing, timing, term, interestrates, discount, redemption features, flowof funds, investmentprovisionsandforeclosurecovenants, shallbeestablishedbythe City. Eachspecialtaxbondissueshallbestructuredtoadequatelyprotectbondownersandtoavoid negativelyimpactingthebondingcapacityor creditworthinessof theCity. Unlessotherwise approvedbytheCityCouncil, thefollowingshallserveasminimumbondrequirements:
1. A reservefundshallbeestablishedfor eachbondissueto befundedoutofthebond proceedsinanamountequalto 10% of theoriginalproceedsof thebondsorsuchlesseramountas mayberequiredbyfederaltaxlaw.
2. Interestshallbecapitalizedfor abondissueonlysolongasnecessaryto placethe specialtaxinstallmentsontheassessmentroll; provided, however, interestmaybecapitalizedfora termtobeestablishedinthesolediscretionoftheCityCouncilonacase-by-casebasis, nottoexceed anaggregateof 24months, takingintoconsiderationthevalue-to-debtratio, theexpectedtimingof initial occupancydatesfor theprivateimprovementsbeingconstructed, expectedabsorptionand buildoutof theproject, theexpectedconstructionandcompletionschedulefor thepublic improvementstobefundedfromtheproceedsofthebondissueinquestion, thesizeofthebondissue, thedevelopmentproformaandtheequitypositionoftheapplicantandsuchotherfactorsastheCity Councilmaydeemrelevant.
3. In instanceswheremultipleseriesof bondsareto beissued, theCityshalldetermine whatimprovementsshallbefinancedfromtheproceedsofeachseriesofbonds.
4. Neitherthefaith, creditortaxingpoweroftheCityshallbepledgedtothepaymentof thebonds. Thesolesourceof revenuefor thepaymentof thebondsshallbethespecialtaxes, capitalizedinterest, if any, andmoneysondepositinthereservefundestablishedforsuchbonds.
DischargeofSpecialTaxObligation
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It isthepolicyoftheCitythatthespecialtaxobligationrelatedtothefinancingof theacquisitionor constructionofpublicimprovementsmaybeprepaidanddischargedinwholeorinpartatanytime.
TheapplicantfortheformationofaDevelopmentRelatedCFDmustprovidenoticeandopportunity for thepurchasersof propertywithinsuchcommunityfacilitiesdistrictto prepaythespecialtax obligationapplicabletosuchpropertyatthetimeofthecloseofescrow.
Theapplicantfor theformationof aDevelopmentRelatedCFDmustprepareandpresentaplan, satisfactoryto theCity Council, prior to thepublichearingto considertheformationof such communityfacilitiesdistrictdescribinghowtheprospectivepurchaserwill benotifiedof the existenceof thespecialtaxlienandtheoptionswhichtheprospectivepurchaserhasregardingthe prepaymentanddischargeofthespecialtaxobligation.
Disclosureto PropertyPurchasersin DevelopmentRelatedCFD's TheapplicantfortheformationofaDevelopmentRelatedCFDwillberequiredtodemonstratetothe satisfactionof theCityManager (whenthetermCityManagerisusedhereinit shallmeantheCity Managerorhisorherdesignee) thattherewillbefull disclosureofthespecialtaxobligationforsuch communityfacilitiesdistrictandof anyandallotherspecialtaxesor assessmentsonindividual parcelsto prospectivepurchasersor lesseesof propertywithinsuchcommunityfacilitiesdistrict, includinginterimpurchasers, merchantbuilders, residentialhomeownersandcommercialorindustrial purchasersorlessees.
Suchnoticemustincludeallof thefollowinginadditionto suchotherprovisionsasmayberequired bytheMello-RoosAct, theMunicipalCodeoftheCityortheapplicantmaydeemnecessary:
1. Providefor full disclosureof theexistenceof thespecialtaxlienandanyother assessmentor specialtaxobligationapplicableto thepropertieswithinthecommunityfacilities district (whetherimposedbytheCityoranyotherpublicagency), includingtheprincipalamountof thespecialtaxobligationandanyotherapplicableassessmentorspecialtaxobligation, termof each of theassessmentorspecialtaxliensandtheamountof theexpectedpaymentsof thespecialtaxes andthemaximumauthorizedspecialtax.
2. Disclosetheoptionto prepaythespecialtaxto payfor publicfacilitiesor allowthe specialtaxtopayforpublicfacilitiestobepassedthroughto thepurchaserof suchpropertyandthe adjustment, if any, inthesalespriceofthehomesorotherpropertywhichwillapplyif thespecialtax lienispassedthrough. Providetheabilityfortheprospectivepurchasertoelecttoexercisetheoption eitherto prepaythespecialtaxobligationforfacilitiesatthecloseof escrowor to havethespecial taxesincludedin thepropertytaxesfor theproperty. Suchdisclosureshallbeplacedin allsales
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brochures, allotheron-siteadvertisingandallpurchasedocuments.
3. Specifyinalldisclosuredocumentsthename, title, telephonenumberandaddressofa representativeof theCityasprovidedto theapplicantwhomaybecontactedbyanyprospective purchaserof propertywithinthecommunityfacilitiesdistrictfor furtherinformationregardingthe communityfacilitiesdistrictandthespecialtaxliens.
Theapplicantmustagreeto provideanoriginalcopyof allapplicabledisclosuredocumentsto the Citypriortoinitiatingpropertysales.
PreformationCostDepositsandReimbursements
ExceptforthoseapplicationsforcommunityfacilitiesdistrictswheretheCityistheapplicant, allCity andconsultantcostsincurredin theevaluationof applicationsandtheproceedingsto forma communityfacilitiesdistrictandissuespecialtaxbondsthereforwill bepaidbytheapplicantby advancedepositwiththeCityofmoneyssufficienttopayallsuchcosts.
Eachapplicationfortheformationofacommunityfacilitiesdistrictshallbeaccompaniedbyaninitial depositinanamountto bedeterminedbytheCityManagertobeadequatetofundtheevaluationof theapplicationandundertaketheproceedingsto formthecommunityfacilitiesdistrictandissuethe specialtaxbondstherefor. TheCityManagermay, inhisorhersolediscretion, permitanapplicantto makeperiodicdepositsto coversuchexpensesratherthanasinglelumpsumdeposit; provided, however, nopreformationcostsshallbeincurredbytheCityinexcessoftheamountthenondeposit for suchpurposes. If additionalfundsarerequiredto payrequiredpreformationcosts, theCity Managermaymakewrittendemandupontheapplicantfor suchadditionalfundsandtheapplicant shalldepositsuchadditionalfundswiththeCitywithinfive (5) workingdaysofthedateofreceiptof suchdemand. Uponthedepletionof thefundsdepositedbyapplicantfor preformationcosts, all proceedingsshallbesuspendeduntilreceiptbytheCityofsuchadditionalfundsastheCityManager maydemand.
ThedepositsshallbeusedbytheCityto payforcostsandexpensesincurredbytheCityincidentto theevaluationof theapplicationandtheproceedingsfor theformationof thecommunityfacilities districtandtheissuanceofthespecialtaxbondstherefor, including, butnotlimitedto, legal, special taxconsultant, engineering, appraisal, marketabsorption, financialadvisor, administrativeandstaff costsandexpenses, requirednotifications, printingandpublicationcosts.
TheCityshallrefundanyunexpendedportionof thedepositsupontheoccurrenceof oneof the followingevents:
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1. Theformationof thecommunityfacilitiesdistrictor theissuanceof thespecialtax bonds;
2. Theformationof thecommunityfacilitiesdistrictor theissuanceof thespecialtax bondsisdisapprovedbytheCityCouncil;
3. Theproceedingsfortheformationofthecommunityfacilitiesdistrictandtheissuance ofthespecialtaxbondsareabandonedatthewrittenrequestoftheapplicant; or
4. TheCityhasdeterminedthatthespecialtaxbondswill notbeissuedandsold.
Exceptasotherwiseprovidedherein, theapplicantshallbeentitled, attheoptionoftheapplicant, to reimbursementof, orcreditagainst, specialtaxesforallamountsdepositedwiththeCityto payfor costsincidentto theevaluationof theapplicationandtheproceedingsfor theformationof the communityfacilitiesdistrictandtheissuanceof thespecialtaxbondsthereforupontheformationof thecommunityfacilitiesdistrictandthesuccessfulissuanceandsaleof thespecialtaxbondsforthe communityfacilitiesdistrict. Anysuchreimbursementshallbepayablesolelyfromtheproceedsof thespecialtaxbonds.
TheCityshallnotaccrueorpayinterestonanymoneysdepositedwiththeCity.
SelectionofConsultants
TheCityshallselectandretainallconsultantsnecessaryfortheevaluationofanyapplicationandthe proceedingsfor theformationof acommunityfacilitiesdistrictandtheissuanceof thespecialtax bondstherefor, including, butnotlimitedto, specialtaxconsultant, bondcounsel, financialadvisor, underwriter, appraiser, andmarketabsorptionanalystafterconsultationwiththeapplicant.
LandUseApprovals
Propertiesproposedto beincludedin aDevelopmentRelatedCFDmusthavereceivedsuch discretionarylanduseapprovalsasmay, in thedeterminationof theCity Manager, or hisor her designee, benecessaryto enabletheCityto adequatelyevaluatethecommunityfacilitiesdistrict includingthepropertiesto beincludedandtheimprovementsproposedtobefinanced. TheCitywill issuebondssecuredbythelevyof specialtaxeswithinaDevelopmentRelatedCFDwhen (i) the propertiesincludedwithin suchcommunityfacilitiesdistricthavereceivedthoseapplicable discretionarylanduseapprovalswhichwouldpermitthedevelopmentofsuchpropertiesconsistent withtheassumptionsutilizedinthedevelopmentof therateandmethodof apportionmentof the specialtaxesfor suchcommunityfacilitiesdistrict; (ii) applicableenvironmentalreviewhasbeen
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completed; and (iii) theCityhasdeterminedthattheotherprerequisitesto abondsalehavebeen satisfied.
It isthepolicyoftheCityCouncilingrantingapprovalfordevelopmentsuchaszoning, specificplan orsubdivisionapprovaltograntsuchapprovalasapartof theCity’songoingplanningandlanduse approvalprocess. Ingrantingsuchapproval, theCityreservessuchrightsasmaybepermittedbylaw to modifysuchapprovalsin thefutureastheCityCouncildeterminesthepublichealth, safety, welfareandinterestmayrequire. Suchapprovalwhengrantedissubjectto aconditionthatthe constructionofanypartofthedevelopmentdoesnot, standingalone, grantanyrightstocompletethe developmentof theremainderof suchdevelopment. Constructionof publicimprovementsto serve undevelopedlandfinancedthroughacommunityfacilitiesdistrictshallnotvestanyrightstothethen existinglanduseapprovalsforthepropertyassessedforsuchimprovementsortoanyparticularlevel, typeorintensityofdevelopmentoruse. ApplicantsforaDevelopmentRelatedCFDmustincludean expressacknowledgmentof thispolicyandshallexpresslywaiveontheirbehalfandonbehalfof theirsuccessorsandassignsanycauseof actionatlawor in equityincluding, butnotlimitedto, takingordamagingofproperty, forreassessmentofpropertyordenialofanyrightprotectedbyUSC Section1983whichmightbeapplicabletothepropertiestobeassessed.
ApplicationProcedurefor DevelopmentRelatedCFD's
Anyapplicationfortheestablishmentofacommunityfacilitiesdistrictshallcontainsuchinformation andbesubmittedinsuchformastheCityManagermayrequire. In additionto suchinformationas theCityManagermayrequire, eachapplicationmustcontain:
1. Proofofauthorizationtosubmittheapplicationonbehalfoftheowneroftheproperty forwhichtheapplicationissubmittedif theapplicantisnottheownerofsuchproperty.
2. Evidencesatisfactoryto theCityManagerthattheapplicantrepresentsor hasthe consentoftheownersofnotlessthan67%, byarea, ofthepropertyproposedtobesubjecttothelevy ofthespecialtax.
3. ForanyDevelopmentRelatedCFDproposedtofinanceimprovementstobenefitnew development, abusinessplanfor thedevelopmentof thepropertywithintheproposedcommunity facilitiesdistrictandsuchadditionalfinancialinformationastheCityManagermaydeemnecessary to adequatelyreviewthefinancialfeasibilityof thecommunityfacilitiesdistrict. ForDevelopment RelatedCFD’sproposedto financeimprovementsto benefitnewdevelopment, theapplicantmust demonstratetothesatisfactionoftheCityManagertheabilityoftheownerofthepropertyproposed to bedevelopedto paythespecialtaxinstallmentsforthecommunityfacilitiesdistrictandanyother
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assessments, specialtaxesandadvaloremtaxesonsuchpropertyuntilfullbuildoutoftheproperty.
It istheintentionof theCityCouncilthatapplicantsforacommunityfacilitiesdistricthaveanearly opportunityto havetheapplicationreviewedbyCitystafffor compliancewiththispolicy. In that regard, theCityCouncilherebydirectstheCityManagerto createacommunityfacilitiesdistrict applicationreviewcommitteecomposedof theCityAttorney, Director of PublicWorks, City Engineer, Directorof DevelopmentServices, andFinanceDirector, or theirdesignees, andsuch additionalpersonsastheCityManagermaydeemnecessary. Thecommitteemaymeetwiththe applicantfor acommunityfacilitiesdistrictfor thepurposeof reviewinganapplicationto forma communityfacilitiesdistrictfollowingthedeterminationbytheCityManager, orhisorherdesignee, thattheinformationcontainedintheapplicationforsuchcommunityfacilitiesdistrictcomplieswith therequirementsof thispolicy. Followingthereviewof suchanapplication, thecommitteeshall prepareandsubmitareporttotheCityManagercontainingthefindingsandrecommendationsofthe committeeregardingtheapplication.
Followingreviewof thecommitteereport, theCityManagershallplacetheapplicationontheCity Councilagendaforreview. Afterreviewoftheapplicationandconsiderationofthecommitteereport, theCityCouncilshalldeterminewhetherornotto approvetheinitiationof proceedingsto formthe communityfacilitiesdistrict. Thedecisionof theCityCouncilpertainingto theapplicationshallbe final.
Theabilityof a propertyownerordeveloperto obtainfinancingof publicimprovementsfromthe proceedsoftax-exemptbondsprovidessubstantialeconomicbenefitstosuchownerordevelopernot theleastofwhichmaybethefinancingofsuchimprovementsatinterestratessubstantiallylowerthan conventionalfinancinginterestrates, if suchconventionalfinancingisavailable, and/ortheabilityto obtainfinancingwithoutprovidingequitycompensationtothelender. Inprovidingsuchfinancingfor a DevelopmentRelatedCFD theCity Councilbelievesthat theCity is providingvaluable considerationtothepropertyownerordeveloperandshouldbereceiveconsiderationinexchange. It isthegoalof theCityto ensurethattheCityandtheremainderofitsresidents, propertyownersand taxpayersarecompensatedfortheconsiderationprovidedto thepropertyownerordeveloperof a DevelopmentRelatedCFDandthatsuchcompensationshouldbeonepercent (1%) of thetotal authorizedbondedindebtednessfor suchacommunityfacilitiesdistrict. Priorto theissuanceof specialtaxbondsforanyDevelopmentRelatedCFD, theapplicantshallpayto theCitytheprorata amountofanycompensationpayabletotheCityasconsiderationfortheCity'sagreementtoprovide thefinancingmechanismfor thefinancingof theauthorizedimprovementsandeligibleincidental expensesandto acquiretheauthorizedimprovementspursuantto thetermsandconditionsof an
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agreementbetweentheCityandthepropertyownerordeveloperasappropriate. Forexample, if the compensationpayabletotheCityforsuchconsiderationis $100,000foraDevelopmentRelatedCFD wherethetotalauthorizedbondedindebtednessis $10,000,000andtheseriesofspecialtaxbondsto beinitiallyissuedis $5,000,000, thecompensationpayableto theCitypriorto theissuanceof the initialseriesof bondswill betheprincipalamountof theinitialbondissue ($5,000,000) dividedby thetotalamountof theauthorizedbondedindebtedness ($10,000,000) multipliedbythetotal compensationforsuchDevelopmentRelatedCFD ($100,000). In thisexample, thecompensation payablepriortotheissuanceofthefirstseriesofbondswouldbe:
5,000,000100,000=$50,00010,000,000CommunityFacilitiesDistrictsfor EnergyEfficiency, WaterConservation, andRenewable EnergyImprovements
IntroductoryStatement
SenateBillNo. 555 (Statutes2011, Chapter493) amendedtheMello-RoosActtoauthorizetheuseof communityfacilitiesdistrictsfor financingenergyefficiency, waterconservation, andrenewable energyimprovementstoprivatelyorpubliclyownedrealpropertyandbuildings.
Inparticular, SenateBill No. 555addedsection53328.1to theMello-RoosAct, therebyauthorizing specialtaxesto beleviedonlywiththeunanimousconsentof allownersof propertyto betaxedby suchadistrict.
Inlightofthelegislativefindingsinsection8ofSenateBill No. 555, theCityCouncilmaydetermine toestablishoneormoreprogramsthroughwhichtheCitymayusesection53328.1oftheMello-Roos ActandtherelatedprovisionsaddedtotheMello-RoosActbySenateBillNo. 555toprovidespecial taxfinancingfor improvementsandpropertiesthatmeetthecriteriasetforthinthehearingreport preparedinconnectionwiththeestablishmentof anysuchprogram (eacha “Program”). TheCity will administereachProgramorcontractwithathird-partytoadministersuchprogram (a “Program Administrator”).
WithrespecttofinancingsdonethroughaProgram, thegoalsandpoliciessetforthinthissection, as suchgoalsandpoliciesmaybeamendedfromtimeto time, supersedeanyothergoalsandpolicies adoptedbytheCityconcerningtheuseoftheMello-RoosAct.
1. EligibleImprovements. A programmaybeusedto financeor refinancethe acquisition, installation, andimprovementof energyefficiency, waterconservation, andrenewable
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energyimprovementsonrealpropertyandinoronbuildings, whethertherealpropertyorbuildings areprivatelyorpubliclyowned, subjecttothefollowing:
A. Forprivatelyownedrealpropertyandbuildings, eachownermustconsentin advancetothefinancing, inwriting.
B. FinancingthroughaProgramisnotavailablefor theinitialconstructionof privately-ownedresidentialbuildingsunlessthat initial constructionis undertakenbytheintendedowneroroccupant.
TheCityisnotestablishinganyprioritieswithrespectto thefinancingof EligibleImprovements.
Priorityfor financingshallbeconsideredonacasebycasebasisasdeterminedbytheCityor the applicableProgramAdministratorinaccordancewiththehearingreportpreparedinconnectionwith therelatedProgram, asamendedor modifiedfromtimeto time (eacha “HearingReport”). No services (asdefinedbyGovernmentCodeSection53313) willbefinancedthroughanyProgram.
1. Noticeto ProspectiveOwners. To ensurethatprospectivepurchasersof property subjecttoaspecialtaxleviedthroughaProgramarefullyinformedaboutthetax, therelatedProgram Administratorwillrecordanoticeofspecial-taxlienforeachparticipatingpropertyasrequiredbythe Mello-RoosAct andwill providethesellerof eachwithadisclosurenoticethatsatisfiessection 53340.2oftheMello-RoosActandCaliforniaCivilCodesection1102.6b.
2. FinancingLimits. Foreachproperty. theminimumfundingrequestandmaximum amountfinancedshallbedeterminedinaccordancewiththeHearingReport. It isnotexpectedthat theCitywillissuebondsinconnectionwithanyProgram. If theCityissuesbondsinconnectionwith aProgram, theCitywill establishpoliciesconcerningthecreditqualityof suchbondsonacaseby casebasis.
3. UnderwritingRequirementsfor Financings. For eachproperty, thefinancingof EligibleImprovementsonthatpropertymustmeettheeligibilityrequirementssetforthintheHearing Report. TheHearingReportmaybeamendedormodifiedfromtimeto timeasspecifiedthereinor theCityCouncilmaywaiveormodifyanyrequirementintheHearingReportonacasebycasebasis.
4. MaximumAnnualSpecialTax. Thetotalannualaggregateamountofpropertytaxes andassessmentsoneachpropertythatparticipatesinaProgram, includingthespecialtaximposed throughsuchProgrammaynotexceedfivepercent (5%) of thevalueof theproperty. Thevalueof thepropertywill bederivedfromtheassessedvalue, theappraisedvalue, or anestimateof value basedupondatasuppliedbyareputablerealestateinformationservice. If appraisalsareusedto determinevalueforanypurposeofaProgram, thedefinitions, standards, andassumptionstobeused
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insuchappraisalsshallbedeterminedonacasebycasebasisbytheCityor therelatedProgram Administrator.
5. AdministrationCosts. Theannualspecialtaxforeachpropertythatparticipatesina Programmustbeinanamountsufficient (i) to financeor refinancetheEligibleImprovementsfor suchpropertyand (ii) to paytheproperty’spro-ratashareof theCity’sandtherelatedProgram AdministratorscoststoadministersuchProgram.
6. MinimumStandards; WaiverandAmendment. Thepoliciessetforthinthissection reflecttheminimumstandardsunderwhichtheCitywill makeuseof theMello-RoosActtofinance EligibleImprovements. TheCitymay, initsdiscretion, requireadditionalmeasuresandprocedures, enhancedsecurityandhigherstandardsinparticularcases. TheCitymay, initsdiscretionandtothe extentpermittedbylaw, waiveanyofthepoliciessetforthherein. Suchwaiversaregrantedonlyby actionof theCityCouncil. Thegoalsandpoliciessetforthinthissectionmaybeamendedatany timeandfromtimetotimebytheCity.