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July 22, 2025
ITEM TITLE
Community Facilities District: Declare Intention to Form Community Facilities District No. 2024 -2 (Moss Street)
Report Number: 25-0183
Location: 676 Moss Street
Department: Development Services
G.C. § 84308 Regulations Apply: Yes
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt resolutions A) approving the proposed boundaries of proposed Community Facilities District No. 2024-2 (Moss Street), declaring the intention of the City Council to authorize the formation of the proposed CFD No. 2024-2, levy a special tax, and set a time and place for the public hearing; and B) declaring necessity to incur bonded indebtedness.
SUMMARY
The owner of the Moss Street project, Shea Homes Limited Partnership, is in the process of constructing 141 for-sale, market rate condominiums on the former industrial warehouse at 676 Moss Street. The Developer has requested the formation of a new Community Facilities District, to pay certain Development Impact Fees and other fees associated with the project. This action is the first step in the process to form a Community Facilities District. A Community Facilities District is a special financing district that will sell bonds to generate funds for the financing of D evelopment Impact Fees to construct public facilities , as well as fees of the Sweetwater Authority. Special taxes will be levied to repay the bonds.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of a governmental P a g e | 2
fiscal/administrative activity which does not result in a physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
Proposed CFD Formation – Moss Street Project
The Shea Homes Limited Partnership (“Developer”) has submitted a formal petition asking the City to begin proceedings to form a new Community Facilities District (“ CFD”) that would finance certain Development Impact Fees (“ DIFs”) associated with their proposed project , as well as fees of the Sweetwater Authority .
These fees are used to fund improvements to public infrastructure needed to serve the new development.
The Moss Street project proposes 141 market -rate condominiums across 18 buildings on a 6.94 -acre site.
This property was formerly used for industrial purposes and is located at 676 Moss Street. The proposed boundary of CFD No. 2024-2 (Moss Street) generally includes the majority of a single parcel that comprises the Moss Street project (Attachment 1). The Developer currently owns 100% of the land within the proposed CFD boundaries.
Background and Purpose of Community Facilities Districts (CFDs) The Mello -Roos Community Facilities Act of 1982 (“Mello -Roos Act”) allows cities and other local governments in California to create special tax districts known as Community Facilities Districts, or CFDs as a way to finance public infrastructure and services. This financing tool is especially useful in growing communities where new development creates demand for roads, parks, sewer systems, and other public facilities.
Before forming any CFDs, local agencies must adopt policies outlining how they will use the Mello-Roos Act.
The Chula Vista City Council adopted such policies on January 13, 1998, officially allowing the use of CFDs in the City to help fund (1) the construction or acquisition of public infrastructure and (2) the operation of certain public services.
Shortly after, on April 28, 1998, the City Council ad opted the “Chula Vista Community Facilities District Ordinance” (the “CFD Ordinance”) under its Charter authority. This ordinance allowed the City to use the Mello-Roos Act with several local modifications, including:
Incorporating all maintenance activities authorized by the Landscaping & Lighting Act of 1972; Allowing additional maintenance activities not specifically covered by either state law; and Establishing a reserve fund for ongoing maintenance in open space districts.
On July 23, 2019, the City Council codified the CFD Ordinance into the Chula Vista Municipal Code as Chapter
3.60 (Community Facilities Districts – General). More recently, on October 24, 2023, the Council approved updates to the Goals and Policies to explicitly allow the use of CFD financing to pay for DIFs, which are charges that help offset the cost of new development on public infrastructure , and to allow an inflationary increase of the tax rates for a limited number of years.
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The CFD proposed under this action CFD No. 2024-2 (Moss Street) aligns with both the City’s current Goals and Policies and the CFD Ordinance.
Proposed Special Tax
The Rate and Method of Apportionment of Special Tax (“RMA”) sets forth how the special taxes will be levied and in what amount (Attachment 2). Each year the Annual Special Tax Requirement, as defined in the RMA, is determined, and then apportioned to each taxable parcel within CFD No. 2024-2 (Moss Street). The special tax is levied first on residential property for which a building permit is iss ued prior to June 30 of the preceding fiscal year. If additional monies are needed to satisfy the Annual Special Tax Requirement after the first step has been completed, an amount will be levied on each parcel of undeveloped property. In no event shall the tax be levied in an amount higher than the Maximum Special Tax.
Table 1 below details the Assigned Special Tax Rates for fiscal year 2026-27.
Table 1
Fiscal Year 2026-27
Assigned Special Tax Rates for Developed Property
Land Use Class
Land Use Type
Building Square Footage
Assigned Special Tax
(per Residential Unit)
1 Residential Property < 1,201 $3,280.00
2 Residential Property 1,201 to 1,475 $3,345.00
3 Residential Property 1,476 to 1,675 $4,128.00
4 Residential Property 1,676 to 1,825 $4,362.00
5 Residential Property 1,826 to 1,925 $4,585.00
6 Residential Property > 1,925 $4,763.00
On each July 1, commencing July 1, 202 7, and ending July 1, 203 7, the Assigned Special Tax for Developed Property shall be increased by two percent (2.0%) of the amount in effect in the prior fiscal year.
Acquisition-Financing Agreement
An Acquisition-Financing Agreement which describes the facilities and DIFs that may be financed with the bonds and establishes the terms and conditions for acquiring and financing the public improvements will be presented at a future Council meeting. The expectation is that bonds will be issued in the future to satisfy the obligation of the developer for several of the City’s DIFs. The Acquisition-Financing Agreement provides the terms for the City to use the bonds proceeds to pay the satisfaction of the DIFs.
Joint Community Facilities Agreement
A Joint Community Facilities Agreement between the City and the Sweetwater Authority which describes the fees of the Sweetwater Authority that may be financed with the bonds and establishes the terms and conditions for financing the fees will be presented at a future Council meeting.
Resolutions and Future Action
The Resolution of Intention declares the City Council’s intent to establish the proposed CFD No. 2024-2 (Moss Street), sets forth the boundaries of the CFD, including the RMA and authorizing the levy of a special tax, sets P a g e | 4
the time and place for the public hearing, and order s the preparation of a CFD Report. The CFD Report is a separate document that includes a description of the facilities and fees , an estimate of the cost of financing the facil ities and fees, and the incidental expenses . These expenses include the costs of proposed bond financing, administrative costs, and all other associated costs. The boundary map (Attachment 1) will be recorded within 15-days of approval of the Resolution of Intention.
The Resolution Declaring the Necessity to Incur Bonded Indebtedness establishes the City Council’s determination that public convenience and necessity require the issuance of bonds by CFD No. 2024-2 in an amount not to exceed $10,000,000. The resolution authorizes the financing of eligible public facilities and related costs through the levy of special taxes and sets a public hearing on the proposed indebtedness for September 9, 2025. This hearing will be consolidated with the public hearing on the formation of the CFD and is a prerequisite to submitting the bond authorization to the qualified electors of the District.
If the Resolution of Intention and Resolution Determining the Necessity to Incur Bonded Indebtedness are approved, a public hearing will be scheduled for the City Council meeting on September 9, 2025, at 5:00 pm.
At that time the City Council will consider the adoption of a resolution forming and establishing CFD No. 2024-2 (Moss Street ), and submission of the authorization for the levy of special taxes to the qualified electors, which in this case is the Developer.
In addition, following the formation proceedings, the Acquisition -Financing Agreement and the Joint Communities Facilities Agreement will be presented for City Council consideration and approval.
DECISION-MAKER CONFLICT
Staff has reviewed the property hol dings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property -related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). Staff is not independently aware of, nor has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
All CFD formation costs are borne by the applicant, resulting in no current-year fiscal impact to the General Fund or Development Services Fund.
ONGOING FISCAL IMPACT
There is no on-going fiscal impact as a result of this action. Once the Community Facility District is formed, the special taxes levied will pay annual administrative costs.
ATTACHMENTS
1. Proposed Boundary Map
2. Rate and Method of Apportionment
Staff Contacts: Rebecca Bridgeford, Deputy Director, Development Services Jeremiah Valenzuela, Facilities Financing Management Analyst II P a g e | 5