AGENDA
CITY COUNCIL OF THE CITY OF ESCALON
MEETING OF JANUARY 16, 2024
City Council Chambers, 2060 McHenry Avenue - 7:00 P.M.
Additional venue GoToMeeting # 1 (408)650-3123 Access Code: 323-691-381 Beginning Resolution No. 01-24
Beginning Ordinance No. 595
Beginning Minute Order No. 01-24
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CALL TO ORDER Mayor David Bellinger
PLEDGE OF ALLEGIANCE Mayor David Bellinger
ROLL CALL Mayor David Bellinger
Mayor Pro Tem Andrew Thomas Hagan
Councilmember Jeremy Engle
Councilmember Malinda Walker
Councilmember Shawn Strohman
NOTE: All cell phones, pagers and similar devices need to be set on silent or vibrate mode or turned off unless you are an on-duty emergency responder.
CONSENT CALENDAR
These items are considered routine in nature and are acted upon by a single action unless requested by an individual Council Member or member of the public for special consideration.
1. Approve the Minutes from the Regular Meeting of December 18, 2023.
2. Approve the Register of Demands for January 9, 2024 in the amount of $ 854,829.72.
3. Adopt Resolution No. XX-24, Accepting a Temporary Easement for Construction and Permanent Easement for Public Utility Purposes on a Portion of Real Property (APN 247- 100-040-000) Commonly Known as 25187 E River Road (Escalon Sportsman’s Club), Authorize City Manager to Execute Said Easements, and Consent to the Recordation in the Official Records, County of San Joaquin.
STAFF COMMUNICATIONS & UPDATES
4. a. Treasurer’s Report for December
b. Police Department Report for December
c. Animal Control Report for December
d. Recreation Report
e. Development Services Report for December
f. Public Works Report for December
g. Building Department Report for December
h. Water Department Report for November
i. Waste Water Treatment Plant Report for November
j. City Manager’s Report
i. Informational Updates
ii. Discussion/Direction - Permanent Vote-by-Mail Drop Box iii. Discussion/Direction - City Owned Properties (Bellota/St. John/Catherine) iv. Discussion/Direction - Main Street Improvement Project
MATTERS PRESENTED FROM THE AUDIENCE
The public may address the City Council on any item that is on the Agenda at the time the item is called. The public may also address the City Council on any item not on the Agenda that is within the subject matter of the City of Escalon. Each speaker is limited to a maximum of five (5) minutes. Unused time may not be yielded to another speaker. You may state your name and address for the record; however, it is not required.
Due to state law, action will not be taken on an item that is not on the Agenda and except for brief responses, the Council is prohibited from discussing any item not on the agenda. If it requires action, it will be referred to staff and/or placed on a future Agenda. The determination of whether an item is within the subject matter of the City is a discretionary decision made by the Mayor.
The Agendas and Reports are posted on the City’s website: www.cityofescalon.org. Any writings or documents related to any open session item of a regular meeting of the Escalon City Council that is distributed less than 72 hours prior to the meeting will be made available for public inspection during normal business hours at the City Clerk’s Office located at 2060 McHenry Avenue, Escalon, CA 95320
ADMINISTRATIVE MATTERS
5. Discuss and Accept the Annual Audit Report for Fiscal Year 2021- 2022.
6. Discuss and Possibly Take Action on an Agenda Item Request from Cody Fowler proposing to Add a Mandate that if an Agenda Item is being voted on, that if at any time, any member of the City Council or City Staff recommends the item be modified in any way, that a new public comment session be conducted prior to any vote. (Continued from the December 4, 2023 Meeting)
7. Discuss and Possibly Take Action on the Agenda Item Request from Mayor Pro Tem Hagan and Councilmember Engle regarding the Use of the Foyer Area of the Community Center building for senior food distribution program when the Center is not in use.
8. Consider and Possibly Take Action on the Non-Profit Organization Applications for Reduced Fees for the Use of City Facilities.
9. Discuss and Provide Direction regarding a City Services and Maintenance Community Facilities District (CFD) for new development projects only and discuss options for the development of a CFD to help fund essential city services based on the impacts of new development; and provide direction to staff.
COUNCIL COMMUNICATIONS & FUTURE AGENDA ITEMS
ADJOURNMENT
SB 343 NOTICE
In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the office of the City Clerk at City Hall during normal business hours at 2060 McHenry Avenue. If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this Agenda.
DECLARATION OF POSTING
I, Ivett Arevalo, Deputy City Clerk, certify under penalty of perjury, under the State of California, that the Escalon City Council Agenda for the Meeting of Tuesday, January 16, 2024 was posted 72 hours prior to the meeting in accordance with the Ralph M. Brown Act, in the area designated below on Friday, January 12, 2024 Escalon City Hall
2060 McHenry Avenue
Escalon, CA 95320
City of Escalon Website
www.cityofescalon.org
Dated: Friday, January 12, 2024
________________________________________
Ivett Arevalo, Deputy City Clerk
ITEM NO. ______
COUNCIL AGENDA ITEM
FOR JANUARY 16, 2024
Prepared By: Ivett Arevalo, Deputy City Clerk
Date: January 11, 2023
Subject: Review and Approve the Minutes
Recommendation:
Approve the Minutes from the Regular Meeting of December 18, 2023. 1
MINUTES
CITY COUNCIL OF THE CITY OF ESCALON
MEETING OF DECEMBER 18, 2023
City Council Chambers, 2060 McHenry Avenue -7:00 P.M.
Beginning Resolution No. 45-23
Beginning Ordinance No. 595
Beginning Minute Order No. 71-23
PRESENT: Mayor David Bellinger
Mayor Pro Tem Andrew Thomas Hagan
Councilmember Jeremy Engle
Councilmember Malinda Walker
Councilmember Shawn Strohman
STAFF PRESENT: Dominique Romo, City Manager/City Clerk
Jaylen French, Development & Community Services Manager Juston Collins, Public Works Superintendent/Manager
Gustavo Flores, Chief of Police
Frank Splendorio, City Attorney
CONSENT CALENDAR
These items are considered routine in nature and are acted upon by a single action unless requested by an individual Council Member or member of the public for special consideration.
1. Approve the Minutes from the Regular Meeting of December 4, 2023.
2. Approve the Register of Demands for December 14, 2023 in the amount of $732,093.80
3. Award the Main Street Bike Path, Sidewalk & Curbs Infill Project to MCE Corporation of Concord, CA in the amount of $1,585,181.30 with a not to exceed amount of $100,000 for change order authorization, for a total project amount of $1,685,181.30; and authorize the City Manager to execute the agreement in a form approved by the City Attorney.
4. Authorize the Execution of a Cooperative Agreement with San Joaquin Council of Governments (SJCOG) regarding Funding Transit Services to Modesto Using Measure K Funding.
Item #3 was pulled from the agenda and will be continued to the next meeting. City Manager Romo mentioned that there are some follow-up items needed for this agenda item.
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Item #1 on Page 12 of the Minutes from the December 4, 2023 minutes incorrectly mentions Danny Fox when it should be Gary Haskin. City Manager Romo requested that the minutes be approved as amended to address this error.
MOTION – It is moved/seconded by STROHMAN/HAGAN that Items 1, 2, and 4 from the consent calendar be approved with Item 1 being approved as amended. Motion carried unanimously (5-0). MINUTE ORDER 71-23
STAFF COMMUNICATIONS & UPDATES
5. a. Treasurer’s Report for November
b. Police Department Report for November
c. Animal Control Report for November
d. Recreation Report
e. Development Services Report for November
f. Public Works Report for November
g. Building Department Report for November
h. Water Department Report for November
i. Waste Water Treatment Plant Report for November
j. City Manager’s Report
i. Informational Updates
City Manager Romo updated the Council that the Recreation Report will be presented in the future as a single "Recreation Report" instead of a monthly report. This approach would ensure that the report is more up-to-date and accurate when presented. The Council did not raise any objections to this proposal.
Jaylen French, Development & Community Services Manager, updated the Council on the Recreation Commission. He mentioned that there are three new members on the Commission, and their first meeting was held earlier in December. He has been engaging with them to share the thoughts of the recreation staff regarding the direction they are heading and to gather input from the commissioners on what they would like to see during their term on the Recreation Commission.
Additionally, French informed the Council about a walking challenge that involved three teams:
the City Hall Team, the Public Works Team, and the Police Department Team. The trophy for this challenge was won by the Public Works Department. He gave a special shoutout to two individuals, Jorge Garnica and Diana Trejo, who consistently achieved over 50,000 steps a day.
Finally, he presented the trophy to Public Works Superintendent Juston Collins.
Chief of Police Gustavo Flores provided an update to the Council, informing them that the Escalon Police Department has acquired two additional radar trailers, bringing the total number of radar trailers available for deployment in the city to three (3).
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City Manager Romo shared with the Council that the City recently organized an Employee Appreciation Celebration and Holiday Party, during which service awards were presented to deserving employees: Joe Sutherland (PW, 5 years, 2022), Luis Chavez (PW, 5 years, 2023), Nathaniel Vieira (PD, 5 years, 2023), Jose Zambrana (PW, 5 years, 2023), Beckie Robbins (Finance, 15 years, 2023), Jake Cook (PW, 15 years, 2022), and Sal Castillo (PW, 20 years, 2023).
Additionally, she mentioned that the Audit will be presented at the City Council meeting scheduled for January 16th. She expressed her intention to ensure that the audit documents are made available to the Council at least one week before the meeting, with the possibility of providing them even earlier if feasible.
6. Update from Ardurra Group, Inc. on the Surface Water Project with SSJID.
Bradley Waldrop, Ardurra representative, provided a quarterly update, highlighting the progress of the project focused on managing water supply, including the construction and maintenance of wells. The project aims to deliver water flow between 250 and 1750 gallons per minute, integrating with a large transmission line and installing significant piping. Challenges such as locating a flow control facility were addressed, with a new proposed location near Dodds Road to ensure safety and operational efficiency.
Councilmember Jeremy Engle questioned the choice of Dodds Road and Escalon Bellota for the project. Waldrop explained it was selected for its straight path, fewer utilities, and direct transmission line connection.
Councilmember Engle expressed concerns about the project favoring SSJID over the City of Escalon, but the Waldrop assured that both parties benefited, and the city staff were actively ensuring the city's interests. Only two locations were considered for the flow control facility due to safety concerns, with Mariposa Road initially favored but rejected for safety reasons related to the project’s above-ground features. When Engle suggested acquiring land near Mariposa Road, Waldrop indicated that all options in that area were dismissed due to the same safety concerns.
Waldrop confirmed that ultimately, SSJID had the final say in the location selection.
Mayor Pro Tem Hagan inquired about who bears the cost of land acquisition for the project, to which Waldrop confirmed that the City is funding it and mentioned the need to secure additional project funding.
Councilmember Shawn Strohman asked if the facility could be located closer to Escalon, questioning the logic of having city-owned property in a remote area. Waldrop explained that they attempted to locate the facility at various southern locations, including a park and Mariposa, but SSJID insisted on delivering water close to their transmission line for operational reasons.
Once the water passes through the flow control facility, it becomes the city's responsibility.
Councilmember Malinda Walker clarified that SSJID would own and maintain the pipeline from Escalon to Dodds, rather than an alternative route. Waldrop confirmed this, noting initial hopes
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for a 50/50 solution with SSJID were rejected, with SSJID changing their stance after an initial agreement.
Councilmember Strohman discussed the possibility of sharing property costs with SSJID if the pump station is partly on their land. He envisioned the pump station sitting on land owned by SSJID and questioned if they would be willing to share 50% of the property acquisition costs.
Waldrop responded that they could revisit this proposal with SSJID. He highlighted an advantage: if SSJID owns and operates the flow control facility, they would do so without intervention from the city or any authority regarding the water flow. This could present an opportunity for SSJID to share some of the costs. Strohman agreed that exploring this option would be worthwhile.
Mayor Bellinger inquired about the location of flow control facilities in other cities that are part of the same system, asking if they are situated similarly to the proposed location for their town or if they are closer to those towns, like in Ripon.
Waldrop explained that there are not many flow control facilities similar to this one to draw direct comparisons. However, he mentioned a facility near Manteca, located on a curve similar to the proposed Mariposa Road site. This facility experienced thefts and accidents, leading to a decision that such a risk was unacceptable.
Waldrop discussed developments in the project, including the siting of a booster pump station with pump curves and control systems compatible with the city's water system. This location now includes an electrical building and an underground 100,000-gallon tank for metering water from SSJID. Waldrop also mentioned a 30% project package review by various entities and efforts to reduce project costs, including a concession from SSJID to build above-ground facilities at the flow control station, resulting in significant cost savings. The current project estimate stands at approximately $13.6 million.
Mayor Pro Tem Hagan inquired whether a hydrologist had assessed the aquifer's condition, expressing interest in knowing its current water levels and whether it was at critical levels.
Waldrop responded that they had not engaged a geohydrologist for the project and thus did not have an assessment of the aquifer's status. However, they offered to go back to the staff to provide additional information on the operating levels of each well, recognizing the importance of understanding the aquifer's condition in relation to the project's urgency and budget realism.
Mayor Pro Tem Hagan agreed, highlighting the need to balance mandates with a realistic budget.
Councilmember Strohman inquired about making the 100,000-gallon tank at the park an aboveground structure for community engagement. Waldrop responded that an above-ground tank would be about twice as costly due to seismic and pumping challenges. Strohman also expressed concern about the reliability of the subterranean tank in a natural disaster, particularly regarding power outages. Waldrop reassured that the design, including a propane-powered emergency
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generator, ensures functionality and water supply even during extended power outages, with the structure built to robust seismic standards.
Mayor Bellinger requested information on which areas share their aquifer, concerned about the impact of nearby growing towns on the water supply. Waldrop agreed to provide this information, referencing a groundwater sustainability plan that involves adjacent jurisdictions.
This plan is designed for a holistic approach to ensure all regions participate fairly and do not deplete the aquifer disproportionately. Waldrop affirmed the importance of regional cooperation in managing shared water resources.
Councilmember Engle inquired about the timeline for their water project, from design to operation. Waldrop indicated that with adequate funding, the project could be completed in two construction seasons, potentially starting at the end of the next summer. Engle also asked about the long-term plan post the 20-year sustainability deadline, questioning if it includes potential population growth. Waldrop confirmed that it does and explained that new projects must be evaluated for their impact on the sustainability plan, with additional rules for new constructions.
Councilmember Walker inquired about the necessity for additional staff once the water project becomes operational. Public Works Superintendent Collins and City Manager Romo responded, clarifying that the operation of the new water project would not require the hiring of additional city staff.
Waldrop discussed the current challenges and next steps for the water project. These include acquiring property for a flow control facility and securing financing. The project requires a geotechnical investigation for the pipeline, identification of underground utilities to avoid conflicts, and final design work, including both horizontal and vertical components. There is also substantial work needed in value engineering to achieve cost savings and in obtaining necessary permits and approvals from the county, SSID, and the Department of Drinking Water to ensure the project's success.
Mayor Bellinger questioned halting design and planning of the water project due to funding issues, citing concerns about rising construction costs and project delays. Waldrop mentioned a nine-month timeline for design completion, with hesitance to proceed without acquiring the necessary parcel for the flow control facility, as it risks later design changes. He noted the need for geotechnical assessments and utility potholing to finalize plans. Bellinger proposed continuing work on other project aspects to avoid delays, stressing the importance of progress.
Waldrop acknowledged these concerns and agreed to collaborate with the city to progress reasonably and avoid rework.
Councilmember Strohman inquired if Ardurra could assist the city staff in identifying funding sources for the water project. Waldrop confirmed their ability to help, drawing on their national experience and relationships in the water and wastewater sector. Strohman also questioned the feasibility of shifting to a design-build approach for the remaining 70% of the project, to which Waldrop explained that design-builds typically incur higher costs and are used to shift risk or compress schedules. Regarding a Public-Private Partnership (P3) for the project, Waldrop noted
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that P3 agreements generally focus on treatment and delivery, not on building infrastructure like pump stations or pipelines.
Councilmember Engle inquired about an estimated timeline for obtaining funding for the water project. City Manager Romo indicated that they are looking at various funding sources, each with its own schedule and release dates for funds. Engle proposed creating a timeline with milestones to monitor funding progress, which Romo agreed was achievable and confirmed Ardurra's involvement in this effort. They also mentioned exploring Self-Help as an additional funding source. Engle requested that the next presentation include this funding timeline with milestones. Waldrop supported this idea, recognizing the value of understanding the specifics of funding sources, including any associated conditions or regulations.
Mayor Bellinger opened public comment.
Ed Alves questioned the unknown future water rates after the project's completion and the rationale for proceeding without clear cost estimates. He highlighted the need for earlier financial planning, given the city's deep investment. City Manager Romo responded that funding of the design is coming from a reserve started in 2013/14, accumulating $104,000 annually from the City of Tracy payment for the City’s allocation of surface water.
Councilmember Strohman asked about the consequences if the water project is not completed.
Waldrop responded that not proceeding with the project would require significant explanation regarding the groundwater sustainability plan, as this project has been a key part of that plan since its inception.
MATTERS PRESENTED FROM THE AUDIENCE
Ed Alves expressed concerns about the Main Street Park design, stating it seemed more appropriate for cities like Livermore or Pleasanton rather than Escalon. He criticized the bike path placement, arguing it reduces park usability and creates maintenance issues with asphalt paving. Alves suggested relocating the bike path along the rear fence and questioned the need for multiple parking lots, implying they might not align with Escalon's character or needs. He emphasized the importance of transparency, suggesting the use of elevations and pictorials for better public understanding, as the current plans are difficult for non-professionals to interpret.
Alves also noted that the design could negatively impact the annual car show, a concern for the Lions Club and community. He urged for a design reassessment to better fit the community's needs and character.
Robert Rickman, Chairman of the Board of Supervisors for District 5, addressed the Mayor, Council members, and staff, extending Christmas greetings and gratitude for their collaborative work over the past year. He expressed pride in the Escalon Cougars' recent success in a sports event and mentioned plans to recognize the team at a Board meeting, inviting local representatives to join.
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Rickman also announced that applications for Nonprofit Community Organization (NCO) funding will open in January, highlighting past successful collaborations with local nonprofits like Escalon Strong. He encouraged nonprofits to contact his office for potential funding opportunities. Additionally, Rickman shared that his office used district funds to reimburse the Chamber for the cost of a Christmas tree, supporting local initiatives. He offered assistance for suitable projects through his District 5 funds and concluded with holiday wishes and an offer of continued partnership with the city.
Gary Haskin expressed concerns about discrepancies between the Main Street Park improvement plan presented at a workshop and the one up for approval. He requested blueprints and renderings for better visualization at the next meeting. Haskin emphasized the impact on the Lions Club car show, a significant contributor to Escalon High School scholarships, and urged transparency in project communication.
ADMINISTRATIVE MATTERS
7. Consider Authorizing the City Manager to execute an 18-month agreement, in a form approved by the City Attorney, with the Escalon Unified School District for a School Resource Officer (SRO) effective January 1, 2024 to June 30, 2025.
City Manager Romo presented the staff report on this item and explained that a school resource officer comes after several months of discussions with the Escalon Unified School District. The City had some vacancies to fill, which have now been addressed, allowing them to provide the school resource officer. The school district has agreed to fund the position 100% of the time when related to the school, covering extra hours and required training. This will cost approximately 70% of the officer's position, which will be filled using existing staff. City Manager Romo emphasized that this arrangement would help the City's General Fund since the school district is covering a portion of the officer's costs. The draft agreement has been worked on with the school district, and view this position as a top priority, aiming for a swift implementation. Any changes or updates will be discussed and brought to both the Council and the school district's board if needed. She mentioned that representatives from the Escalon school district, Superintendent Ricky Chavez, and board member Nick Caton are present.
Mayor Bellinger inquired about the training required for the school resource officer (SRO) and whether it is something that can be done online or if an officer needs to attend physically. City Manager Romo explained that the training is a 40-hour requirement that necessitates physical attendance. Mayor Bellinger asked if there would be a gap in having an SRO present if they need training and if a backup SRO is needed. Chief Flores clarified that there would not necessarily be a need for another officer to go through the same training, as the absence of the SRO during training could be temporarily covered. Additionally, there is a period within which the training can be completed, so there is flexibility in scheduling it. The Mayor expressed concern about funding additional training for backup officers due to potential sick leave or vacation coverage.
Chief Flores assured that there should not be an issue with substituting officers during the training period, and there is a timeframe to complete the training.
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Councilmember Engle expressed support for the transition of the position into a school resource officer (SRO) and inquired about the potential stress on the department due to this transition, particularly starting on January 1. Chief Flores reassured that the transition should not add additional stress to the department.
Councilmember Engle also asked about the timing for considering additional funding for a tenth officer position in future budgets. City Manager Romo explained that they are working to bring this discussion to the Council as soon as possible. While the mid-year budget may be a bit early, it will be a topic for discussion. Staff are exploring options to increase general fund revenues, and estimates for the fiscal year ahead will be provided based on those options. Depending on the outcomes, funding for a tenth officer position might be forecasted for the next fiscal year or the one after, depending on the results of the general fund options being explored.
Councilmember Walker expressed concerns about the timeline for filling the vacant position.
She inquired about the realistic timeframe for getting another officer back if additional funding were approved. She noted that the position had been vacant for three years due to legal constraints and questioned how quickly it could be filled once it becomes available. Chief Flores explained that one of the new hires had filled a position, but the SRO position has specific qualifications that not all officers meet. City Manager Romo mentioned that they had identified an individual with the required qualifications for the SRO position.
Councilmember Engle sought clarification on the timeline for filling the vacant officer position.
City Manager Romo explained that they would discuss it at the mid-year budget and could move to fill the position in the next fiscal year if the Council approves it. Chief Flores added that they have a list of candidates for new hires, and the hiring process, including background checks and evaluations, typically takes 2 to 3 months. Taking these factors into account, it could realistically take up to a year to fill the position.
Councilmember Strohman highlighted the opportunity to classify the tenth officer position as a school resource officer in the future budget. He suggested that since the school district is willing to pay for that position, it could be on a 10-month salary to match the school calendar, with no cost coming from the General Fund. He emphasized that working together with the school district on this matter would build community pride and integrate police officers into the community.
Councilmember Walker inquired about the scheduling percentage for the security officers at various school sites, and Chief Flores mentioned that it would be discussed further.
Mayor Bellinger suggested a rotation that includes other school sites such as Van Allen, Collegeville, and Farmington to ensure they also benefit from having a resource officer.
Mayor Pro Tem Hagan emphasized the importance of providing a safe learning environment for students and expressed support for the proposal.
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Mayor Bellinger opened up for Public comment at 8:12 pm.
Ricardo Chavez, Superintendent of Escalon Unified School District, expressed his gratitude for the consideration of the school resource officer proposal. He highlighted the collaborative efforts between the district and the city to improve services for constituents. Chavez mentioned that they are working on finalizing schedules to ensure visibility of law enforcement presence at all schools, including those outside city limits. He emphasized that this initiative is part of their broader goal to provide safe schools, which includes improving facility access control and mental health services for students. Chavez thanked the Council for considering the proposal.
Mayor Bellinger closed for Public comment at 8:14pm.
MOTION – It is moved/seconded by HAGAN/STROHMAN to approve Authorizing the City Manager to execute an 18-month agreement, in a form approved by the City Attorney, with the Escalon Unified School District for a School Resource Officer (SRO) effective January 1, 2024 to June 30, 2025. Motion carried unanimously (5-0).
MINUTE ORDER 72-23
8. Discussion regarding a City Services and Maintenance Community Facilities District (CFD) for new development projects only and discuss options for the development of a CFD to help fund essential city services based on the impacts of new development; and provide direction to staff.
Jaylen French, Community and Development Services Manager, discussed the potential use of Community Facilities Districts (CFDs) to generate revenue for the city. CFDs are assessment taxes on new developments that fund infrastructure and services, addressing fiscal challenges caused by property tax limitations under Prop 13. Two options were presented: establishing individual CFDs for each development or creating a citywide boundary for future developments to join. The goal is to ensure new developments cover long-term maintenance costs. CFDs apply only to new developments, not existing properties.
Councilmember Walker inquired about whether infill lots and apartment rentals would be included in the Community Facilities Districts (CFDs). French explained that it is possible, but typically small infill projects do not fit well into CFDs from a financial perspective.
Additionally, the decision to include commercial or industrial developments in the CFDs would be a policy-level choice made by the Council.
Councilmember Strohman expressed concerns about the Community Facilities District (CFD) and its potential impact as an additional tax. He highlighted that the size of the project should be considered when implementing a CFD. French provided information on the potential costs associated with establishing a CFD, including the upfront cost of district establishment, infrastructure costs, and ongoing service funding. The decision on who bears these costs would depend on Council direction and policy decisions.
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Mayor Bellinger inquired whether data from other cities or more detailed information regarding the potential costs for residents in various types of projects could be provided. He expressed interest in understanding the revenue side and how it would impact housing prices in Escalon.
Jaylen French agreed that they could conduct research to estimate the costs associated with a CFD for different types of developments. However, he noted that the analysis would depend on Escalon's specific circumstances, making it challenging to provide exact figures.
Councilmember Strohman expressed concern that the establishment of a CFD might discourage developers from investing in Escalon, potentially hindering the city's efforts to increase its tax base. French explained that while it could be an additional cost, CFDs are more commonly associated with residential development rather than commercial and industrial projects.
Mayor Bellinger added that the cost of a CFD is typically passed on to the consumer who buys the house, as a property tax.
City Attorney Splendorio provided additional context, mentioning that CFDs have become common in California as a way for cities to generate revenue due to restrictions on other revenue-raising methods. He explained that the market may adjust for the CFD cost when pricing homes, potentially resulting in a discount for houses in areas with CFDs.
Councilmember Engle expressed support for imposing a timeline for future large developments and suggested that they should begin investing in the community sooner. He also raised a concern about the language in the staff report regarding preparing and adopting the city's CFD goals and policies, suggesting that it should involve multiple steps and not just a one-step process. Splendorio clarified that the intent was to have a multi-step process involving preparation, review, and adoption before formally proceeding with a resolution of intention to form the CFD. French confirmed that it could involve a series of meetings and workshops.
Councilmember Walker inquired about how the cost to residents is calculated for the CFD.
French explained that the cost is set per unit or parcel and is not based on property value or square footage. He also mentioned that there could be an escalator of up to 2% per year, but it is not determined by property sales and would be at the discretion of the city.
Mayor Pro Tem Hagan expressed the need to determine a realistic number for the cost to individuals and evaluate whether the risk is worth the reward in implementing a Community Facilities District (CFD) to generate revenue. Mayor Bellinger mentioned the importance of having a revenue stream.
Councilmember Strohman asked about the difference between a CFD and a Landscape District (LMC). French explained that LMCs are specifically for landscape and lighting, whereas CFDs have more flexibility in terms of what services and infrastructure they can fund. In the case being discussed, it's for services provided by the CFD.
Mayor Bellinger inquired if there is a need to track the revenue generated by a Community Facilities District (CFD) against an enterprise and how the ins and outs of revenue and
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expenditures for ongoing maintenance items funded by the CFD are managed. French explained that unlike Landscape Maintenance Districts (LMD), CFDs do not require direct proportionality in tracking, but constituents may still expect to see some reasonableness in the management of funds.
Mayor Bellinger opened up for public comment at 7:37 pm.
Ed Alves asked about the difference between the proposed Community Facilities District (CFD) and a gated community or homeowners association (HOA). Jaylen French explained that an HOA is an assessment within a specific housing project for private maintenance, while a CFD generates revenue beyond project costs and can fund various services like police, recreational programs, and parks. He also mentioned that CFDs may have a sunset depending on the type, and the revenue increase is typically based on a built-in escalator, not exceeding 2%.
Councilmember Walker asked about estimating the yearly cost of the CFD and its potential increase. Jaylen French mentioned that staff would provide a rough estimate, and the increase is capped at 2% per year, not based on property value.
Alves inquired about the effect of CFDs on property values, and Splendorio explained that while it does not directly raise property values, market forces may influence the perception of homes with or without CFDs. Some buyers may be willing to pay more for homes without CFDs, but it is a market dynamic.
Alves expressed concerns that the additional cost of CFDs may discourage development, especially in an area where home prices are already high. He mentioned that some potential homebuyers may find it challenging to afford homes priced at $700,000 or higher, particularly if they are relocating from the Bay Area where housing costs are high. Ed suggested that CFDs are primarily focused on expanding the tax base rather than just covering the cost of development.
Nick Caton shared his perspective on Mello-Roos tax districts in Oakdale. He mentioned that in 2008, the Oakdale City Council set a standard for new single-family residences, which was around $75 per month. He noted that this fee had a constant annual increase, typically around 2%. Nick also pointed out that properties within these districts often have amenities like a firehouse, and the landscaping and lighting costs are also included. He expressed that he wanted to bring this information to the attention of the Council and felt that the discussion should represent these aspects more accurately.
Mayor Bellinger closed public comment at 7:48 pm.
Councilmember Malinda Walker expressed her interest in getting a more accurate estimate of the annual cost of the CFD, especially if it is closer what was mentioned by Mr. Caton. She requested that the city provide an estimate when they come back with more information on the CFD.
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Splendorio suggested that estimating costs for services would be more doable, and Mayor Pro Tem Hagan asked if Oakdale could be used as a reference. Splendorio recommended considering cities of similar size and general fund revenue for comparison and French mentioned that the city had some jurisdictions in mind for reference.
COUNCIL COMMUNICATIONS AND FUTURE AGENDA ITEMS
9. Discuss and Provide Direction on the Agenda Item Request from Mayor Pro Tem Hagan and Councilmember Engle regarding the Use of the Foyer Area of the Community Center building for senior food distribution program when the Center is not in use.
City Manager Romo provided background information on the item under discussion, which pertained to the use of the foyer area in the Community Center. The discussion was initiated based on a request to consider allowing Escalon Strong to use the foyer area for their senior food distribution, which was better suited for their needs. Mayor Pro Tem Hagen and Councilmember Engle supported the inclusion of this item on the agenda for discussion.
Mayor Pro Tem Hagan expressed his intention to step out of the discussion to avoid any potential influence on the vote. Splendorio informed Mayor Pro Tem Hagan that he was free to step out if he wanted to, but he clarified that there was no legal conflict of interest in the matter being discussed. Mayor Pro Tem Hagan decided to step out of the discussion, reiterating his concern about a potential conflict of interest.
Sherry Hill provided context and details about her proposal to use the foyer area of the Community Center for food distribution. She explained that using the foyer would be more convenient and efficient for her food distribution program, as it allows for a smoother setup, distribution process, and cleanup. Sherry also mentioned the high volume of food and people her program serves on a typical Thursday, and how using the foyer area helps streamline the process.
She emphasized that the foyer setup would not interfere with other events in the main hall, and it would prevent food recipients from accessing the senior room or other areas of the building, ensuring a more contained distribution process.
Hill explained that the food distribution program typically takes place on Thursdays, and it depends on the availability of food from their partner organization in Stockton. The distribution times can vary, but they aim to be done by 4 pm to 4:30 pm on the same day. Hill mentioned that there are occasional exceptions, such as holidays when they don't distribute food. She also highlighted their communication methods, including texting and phone calls, to inform people of the distribution schedule.
Hill mentioned that they have used the courtyard outside the kitchen area as a Plan B when the hall was rented for an event. She explained that they are fast in their food distribution, and the courtyard worked well on that occasion. However, in the summer when it's hot, they may not have an alternative. Mayor Bellinger inquired if there would be adequate coordination to ensure the organization is aware of event bookings, and City Manager Romo confirmed that they are
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proactive in avoiding scheduling conflicts and that Thursdays are generally not heavily booked for Friday events.
Public Works Superintendent Collins mentioned that from the Public Works side, they do not see any issues as long as scheduling is worked out. He and Sherry Hill work closely together, and any scheduling issues are addressed promptly. He also expressed that it's manageable and beneficial to offer services to the community.
Councilmember Engle inquired about the management of the facility for reservations. City Manager Romo explained that there is a staff in City Hall responsible for taking reservation requests for the Community Center. They have a calendar, and all staff members have access to it to mark reservations. They also check it weekly to avoid conflicts, especially with last-minute requests related to life memorials and funeral services.
Public Works Superintendent Collins mentioned a small change that might be needed, which is waxing or cleaning the atrium area more often due to increased foot traffic. However, he emphasized that this wouldn't be an issue and would be a minor additional cost.
Councilmember Engle expressed his support for the proposal and did not see any reason not to proceed with it. He invited other members of the Council to ask any further questions or share their thoughts.
Councilmember Walker inquired about the process of reinstating Council-approved nonprofits and whether it is ready for approval in January. City Manager Romo confirmed that the process is in progress, and a letter will be sent out to all nonprofits, including Escalon Strong. In January, all applications received will be brought to the Council for review and approval as a group. Any future applications will be considered separately as they come in.
Councilmember Walker asked if there was a specific rate for the foyer included in the rate schedule. City Manager Romo stated that there is not.
Councilmember Strohman inquired about what happens when the Senior Fun Bunch has their program on Thursdays. Hill clarified that they do not have a conflict with the Senior Fun Bunch.
Councilmembers raised questions about the use of the foyer by other nonprofits in the future and whether there should be a rate attached to it. Councilmember Walker suggested that there could be a standard rate, and the Council could have the authority to waive it if needed.
Councilmember Strohman expressed support for the current arrangement for Sherry Hill's organization.
City Manager Romo clarified that the current preference is to prioritize Council-approved nonprofits with a preference for serving seniors. She also mentioned that if other nonprofits inquire about using the foyer, they would be directed to come to the Council for approval. The
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discussion revolved around whether to set a standard rate for the foyer or keep it open for approved nonprofits serving seniors without a specific rate.
Mayor Bellinger suggested looking into the rules established for the use of the senior room and possibly applying similar rules to the foyer.
Councilmember Walker suggested setting a standard rate for the use of the foyer and allowing nonprofits to request forgiveness of the fee by coming to the Council. This approach would provide a framework for potential renters while allowing flexibility for Council-approved nonprofits to be exempt from the fee.
Sherry Hill clarified that they do not turn anyone away when serving food, emphasizing that their program primarily serves seniors but also includes some families.
The discussion revolved around whether to put the proposal on the agenda for a future meeting.
Mayor Bellinger clarified that this decision is up to the Council, and City Attorney Frank Splendorio confirmed that it is a decision for the Council to make.
Hill requested this item be considered an emergency request as the program has food coming that needs to be distributed. Mayor Bellinger suggested that public works, in their official capacity, can work with Sherry Hill to find a solution for her emergency request. They also mentioned that they will work on establishing a policy for future use of the foyer.
Charles Levitt expressed his gratitude for being able to use the senior center for the Escalon Strong group's food distribution program. He mentioned that the program serves a significant number of needy elderly people and that having access to the center has been an asset in providing food efficiently to those in need. Charles thanked the council for their support of the program.
Karen Corey expressed that using the Senior Room for food distribution program was challenging due to the need to set up and take down tables quickly. They start early in the morning and leave by noon, and it was difficult to manage the room effectively. Using the foyer was seen as a much easier option, allowing for better control of the space and preventing people from going through their setup. Karen also mentioned that valuable items on their tables were at risk when using the Senior Room. She hoped that the council would consider using the foyer for the food distribution program.
The Council gave consensus to proceed with putting the proposal on the agenda for further discussion at the next meeting.
Mayor Pro Tem Hagan returned to the chamber.
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Councilmember Walker expressed satisfaction with the meeting and the addition of a resource officer to improve safety in the school district. She also suggested working on a potential pricing structure for renting the foyer, which would allow for smaller services to be offered to the community. She wished everyone a great New Year and Merry Christmas and concluded the meeting.
Councilmember Strohman expressed his appreciation for the addition of a police officer in the schools and his concern about the lack of detailed information regarding the Main Street Park project, which has a proposed contract of $1.6 million. He suggested that before approving the project, the design company should make a presentation to the Council to provide a better understanding of the project's scope and details. He sought support from the Council for this request, as he believes it is essential to have a clear understanding of the project before proceeding with such a significant expense.
Councilmember Walker stated she supported Strohman’s request and expressed her concerns about the lack of detailed information regarding the Main Street Park project. She mentioned that there have been changes since the last workshop and that she would like to see at least a presentation of the project to understand its details, such as parking, potential tree removal, and other aspects. She emphasized the need for more information to make an informed decision about the historical park in Escalon.
Councilmember Strohman reiterated the request for a presentation on the Main Street Park project at the next meeting to better understand its details before awarding the bid. He also expressed his gratitude to Supervisor Rickman for attending the meeting and congratulated Escalon Strong for their food distribution efforts. He wished everyone a Merry Christmas, Happy New Year, and happy holidays, looking forward to seeing everyone in 2024.
City Manager Romo mentioned that if they bring back the design and presentation on the Main Street project, it would likely push back the award of the project. The City Attorney also mentioned the need to ensure that the contractor will hold the bid in the meantime.
Councilmember Engle expressed the need for an additional workshop to gather public feedback and ensure that the Main Street Park project aligns with the goals of the town and its residents.
He also mentioned that the project is 100% grant-funded and that there is enough funding to cover the entire project. Mayor Pro Tem Hagan expressed support for Councilmember Engle's suggestion of holding a workshop for public input.
Mayor Pro Tem Hagan expressed support for the idea of transparency and public input regarding the Main Street Park project. He emphasized the importance of all council members being on the same page and avoiding potential frustrations by having open communication and input from both residents and council members.
Mayor Pro Tem Hagan also expressed excitement about the implementation of a police officer on campus in the school district, a development that has been anticipated for some time. He wished everyone a safe and happy Christmas and encouraged vigilance in large crowds.
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City Manager Romo sought clarification on whether the presentation would be held at the next council meeting or if a workshop was preferred. Mayor Pro Tem Hagan expressed a preference for a workshop format, explaining that it would allow for a comprehensive review of the project's changes, facilitate input from various stakeholders, and address concerns related to community traditions and events like the car show. City Attorney Splendorio clarified that a workshop could include a presentation and suggested avoiding duplication. Councilmembers Strohman and Hagan agreed to combine the presentation and workshop into a single session, possibly scheduled for 6:00 PM before the next council meeting, and they emphasized the importance of advertising the workshop to involve the community. Additionally, Councilmember Engle requested that the previous project presentation materials be made available for reference during the workshop. Ultimately, the decision was made to hold a combined presentation and workshop, providing an opportunity for thorough project review and public input, with the previous presentation materials available for reference.
Mayor Bellinger expressed gratitude for the positive discussion during the meeting, highlighting topics such as the resource officer and the radar trailer. He also thanked the public works team for their efforts. Mayor Bellinger wished everyone a happy holiday season, encouraging them to be safe and enjoy time with family and friends. He concluded the meeting, thanking everyone for their participation.
ADJOURNMENT
There being no further business, Mayor Bellinger adjourned the meeting at 9:23 pm.
Respectfully Submitted,
Ivett Arevalo, Deputy City Clerk
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1 ITEM NO. ______
COUNCIL AGENDA ITEM
FOR JANUARY 16, 2024
Prepared By: Jaylen French, Development and Community Services Manager Date: January 8, 2024
Subject: Discussion Regarding a City Services and Maintenance Community Facilities District and Discuss Options for the Development of a City Services Community Facilities District.
RECOMMENDATION:
Discussion regarding a City Services and Maintenance Community Facilities District (CFD) for new development projects only, and discuss options for the development of a CFD to help fund essential city services based on the impacts of new development; and provide direction to staff.
BACKGROUND AND OVERVIEW:
The City of Escalon City Council has emphasized fiscal stability and has established policies and strategies associated with this principal in the City’s General Plan and past budget documents.
These policies and strategies are aimed at ensuring adequate City services’ sources of revenue to fund the City service needs and the ongoing operations, especially with new development that stretches existing service capacity. These initiatives include:
- Prepare and implement Citywide infrastructure master plans which carry out adopted land use goals, objectives and policies and federal and State regulations. These master plans shall be implemented through various funding mechanisms including assessment district, property owner’s associations, user fees, development impact fees, mitigation payments, reimbursement agreements and/or other mechanisms which provide for equitable distribution of development and maintenance costs.
- The purpose of the Escalon General Plan Public Services & Facilities Element is to ensure that sufficient levels of public services are provided as Escalon develops. …plans for the needed expansion and funding of public services and infrastructure to coincide with new development.
Most California cities experience difficulty fully funding necessary services and maintaining adequate revenue to do so, and have continued to do so since Prop 13’s passage in 1978. Further, Escalon recently experienced the loss of a major sales tax generator and its immediate fiscal impacts.
While the adopted FY 2023-2024 budget maintains all important City services, including public safety, public works services and recreation, at the current rate, according to the Escalon FY 23-24 Budget, the City is expected to deplete its built up reserves in the next five fiscal years. Therefore, 9
2 either reductions in staff and services, and/or new City revenue sources are needed to ensure the long-term fiscal sustainability of the City.
Over the years, the Escalon City Council has ensured that development pays its own way and has taken a steps to maintain development related fees at an appropriate level to help mitigate the impacts that new development has on community infrastructure and facilities. However, those revenues do not provide funding for expansion of essential City services to accommodate new development’s service demands.
The City is exploring options to ensure adequate funding for the provision of City services.
The Escalon General Plan, adopted by the City Council in 1995, includes goals and policies that address new development and support efforts to mitigate potential fiscal impacts new development has on the City. Specific goals and policies include:
- Public Facilities, Objective B: “… Funding can be through the formation of an assessment district, entering into deferral agreements or direct developer funding of improvements.
Distribution of cost for improvements shall be done in a fair and equitable manner.” - Residential Land Use, Policies and Standards #3: “In reviewing proposals for changes in land use to or from a residential land use, a fiscal/economic impact analysis shall be completed to ensure that the change is fiscally and economically beneficial to the City.” One of the tools available to local governments to fund the provision of essential City services is creation of a Community Facilities District (CFD). This informational report provides options for development of a community services CFD and outlines the procedures for formation of a CFD for new development.
At the December 18, 2023 City Council meeting, the City Council discussed a potential City Services and Maintenance CFD. At that time the Council inquired regarding the impact a potential CFD would have on residents and businesses and directed staff to research this matter and bring forth information for consideration.
DISCUSSION:
Mello-Roos Community Facilities Act of 1982 (the “Mello-Roos Act”) offers one method by which developing property owners can satisfy their obligation to mitigate adverse impacts of development on City services. There are two types of CFDs—Service/Maintenance and Infrastructure.
Maintenance CFDs provide funding for maintenance services related to public landscaping, parks, street lighting, public safety, etc as defined in the Mello-Roos Act. Funds collected on behalf of the CFD are restricted for the maintenance and operation services outlined in the CFD’s formation documents. Infrastructure CFDs are established for the purpose of issuing bonds to finance certain public infrastructure/utilities improvements that are owned, or will be owned, by the public agency with an estimated useful life of five years or more.
Mello-Roos CFDs are a type of special tax district formed when property owners within a geographic area agree to self-impose a tax on property in order to fund infrastructure improvements
3 or services. These fees can then be used either for pay-as-you-go financing or to pay off tax-exempt bonds issued against the anticipated revenue from the CFD. CFDs are flexible in both the basis and application of the special tax. Rates and methods of apportionment (RMA) have been based on land or property square footage or number of bedrooms; distinct areas defined by zones within the CFD and land uses may also be taxed differently. The only standard for the special tax is that it be reasonable and that it not be ad valorem (i.e., it cannot be based on property value). CFDs are also flexible in the type of improvements or services that can be paid for. They are used most commonly for streets, water, sewer/drainage, parks and police. The method of apportionment and types of improvements or services to be authorized, as well as the amount and term of any bond, must be designated.
CFDs are similar to landscape and lighting districts (LLDs), which are established districts that assess properties within the district for direct service(s) being provided. The City currently has 5 LLDs. CFDs impose a special tax levied on real property and is more flexible, able to cover the ongoing cost of a broader range of services without the special benefit requirements of LLDs or other types of assessment districts. CFDs are most commonly formed in undeveloped areas at the time of development initiated by petition of the property owner. The Mello-Roos Act also allows for public agencies to institute proceedings to establish a CFD by its own initiative.
Authorized Services
The Mello-Roos Act authorizes cities to establish a CFD to finance certain public services through the levy of a special tax. The services that can be financed by a CFD under the Mello-Roos Act, which most commonly include, but is not limited to the following:
- Police protection services
- Fire protection and suppression services, and ambulance and paramedic services - Recreation program services
- Maintenance and lighting of parks, parkways, streets, roads, and open space - Flood and storm protection services, including, but not limited to, the operation and maintenance of storm drainage systems
- Maintenance and operation of any real property or other tangible property with an estimated useful life of five or more years that is owned by the local agency or by another local agency (by agreement).
Under the Mello-Roos Act, a special tax approved by vote of the landowners of the district may only finance authorized services to the extent that they are in addition to those provided in the territory of the district before the district was created, and the additional services may not supplant services already available within that territory when the CFD was created.
In Building Industry Assn. of Bay Area v. City of San Ramon (2016) 4 Cal. App. 5th 62, the California Court of Appeal ruled that developer-approved special taxes can be used to fund an increased demand for existing services, even though some services already existed in the CFD before its formation and the additional services would not be superior to the services provided outside the CFD.
CFD Formation Options
4 The City is exploring forming a CFD to mitigate the impacts on City service levels from new development. The City could form such a CFD in a number of ways:
- Option #1: The City could establish a CFD that includes the entire territory of the City and hold a Citywide registered voter election on whether new development (but not existing land uses) should pay special taxes, specifying special tax rates based on land use categories. The benefit of a Citywide registered voter election is that it establishes the special tax to be paid by developing property without further legislative or property owner action, meaning that all future developed areas are automatically annexed into the CFD District. A registered voter election also avoids some of the limits imposed on landowner elections under the MelloRoos Act described above. However, Citywide registered voter elections are costly. A 2/3 approval rate is required for increased taxes. A registered voter election to approve special taxes only on new development also might trigger a legal challenge from development groups.
- Option #2: The City could establish a CFD with the cooperation of an initial property owner(s) and annex all future developing properties into the CFD using the Mello-Roos Act’s “traditional” annexation process. This process involves 1) the City’s Assessment District consultant to prepare the necessary materials and to form the District. The City has received a quote of $25,000 to establish this District. 2) Two meetings of the City Council, a public hearing and an election by the owners of or registered voters on the annexing property. This option does not require a Citywide election but requires a additional legislative effort for each property that joins the CFD. o Staff will further seek direction on how to fund the formation of the CFD and whether this is to be city funded or development funded.
Potential Next Steps Under Option #2. Staff would determine next steps if another option is chosen.
However, to provide visibility into the process, City staff outlined next steps for one of the options.
Step #1: Under the Mello-Roos Act, the City must adopt local goals and policies before initiating proceedings to establish a CFD. The policies must include at least the following information:
1) A statement of the priority that various kinds of public facilities and services shall have for financing through the use of this chapter, including public facilities to be owned and operated by other public agencies, including school districts, and services to be provided by other public agencies.
2) A statement concerning the credit quality to be required of bond issues, including criteria to be used in evaluating the credit quality.
3) A statement concerning steps to be taken to ensure that prospective property purchasers are fully informed about their taxpaying obligations imposed under this chapter. 4) A statement concerning criteria for evaluating the equity of tax allocation formulas and desirable and maximum amounts of special tax to be levied against any parcel pursuant to
5 the Mello-Roos Act.
5) A statement of definitions, standards, and assumptions to be used in appraisals required by the Mello-Roos Act.
Step #2: The City Council would adopt a resolution declaring its intention to establish the CFD and the Future Annexation Area (“Resolution of Intention”). The Resolution of Intention must describe the public services to be financed by the CFD, which should be broadly defined to ensure mitigation of the full range of potential development impacts. The Resolution of Intention should also establish the method for defining the special taxes to be paid by property owners annexing into the CFD, which should be calculated based on the costs of providing the CFD-funded services to the annexing property. The Resolution of Intention will also call for a public hearing (which should be held 30-60 days after adoption of the Resolution of Intention).
Step #3: The Mello-Roos Act provides for a public hearing to be held at which interested persons could provide comments about the establishment of the CFD and the Future Annexation Area, the boundaries of the CFD and the Future Annexation Area, or the furnishing of specified types of public services. The City would not expect protests from the owner of the property that is voluntarily participating in the CFD formation process, and that landowner would be the only party whose protest could halt the CFD formation proceedings. The Future Annexation Area formation process would be halted if more than 50% of the registered voters or the owners of more than 50% of the land in the City protested. In preparation for the public hearing, staff will prepare a report that contains a brief description of the public services by type which will be "required to adequately meet the needs of the district" and the estimated cost (including estimated administrative costs) of providing those services. The report will only address the initial property included in the CFD, not the property in the Future Annexation Area.
Step #4: After the public hearing, the City Council would consider the following resolutions:
1) Resolution of Formation, establishing the CFD and approving the special taxes to be levied on the initial property owner, subject to the landowner election. 2) Resolution Calling Election, calling a mail ballot election of the original landowner in the CFD. Immediately upon calling the election, the City Clerk would open the landowner ballot(s), because the Mello-Roos Act allows landowners to approve an accelerated election. Assuming the original landowner submits a favorable ballot, then the City Council would consider the following actions:
• Resolution Declaring Election Results, in which the City Council would declare the results of the election and order recordation of a Notice of Special Tax Lien in the San Mateo County real property records.
• Introduction of Special Tax Ordinance; the Mello-Roos Act requires special taxes to be levied by ordinance, and the Ordinance would levy taxes in the original boundaries of the CFD and any properties that annex into the CFD in the future.
6 Step #5: Adoption of the Special Tax Ordinance.
Post-Formation Annexations. As described above, after the City has formed the CFD, the owners of developing properties in the City could annex into the CFD from the Future Annexation Area by executing a Unanimous Approval. Following execution of the Unanimous Approval, the City would record a Notice of Special Tax Lien and the City Council would periodically adopt a resolution confirming the annexation.
CFD Land Use Applicability
Another factor for the Council to weigh is the type of development that requires a CFD. According to a 2015 report by the California Legislative Analyst Office, “California’s High Housing Costs”, many California cities find that housing development lead to more local costs than offsetting tax revenues because these properties do not produce sales tax and property taxes are limited by Proposition 13. Further, the cities receive only a fraction of the tax revenue collected from property tax.
Therefore, CFDs are typically established for residential developments, but can be established for commercial and industrial developments as well. Larger cities will create CFDs for specific plan areas covering both residential and non-residential development and other cities will determine based on need, predominance of development and impact to community.
In any event, it is recommended the City develop and clearly communicate the CFD requirement in all conditions of approval putting the property owner on notice that the CFD, or some other funding mechanism, is required to offset the impacts of said development. The City should work with all property owners wishing to develop projects that will require the CFD to ensure they are aware of the process, obligations, and costs associated with forming or annexing into a CFD.
City staff reviewed the service and maintenance CFDs of six (6) other communities ranging in population size 2,000 to 90,000, located from Stanislaus County to Riverside County. The communities include: City of Hughson, City of Oakdale, City of San Juan Bautista, City of Hemet, City of Lake Elsinore, City of Montclair.
The cost impact to single-family home residents in these communities ranges from $361 per parcel (unit) per year to $1,880 per parcel per year, or $3/month annually to $157/month annually. The average cost is $813 per parcel per year and the median cost is $709 per parcel per year.
The impact to multi-family home residents in these communities ranges from $208 per unit per year to $1,179 per unit per year, or $17/month annually to $98/month annually. The average cost is $609 per unit per year and the median cost is $564 per unit per year.
All six CFDs have an annual inflator. 5 of the 6 CFDs are charged for non-residential uses as well (Commercial and Industrial), and 5 of 6 CFDs include services delivered outside of CFD boundary (i.e. Police, Fire, etc.).
The six CFDs cover the following maintenance and/or service categories:
7 - Police (4)
- Fire (3)
- Paramedic (2)
- Street Maintenance (4)
- Street Lights (5)
- Park Maintenance (2)
- Storm Drainage (5)
- Landscape Maintenance (5)
- Graffiti Abatement (3)
- Recreation (2)
- Soundwall (1)
- Fencing (1)
- Mosquito Abatement (1)
- Facilities (1)