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COMMUNITY FACILITIES
DISTRICT REPORT
CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 116M
Report Date: September 30, 2024
www.FinanceDTA.com 18201 Von Karman Avenue, Suite 220
Irvine, CA 92612
COMMUNITY FACILITIES DISTRICT REPORT
FOR
CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 116M
Prepared for:
City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
TABLE
OF CONTENTS
SECTION
I INTRODUCTION ................................ .............................. 1 II PROJECT DESCRIPTION ................................ ................ 2
III DESCRIPTION AND ESTIMATED COSTS OF PUBLIC
SERVICES ................................ ................................ .......... 3 A Description of Public Services ................................ ......... 3 B Estimated Costs of Public Services ................................ . 3 C Incidental Expenses ................................ ............................ 3 IV RATE AND METHOD OF APPORTIONMENT .............. 4
A Explanation for Special Tax Apportionment ................. 4 B Maximum Special Tax ................................ ........................ 4 C Apportionment of Special Taxes ................................ ..... 4 D Accuracy of Information ................................ ................... 5 V BOUNDARIES OF THE CFD ................................ ............ 6 VI GENERAL TERMS AND CONDITIONS ......................... 7 A Substitution of Facilities and Services ........................... 7 B Appeals and Interpretations ................................ ............. 7 C Prepayment of Special Tax ................................ ............... 7
APPENDICES
APPENDIX A RATE AND METHOD OF
APPORTIONMENT
APPENDIX B BOUNDARY MAP
1 SECTION I
INTRODUCTION
City of Fontana September 30, 2024
Community Facilities District No. 116M
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I INTRODUCTION
WHEREAS, the City Council of the City of Fontana (hereinafter referred to as the "Council") did, pursuant to the provision of the "Mello -Roos Community Facilities Act of 1982," being Chapter 2.5, Part 1, Division 2 of Title 5 (commencing with Section 53311) of the Government Code of the State of California (hereinafter referred to as the "Act"), and specifically Section 53321.5 thereof, expressly order the filing of a written "Report" with the legislative body of the proposed Community Facilities District(“CFD”). This CFD being City of FontanaCFD No. 116M shall hereinafter be referred to as:
"CFD No. 116M"; and,
WHEREAS, on September 10 , 2024 , Council, pursuant to the Act, adopted a resolution entitled “RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA DECLARING ITS INTENTION TO ESTABLISH CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 116M, TO AUTHORIZE THE LEVY OF A SPECIAL TAX THEREIN TO FINANCE THE PROVISION OF CERTAIN PUBLIC SERVICES , AND TAKING OTHER ACTIONS THERETO " (hereinafter referred to as the "Resolution of Intention") directing that the Report generally contain the following:
1. A brief description of the services by type that will be required to adequately meet the needs of CFD No. 116M; and
2. An estimate of the fair and reasonable cost of providing the public services and the incidental expenses to be incurred in connection therewith.
WHEREAS, each officer of the City of Fontana (hereinafter referred to as the "City") who is or will be responsible for providing one or more of the proposed types of public services to be financed by CFD No. 116M has hereby directed DTA, Inc. (“DTA”) to study the proposed CFD No. 116M and, at or before the time of the public hearing on the establishment of CFD No. 116M, file the Report with Council pursuant to the provisions of the Resolution of Intention.
NOW, THEREFORE, DTA does hereby submit the Report.
2 SECTION II
PROJECT DESCRIPTION
City of Fontana September 30, 2024
Community Facilities District No. 116M
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II PROJECT DESCRIPTION
CFD No. 116M encompasses approximately 11 gross acres of land within the Citylocated at the south-east corner of Sierra Lakes Parkway and Lytle Creek Road. This property is expected to be developed into a total of 127 residential units subject to a Mello -Roos Special Tax1.
1 Please note that all capitalized terms used herein, unless otherwise indicated, shall have the meanings defined in the Rate and Method of Apportionment for CFD No. 116M. 3 SECTION III
DESCRIPTION AND ESTIMATED
COSTS OF PUBLIC SERVICES
City of Fontana September 30, 2024
Community Facilities District No. 116M
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III DESCRIPTION AND ESTIMATED COSTS OF PUBLIC SERVICES
A community facilities district may finance any one or more of the following types of services: police protection services, including, but not limited to, criminal justice services, fire protection and suppression services, and ambulance and paramedic services, recreation program services, library services, and the operation and maintenance of museums and cultural facilities, maintenance of parks, parkways and open space, flood and storm protection services, including, but not limited to, the operation and maintenance of storm drainage systems, and sandstorm protection systems, and services with respect to removal or remedial action for the cleanup of any hazardous substance released or threatened to be released into the environment. The authorized services may be financed only to the extent that such services are in addition to those services provided in the community facilities district prior to creation of the community facilities district.
A Description of Public Services
The types of public services to be financed by CFD No. 116M are the maintenance of parks, parkways, street lighting and open space within and surrounding the area of the District and within and surrounding the area of any territory to be annexed to the District in the future.
B Estimated Costs of Public Services
The Special Tax for CFD No. 116M has been established to pay for the public services described above at $737 per residential lot for Fiscal Year 2025-2026. This amount shall be subject to an annual increase of two (2%)as specified in Section C.1 of the Rate and Method of Apportionment (defined herein).
The maximum Fiscal Year 202 5-2026 costs for Maintenance Services is estimated at approximately $94,000, assuming buildout. These costs are expected to be fully funded by CFD No. 116M at buildout.
C Incidental Expenses to be Included in the Annual Levy of Special Taxes Pursuant to Section 53340 of the Act, the proceeds of any special tax may only be used to pay, in whole or part, the costs of providing public facilities, services and incidental expenses. While the actual costs of administeringCFD No. 116M may vary, it is anticipated that the amount of Special Taxes which can be collected will be sufficient to fund at least $ 7,000 in annual administrative expensesfor Fiscal Year 2025-2026, which shall also be subject to an annual increase of two (2%) annually.
4 SECTION IV
RATE AND METHOD OF
APPORTIONMENT
City of Fontana September 30, 2024
Community Facilities District No. 116M
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IV RATE AND METHOD OF APPORTIONMENT
All of the property located withinCFD No. 116M, unless exempted by law or by the Rate and Method of Apportionment (defined below), shall be taxed for the purpose of funding public services authorized to be financed byCFD No. 116M. Pursuant to Section 53325.3 of the Act, the tax imposed “is a special tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property.” The special tax “may be based on benefit received by parcels of real property, the costs of making authorized facilities o r authorized services available to each parcel or other reasonable basis as determined by the legislative body,” although the special tax may not be apportioned on an ad valorem basis pursuant to Article XIIIA of the California Constitution.
The rate and method of apportionment of the special tax (the "Rate and Method of Apportionment") proposed to be levied withinCFD No. 116M is described in Exhibit C to the Resolution of Intention. This proposed Rate and Method of Apportionment, also provided herein as Appendix A, provides information sufficient to allow each property owner within CFD No. 116M to estimate the maximum annual Special Tax he or she will be required to pay.
Sections A through D below provide additional information on the Rate and Method of Apportionment.
A Explanation for Special Tax Apportionment
When a community facilities district is formed, a special tax may be levied on each parcel of taxable property within the community facilities district to pay for the construction, acquisition and rehabilitation of public facilities, to pay for authorized services or to repay bonded indebtedness or other related expenses incurred by a community facilities district.
This special tax must be apportioned in a reasonable manner; however, the tax may not be apportioned on an ad valorem basis.
Based on the types of public services that are proposed forCFD No. 116M, the Special Taxes assigned to Developed Property are generally proportionate to the relative benefits received by them, and, accordingly, the Special Taxes in CFD No. 116M can be considered fair and reasonable.
B Maximum Special Tax
Table 1 within the Rate and Method of Apportionment lists the Fiscal Year 2025-2026 Maximum Special Tax that may be levied against Developed Property within CFD No. 116M to fund the Special Tax Requirement. On each July 1, commencing July 1, 2026, the Maximum Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. No Special Tax shall be levied on Undeveloped Property, Public Property, or Property Owner Association Property in CFD No. 116M.
C Apportionment of Special Taxes
Each year the Special Tax shall be levied subject to the methodology and Maximum Special 5 SECTION IV
RATE AND METHOD OF
APPORTIONMENT
City of Fontana September 30, 2024
Community Facilities District No. 116M
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Taxes set forth in the Rate and Method of Apportionment, in an amount sufficient to meet the appropriate special tax requirement.
The amount of the special tax requirement that is apportioned to each parcel is determined through the application of Section D of the Rate and Method of Apportionment.
D Accuracy of Information
In order to establish the Maximum Special Tax rates forCFD No. 116M as set forth in the Rate and Method of Apportionment, DTA has relied on information which was provided to DTA by others. DTA has not independently verified such data and disclaims responsibility for the impact of inaccurate data, if any, on the Rate and Method of Apportionment forCFD No. 116M, including the inability to meet the financial obligations within CFD No. 116M. 6 SECTION V
BOUNDARIES OF THE CFD
City of Fontana September 30, 2024
Community Facilities District No. 116M
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V BOUNDARIES OF THE CFD
The boundaries of CFD No. 116M include all land on which the Special Taxes may be levied.
A reduced scale map showing the boundaries of CFD No. 116M is provided herein as Appendix B. A full-scale map is on file with the City Clerk of the City and was recorded o n September 24, 2024, in Book 91 of Maps of Assessment and Community Facilities Districtsat
of San Bernardino.
7 SECTION VI
GENERAL TERMS AND
CONDITIONS
City of Fontana September 30, 2024
Community Facilities District No. 116M
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VI GENERAL TERMS AND CONDITIONS
A Substitution of Facilities and Services
The descriptions of the public services, as set forth herein, are general in their nature. The City will determine the final nature, location, and costs of services upon the preparation of final plans and specifications. The final plans may show substitutes, in lieu of modifications to the proposed work in order to accomplish the work of improvement, a nd any such substitution shall not be a change or modification in the proceedings as long as the public services provide a service substantially similar to that as set forth in this Report.
B Appeals and Interpretations
Any landowner or resident who feels that the amount of the Special Tax levied on his/her Assessor’s Parcel is in error may submit a written appeal to the CFD Administrator, provided that the appellant is current in his/her payment of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, a cash refund shall not be made (except for the last year of levy), but the amount of the Special Tax levied shall be appropriately modified, reduced, or eliminated through an adjustment to the Special Tax levy in the following Fiscal Year. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has thirty (30) days in which to appeal to the Council by filing a written notice of appeal with the City Clerk, provided that the appellant is current in his/her payment of Special Taxes. This second appeal must specify the reasons for its disagreement with the CFD Administrator's determination.
The CFD Administrator shall interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals. Any decision of th e CFD Administrator shall be subject to appeal to the Council whose decision shall be final and binding as to all persons.
C Prepayment of Special Tax
Pursuant to Section I of the Rate and Method of Apportionment, the Special Tax cannot not be prepaid.
APPENDIX A
City of Fontana
Community Facilities District No. 116M
RATE AND METHOD OF
APPORTIONMENT
City of Fontana August 15, 2024
Community Facilities District No. 116M Page 1
RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 116M OF THE
CITY OF FONTANA, COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA
A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in City of Fontana Community Facilities District No. 116M ("CFD No. 116M") and collected each Fiscal Year , commencing in Fiscal Year 2025-2026, in an amount determined by the City Council of the City of Fontana, through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 116M, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre” or “Acreage" means the land area expressed in acres of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County map or the land area calculated to the reasonable satisfaction of t he CFD Administrator using the boundaries set forth on such map or plan.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 116M, including, but not limited to : the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County or otherwise); the costs to the City, CFD No. 116M or any designee thereof of complying with City or CFD No. 116M disclosure requirements; the costs associated with responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 116M or any designee thereof related to an appeal of the Special Tax; and the City’s annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 116M for any other administrative purposes of CFD No. 116M, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
City of Fontana August 22, 2024
Community Facilities District No. 116M Page 2
"Assessor’s Parcel" means a lot or parcel shown in an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
"Assessor’s Parcel Map" means an official map of the County Assessor of the County of San Bernardino designating parcels by Assessor’s Parcel Number. “Assessor’s Parcel Number” means that number assigned to an Assessor’s Parcel by the County of San Bernardino for purposes of identification. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, providing for the levy and collection of the Special Taxes, and performing other duties as set forthherein. “CFD No. 116M” means the City of Fontana Community Facilities District No. 116M.
"City" means the City of Fontana, California.
"Council" means the City Council of the City of Fontana, acting as the legislative body of CFD No. 116M.
"County" means the County of San Bernardino.
"Developed Property" means, for each Fiscal Year, all Assessor’s Parcels of Taxable Property for which (i) a Final Residential Subdivision has been recorded with the County as of January 1 of the previous Fiscal Yearor (ii) a building permit for new construction has been issued on or before January 1 of theprevious Fiscal Year for a non-residential use.
"Final Residential Subdivision" means a Final Subdivision that creates individual lots for which building permits may be issued for residential dwelling units without further subdivision of such property.
"Final Subdivision" means (i) a subdivision of property by recordation of a final map, parcel map, or lot line adjustment approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq. ) that creates individual lots or parcels for which building permits may be issued, or (ii) for condominiums, a final map approved by the City and a condominium plan recorded pursuant to California Civil Code Section 4285 that creates an individual lot(s) for which a building permit(s) may be issued without further subdivision. The term "Final Subdivision" shall not include any Assessor’s Parcel Map or subdivision map or portion thereof that does not create individual lots for which a building permit may be issued, including Assessor’s Parcels that are designat ed as remainder parcels. Notwithstanding the above, a condominium plan for which City of Fontana August 22, 2024
Community Facilities District No. 116M Page 3
one or more building permits have been issued, but no individual lots have been created for such building permits, shall be considered a Final Subdivision, and the portion of the condominium plan for which building permits have been issued shall be defined as Developed Property.
"Fiscal Year" means the period starting July 1 and ending on the following June
30. "Land Use Class" means any of the classes listed in Table 1 below. "Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section C hereof, that can be levied by CFD No. 116M in any Fiscal Year on any Assessor’s Parcel.
"Non-Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued by the City permitting the construction of one or more non-residential structures or facilities. “Property Owner Association Property" means, for each Fiscal Year, any Assessor’s Parcel within the boundaries of CFD No. 116M that was owned by or irrevocably offered for dedication to a property owner association, including any master or sub-association, as of January 1 of the previous Fiscal Year. “Proportionately” means, for Developed Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor’s Parcels of Developed Property.
"Public Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 116M that is (i) owned by, irrevocably offered or dedicated to the federal government, the State, the County, the City, or any local government or other public agency, provided, however, that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use; or (ii) encumbered by a public utility easement making impractical its use for any purpose other than that set forth in the easement. To ensure that property is classified as Public Property in the first Fiscal Year after it is acquired by, irrevocably offered for dedication to, or dedicated to a public agency, the property owner shall notify the CFD Administrator in writing of such acquisition, offer, or dedication not later than June 30 of the Fiscal Year in which the acquisition, offer, or dedication occurred. “Rate and Method of Apportionment” means this Rate and Method of Apportionment of Special Taxes for CFD No. 116M.
City of Fontana August 22, 2024
Community Facilities District No. 116M Page 4
"Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property, to fund the Special Tax Requirement. "Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 116M to pay for: (1) maintenance services authorized to be financed by CFD No. 116M, (2) Administrative Expenses, (3) anticipated delinquent special taxes (such delinquent special taxes shall be estimated based on the delinquency rate in CFD No. 116M for the previous Fiscal Year), and (4) less a credit for funds available to reduce the annual Special Tax levy, if any, as determined by the CFD Administrator.
"Taxable Property" means all of the Assessor’s Parcels within the boundaries of CFD No. 116M which are not exempt from the Special Tax pursuant to law or Section E below.
“Undeveloped Property” means, for each Fiscal Year, all Assessor’s Parcels of Taxable Property which are not categorized as Developed Property. "Welfare Exemption" means, for each Fiscal Year, any Assessor's Parcel that is subject to a welfare exemption under subdivision (g) of Section 214 of the California Revenue and Taxation Code (or any successor statute), as indicated in the County’s assessment roll finalized as of the last preceding January 1.
B. ASSIGNMENT TO LAND USE CATEGORIES
For each Fiscal Year, commencing with Fiscal Year 2025-2026, all Taxable Property within CFD No. 116M shall be categorized as either Developed Property or Undeveloped Property, and shall be subject to the Special Tax in accordance with the rate and method of apportionment determined pursuant to Sections C and D below.
C. MAXIMUM SPECIAL TAX RATE
1. Developed Property
The Fiscal Year 2025-2026 Maximum Special Tax for each Assessor’s Parcel classified as Developed Propertyshall be equal to the amount shown in the table below:
City of Fontana August 22, 2024
Community Facilities District No. 116M Page 5
TABLE 1
Fiscal Year 2025-2026
Maximum Special Tax for Developed Property
Land Use Class FY 2025-2026 Maximum Special Tax
Final Residential Subdivision $737 per lot
Non-Residential Property $8,217 per Acre
On each July 1, commencing July 1, 202 6, the Maximum Special Tax for Developed Property shall increase by two percent (2%) per Fiscal Year.
2. Undeveloped Property
The Maximum Special Tax for each Assessor’s Parcel classified as Undeveloped Property shall be equal to $0 per Acre.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2025-2026 and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requirement andthe City shall provide for the levy of the Special Tax until the total Special Tax levy equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows:
The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the Maximum Special Tax for such Assessor’s Parcel.
E. EXEMPTIONS
No Special Tax shall be levied on (i) Public Property, (ii) Property Owner Association Property , (iii) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (iv) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public us es, (v) or any Assessor’s Parcel that has a Welfare Exemption. Should an Assessor’s Parcel, however, no longer be classified as items (i) -(v) above, including Property Owner Association Property, Public Property, or have a Welfare Exemption, its tax -exempt status will, without the necessity of any action by the Council, terminate.
The exempt status of any property will be determined by the CFD Administrator and such determination shall be final.
City of Fontana August 22, 2024
Community Facilities District No. 116M Page 6
F. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem property taxes; provided, however, that CFD No. 116M may directly bill the Special Tax, and/or may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of CFD No. 116M.
G. TERM OF SPECIAL TAX
The Special Tax shall be leviedin perpetuity as necessary to meet the Special Tax Requirement, unless no longer required to pay for the authorized services as determined at the discretion of the Council.
H. APPEALS
Any landowner or resident who feels that the amount of the Special Tax levied on his/her Assessor’s Parcel is in error may submit a written appeal to the CFD Administrator, provided that the appellant is current in his/her payment of Special Taxes. Duringthe pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, a cash refund shall not be made (except for the last year of levy ), but the amount of the Special Tax levied shall be appropriately modified , reduced, or eliminated through an adjustment to the Special Tax levy in the following Fiscal Year. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has thirty (30) days in which to appeal to the Council by filing a written notice of appeal with the City Clerk, provided that the appellant is current in his/her payment of Special Taxes. This second appeal must specify the reasons for its disagreement with the CFD Adm inistrator's determination.
The CFD Administrator shall interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals.
Any decision of the CFD Administrator shall be subject to appeal to the Council whose decision shall be final and binding as to all persons.
City of Fontana August 22, 2024
Community Facilities District No. 116M Page 7
I. PREPAYMENT
No prepayments of the Special Tax are permitted.
APPENDIX B
City of Fontana
Community Facilities District No. 116M
BOUNDARY MAP
18201 VON KARMAN AVENUE, SUITE 220
IRVINE, CA 926 12
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