Memorandum
To: James Hamill, CSCDA
From: DPFG
Date: May 9, 2024
Subject: Owl Ranch Subdivision (City of Hercules) – SCIP Financing Plan for 2024C James,
Per the request of D.R. Horton (“Developer”), we have prepared this memo to provide background information and discuss a proposal for the formation of an Community Facility District through the California Statewide Communities Development Authority (“CSCDA”) and the Statewide Community Infrastructure Program (“SCIP”) for the Owl Ranch Subdivision (“Project”) within the City of Hercules (“City”).
The City is currently a participating member of SCIP with authorizations to form assessment districts only.
In 2017, the City updated their SCIP resolution to require City Council approval for any future SCIP applications. Once a SCIP application has been formally approved by City Council, the balance of remaining actions related to the District formation and subsequent bond issuance would remain delegated to the City Manager.
The Developer would also like to seek the West Contra Costa Transportation Advisory Committee’s cooperation with CSCDA and SCIP in order to potentially finance the West County Sub‐Regional Transportation Mitigation Fee.
The Developer would like to submit a SCIP application for the Project to participate in the 2024C SCIP Series which begins in August 2024 and closes bonds in December 2024. The anticipated 2024C SCIP Series application and bond issuance schedule is shown below:
SCIP Series 2024C Series
Applications Due August 1, 2024
Prepare Preliminary Engineer's Report August ‐ September 2024 Resolution of Intention to Form AD September 19, 2024
Hold Public Hearing to Form AD November 7, 2024
Sell Bonds November 26, 2024
Close Bonds December 18, 2024
Project Details:
The Project is planned for the development of 40 single‐family residential lots on the approximately 7.3 acre site at 215 Skelly Road. A preliminary site plan is attached to this memo for reference. Lot 19 and Lot 29 will be excluded from the SCIP financing district as they have been designated as deed restricted affordable housing. For the purposes of the SCIP financing proposal, only 38 residential units will be considered in the remainder of this memo.
The Project’s final map was approved by the City on November 14, 2023. Land development is currently underway with underground storm and sewer improvements completed. Water improvements are anticipated to begin in May 2024 and paving to begin in September 2024.
The Developer anticipates that the building permits for model homes will be issued in August 2024. Sales for homes will begin in December 2024 with the first anticipated home closing expected in February 2025.
The Developer plans to offer three different house plans between 1,582 to 2,311 square feet. The average overall average sales price is estimated to be $826,184. See table below for anticipated house plan, unit counts, and anticipated sales pricing assumptions.
Plan Sq. Ft. Units Est. Sales Price
Plan 1583 1,582 13 $ 765,000
Plan 1874 1,856 15 $ 830,000
Plan 2311 2,311 10 $ 900,000
Total/Avg. 1,867 38 $ 826,184
DPFG has prepared a preliminary total tax rate analysis for the Project based on the Developer’s anticipated sales price information for the 2023/24 fiscal year. The Project’s baseline total rate burden as a percentage of anticipated sales pricing is currently 1.47% before the addition of a potential SCIP CFD.
The Developer would propose a SCIP Special Tax of approximately $1,475 per residential unit which would bring the Project’s average tax burden up to a 1.65%. Please see Exhibit A for a summary of the Project’s anticipated ad‐valorem, special taxes, and assessments.
Summary of SCIP Community Facilities District Formation Deal Points:
1. In order to facilitate the financing and construction of public improvements necessary to serve the Project, we would propose the formation of a SCIP CFD to finance City and local jurisdiction development impact fees as well as certain offsite improvements. A list of potentially eligible impact fees and infrastructure amounts may be reviewed in the table below:
Potential Impact Fees for SCIP Financing Agency Fee per Unit Total Fee Park and Recreation Facilities City $ 1,705 $ 64,790 Transportation Facilities City $ 5,977 $ 227,126 Sewer Facilities City $ 4,679 $ 177,802 West County Sub‐Regional Transportation Mitigation Fee WCCTAC $ 6,916 $ 262,808 Total Potential Fees for SCIP Financing $ 19,277 $ 732,526
Potential Improvements for SCIP Financing Agency Cost per Unit Total Cost Skelly Road ‐ Bulb Out City $ 1,336 $ 50,750 Total Potential Improvements for SCIP Financing $ 1,336 $ 50,750 Total Potential SCIP Financing $ 20,613 $ 783,276 *The West County Sub‐Regional Transportation Mitigation Fee is collected on behalf of the West Contra Costa Transportation Advisory Committee (WCCTAC) and may require additional agency approval for SCIP financing.
2. The Developer would like to use SCIP to finance the public improvements and fees listed in the table above at approximately $13,158 per unit or $500,00 in total.
3. The SCIP Special Tax necessary to finance the amounts noted above, is estimated to be $1,475 per residential unit. See Exhibit B for an analysis of the Project’s SCIP financing potential.
4. The bonding capacity for the Project is estimated to yield $500,000 in net proceeds. The preliminary bond sizing analysis is described in further detail in Exhibit B.
5. The proposed annual special tax, when combined with all other property taxes, has been estimated at an average of 1.65%.
6. Lot 19 and Lot 29 will be excluded from the boundaries of the proposed SCIP Community Facility District.
7. For modeling purposes, it was assumed that the annual special tax levied on developer property will escalate at 2% per year, the interest rate on the bonds was assumed at 5.50%, and net of estimates for priority admin, underwriter discount, reserve funds, capitalized interest, and incidental expenses.
8. The actual amount of the SCIP bonds to be issued is expected to be a function of the project’s special tax revenue and appraised value. The bonds would be anticipated to be issued when the value‐to‐lien ratio is met for the Project, consistent with goals and policies and timing the sale of bonds to occur in the next pooled issuance.
9. Developer and DPFG are prepared to work with the SCIP consultant team and the City as expeditiously as practicable in order for the Project’s SCIP application to be approved by City Council.
Land Use Information
Plan [1] Plan 1583 Plan 1874 Plan 2311 Total/Average
Number of Units [1] 13 15 10 38
Unit Square Footage [1] 1,582 1,856 2,311 1,882
Garage Square Footage [1] 400 400 400 400
Estimated Sales Price [1] 765,000$ 830,000$ 900,000$ 826,184 Ad‐Valorem Property Taxes (2023/24) [2] Rate
1% COUNTYWIDE TAX 1.0000% 7,650$ 8,300$ 9,000$ 8,262$ BART 0.0048% 37 $ 40$ 43$ 40 BART BOND 2016 0.0086% 66 $ 71$ 77$ 71 EAST BAY REG PK BD 0.0057% 44 $ 47$ 51$ 47 WEST CC UNIF BD 98 0.0000% ‐$ ‐ $ ‐ $ ‐ WCC UNIF BOND 2000 0.0118% 90 $ 98$ 106$ 97 WCCUSD 2002 BOND 0.0548% 419 $ 455$ 493$ 453 WCC UNIF BOND 2005 0.0636% 487 $ 528$ 572$ 525 WCCUSD 2010 BOND 0.0348% 266 $ 289$ 313$ 288 WCCUSD 2012 BOND 0.0284% 217 $ 236$ 256$ 235 WCCUSD 2020 BOND 0.0530% 405 $ 440$ 477$ 438 COMM COLL 2002 BND 0.0027% 21 $ 22$ 24$ 22 COMM COLL 2006 BND 0.0043% 33 $ 36$ 39$ 36 COMM COLL 2014 BND 0.0076% 58 $ 63$ 68$ 63 Total Ad‐Valorem Property Taxes 1.2801% 9,793$ 10,625$ 11,521$ 10,576$ Special Taxes and Assessments (2023/24)
West Contra Costa Unified School District Assessment (Measure T) [3] 114 $ 134$ 166$ 136$ Contra Costa County Mosquito Abatement District [4] 3$ 3$ 3$ 3$ Contra Costa County Emergency Medical Services ‐ Parcel Tax (Zone B) [5] 10 $ 10$ 10$ 10$ City of Hercules ‐ Sewer Service Charge [6] 626$ 626$ 626$ 626$ Contra Costa County Flood Control and Water Conservation District – Stormwater No. 6 [7] 35 $ 35$ 35$ 35$ West Contra Costa Unified School District Assessment (Measure E) [8] 72 $ 72$ 72$ 72$ East Bay Regional Park District ‐ Landscape & Lighting District [9] 5 $ 5$ 5$ 5$ West Contra Costa Health Care District ‐ Parcel Tax [10] 52$ 52$ 52$ 52$ San Francisco Bay Restoration Authority – Measure AA [11] 12$ 12$ 12$ 12$ City of Hercules Landscape & Lighting Assessment District No. 83‐2 (Neighborhood Zone 1) [12] 143 $ 143$ 143$ 143$ City of Hercules Landscape & Lighting Assessment District No. 83‐2 (District‐Wide Parks ‐ Zone 10) [13] 150 $ 150$ 150$ 150$ Rodeo – Hercules Fire Protection District – Parcel Tax (Measure O) [14] 245 $ 245$ 245$ 245$ Rodeo – Hercules Fire Protection District ‐ Fire Suppression Assessment [15] 111 $ 111$ 111$ 111$ Total Special Taxes and Assessments 1,577$ 1,597$ 1,630$ 1,599$ Baseline Tax Burden Before the Addition of SCIP Assessment Baseline Total Tax Burden (Excluding SCIP) 11,370$ 12,222$ 13,151$ 12,175$ Baseline Tax Burden as % of Assessed Value 1.49% 1.47% 1.46% 1.47% Potential SCIP Special Tax (See Attached SCIP Financing Analysis) 1,475 $ 1,475$ 1,475$ 1,475$ Total Tax Burden (Including SCIP Special Tax) 12,845$ 13,697$ 14,626$ 13,650$ Tax Burden as % of Assessed Value (Including SCIP Special Tax) 1.68% 1.65% 1.63% 1.65% [6] Represents the projected Fiscal Year 2023‐2024 annual assessment of $625.80 of the City of Hercules ‐ Service Charge to pay for sewer service charges.
Exhibit A
[12] Represents the projected Fiscal Year 2023‐2024 annual assessment of $142.52 of the City of Hercules Landscape & Lighting Assessment District No. 83‐2 (Neighborhood Zone 1) to pay for Street lighting maintenance, landscape maintenance, Railroad Park and Beechnut Park maintenance, weed control and planted median and slope maintenance, backflow prevention system inspection, irrigation water expenses, unscheduled landscape work, graffiti abatement, weed abatement, and miscellaneous open space cleanup Neighborhood Zone 1 pro‐rata share of Citywide Arterial Roadway landscape and lighting maintenance. This amount is subject to increase annually by the CPI for the San Francisco Bay Region All Urban Consumers Index. [13] Represents the projected Fiscal Year 2023‐2024 annual assessment of $149.50 of the City of Hercules Landscape & Lighting Assessment District No. 83‐2 (District‐Wide Parks ‐ Zone 10) to pay for park maintenance services. This amount is subject to increase annually by the CPI for the San Francisco Bay Region All Urban Consumers Index. [14] Represents the projected Fiscal Year 2023‐24 annual assessment of $245.00 of the Rodeo – Hercules Fire Protection District – Parcel Tax (Measure O) to pay for fire protection and emergency services. This amount is subject to increase annually by the lesser of 3% or the annual change in the CPI for All Consumers for the San Francisco‐Oakland‐San Jose area as published by the U.S. Department of Labor.
[15] Represents the projected Fiscal Year 2022‐2023 annual assessment of $111.00 of the Rodeo – Hercules Fire Protection District – Fire Suppression Assessment to pay for fire protection and emergency response services, including, but not limited to, obtaining, furnishing, operating, and maintaining fire suppression, protection and emergency services equipment and apparatus; paying salaries, benefits and other compensation for firefighting and fire prevention personnel; training and administration of personnel performing said fire suppression, protection and emergency services; community fire prevention education and fire inspection. [7] Represents the projected Fiscal Year 2023‐2024 annual assessment of $35.00 of the City of Hercules Storm Drain Charge to pay the costs administering, monitoring, operating, maintaining and improving the storm sewer system throughout the City of Hercules. [8] Represents the projected Fiscal Year 2023‐2024 annual assessment of $72.00 of the West Contra Costa Unified School District Assessment (Measure E) to pay for various school programs and services in the district.
[9] Represents the projected Fiscal Year 2023‐2024 annual assessment of $5.44 of the East Bay Regional Park District ‐ Landscape & Lighting District to pay for pay for the operation, maintenance, and servicing of trails in the district.
[10] Represents the projected Fiscal Year 2023‐2024 annual assessment of $52.00 of the West Contra Costa Health Care District ‐ Parcel Tax to pay for emergency room medical services in West Contra Costa County.
[11] Represents the projected Fiscal Year 2023‐24 annual assessment of $12.00 of San Francisco Bay Restoration Authority to pay for clean water, pollution prevention and habitat restoration [5] Represents the projected Fiscal Year 2023‐2024 annual assessment of $10.00 of the Contra Costa Emergency Medical Services Parcel Tax (Zone B) to pay for increased paramedic service, medical training, equipment, supplies for fire service, and upgrades to the County radio system.
D.R. Horton
Owl Ranch (City of Hercules)
Annual Special Taxes and Assessments for Final Map (Developed) Property 2023/24 Fiscal Year
[1] Average unit square footage and estimated sales pricing based on information provided by Developer.
Total Tax Rate Analysis
[2] Tax rates are based on information provided by Contra Costa County's Treasurer‐Tax Collector for FY 2023/24. [3] Represents the projected Fiscal Year 2023‐2024 annual tax of the West Contra Costa Unified School District Parcel Tax (Measure T) to pay for various school programs and services in the district. The tax is currently calculated at $0.072 per livable square foot of building area. [4] Represents the projected Fiscal Year 2023‐2024 annual assessment of $3.12 of the County of Contra Costa Mosquito Abatement District to pay for mosquito abatement and control Prepared by DPFG 5/9/2024
Other Fixed
Charges,
Est. Estimated Ad Assessment Proposed Total Total Total Home Base Valorem and Special Tax per Tax per Tax Proposed Plan Units (1) Size (1) Price (1) Tax Rate Taxes Unit Unit Rate Revenues
1.2801%
Total Proposed Annual Revenue 56,050$
Plan 1583 13 1,582 765,00 0$ 9,793$ 1,577$ 1,475$ 12,845$ 1.68% 19,175$ Less Priority Admin 46,050 Plan 1874 15 1,856 830,00 0$ 10,625$ 1,597$ 1,475$ 13,697$ 1.65% 22,125$ Plan 2311 10 2,311 900,00 0$ 11,521$ 1,630$ 1,475$ 14,626$ 1.63% 14,75 0$ Gross Bond Amount (30 Year Term, 29 Year Amortization) 715,000
Reserve Fund (125% of Avg. Annual Debt Service) (67,482) Capitalized Interest (9 months) (29,477)
Underwriter Discount @ 2.25%: (17,875)
Legal Services and Issuer Costs (3.00%) (21,450)
Additional Cost of Issuance (Estimate) (78,717)
Net Construction Proceeds 500,00 0$
Total 38 1,882 826,184$ 10,576$ 1,599$ 1,475$ 13,650$ 1.65% 56,050$ Net Construction Proceeds (Per Unit) 13,15 8$ Footnotes:
Exhibit B
[1] Provided by Developer
D.R. Horton
Owl Ranch (City of Hercules)
SCIP CFD Capacity Analysis
May 9, 2024
LAND USE INFORMATION TOTAL TAX RATE ANALYSIS CFD FINANCING ANALYSIS
5.50% Bond Interest Rates
Prepared by DPFG 5/9/2024
TYPEWIDTHHEIGHT
TYPEWIDTHHEIGHT
TYPEWIDTHHEIGHT
TYPEWIDTHHEIGHT
TYPEWIDTHHEIGHT
TYPEWIDTHHEIGHT
TYPEWIDTHHEIGHT
TYPEWIDTHHEIGHT
TYPEWIDTHHEIGHT
TYPEWIDTHHEIGHT
14 12
6 437
35 2925
33 3
1 2623211817
38 7
15 11109
2 PEARCE ROADROSTI
323113 36
5 24192016 27
34 8
22 28
30 SKELLYCONTRA COSTA COUNTY FCD & WCD
PAVON
3940
PARCEL DPARCEL E
PARCEL G
PARCEL FPARCEL A
PARCEL BPARCEL CBIORETENTION
CONNECTIONTO BAY TRAIL
SKELLY McLEODSKELLY @ BULBOUT213 42 1213 42 1 13 322 1
PRODUCT MIX# OF LOTS% OF TOTALPLAN #
MINIMUM SETBACK REQUIREMENTS:
F:\3204\ACAD\EXHIBITS\XB - REVISED DEVELOPMENT PLAN.DWG VESTING TENTATIVE MAPOWL RANCH - SUBDIVISION 9606CITY OF HERCULES CONTRA COSTA COUNTY CALIFORNIASCALE: 1" = 40'REVISED: AUGUST 2023 12080400 CIVIL ENGINEERSSURVEYORSPLANNERSSAN RAMONWWW.CBANDG.COMROSEVILLE(925) 866-0322(916) 788-4456 REVISED DEVELOPMENT PLANEMERGENCY VEHICLETURNING TEMPLATELAND USE TABLEPARCELDESCRIPTIONAREA (AC)% of TOTALLANDSCAPE AREA SUMMARYDESCRIPTIONAREA (SF)AREA (AC)