Prepared by:
Report for:
Community Facilities District No. 2021-1
(Residential Maintenance & Services)
Special Tax Report
January 2022
Prepared by NBS for and on behalf of the City of Hesperia Attachment 5
TABLE OF CONTENTS
INTRODUCTION ......................................................................................... ............................ 1 DESCRIPTION OF SERVICES .............................................................................. ....................... 2 Authorized Services: ............................................................................................................ 2 Administrative Expenses: .................................................................................................... 2 Incidental Expenses: ............................................................................................................ 2 COST ESTIMATE ........................................................................................ ............................. 3 Fiscal Year 2022/23 Maximum Annual Special Tax Rate .................................................... 3 Annual Maximum Special Tax Escalation ............................................................................ 3 APPENDIX A: PROPOSED BOUNDARIES OF THE COMMUNITY FACILITIES DISTRICT AND FUTURE ANNEXATION AREA ................................... ................................................... ......................... 4 APPENDIX B: RATE AND METHOD OF APPORTIONMENT......................................................... 5
City of Hesperia
Community Facilities District No. 2021-1 (Residential Maintenance and Services) Special Tax Report 1
INTRODUCTION
The City Council (the “City Council”) of the City of Hesperia (the “City”) did, pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 (Sections 53311 and following, California Government Code; hereafter referred to as the “Act”), on December 21, 2021, adopted Resolution 2021-61 entitled the Resolution of the City Council of the City of Hesperia, State of California, Declaring Its Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes (the “Resolution of Intention”). In the Resolution of Intention, the City Council directed the study and filing of a public hearing report (the “Report”) required by Section 53321.5 of the Act for the proposed City of Hesperia Community Facilities District No. 2021-1 (Hesperia Residential Maintenance & Services) (the “District”).
Section 53321.5 of the Act provides that the Report contain the following:
1. A brief description of the public facilities or services to be provided by the District; and
2. An estimate of the fair and reasonable cost of providing the public facilities or services, including the incidental expenses in connection therewith, an y City administration costs, and all other related costs.
For particulars, reference is made to the Resolution of Intention for the District, as previously adopted on December 21, 2021 by the City Council.
NOW, THEREFORE, the Director of Public Works of the City, the appointed responsible officer directed to prepare the Report or cause the Report to be prepared pursuant to the provisions of the Act, does hereby submit this Report containing the following information:
DESCRIPTION OF SERVICES. A description of the services that the City Council has determined to be eligible to be funded by the District.
COST ESTIMATE . The initial maximum cost estimate for the District services and the anticipated initial maximum special tax revenue.
PROPOSED BOUNDARIES OF THE COMMUNITY FACILITIES DISTRICT: The proposed boundaries of the District are those properties and parcels in which special taxes may be levied to pay for the costs and expenses of the Services. The proposed boundaries of the District are described on the map of the District.
RATE AND METHOD OF APPORTIONMENT . The Rate and Method of Apportionment of Special Tax which was included in the Resolution of Intention and approved by this City Council on December 21, 2021.
City of Hesperia
Community Facilities District No. 2021-1 (Residential Maintenance and Services) Special Tax Report 2
DESCRIPTION OF SERVICES
The public services and incidental costs authorized to be funded by the special taxes levied in the District consist of the following:
Authorized Services:
The services to be funded, in whole or in part, by the community facilities district (the "District”) consist of all services authorized under Section 53313 of the Gove rnment Code, including, but not be limited to, poli ce protection services, maintenance and lighting of pa rks, parkways, streets, roads, storm drains, and op en space. (the "Services"). The Services include all d irect and incidental costs related to providing for the maintenance of public infrastructure within the area of the District and areas adjacent to or in the vicinity of such areas. The District may fund any of the follow ing related to the Services: furnishing, operating and maintaining equipment, apparatus or facilities rela ted to providing the services and/ or equipment, apparatus, facilities or fixtures in areas to be ma intained, paying the salaries and benefits of perso nnel necessary or convenient to provide the Services, payment of insurance costs and other related expenses and the provision of reserves for repairs and replacements and for the future provision of Services. It is expected that the Services will be provided by the City of H esperia (the “City”), either with its own employees or by contract with third parties, or any combination thereof.
Administrative Expenses:
The administrative expenses to be funded by the District include the direct and indirect expenses incurred by the City in carrying out its duties with respect to the District (including, but not limited to, the l evy and collection of the special taxes) including the fees and expenses of attorneys, any fees of the County of San Bernardino related to the District or the collectio n of special taxes, an allocable share of the salar ies of the City staff directly related thereto and a proportio nate amount of the City’s general administrative ov erhead related thereto, any amounts paid by the City from its general fund with respect to the District or the services authorized to be funded by the District, and expens es incurred by the City in undertaking action relat ed to properties for which the payment of special taxes i s delinquent, and all other costs and expenses of t he City in any way related to the District.
Incidental Expenses:
The incidental expenses that may be funded by the D istrict include, in addition to the administrative expenses identified above, the payment or reimburse ment to the City of all costs associated with the establishment and administration of the District.
City of Hesperia
Community Facilities District No. 2021-1 (Residential Maintenance and Services) Special Tax Report 3
COST ESTIMATE
Initial Maximum Amount Proposed to be Expended
The annual budget presented below represents the initial maximum costs for providing the District services as well as the estimated costs for Fiscal Year 2022/23.
District Costs
20 22/2 3 Maximum
Budget Amount
20 22/23 Estimated
Budget Amount
District Service Costs $25,752.42 $25,752.42
District Administration Costs $4,500.00 4,500.00
Total: $30,252.42 $30,252.42
Anticipated Fiscal Year 2022/23 Maximum Special Tax Revenue The initial maximum annual special tax rates are set forth in the Rate and Method of Apportionment for the District. Based upon expected development, the initial maximum annual special tax revenue is as follows:
Property Land Use
2022/23
Maximum Annual
Special Tax Rate
20 22/23
Total Anticipated
Maximum Annual
Special Tax
Single Family Residential Property $840.35 per Uni t $30,252.42 Multi-Family Residential Property $536.20 per Unit 0.00 Accessory Dwelling Unit
30% of the applicable
Maximum Special Tax
Rate for the property
type of the primary
Unit
0.00 Total Anticipated Maximum Annual Special
Tax Revenue (1) : $30,252.42
(1) Anticipated based upon the full development of 36 re sidential lots.
Fiscal Year 2022/23 Maximum Annual Special Tax Rate
The Fiscal Year 2022/23 maximum annual special tax rate for Single Family Residential Property within the District is $840.35 per single family residential lot. The maximum annual special tax rate for Multi-Family Residential Property is $536.20 per unit.
Annual Maximum Special Tax Escalation
On July 1 of each Fiscal Year, commencing on July 1, 2023, the maximum annual special tax rate shall be increased by an amount equal to three percent (5%) of the maximum annual special tax rate in effect for the previous Fiscal Year.
City of Hesperia
Community Facilities District No. 2021-1 (Residential Maintenance and Services) Special Tax Report 4 APPENDIX A: PROPOSED BOUNDARIES OF THE
COMMUNITY FACILITIES DISTRICT AND FUTURE
ANNEXATION AREA
The boundary map and future annexation area for the District is shown on the following page. The lines and dimensions of each lot or parcel within the District are those lines and dimensions shown on the maps of the County Assessor, at the time this Report was prepared, and are incorporated by reference herein and made part of this Report.
City of Hesperia
Community Facilities District No. 2021-1 (Residential Maintenance and Services) Special Tax Report 5 APPENDIX B: RATE AND METHOD OF APPORTIONMENT
The following pages provide a copy of the District’s Rate and Method of Apportionment approved by the City Council on December 21, 2021.
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
CITY OF HESPERIA
COMMUNITY FACILITIES DISTRICT NO. 2021-1
(RESIDENTIAL MAINTENANCE AND SERVICES)
A Special Tax shall be levied and collected in City of Hesperia Community Facilities District No. 2021 -1 (Residential Maintenance and Services) (“CFD 2021-1”) each Fiscal Year, in an amount determined by the application of the procedures below. All of the Taxable Property (as defined below) in CFD 2021-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.
I. DEFINITIONS
The terms hereinafter set forth have the following meaning:
“Accessory Dwelling Unit” or “ADU” means a secondary residential unit of limited size , as defined in California Government Code Section 65852.2 as that may be amended from time to time, that is accessory to a single-unit dwelling. The ADU may be on the same Assessor’s Parcel as the single-unit dwelling or on a separate Assessor’s Parcel.
"Acre” or “Acreage" means the land area of an Assessor’s Parcel as show n on an Assessor’s Parcel Map or in the Assessor’s Data for each Assessor’s Parce l. In the event that the Assessor’s Parcel Map or Assessor’s Data shows no Acreage, the Acreage for any Assessor’s Parcel may be determined by the CFD Administrator based upon the applicable condominium plan, final map, parcel map, or calculated using available spatial data and GIS.
“Act” means the Mello-Roos Community Facilities Act of 19 82, as amended, being Chapter 2.5 of Part 1, Division 2 of Title 5 of the Government Code of the State. “Administrative Expenses” means the following actual or reasonably estimated costs directly related to the administration of CFD 2021-1 including, but not limited to, the following: the costs of computing the Annual Special Tax Requirement and the annual Speci al Tax and of preparing the annual Special Tax collection schedules; the costs of collecting the S pecial Tax, including any charges levied by the Cou nty Auditor’s Office, Tax Collector’s Office or Treasurer’s Office; the costs of the City or designee in complying with the disclosure requirements of the California Government Code (including the Act), including public inquiries regarding the Special Tax; the costs of the City or designee related to levying or an appeal of the Special Tax; and the costs of commencing and pursuing to completion action arising from any delinquent Special Tax in CFD 2021-1 or costs of the County ta x sale process. Administrative Expenses shall inclu de amounts estimated or advanced by the City or CFD 20 21-1 for any other administrative purposes, including, but not limited to, attorney’s fees.
“Annual Services Costs” means the amounts required to fund services author ized to be funded by CFD 2021-1.
“Annual Special Tax Requirement” means that amount with respect to CFD 2021-1 determ ined by the City Council or designee as required in any Fiscal Year to pay: (1) the Administrative Expenses, (2) t he
Annual Services Costs, (3) any amount required to establish or replenish any reserve or replacement fund established in connection with CFD 2021-1, and (4) any reasonably anticipated delinquent Special Tax based on the delinquency rate for any Special Tax levied in the previous Fiscal Year. “Assessor’s Data” means Units, Acreage, or other information containe d in the records of the County Assessor for each Assessor’s Parcel.
“Assessor’s Parcel” or “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 Assessor of the Count y designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means, with respect to an Assessor’s Parcel, that number assigned to such Assessment’s Parcel by the County Assessor for purposes of identification. “Boundary Map” means that map recorded with the County Recorder’s office on January 4, 2022, in Book 90 at Page 2 as Document 2022-0004210 of Maps of Assessment and Community Facilities Districts “CFD 2021-1 ” means the City of Hesperia Community Facilities D istrict No. 2021-1 (Residential Maintenance and Services), County of San Bernardino, State of California. “CFD Administrator” means an official of the City, or designee thereof , responsible for determining the Annual Special Tax Requirement and providing for the levy and collection of the Special Taxes. “City” means the City of Hesperia, California.
“City Council” means the City Council of the City, acting as the legislative body of CFD 2021-1. “County” means the County of San Bernardino, California. “Developed Property” means, in any Fiscal Year, all Taxable Property in CFD 2021-1 for which a building permit for new construction was issued by the City prior to June 30 of the preceding Fiscal Year. “Exempt Property” means all Assessor’s Parcels located within the bo undary of CFD 2021-1 which are exempt from the Special Tax pursuant to Section E.
“Fiscal Year ” means the period starting July 1 and ending on the following June 30 th .
“GIS” means a geographic information system.
“Maximum Special Tax” means the maximum Special Tax authorized for levy in any Fiscal Year that may apply to Taxable Property as described in Section C.
“Multi-Family Residential Property” means, in any Fiscal Year, all Assessor’s Parcels of Developed Property with two or more Units that share a single Assessor’s Parcel Number, are offered for rent to the general public, and cannot be purchased by individu al homebuyers, according to Assessor’s Data or as otherwise known by the CFD Administrator. Multi-Fam ily Property also means, in any Fiscal Year, all Assessor’s Parcels of Developed Property with one U nit with a single Assessor’s Parcel Number that is a condominium pursuant the definition in Civil Code Section 4125 or a townhome. “Property Owner’s Association” means any property owner’s association. As used in this definition, a
Property Owner’s Association includes any home-owner’s association, condominium owner’s association, master or sub-association.
“Property Owner’s Association Property” means any property within the boundaries of CFD 2021-1 which is (a) owned by a Property Owner’s Association or (b) designated with specific boundaries and acreage on a final subdivision map as property owner association property. “Proportionately” means, in any Fiscal Year, that the ratio of the Special Tax to the Maximum Special Tax is equal for all Assessors’ Parcels Authorized to b e levied in that Fiscal Year within each respective Tax Zone.
“Public Property” means any property within the boundaries of CFD 2021-1 which (i) is owned by a public agency, (ii) has been irrevocably offered for dedication to a public agency, or (iii) is designated with specific boundaries and Acreage on a final subdivision map a s property which will be owned by a public agency.
For purposes of this definition, a public agency in cludes the federal government, the State, the Count y, school districts, or any other public agency.
“Rate and Method of Apportionment” means this Rate and Method of Apportionment of Special Tax for CFD 2021-1.
“Single Family Residential Property” means, all Assessor’s Parcels of Developed Propert y with a residential structure intended for a single primary Unit. “Special Tax” means the annual special tax to be levied in each F iscal Year on each Assessor’s Parcel of Taxable Property to fund the Annual Special Tax Requirement. “State” means the State of California.
“Tax Escalation Factor” means change in the April to April Riverside-San Bernardino-Ontario CPI-U Index (or a similar successor index) up to a maximum factor of 5% that will be applied annually after Fiscal Year 2022/23 to increase the Maximum Special Tax shown in Section III. Should the specified index cease to be reported, the CFD Administrator will determine a comparable index to use. “Tax Zone” means a mutually exclusive geographic area within which the Special Tax may be levied pursuant to this Rate and Method of Apportionment. All the Taxable Property within CFD 2021-1 at the time of its formation is within Tax Zone No. 1. Add itional Tax Zones may be created when property is annexed to CFD 2021-1, and a separate Maximum Special Tax shall be identified for property within each new Tax Zone at the time of such annexation. The Assessor’s Parcels included within a new Tax Zone when such Parcels are annexed to CFD 2021-1 shall be identified by Assessor’s Parcel number in the annexation documents at the time of annexation.
“Taxable Property” means all the Assessor’s Parcels within the bounda ries of CFD 2021-1 that are not exempt from the Special Tax pursuant to law or Section E below. “Undeveloped Property” means all Assessor’s Parcels of Taxable Property wi thin the boundaries of CFD 2021-1 that are not Developed Property.
“Unit” means an individual residential living space. The number of Units assigned to each Assessor’s Parcel may be determined by (i) referencing Assessor’s Data, (ii) site surveys and physical unit counts, and/or (iii)
other research by the CFD Administrator. Accessory Dwelling Units are considered Units for purposes of the Special Tax.
“Vacant Property” means all Taxable Property that is Undeveloped Pro perty and is not Public Property, Property Owner’s Association Property.
“Welfare Exempt Property” means all Parcels within the boundaries of CFD 2021 -1 that have been granted a welfare exemption pursuant to Section 53340 (c) of the Act under subdivision (g) of Section 214 of the Revenue and Taxation Code.
B. DETERMINATION OF TAXABLE PARCELS
On, or about, July 1 of each Fiscal Year, the CFD Administrator shall determine the valid Assessor’s Parcel Numbers for all Taxable Property within CFD 2021-1. If any Assessor’s Parcel Numbers are no longer valid, the CFD Administrator shall determine the new Asses sor’s Parcel Number or Numbers in effect for the then-current Fiscal Year. To the extent a Parcel or Parcels of Taxable Property are subdivided, consolidated, or otherwise reconfigured, the Maximum Special Tax shall be assigned to the new Assessor’s Parcels Numbers pursuant to Section C. The CFD Admi nistrator shall also determine: (i) the Tax Zone within which each Parcel is located; (ii) which Parcels are Developed Property and Undeveloped Property; (iii) the number of Units or Acreage each Parcel co ntains; (iv) the property type, i.e., Single Family Residential Property, etc.; and (v) the Annual Special Tax Requirement for the Fiscal Year.
C. MAXIMUM ANNUAL SPECIAL TAX RATE
The Maximum Special Tax for each Assessor’s Parcel of Taxable Property shall be assigned according to the table below:
TABLE 1
MAXIMUM SPECIAL TAX RATES – TAX ZONE NO. 1
FISCAL YEAR 2022/23*
Property Type Maximum Special Tax Rate Per
Single Family Residential Property $840.35 Unit
Multi-Family Residential Property 536.20 Unit
Accessory Dwelling Unit
30% of the applicable Maximum
Special Tax Rate for the property
type of the primary Unit
Unit
*On each July 1, commencing on July 1, 2023, the Maximum Special Tax Rate shall be increased by the Tax Escalation Factor.
In some instances, an Assessor’s Parcel of Developed Property may contain more than one property type.
The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for all Units of each property type on that Assessor’s Parcel, i.e. more than one Single Family or more th an one Multi-Family Unit.
For purposes of clarification, where an Accessory D welling Unit and primary Unit are on the same Assessor’s Parcel, the primary Unit and Accessory Dwelling Unit located on such Assessor’s Parcel are both
levied a Special Tax.
Should an Assessor’s Parcel contain only an Accessory Dwelling Unit, such Assessor’s Parcel will be levied a Special Tax.
All of the Taxable Property within CFD 2021-1 at th e time of its formation is within Tax Zone No. 1.
Additional Tax Zones may be created when property is annexed to CFD 2021-1, and a separate Maximum Special Tax shall be identified for property within the new Tax Zone at the time of such annexation. T he Assessor’s Parcels included within a new Tax Zone when such Parcels are annexed to CFD 2021-1 shall be identified by Assessor’s Parcel number in the annexation documents at the time of annexation. A different Maximum Special Tax rate may be identified in Tax Z ones added to CFD 2021-1 as a result of future annexations.
D. METHOD IF APPORTIONMENT OF THE SPECIAL TAX
All Taxable Property shall be subject to a Special Tax defined as follows.
The Special Tax shall be levied each Fiscal Year by the CFD Administrator. The Annual Special Tax Requirement shall be apportioned to each Parcel within CFD 2021-1 by the method shown below.
First. Determine the Annual Special Tax Requirement.
Second. Levy the Special Tax on each Parcel of Developed Pr operty, Proportionately, up to the Maximum Special Tax described in the table below to satisfy the Annual Special Tax Requirement.
Under no circumstances will the Special Tax on any Assessor’s Parcel of Developed Property be increased by more than 10% as a consequence of delinquency or default by the owner of any other Assessor’s Parcel within CFD No. 2021-1.
E. EXEMPTIONS
Notwithstanding any other provision of this Rate and Method of Apportionment of Special Tax, no Special Tax shall be levied on Property Owner’s Association Property, or Public Property, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act.
Welfare Exempt Property shall thereafter be exempt from the Special Tax for as long as the property qualifies as Welfare Exempt Property.
F. APPEAL OF SPECIAL TAX LEVY
Any property owner may file a written appeal of the Special Tax with the CFD Administrator claiming that the amount or application of the Special Tax is not correct. The appeal must be filed not later than o ne calendar year after having paid the Special Tax tha t is disputed, and the appellant must be current in all payments of the Special Tax. In addition, during the term of the appeal process, all Special Tax levied must be paid on or before the payment date established when the levy was made.
The appeal must specify the reasons why the appella nt 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 property owner disagrees with the CFD Admini strator’s decision relative to the appeal, the owne r may then file a written appeal with the City Council whose subsequent decision shall be final and binding on all interested parties. If the decision of the C FD Administrator or subsequent decision by the City Council requires the Special Tax to be modified or changed in favor of the property owner, the CFD Administrator shall determine if sufficient Special Tax revenue is available to make a cash refund. If a cash refund cannot be made, then an adjustment shall be made to credit future Special Taxes.
This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to filing any legal action by such owner.
G. INTERPRETATION OF RATE AND METHOD OF APPORTIONME NT
The City Council may, by resolution or ordinance, interpret, clarify and/or revise this Rate and Method of Apportionment to correct any inconsistency, vaguene ss, or ambiguity as it relates to the Special Taxes , method of apportionment, classification of Assessor ’s Parcels, or any definition used herein, as long as such correction does not materially affect the levy and collection of Special Taxes. In addition, the interpretation and application of any section of this document shall be at the City’s discretion.
H. MANNER AND DURATION OF SPECIAL TAX
The Special Tax shall be collected in the same mann er and at the same time as ordinary ad valorem property taxes, provided that the City may directly bill the Special Tax, may collect the Special Tax at a different time or in a different manner if needed to meet the financial obligations of CFD 2021-1, and may collect delinquent Special Taxes through available methods.
A Special Tax shall be levied commencing in Fiscal Year 2022/23 to the extent necessary to satisfy the Annual Special Tax Requirement and shall be levied perpetually or for as long as required to satisfy t he Annual Special Tax Requirement, as determined by the CFD Administrator.
I. PREPAYMENT OF SPECIAL TAX
The Special Tax may not be prepaid.