DATE:
June 18, 2024
TO:
Mayor and Council Members
FROM:
Rachel Molina, City Manager
BY:
Nathan R. Freeman, Director of Development Services
Andrew Lemke, Building Official
SUBJECT:
Professional Services Agreement with NBS for Community
Facilities District No.’s 2021-1 and 2022-1 Annexation Services
RECOMMENDED ACTION
It is recommended that the City Council approve a Professional Services Agreement (PSA) with NBS, in an amount not to exceed $150,000, for Community Facilities District (CFD) No.’s 2021-1 and 2022-1 annexation services for a term of three (3) years.
BACKGROUND
Government Code Section 53311, the Mello-Roos Act of 1982, allows local governmental entities, such as Hesperia, to form Community Facilities Districts (CFDs) to fund maintenance of public facilities, including street lighting, landscaping, drainage, and other basic public infrastructure and services including fire and emergency services.
In May of 2021, staff completed a Fiscal Impact Analysis for Citywide Future Development. The analysis identified the potential negative fiscal impacts to the City of new developments throughout the community.
With this in mind, in February and May of 2022, the City Council adopted separate resolutions establishing the formation of CFD 2021-1 (for new residential development) and CFD 2022-1 (for new non-residential development) with the intention that future development within the City would annex into one of the respective districts and offset any negative fiscal impacts associated with new development.
The services funded via CFD’s 2021-1 and 2022-1 include, but are not limited to, police protection services, maintenance and lighting of parks, parkways, streets, roads, storm drains, and open space. The services funded also include all direct and incidental costs related to providing for the maintenance of public infrastructure.
ISSUES/ANALYSIS
Currently, the City contracts with NBS to provide administration/delinquency services for CFD 2005-1 (Belgate Development), CFD 2021-1, CFD 2022-1, and CFD 2023-1 (Silverwood Maintenance and Services).
In addition to the work described above, staff is seeking NBS’ assistance in annexing future residential and non-residential development into CFDs 2021-1 and 2022-1. Specifically, all residential projects, consisting of four (4) or more units, as a condition of approval, are required to annex into CFD 2021-01 prior to the issuance of a Certificate of Occupancy. Likewise, all non-residential (i.e., industrial) projects requiring discretionary approval from the City are required, as a condition of approval, to annex into CFD 2022-01 prior to the issuance of a Certificate of Occupancy.
The current CFD maximum special tax rates for non-residential projects are as follows:
Industrial Property: $0.15 per building square foot
Industrial Parking Facility Property: $0.15 per improved square foot Mixed-Use Property: $0.15 per building square foot
The current CFD maximum special tax rates for residential projects are as follows:
Single-Family Residential: $840.35 per unit
Multi-Family Residential: $536.20 per unit
Accessory Dwelling Unit: 30% of the maximum rate for the property type of the primary unit.
Lastly, the cost for NBS to process annexation requests is $5,500 (per application) and it is anticipated that NBS will process approximately 5-10 applications per year for the next three (3) years. Additionally, approval of the PSA with NBS does not mean the entire contract amount will be used but will be available for use when required.
CITY GOAL SUPPORTED BY THIS ITEM
Future Development: Facilitate balanced growth to ensure cohesive community development and pursue economic development.
FISCAL IMPACT
The annexation services will be funded from the applicable CFD funds (Fund 241 for CFD 2021-1 and Fund 242 for CFD 2022-1), with the cost for the services recovered through fees paid by the developer. A budget amendment will be requested during the quarterly budget review, as the cost for annexation services was not included in the proposed FY 2024-25 Budget.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
None
City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the Mayor and Council Members
Professional Services Agreement for CFD Annexation Services June 18, 2024