Report to City Council
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TO: Mayor and City Council
FROM: Launa Jimenez, Chief Financial Officer
AGENDA DATE: June 4, 2024
TITLE: NOTICE OF CESSATION OF SPECIAL TAX LIEN
TITLE SUMMARY: Notice of Cessation of Special Tax Lien For Community Facilities District 87-1 Improvement Area No. 1 (Towngate)
Recommendation(s)
That the City Council:
1. Adopt Resolution No. 2024-___. A Resolution of the City Council of the City of Moreno Valley, Acting as the Legislative Body of City of Moreno Valley Towngate Community Facilities District No. 87-1 Improvement Area No. 1, Determining that the Special Tax of Said Community Facilities District Shall Cease to be Levied, Authorizing and Directing the Recordation of a Notice of Cessation of Special Tax and Taking Certain Other Actions in Connection Therewith.
SUMMARY
This report recommends adoption of a Resolution to authorize the recordation of a Notice of Cessation of the special tax lien against properties within Community Facilities District (CFD) No. 87-1 Improvement Area No. 1 (Towngate) (87-1 IA1) and the use of moneys in the funds and accounts established with respect to the CFD No. 87 -1 IA1 bonds for any lawful purpose of CFD No. 87-1 IA1 including to reimburse the City for staff time and expenses related to the administration of CFD No. 87 -1 IA1 (Attachment 1). The bonds have been paid in full and the special tax lien has been satisfied.
DISCUSSION
In March 1993, at the request of the property owners, the City formed CFD No. 87-1 IA1 to financing certain public facilities. On April 1, 1993 the City of Moreno Valley Towngate
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Community Facilities District No. 87-1 IA1, Special Tax Bonds were issued (the “Original Bonds”). On November 29, 2007, the City of Moreno Valley Towngate Community Facilities District No. 87 -1 IA1 Special Tax Refunding Bonds (the “2007 Bonds”) were issued to refinance the outstanding 1993 Bonds. The 2007 Bonds matured in 2023, with the final debt service payment made on October 1, 2023.
Section 53330.5 of the California Government Code provides that a special tax may b e levied by a community facilities district only so long as it is needed to pay the principal and interest on debt incurred by the community facilities district. Given the special tax is no longer needed to make debt service payments, a Notice of Cessation of Special Tax is required to be recorded against the affected properties.
Adoption of the resolution directs the City Clerk to record the Notice of Cessation against the property in the CFD, thereby eliminating the City’s ability to levy the special tax.
Further, in an overabundance of caution, the City did not take the total administrative fee as authorized by the Bond Indenture for the 2007 Bonds, leaving an uncollected balance of $ 113,000. The City now seeks to be reimbursed from the approximately $1 28,000 remaining in the bond accounts. The remaining balance will be returned to ROPS.
Adoption of the Resolution will enable CFD No. 87-1 IA1 to reimburse the City up to such amount, as determined by the City Manager and in consultation with bond counsel.
ALTERNATIVES
1. Adopt the Resolution and recommended actions as presented . Staff recommends this alternative because it is consistent with the legal requirements necessary to remove the taxing obligation on those properties formerly subject to the special tax.
2. Do not approve the recommended actions. Staff does not recommend this alternative since the bonds have been paid in full and there is no longer a legislative requirement to maintain the Notice of Special Tax Lien.
FISCAL IMPACT
Administrative costs incurred as part of this action are not expected to exceed $2,500 and will be paid from administrative fees received by the City for administration of the CFD.
NOTIFICATION
Agenda process.
PREPARATION OF STAFF REPORT
Prepared By: Department Head Approval:
Kimberly Ganimian Launa Jimenez
Deputy Finance Director Chief Financial Officer/City Treasurer
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CITY COUNCIL GOALS
Revenue Diversification and Preservation: Develop a variety of City revenue sources and policies to create a stable revenue base and fiscal policies to support essential City services, regardless of economic climate.
CITY COUNCIL STRATEGIC PRIORITIES
1. Economic Development
2. Public Safety
3. Library
4. Infrastructure
5. Beautification, Community Engagement, and Quality of Life
6. Youth Programs
See the Discussion section above for details of how this action supports the City Council’s Strategic Priorities.
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Report Approval Details
Document Title: STAFFREPORT_NOTICEOFCESSATION.docx
Attachments: - Resolution.doc
Final Approval
Date:
May 28, 2024
This report and all of its attachments were approved and signed as outlined below:
No Signature found
Kimberly Ganimian
Natalia Lopez
Launa Jimenez
Brian Mohan
Mike Lee
No Signature - Task assigned to Jane Halstead was completed by assistant Patty Rodriguez
Jane Halstead