City of Murrieta
City Council Policy
POLICY: Community Facilities District Goals and Policies POLICY NO: TBD DATE: December 5, 2023
1.0 PURPOSE
Pursuant to Section 53312.7 of the California Government Code, the City Council of the City of Murrieta (hereafter the “City Council”) hereby states its goals and policies concerning the use of Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (hereafter the “Mello Roos Act”) in providing adequate public capital infrastructure, facilities, equipment and public services for the residents of the City of Murrieta (the “City”). The following goals and policies shall apply to all community facilities districts (each a “Community Facilities District) and to all assessment districts (each an “Assessment District” and together with any Community Facilities District, the “Districts”) under the improvement acts of 1911, 1913, 1915 and 1972 (the “Improvement Acts”) hereafter formed by the City.
2.0 POLICY
The City has developed the following Policies and Procedures on financing facilities and/or services through the formation of community facilities districts as guidelines to assist concerned parties in following the City’s approach to special assessment and community facilities district financing. It is the City’s goal to support projects that address a public need and provide a public benefit. Proposed projects requesting special assessment or community facility district debt financing will be evaluated to determine if such financing is financially viable, provide a public benefit and are in the best interest of the City, and current and future City and project residents.
These Policies and Procedures are designed to comply with Section 53312.7 of the Government Code.
The City will consider developer or property owner -initiated applications requesting the formation of community facilities or special assessment districts and the issuance of bonds to finance eligible public facilities and/or public services necessary to serve newly developing projects. The following criteria will be applied to all districts by the City staff with final determination and findings to be made by the City Council:
1) When public financing of project public facilities will result in a significant public benefit or address City identified needs.
2) When a Specific Plan has been adopted on the property, or the City has negotiated and executed a Development Agreement addressing project implementation either of which includes requirements to form a District to finance public improvements or services. 619
3) Each time a District is formed to finance public facilities for the benefit of a development project, the City will require in those situations where maintenance requirements will exceed normal City standards or where such development requires the provision of additional services, the creation of an alternative financing mechanism to pay for such maintenance requirement or such additional services. 4) Existing neighborhoods may apply to the City for the use of a District to finance local or neighborhood-serving facilities. The City will apply applicable provisions of these policies to those financing programs for existing neighborhoods.
The City may initiate Districts by itself at any time to assist in mitigating service impacts or for any other reason.
The City shall make the determination as to whether a proposed District shall proceed under the provisions of the Improvement Acts or the Mello -Roos Act. The City may confer with consultants and the applicant to learn of any unique district requirements such as facilities serving the regional area or long-term development phasing prior to making any final determination.
All City and consultant costs incurred in the evaluation of new development district applications and the establishment of districts will be paid by the applicant(s) by advance deposit increments.
The City shall not incur any non- reimbursable expense for processing assessments or community facilities districts. Expenses not chargeable to the district shall be borne by the applicant.
2.1 FINANCE COMMITTEE
All proposed Districts shall be reviewed by the City Finance staff for adherence to the policy prior to being presented to the City Council. Any variances from policy as well as any other material information will be noted by the Finance staff and reported to the City Council with recommendation for action.
2.2 RESOURCE CONSULTANTS
Bond Counsel
Financial/ Municipal Advisor
Assessment Engineer or Special Tax Consultant
Appraiser
Economist/Market Absorption Specialist
Bond Underwriter
Disclosure Counsel
Trustee/Fiscal Agent
The City shall have the sole discretion as to selection of consultants and determination of fees and expenses of all consultants necessary for the formation of a Special District and the issuance of bonds. Prior consent of the applicant(s) shall not be required in the determination by the City of the consulting and financing team. Costs of the applicant(s) and any costs of consultants working on behalf of the applicant(s) are not eligible for reimbursement from a future issuance of bonds.
No firm may serve as both design engineer and engineer of work and assessment engineer or special tax consultant on the same project, pursuant to Section 87100 of the Government Code. 620
3.0 ELIGIBLE PUBLIC FACILITIES, SERVICES AND PRIORITY
Priority for CFD financing shall be given to public facilities and services directly benefiting the City as well as those improvements identified by the City as the most necessary to serve the specific needs of the portion of the City in which the CFD will be located. The financing of public facilities to be owned and operated by public agencies other than the City shall be considered on a case -by-case basis. The list of eligible public facilities include s but are not limited to the following and include facilities included as part of the City’s or another public agencies development impact fee programs to the extent permitted by the Mello Roos Act or Improvement Acts:
Streets, highways and bridges Flood control facilities
Street lighting Libraries
Traffic signals and safety lighting Public utilities
Parks Police and fire protection facilities
Governmental facilities Recreation facilities
Sanitary sewer facilities Biological mitigation measures involving land acquisition, dedication and revegetation
Storm drain facilities Landscaping
Potable and reclaimed water facilities
In general, none of the foregoing types of facilities will have priority over the others ; however, the City has the final determination as to any facility’s eligibility for financing, as well as the prioritization of facilities to be included within a financing district. The use of bond proceeds for grading and right-of-way acquisition will be reviewed by the City and bond counsel on a case-by- case basis.
It is acknowledged the Act permits the financing of fee obligations imposed by governmental agencies, the proceeds of which fees are to be used to fund public capital improvements. The City will consider applications to finance fee obligations on a case -by-case basis. The City may condition the financing of facilities included as part of the City’s or another public agency’s development impact fee programs on the applicant’s agreement to participate in the financing of City services for public safety.
It is secondarily the policy of the City to assist in the provision of other public facilities when to do so is necessary, in the sole discretion of the City Council acting as the legislative body of the affected CFD, to serve taxpayers residing within or owning property within the City boundaries.
Additionally, the City may finance any one or more of the types of services specified in Section 53313 of the Act. Priority for CFD financing shall be given to services provided by or directly benefiting the City and, if multiple services are to be financed, with no service having priority over another service; provided, however, the City has the final determination as to any service’s eligibility for financing. The City shall not finance services on behalf of other public agencies.
3.1 CREDIT QUALITY – VALUE-TO-LIEN RATIO
Credit quality will be determined in part by the District (or improvement area) property value-to- lien ratio which will be at a minimum 4:1, including the value of the financed public improvements to be installed, and considering all prior or pending special taxes or improvement 621
liens and debt. Value -to-lien ratios of individual parcels will be reviewed to analyze credit quality. The value of the property utilized in the calculation of the value -to-lien ratio will be determined by using the assessed value of the property as reflected on the most recent tax roll or by an independent MAI -certified appraiser engaged by the City as discussed in more detail below. Acceptance by the City of the value-to-lien ratio will be determined by an appraisal with recommendations from bond counsel, any financial advisor, and the underwriter with consideration of the project and diversification of land ownership.
The appraisal shall be coordinated by, under the direction of, and addressed to the City. The applicant shall pay all costs associated with the preparation of the appraisal report through an advance deposit of funds with the City. The appraiser should be credentialed by the State of California Office of Real Estate Appraisers and be a Member of the Appraisal Institute (MAI).
The appraiser should have demonstrated prior experience in appraising property subject to special assessments or taxes in conjunction with a bond offering.
The appraisal shall be conducted in accordance with criteria, standards and assumptions in accordance with the California Debt and Investment Advisory Commission Appraisal Standards for Land-Secured Financings, and based upon the recommendations from the City’s financing team. In every case, the appraisal shall reflect nationally Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation and employ all, or a combination of: discounted cash flow, bulk sale comparable, raw land value as is, and project build-out values.
Upon receiving an appraisal, determining the value -to-lien ratio, and evaluating the project and current underwriting criteria, the City may require letters of credit or other security to secure payment of the special taxes to be levied annually on properties within the District. Letters of credit or other security may also be required for individual parcels of specific property ownership within a District. (See Section 3.3, Security).
For projects with a significant amount of development or the refunding of outstanding special assessment and community facilities district debt, the assessed value of property or other mass appraisal techniques may be options for the establishment of credit quality.
Depending on the circumstances of the development, a market absorption study may be required by the City. The City will retain the consultant to prepare a report to verify market absorption assumptions and projected base sales prices of the properties subject to the special taxes or assessments in the District. The market absorption and/or price point study shall be completed prior to completion of the appraisal, and the appraisal shall take into consideration the conclusions of the market absorption study. All City and consultant costs incurred for this study will be paid by the Applicant by advance deposit or out of special taxes or bond proceeds.
3.2 SECURITY
Prior to the issuance of bonds in connection with a District program, each person who, together with any affiliate thereof, owns land within the Special District the maximum special tax or assessment applicable to which equals or exceeds 20% of the aggregate maximum special tax or assessments authorized to be levied in the District (such person and affiliates collectively, a “20% Owner”) shall deliver to the City or as directed by the City either (i) a renewable, irrevocable instrument of credit from a fina ncial institution rated “A” or better or otherwise acceptable to the City or (ii) cash in -lieu thereof (a “Security”). The Security shall be in an amount equal to 200% of the product of the maximum annual debt service on the bonds proposed to be issued (without taking into consideration any capitalized interest) times a fraction 622
the numerator of which is the projected annual special taxes or assessments applicable to the land within the Special District owned by the 20% Owner and the denominator of which is the total maximum special taxes or assessments applicable to all land in the District (the “Stated Amount”). The Security shall be maintained in full force and effect by the 20% Owner until the property owned by the 20% Owner is responsible for less than 20% of the projected special taxes or assessments to be levied in the District (without taking into consideration any capitalized interest); provided that the Stated Amount may be reduced to an amount equal to 200% of the product of the projected annual debt service on the bonds proposed to times a fraction the numerator of which is the projected annual special taxes or assessments applicable to the land within the Special District owned by the 20% Owner (without taking into consideration any capitalized interest) and the denominator of which is the total projected special taxes or assessments applicable to all land in the Special District as of June 1 of the applicable year (subject to the City’s receipt of a replacement security from any person to whom a 20% Owner conveys property and who becomes a 20% owner as a result of such conveyance). The Security shall name the City, or its designee, as a beneficiary and shall provide that the City, or its designee, may draw an amount equal to any delinquencies in payment of semiannual installments of the special taxes of assessments levied on property owned by the 20% Owner.
The total amount to be drawn under the Security shall not exceed an amount equal to the special taxes or assessments owed with respect to property within the Special District owned by the 20% Owner that is delinquent at the time the draw is made, or in the event the Security is to expire by its terms and has not been renewed as required by the City, the Stated Amount. The amount drawn of the Security shall be applied in the same manner and for the same purposes as the delinquent special taxes would have been applied; provided that the payment of a draw under the Security will not be deemed to cure the delinquency in payment of the special taxes. The form and substance of the Security, including the provisions thereof with respect to remedies upon non-renewal thereof shall be set forth in the acquisition agreement for the District.
4.0 EQUITY OF SPECIAL TAX FORMULAS AND MAXIMUM SPECIAL TAXES Special tax formulas for Community Facilities Districts shall provide for minimum special tax levels which satisfy the following expenses of all Community Facilities Districts: (a) at least 110 percent of debt service on all Community Facilities District bonds due each year, and (b) the reasonable and necessary administrative expenses of the Community Facilities District.
Additionally, the special tax formula may provide for the following: (a) any amounts required to establish or replenish any reserve fund established in association with the indebtedness of the Community Facilities District, (b) the accumulation of funds reasonably required for future debt service, (c) amounts equal to projected delinquencies of special tax payments, (d) the costs of remarketing, credit enhancement and liquidity facility fees, (e) the cost of acquisition, construction, furnishing or equipping of facilities, (f) lease payments for existing or future facilities, (g) costs associated with the release of funds from an escrow account, and (h) any other costs or payments permitted by law, including, but not limited to, financing public capital facilities or any one or more of the types of services specified in Section 53313 of the Mello Roos Act.
The special tax formula shall be reasonable and equitable in allocating public facilities’ costs to parcels within the Community Facilities District . Unless the City determines that special circumstances warrant a change, the special tax formula originally accepted for the Community Facilities District shall remain the same in order to ensure equity as originally envisioned at the time of Community Facilities District formation. At the time of formation of the Community Facilities District, exemptions from the special tax may be given to parcels which are publicly owned, are held by a property owner’s association, are used for a public purpose such a s open 623
space or wetlands, are affected by public utility easements making impractical their utilization for other than the purposes set forth in the easements, or have insufficient value to support bonded indebtedness.
It is the goal of the City that maximum special taxes or assessments on residential owner - occupied property, when taken together with ad valorem taxes, any other special taxes levied pursuant to the Act and assessments applicable to such property, do not exceed in any year two percent (2%) of the greater of the assessed value or appraised value of such property.
Nevertheless, special taxes on residential owner -occupied property, when taken together with ad valorem taxes, any other special taxes levied pursuant to the Act and assessments applicable to such property, may exceed in any year two percent (2%) of the greater of the assessed value or appraised value of such property if the City determines at the time of formation of a Community Facilities District that over the term of the bonds, the special taxes, ad valorem taxes and assessments are expected to average two percent (2%) or less per year of the greater of the assessed value or appraised value of such property. The City may permit the escalation of any facilities tax in any amount not to exceed 2% annually for those projects that also participate in a community facilities district for services. Special taxes for services may escalate in any manner determined by the City as necessary to cover annual estimated increases in the costs of providing such services or as otherwise permitted under the Act.
Special taxes will only be levied on an entire County Assessor’s parcel, and any allocation of special tax liability of a County Assessor’s parcel to leasehold or possessory interest in the fee ownership of such County Assessor’s parcel shall be the responsibility of the fee owner of such parcel (except where the City is the fee owner of the parcel and has, subsequent to the date of adoption of these goals and policies, leased the parcel pursuant to a lease with a term of at least 5 years, in which case the lessee shall have the responsibility for the special tax liability) and the City shall have no responsibility therefor and has no interest therein. Failure to pay or cause to be paid any special taxes in full when due shall subject the entire parcel to foreclosure in accordance with the Act.
The City shall have a report prepared which: (a) recommends special tax rates and methods of allocation among parcels in the proposed Community Facilities District , and (b) evaluates the special tax proposed to determine it ability to adequately fund identified public facilities, City administrative costs, services (if applicable) and other related expenditures.
The City shall retain a special tax consultant to prepare a Rate and Method of Apportionment and the report described above which:
A. Recommends a special tax formula for the proposed community facilities district.
B. Evaluates the special tax proposed to determine its ability to adequately fund identified public facilities and proposed services, City administrative costs, services (if applicable) and other related expenditures. The Rate and Method of Apportionment of special taxes shall be designed to ensure sufficient revenues are produced in case of final development at lower densities than anticipated.
C. The special tax consultant shall also address the resulting aggregate tax burden of all proposed special taxes plus existing special taxes, ad valorem taxes levies and assessments on the properties within the community facilities district.
4.1 TERMS AND CONDITIONS OF BONDS
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The City shall establish all terms and conditions of the bonds. The City will control, manage and invest all District issued bond proceeds. Each bond issue shall be structured to adequately protect bond owners and to not adversely impact the bonding capacity or credit rating of the City. Unless otherwise authorized by the City, the following shall serve as bond requirements:
A. A reserve fund equal to the lesser of (i) ten percent (10%) of the issue price of the bonds, (ii) maximum annual debt service, or (iii) one hundred twenty -five percent ( 125%) of average annual debt service, or as otherwise deemed appropriate by the City.
B. The term of the bonds will generally not exceed 30 years and shall not include capital appreciation bonds.
C. For Districts containing residential property, the timing of bond sales(s) and/or Rate and Method of Special Tax Apportionment shall be such that special taxes or special assessments are levied no later than the first fiscal year following the occupancy of residential units. For all Districts, interest shall not be funded (capitalized) beyond what is permitted in the Mello Roos Act or the Improvement Acts.
D. The repayment of the principal shall begin on the earliest principal payment date for which sufficient special tax revenues can be made available.
E. The maximum special tax shall be established to assure that the annual revenue produced by levy of the maximum special tax shall be equal to at least one hundred ten percent (110%) of annual debt service plus administration expenses..
F. In instances where multiple series of bonds are to be issued, the first series shall include public facilities of the highest priority acceptable to the City.
G. All statements and materials related to the sale of special assessment or community facilities district bonds shall emphasize and state that neither the good faith, nor the taxing power of the City is pledged to the security or repayment of the bonds. The sole sources of revenues to secure bond owners are special taxes, annual assessments or foreclosure proceeds.
4.2 AGREEMENTS
Agreements will be prepared incidental to District formation proceedings in a form satisfactory to the City and consistent with these policies. These agreements may include, but not be limited to:
A. Deposit and Reimbursement Agreement.
B. Funding and Acquisition Agreement.
C. Joint Community Facilities Agreements with any other public agency entitled to receive any portion of the bond proceeds or entitled to own and operate any of the public facilities financed by bond proceeds.
Prior to the issuance of bonds by a District, all of the agreements specified shall be duly approved and executed by the relevant parties. Prior to theexecution of any agreements, such agreements shall be reviewed and approved by bond counsel and the City Attorney and approved by the City Council.
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4.3 USE OF CONSULTANTS
The City shall have the sole discretion as to the selection of consultants and determination of fees and expenses of all consultants necessary for the formation of the District and the issuance of bonds, including the underwriter(s), bond counsel, municipal financial advisor, disclosure counsel, assessment engineer, appraiser, trustee, paying agent, market absorption and/or price point consultant , and the special tax consultant. Prior consent of the applicant shall not be required in the determination by the City of the consulting and financing team The City shall also be responsible for determining the structure of the bonds to be issued, including the method of sale (negotiated , competitive or direct placement ), the need for bond ratings, the need for escrow provisions, investment of bond proceeds, and all other terms and conditions incidental to structuring and closing a bond issuance.
4.4 ACQUISITION PROVISIONS
The City shall have the final determination as to whether it will allow the financing of public facilities through acquisition or if the improvements will be constructed by the City.
In the event the acquisition provisions of the Municipal Improvement Act of 1913 or the Mello - Roos Act are utilized, the City, at its sole discretion, will determine the facilities to be acquired, the priority of acquisition of completed facilities and the method of determining reasonable acquisition costs. Applicable bidding and prevailing wage requirements are extensive and will be addressed during the preparation of the funding and acquisition agreement.
The City has determined (pursuant to Section 53329.5(c) of the Government Code) that the public interest will not be served by allowing property owners to elect to enter into agreements with the City to perform construction work after competitive construction bids have been received. The City Council will make such a determination in the resolution of intention regarding the formation of a community facilities district.
4.5 DISCLOSURE TO PURCHASERS
Developers who are selling lots or parcels that are within a Community Facilities District shall provide the disclosure notice to prospective purchasers that compl y with all of the requirements set forth in Section 53341.5 of the Government Code. The disclosure notice must be provided to prospective purchasers of property at or prior to the time the contract or deposit receipt for the purchase of property is executed. Developers shall keep an executed copy of each disclosure document as evidence that disclosure has been provided to all purchasers of property within a Community Facilities District.
Owners of land securing 20% or more of the debt service on bonds will be required to provide financial information, as deemed appropriate by the City, for inclusion in the continuing disclosure document the City must provide annually and will also be required to provide written undertakings to provide financial and operating data as required by the SEC’s Rule 15c2 -12 and by the underwriter of the bonds.
4.6 PROPERTY OWNER SUPPORT
In the instance of multiple property owners, the applicant shall be required to produce letters evidencing other property owners’ support for the scope and establishment of the District as an 626
attachment to the application. The applicant must have concurrence of at least [60%] of the other property owners to be included in the proposed District, unless there is an overriding need for the public facilities, or the applicant is willing to separately fund the facilities for non -participating property.
4.7 LAND USE APPROVALS
Properties proposed for inclusion in a District must possess a land use determination such that proposed development land uses and specific facility requirements can be adequately assessed.
4.8 EXCEPTIONS TO THESE POLICIES
The City may find in limited and exceptional instances that a waiver to any of the above -stated policies is reasonable given identified special City benefits to be derived from such waiver. Such waivers are granted only by action of the City Council based upon specific public purpose and/or health and safety findings. Any policy or goal stated herein shall be deemed amended or supplemented in the event, and as of the date, if ever, that such amendment or supplement is required to ensure compliance with the Act or any other laws of the State of California or federal laws of the United States of America.
A waiver of certain provisions of these policies may also be relevant for the refunding of outstanding special assessment and community facilities district debt.
4.9 APPLICATION PROCESS
Early communication with the City is encouraged to assist applicants in evaluating the feasibility of available financing programs and to discuss program procedures.
1. PREAPPLICATION CONFERENCE: Applicant meets with City to discuss the proposed project and application procedures.
2. APPLICATION SUBMISSION: Applicant/developer shall submit an application to the City with a deposit and reimbursement agreement in the initial amount of $ 50,000 to $70,000 (as deemed necessary by staff, based on the size of the proposed District). The deposit will be handled as set forth in the Deposit and Reimbursement Agreement as established by the City and approved by the applicant/developer. This deposit is for the purpose of application processing, preliminary costs, retention of appropriate consultants, and the compensation of staff time devoted to the formation of the District. The City will conduct an initial evaluation of the application to determine if it is complete and whether additional information is required.
3. PROJECT REVIEW: Applicant and City staff meet to discuss the initial application, including any issues raised and further information that might be required. If necessary, the applicant submits a revised application. City staff may deny any applicant that does not comply with these goals and policies or is determined not to be in the best interest of the City and its residents.
4. PROJECT INITIATION: Staff submits consultant contracts, reimbursement agreements and other similar items for City Council consideration. 627
5. PROJECT IMPLEMENTATION: Applicant, staff and consultants meet to determine preliminary project schedule and begin work necessary to initiate district formation. This document outlines district formation procedures.
4.10 SPECIAL ASSESSMENT DISTRICT FORMATION PROCEEDINGS FORMAT Assessment district proceedings under the Municipal Improvement Act of 1913 normally provide for the construction of improvements by the City and the financing of such improvements with improvement bonds, which are secured by a fixed lien assessment on the benefited property. In certain instances, if authorized by the City, the developer may construct the improvements (or portion thereof), which would be acquired by the City as provided in the proceedings..
The formation proceedings are subject to and contingent upon satisfaction of all environmental zoning and land use regulations. The following is a summary of the proceedings under the Municipal Improvement Act of 1913 for the formation of an Assessment District. All such proceedings are subject to the requirements of the Improvement Acts, as applicable.
1. Initiation of Proceedings. An applicant or landowner petition for City Council action initiates the District. Upon initiation, the design engineer prepares plans, specifications and cost estimates of the proposed public improvements. The assessment engineer begins preparing the Engineer’s Report, including the assessment diagram, assessment roll, description of improvements and preliminary cost spread. If required, the Environmental Impact Report “EIR” consultant begins processing the appropriate environmental documentation for the public improvements.
2. Presentation of Report. Upon completion of the preliminary engineering work, the City Council adopts a resolution of intention to form the assessment district, approves the Engineer’s Report, calls for construction bids, authorizes the future sale of bonds, sets the date, time and place for the public hearing and directs assessment notices to be mailed.
3. Bid Process . Finance Department receives construction bids. Assessment engineer modifies the assessment roll and Engineer’s Report and notifies property owners of revised assessments.
4. Public Hearing. City Council holds public hearing at which written protests are presented and public testimony is taken. If a majority protest has not been received, City Council approves district formation, awards bids, orders construction work, confirms the assessments, directs Finance Director/Treasurer to mail assessment notices and approves the bond sale.
5. Cash Collection Period. Treasurer may receive cash payments during the 30 days following confirmation if property owners elect to pay off the assessment or portion thereof prior to the issuance of bonds.
6. Authorize Issuance of Bonds. City Council determines the balance of unpaid assessments and provides for the issuance of bonds to be secured thereby.
7. Sale of Bonds. Bonds are issued in exchange for the cash proceeds of the sale, which are held by the City or its fiscal agent (or paying agent/registrar) and utilized for the construction of public improvements described in the Engineer’s Report. 628
4.11 MELLO-ROOS COMMUNITY FACILITIES DISTRICT FORMATION PROCEEDINGS A Community Facilities District is a legally constituted governmental entity created for the purpose of financing public facilities and services.
The formation proceedings are subject to and contingent upon satisfaction of all environmental, zoning and land use regulations. The following is a summary of the proceedings for the formation of a Community Facilities District under the Mello Roos Act. All such proceedings are subject to the requirements of the Mello Roos Act.
1. Initiation of Proceedings. Proceedings must be instituted when a written request is made by a petition signed by 10% of the registered voters or 10% of the landowners by area. The petition shall be accompanied by payment of a fee determined by the City Council to be sufficient to pay for costs incurred in conducting the proceedings.
2. Resolution of Intention. Within 90 days of the receipt of a written request or petition, the City Council will adopt a resolution of intention to establish a community facilities district (“CFD”). The resolution will state the name of the proposed CFD, the types of facilities or services to be financed , and that, except where funds are otherwise available, a special tax to pay for such facilities and services will be annually levied.
The resolution of intention shall also fix a time and place for a public hearing between 30 and 60 days after the adoption of the resolution of intention, describe the method of levy and apportionment of the special tax , and describe the proposed voting procedure.
In addition, the resolution may specify conditions under which the obligation to pay the special tax may be prepaid and permanently satisfied. The City Council directs its responsible officers to study the proposed district and to file a report at or before the public hearing describing the proposed public facilities and services and an estimate of costs.
3. Public Hearing. Protests against the establishment of the community facilities district, the extent of the community facilities district or the furnishing of specified types of public facilities or services may be made orally or in writing by interested persons or taxpayers. If 50% or more of the registered voters, 6 registered voters, whichever is more, residing within the proposed community facilities district or the owners of 1/2 or more of the area of land in the proposed community facilities district file written protests against the establishment of the community facilities district, the proceedings are abandoned. If the protests are directed toward certain types of facilities or services, or against a specified special tax, those specific items may be eliminated from the resolution forming the community facilities district. The hearing may be continue d for up to 30 days without special findings and up to 6 months if the City Council makes specified findings.
4. Resolution of Formation. If the City Council decides to establish the community facilities district, it will adopt a resolution of formation containing similar information as contained in the resolution of intention.
5. Election. If the City Council determines to form the community facilities district, it submits the question of whether special taxes should be levied to an election of the voters (or land owners if less than 12 registered voters preside within the boundaries of the propose Community Facilities District for each of the 90 days prior to the date of the public hearing) of the proposed community facilities district. Combined with the tax proposition, there may be a proposition on the question of incurring bond ed 629
indebtedness. The tax, in order to be levied, must be approved by two-thirds of the votes cast and thereafter levied by adoption of an ordinance of the City Council. The Mello - Roos Act provides that the election shall be at the next general election or at a special election to be held between 90 and 180 days following the close of the protest hearing.
The unanimous consent of the qualified electors within the proposed district and the concurrence of the election official conducting the election may shorten the election time limits.
6. Special Tax Bonds. A community facilities district may be created solely to provide the services permitted by statute. However, most community facilities districts have been created specifically for the purpose of levying special taxes to service bonded indebtedness incurred by the community facilities district in order to finance the construction of facilities. Public services and maintenance Districts may also be created.
The proceedings to authorize and incur bonded indebtedness usually parallel the proceedings for the formation of the community facilities district and the authorization to levy the special tax, although the bond proceedings could be conducted separately and at a later date. The proceedings to authorize bonded indebtedness involve a resolution of intention, public hearing and election; all conducted in a manner very similar to proceedings to form the community facilities district and levy the tax.
Community facilities district bonds may be sold competitively or through negotiated sales and may bear fixed or variable interest rates.
In some cases, a community facilities district may provide specified facilities for only a portion of the land within the community facilities district. In that event, the Act provides for the formation of improvement areas for which separate elections are conducted and to which a specified special tax applies.
5.0 ROLES AND RESPONSIBILITIES
• The Finance Director is responsible for administering this policy and procedure. • All employees are responsible for compliance with this policy and procedure.
6.0 DEFINITIONS
Unless the context otherwise requires, the terms employed in the following policies shall have the meanings specified below:
“Bonds” means bonds authorized and issued under the Mello -Roos Community Facilities Act of 1982 or the Municipal Improvement Act of 1911 and the Improvement Bond Act of 1915. “City” means the City of Murrieta.
“District” means a community facilities district formed under the Mello -Roos Community Facilities Act of 1982 or an assessment district formed under the Improvement Act of 1911 or the Municipal Improvement Act of 1913, as amended.
“Improvement Acts” means the current enabling legislative Acts of 1911, 1913 and 1915 “Mello-Roos Act” means the Mello-Roos Community Facilities Act of 1982 630
“Public Facilities” means improvements authorized to be constructed or acquired under the Mello-Roos and Improvement Acts including, but not limited to, fees for capital facilities imposed by public agencies as a condition to approval of the development encompassed by the district or as a condition to service the district.
“Value” or “Fair Market Value” means the value established by using the assessed value or the appraisal undertaken to establish value-to-lien ratios for a land-secured financing. 631
PURPOSE
City of Murrieta
City Council Policy . '
POLICY: Land Secured Financing Policy
POLICY NO. : 100-24 DATE: June 1, 2016
The purpose of the Land Secured Financing Policy is to provide guidelines and procedures for the formation of Special Assessment and Mello-Roos Community Facilities Districts.
POLICY
The City of Murrieta encourages development of commercial, residential and industrial property which result in reciprocal value to the City (i.e. increased jobs, property or sales tax revenues, major public improvements) , and will consider develope r or property initiated applications requesting the formation of Community Facilities Districts ("CFD s") or Special Assessment districts ("ADs")(together referred to as "Districts "), as well as other financing methods to assist these types of development. Facilities will be financed in accordance with the provisions of the Mello-Roos Community Facilities Act of 1982 as amended and/or the appropriate laws governing the levying of assessments and the issuance of bonds concerning ADs.
Generally, only improvements benefiting the CFD or the AD can be financed with Mello-Roos or assessment district bonds. Developer exactions , such as off-site housing subsidies and transit impact fees, may not be financeable.
The City will consider developer or property owner initiated applications requesting the formation of Districts and the issuance of bonds to finance eligible public facilities necessary to serve commercial, industrial and residential projects in the following instances:
• When tax-exempt financing of project public facilities will result in a significant benefit to the community; 'and/or
• When the formation of a district is part of an executed Development Agreement addressing project implementation.
The City shall make the determination as to whether a proposed district shall proceed under the provisions of the Mello-Roos Community Facilities Act.9r the appropriate assessment district l
aws, and whether the district will be a construction or acquisition district or a combination thereof. The City may confer with the applicant and its consultants to learn of any unique district requirements, such as regional serving facilities or long-term development phasing prior to making any final determination .
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All City and consultant costs incurred in the evaluation of new development district applications and the estab lishment of districts will be paid by the applicant(s) by advance deposits in those instances where a proposed district has been initiated by a party or parties other than the City. The City may incur expenses for analyzing proposed districts where the City is the principal proponent of the formation for financing of the district. Expenses not legally reimbursable by the district shall be borne by the applicant. Most City and district consultant costs can be funded from Bond proceeds regardless of how funding is initially arranged.
PROCEDURES
APPLICATION PROCESS
Early communication with the City is encouraged to assist applicant s in evaluatin g the feasibility of available financing program s and to discuss program procedures. The followin g details a typical district application review and application process :
1. Application Submission - Applicant/developer shall submit an application to the City together with a non-refundable fee in the amount of $10,000.00 to cover the City costs associated with processing the application. The City will conduct an initial evaluation of the application to determine if it is complete and whether additional information is required.
2. Project Review - Applicant and the City Mana ger, or his designee, shall meet to discuss the initial project application, including any issues raised and further information that might be required. If necessary, applicant submits a revised application. Once the application is accepted by the City Manager , it will be reviewed by a City financing team assigned based on the needs of the project.
3. Analysis and Study - Once the City review team has determined that the proposed district formation and financing application is complete and that the new district complies with the public benefit requirement or is in accordance with a Development Agreement , the City Manager or his designee will request the City Council to approve a preliminary feasibility study on the project. This study may be done internally or externally , as the circumstances of the project may dictate. The applicant will be required to deposit funds to cover the cost of the study.
4. City Council Consideration - The Council will either approve or deny the application. If approval is granted, the Counci l direct s the City Manager to engage additional consultants, negotiate necessary contracts, and collect additional developer deposits, as necessary.
5. Project Initiation - The City Mana ger and the City's financing team submit contracts, reimbur sement agreements, bond document s and other pertinent items for consideration ofthe City Council, as required .
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6. Project Impl ementation - Applicant , the City's financing team and consultants meet to determine a preliminary schedule and begin work necessary to complete the district's formation and financing.
DISTRICT COSTS, REIMB URSEMENT AND SURPLUS POLICIES
• Costs incurred b y the City pri or to form ation and th e issuan ce of bonds: All costs incurred by the City prior to the formation of the district and the issuance of the Bonds, including but not limited to consultant costs (e.g., legal counse l, engineer firms, appraisers, market absorption consultants, special tax consultants, fmancial advisors , etc.), City staff and administrative costs and related expenses, cost of providing notices, printing and publication costs, and all expenses directly or indirectly relating to these items, shall be reimbursed to the City by the applicant/developer prior to formation . Reimbursement shall be facilitated by advance deposit increments in accordance with the agreements required by this policy document.
• Costs incurr ed b y the City subsequent to formation : All City administrative and consultant and legal costs related to administration of the district and bonds incurred after the formation and bond issuance shall be included withln the assessme nt or special tax formula in accordance with applicab le prov isions of law.
• Reimbur sement to applicant/d eveloper:
1. Where District is formed and bonds are issued. If the District is formed and bonds are issued, the applicant/deve loper shall be entitled to reimbursement from bond proceeds for all reasonable costs and expenses incide nt to the proceedings and construction of the public facilities, subject to approval of bond counsel , and subject to any applicable restrictions contained in the Improvement Acts or the Mello-Roos Commuruty Facilities Act of 1982 . With regard to applicant/deve loper paid consultant costs, reimbursement shall be limited to those District-re lated consultants hired by the City or those hired by the developer /applicant and expressly approved by the City. Eligibility for reimbursement for any otherwise-eligible expense is conditioned upon the avai lability of sufficient bond proceeds , the applicant/deve loper providing paid invoices therefore to the City, and City approval.
The applicant/deve loper shall not be entitled to reimbursement from bond proceeds for any of the following:
• Administrative or overhead expenses , fmanc iaJ consultant or legal fees incurred by an applicant for the formation of a District (this limitation does not apply to amounts advanced by the applicant to the City). • Land-use planning and subdivisio n costs and environmen tal review costs
related to such land use planning and subdivision.
• Construction loan interest.
• Costs, including but not limited to, land acquisition costs incurred prior to entering into a reimbursement or acquisition agreement or the adoption of a resolution of intention to form the District.
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• Attorney's fees related to the land use entitlement or subdivision process unless off-site and directly related to the project.
• Other overhead expenses incurred by the applicant.
• Development Impact and Other Fees
2. Where District is not formed, or where District is formed and bonds are not issued.
In the event that the District is not formed due to City disapproval or abandonment , or due to applican t/developer abandonment , or the District is formed and bonds are not issued for any reason, the City will refund to applicant/developer any remaining unexpended and unobligated portion of advance deposits posted with the City, subject to the City's prior and full reimbursement of all its direct and indirect costs associated with the District in accordance with policies herein. If the applicant/developer's advance deposit to the City is not sufficient to reimbur se the City for all of its direct and indirect costs, the City will require an additional deposit by the applicant/developer for the difference . The City shall be entitled to pay any refund to the applicant/developer listed on the application form without interest , irrespective of any changes in the ownership or composition of the applicant/developer. If a district is formed and bonds are not issued within five (5) years of formation and no activity has occurred , the District will be considered abandoned and may be dissolved at the City's discretion.
USE OF CONSULT ANTS
The City shall have the sole discretion as to selection of consultants and determination of fees and expenses of all consultants necessary for the formation of the District and the issuance of bonds, including the underwriter(s) , bond counsel , financial advisor , asses sment engineer, appraiser , trustee, paying agent, market absorption study consultant , and the special tax consultant after reasonable consultation with the applicant. Prior consent of the applicant shall not be required in the determination by the City of the consulting and financing team. Under no circumstances shall the City Attorney for the City of Murrieta serve as bond counsel.
ELIGIBLE INFRASTRUCTURE AND PUBLIC FACILITIES
Infrastructure and public facilities eligible for District financing are those public improvement s which benefit properties within a proposed development , and/or will mitigate impacts of that development upon areas of the City outside the proposed development , and which will be owned, operated and maintained by the City or another public agency approved by the City. (A complete listing is detailed in the Glossary under Infrastructure and Public Facilities .) Improvements which are or will be owned, operated or maintained by a private company or utility are not eligible, except for improvements to be owned by shareholder owned utility companies regulated by the California Public Utilities Commission and which comprise less than five percent of the project. No development impact fees or other fees may be fmanced by the district. Infrastructure and public facilities to be owned by the City shall take priority of funding over infrastructure and public facilities to be owned by other public agencies. The City shall consider fmancing those services as permitted by Section 53313 of the Mello Roos Community 4 635
Facilities Act. City services shall take priority of funding over services to be provided by other public agencies.
LAND USE APPROVALS
All proposed projects within the proposed District, together with the infrastructure and public facilities, must be consistent with the City's adopted General Plan and zoning classifications.
All property within the proposed District must possess land use determinations or zoning classifications of sufficient certainty, and facility requirements of sufficient specialty that each parcel can be adequately assessed.
AGREEMENTS REQUIRED
The applicant will be required to enter into all necessary agreements incident to District proceedings in a form provided by the City and consistent with these policies. These agreements may include, but not be limited to:
• Development and Disposition Agreement
• Acquisition and Disclosure Agreement
• Funding and Reimbursement Agreement
• Advance Deposit Agreement
• Land Dedication Agreement (where required)
• Agreement to use the City as the sole issuer of bonds in the District. No other governmental entity may be used to issue any additional bonds in the future. • Other Agreements (as required)
As a condition to the issuance and sale of the bonds, all of the agreements required by the City shall be duly approved and executed by the parties thereto. Prior to execution of any agreements , such agreements shall be reviewed by bond counsel and City Attorney and such other consultants as the City believes are appropriate.
THE APPRAISAL PROCESS
The appraisal shall be coordinated by, under the direction of, and addressed to the City. The applicant shall pay all costs associated with the preparation of the appraisal report through the advance deposit mechanism. The appraisal shall be conducted in accordance with criteria, standards and assumptions established by the City, based upon the recommendations for each specific project received from the underwriter and financial advisor designated by the City. In every case, the appraisal shall reflect nationally and locally recognized appraisal standards , for land-secured bond financing. The City prefers that the appraisal be prepared in accordance with the recommendations of the California Debt Advisory Commission as contained in the Disclosure Guidelines for Land-Based Securities , and deviations therefrom will only be considered upon recommendation from bond counsel , the financial advisor, the underwriter and the appraiser , with consideration of the facts pertaining to each particular project.
1. Introduction
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The process of arriving at an appraised value may be summarized as follows:
• Statement of appraisal problem.
• Required data and sources of data.
• Gathering, recording and verification of data.
• Determination of "highest and best use."
• Estimation of land value.
• Estimation of improvement value by relevant approach:
o Sales comparison,
o Cost (or replacement value), or
o Income capitalization.
• Reconciliation of results to concluded value.
• Report of value with statement of limitations , conditions , and assumptions.
2. The Appraiser- General Requirements
Appraisals undertaken to establish value-to-lien ratios for land-secured financings can be complex, requiring the appraiser to interpret the significance ofvarious fmancial and demographic data. Because an appraisal essentially is an appraiser' s opinion of value, the City requires that the appraiser be qualified to render this opinion. • Credentials
The appraiser will be credentialed by the State of California Office of Real Estate Appraisers and be a member of the Appraisal Institute (MAl) or have similar training, experience and qualifications.
• Independence
The appraiser will be an independent contractor retained by the City, rather than a land owner/developer.
3. Date of the Value Estimate
The date ofthe value estimate should clearly be identified in the appraisal report. The period between the date of the appraisal and the financing should be no more than 90 days, to accurately represent land values to prospective
investors , unless a longer period is
determined reasonable as recommended by the appraiser, financial advisor or underwriter based on market condition s at the time of the sale of the bonds.
4. Appraisal Deposits
Appraisal fees will be estimated by the City and deposit of said fee with the City will be required prior to starting the appraisal.
SECURITY: CREDIT ENHANCEMENT
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• Financial Plan - for new development, prior to City Council approval of the District, the applicant/developer must submit a financial plan which demonstrates to the City's satisfaction the applicant/developer's ability to pay all assessments and/or special taxes through build out of the project.
• Credit Enhancement- in general, where credit enhancement is required for all or part of a bond issue, in the opinion of the City, the applicant/developer shall provide such enhancement in such form as is approved by the City and the underwriters. Such enhancement may, for example, be required in cases where the value-to-lien ratio for property within the District is low or where bond debt service is expected to be supported significantly (by more than 20%) by the levy of special taxes on undeveloped property or where there are significant or unusual development risks, and may take the form of letters of credit, policies of insurance, or other vehicles. • As an alternative to providing security, depending on circumstances:
o A portion of the bond proceeds may be placed in escrow with a corporate agent in an amount sufficient to assure an acceptable value-to-lien ratio is reached on the escrowed proceeds. The escrowed proceeds shall be released at such times and in such amounts as will assure an acceptable value-to -lien ratio with regard to the aggregate outstanding bonds and other covenants; or
o The bonds may be issued in series with each series in an amount sufficient to assure an acceptab le value-to- lien ratio with regard to the aggregate outstanding bonds and other covenants. However , where practical, the City shall limit the number of series of bonds to a single series in order to reduce costs on future residents and administrative burdens on the City.
VALUE-TO-LIEN RATIOS
The City may sell bonds for the District only if it determines that the value of the real property that would be subject to the special tax or assessment to pay debt service will be at least three times the principal amount of the bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax or assessment. Such determination will be based upon the full cash value as shown on the ad valorem assessment roll or upon an appraisal of the subject property made in a manner consistent with the policies of the City. Requirements of a higher value to lien ratio may be imposed by the City and will be determined by an appraisal with recommendations from bond counsel , fmancial advisor, and the underwriter , with consideration of the facts pertaining to each particular project, including diversification of land ownership . The City may allow exceptions to its value to lien ratio requirements if it fmds and determines that the proposed bonds do not present any unusual credit risk due to the availability of credit enhancements or for other reasons determined by the City. 7 638
MARKET ABSORPTION STUDY
The City in its discretion may require and may employ a consultant for the purpose of conducting a market absorption study. The study, if required, shall include an estimate of the total number of units, estimated home prices and rate of absorption, and will be used as a basis for verification that sufficient revenues can be generated , and to determine if the financing of the infrastructure and public facilities is appropriate given the projected level and pace of development.
Market absorption consultant fees will be estimated by the City and deposit of said fees with the City will be required prior to the commencement of the work.
SPECIAL
TAXES AND ASSESSMENTS
The projected special assessment and/or special tax, when added to the ad valorem property tax and other direct and overlapping debt for the proposed District (including other benefit assessments, special taxes levied for authorized but unissued debt, and any other anticipated
special assessments , taxes or charges which may be included on a property owner's annual property tax bill), shall not exceed one and eight tenths percent (1.8%) of the projected assessed value of each improved parcel within the District. Such tax rate shall be measured at formation of the District and again at the time bonds are sold. The City may, at its discretion , engage a market analyst to determine home values in the District. In the event that the projected tax rates exceed 1.8%, the District may require the developer(s) to prepay special taxes to reduce the tax rate or issue fewer bonds . A backup special tax shall be required to protect against changes in land use that may result in insufficient annual special tax revenues.
SPECIAL TAX FORMULA
The total of the following shall not exceed one and eight tenths percent ( 1. 8%) of the projected assessed value of the subject properties at the time all properties are deemed Developed in the District:
1. Ad valorem property taxes levied by the City.
2. Voter approved ad valorem taxes levied by the City in excess of one percent ( 1%) of the assessed value.
3. Special taxes levied by any existing CFD for the payment of bonded indebtedness or on-going services.
4. Assessments levied for any assessment district or maintenance district for the payment of bonded indebtedness or services.
5. The maximum special tax for the proposed CFD (but not including any "back up" special tax.
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The maximum special tax formula shall adhere to the following requirements:
1. The maximum tax shall include the annual costs incurred by the City to administer the District, including debt service , City, County administrative expenses and 10% delinquency coverage.
2. The maximum special tax shall establish tax rates which correspond to the adopted land use designation of each parcel.
3. The special tax formula shall be structured to ensure sufficient funds to pay for annual debt service and administrative expenses of the District.
4. A backup special tax to protect against changes in densities resulting in insufficient annual special tax revenues to pay annual debt service and administrative expenses shall be required.
5. The City will not provide for an annual escalation factor of the Maximum Special Tax
The City shall retain a special tax consultant to prepare a report which:
1. Recommends a special tax for the proposed CFD, and
2. Evaluates the proposed special tax in light of its ability to adequately fund identified public facilities, City administrative costs and services (if applicable) and other related expenditures. Such analysis shall also address the resulting aggregate tax burden of all proposed special taxes plus existing special taxes, ad valorem taxes and assessments on the properties within the CFD.
The City may establish an annual charge, not to exceed the amount of the maximum authorized annual tax of the District on developed property that is in excess of the amount needed to pay the bonds and any special tax delinquencies or deficiencies in the bond reserves due to delinquencies.
City staff has the discretion to direct this excess, other than any amount needed to pay District administration expenses, to reimbursement to CFD proponents for "pay-as-you-go" authorized District improvements. Such use of the excess would be limited to the earlier of the completion of the District improvements or until bonds are issued.
TERMS AND CONDITIONS OF BONDS
All terms and conditions of the bonds shall be established by the City and included in the Bond Indenture or Fiscal Agent Agreement. The City will control, manage and invest all District issued bond proceeds designated for use on improvements. The City will also be responsible for determining the structure ofthe bonds to be issued, including the method of sale (negotiated or competitive), the need for bond ratings, and all other terms and conditions incidental to structuring and closing a bond issuance. Each bond issue shall be structured to 9 640
adequately protect bond owners and to not adversely impact the bonding capacity or credit rating of the City through the special taxes or assessments , credit enhancements , foreclosure covenant and reserve fund. Unless otherwise authorized by the City, the following shall serve as bond requirements:
1. A reserve fund in an amount equal to the lesser of ten percent (1 0%) of the original bond principal, or maximum annual debt service on the Bonds , or 125% of average annual debt service on the Bonds, or as otherwise provided by Federal law.
2. The special taxes/assessments shall be levied for the first fiscal year following sale of the bonds for which they may be levied or at the end of capitalized interest period.
Interest shall be funded (capitalized) during the estimated period of construction, but shall not exceed 24 months.
3. The repayment of principal shall begin on the earliest principal payment date for which sufficient special tax/assessment revenues can be made available after the end of the capitalized interest period.
4. Beginning with the commencement of the repayment of principal, annual debt service shall be level.
5. The maximum special tax shall be established to ensure that the annual revenue produced by the levy of the maximum special tax shall be equal to at least 11 0% of the maximum annual debt service.
6. In instances where multiple series of bonds are to be issued, the first series shall include public facilities of highest priority as determined by the City.
7. All statements and materials related to the sale of District bonds shall emphasize and state that neither the good faith, nor the taxing power of the City is pledged to security or repayment of the bonds. The sole source of revenues to secure bond owners is special taxes, annual assessments or foreclosure proceeds.
8. Bond Redemptions . Maximum redemption premiums shall not exceed three percent (3% ). Call protection provisions shall not exceed ten (1 0) years. Consideration shall be given to allowing redemption of bonds at par (without premium) with surplus construction funds, or from the prepayment of the special tax. Provision shall be made to allow the City to purchase bonds on the open market at par plus accrued interest , in lieu of redemption of bonds.
9. Criteria for the Sale of Bonds. In order to ensure the long-term security of any District bonds, the following policies shall be followed:
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o The ratio ofthe appraised value of the land to the value of the proposed bond issue, and any other overlapping debt , shall not be lower than 3-to- 1 o Certificates of Occupancy are issued to at least 50% of properties within the District and/or credit enhancement is provided in an amount equal to two years of maximum special taxes on all properties owned by any merchant builder or developer
10. Refundings - The City will analy ze outstanding bond issues for refunding opportunities. In addition, the City will accept refunding proposals from underwriting firms which the City will then analyze and verify. The City will refund outstanding bond issues if:
o The refunding will generate at least three percent (3%) net present value savmgs; or
o There is another reason the City determines is compelling enough to complete a refunding (e.g. for the purpose of changing onerous legal requirements in a previous bond indenture or resolution or in order to modify the special tax formula).
FISCAL FEASIBILITY REPORT
Prior to the formation of a District , a fiscal feasibility report may be required if fifty percent (50%) or more of the land within a District is substantially undeveloped. The report shall be prepared by or at the direction of the City. All costs for preparing this report shall be borne by the applicant/developer. An estimate of the report cost will be made prior to initiating the study and the applicant/developer shall deposit one hundred percent (1 00%) of the cost prior to starting the report.
ACQUISITION PROVISIONS
Unless as otherwise agreed to between the City and the applicant/developer, the following provisions will apply concerning the acquisition of public facilities District funds:
• The delivery to the City by the
applicant/developer of all deeds , easements, or other
documents necessary to complete the transfer of title to the improvements and the land or interests in land on which the improvements have been constructed . • Issuance of a title insurance policy in favor of the City that ensures clear title to the land or interests in land to be conveyed to the City.
• The delivery to the
City of a certified copy of the developer's "Notice of Completion" filed with the County of Riverside Recorder ' s Office thirty-five (35) days prior to acceptance of the improvement s.
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• The delivery to the City by the applicant/developer of lien waivers or releases from all contractors, subcontractors , and suppliers associated with construction of the improvements ; or, in cases where this is not practical, other equivalent security such as a lien-free endorsement from a title company.
• Any other documentation required pursuant to the acquisition agreement between applicant/developer and the City.
CONTINUING DISCLOSURE
The developer will comply with federal and State securities laws and SEC Rule 15c 2-12 requirements concerning secondary market disclosure as those requirements are interpreted by the
underwriter and its counsel.
HOME BUYER DISCLOSURE
The applicant or property owner will be required to demonstrate to the satisfaction of the City that, to the best of their abilities, there will be full disclosure of the Mello-Roos special taxes and any other special tax, assessment, overlapping special taxes or assessments of other districts, or other liens on individual parcels to existing and future property owners, and to prospective purchasers of property including interim purchasers and sales to merchant builders. In addition to all requirement s of law, the City shall require the applicant to provide disclosure of such information as the City deems appropriate to the purchasers of property within the District, with respect to the existence of the District, maximum and/or backup special taxes to be levied within the District, facilities to be constructed, the foreclosure process ·and the terms and conditions of bonds issued on behalf of the District. Such disclosure shall include homebu yer notification s requiring signature prior to home purchase s, as well as methods to notify subsequent home purchasers.
Upon request, the City will provide a "Notice of Special Tax" to sellers of real property subject to the levy of special taxes as required by Government Code Section 53340.2.
EXCEPTIONS TO THESE POLICIES
The City may fmd in limited and exceptional instances that a waiver to any of the above stated policies is reasonable based upon specific public purpose and/or health and safety findings. Staff ofthe City and the City Attorney shall determine ifthe waiver shall be approved by action of the City Council and if so, such waivers must be identified in the staff report to Council as part of the proceedings .
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GLOSSARY
Acquisition district- a special assessment district or CFD formed to finance the acquisition of infrastructure or public facilities where the applicant/developer will be reimbursed for eligible construction and related costs.
Bonds - bonds authorized and issued under the Improvem ent Act of 1911, the Municipal Improvement Act of 1913, the Improvement Bond Act of 1915, the Mello-Roos Act of 1982, or such other mechanism as is utilized by the City in its discretion to finance the infrastructure and/or public facilities .
Bond counsel - special counsel retained by the City to assure compliance with applicable federal and state tax and other laws and regulations relating to public financing .
Bond underwriter- the investment banker(s) retained by the City to design , develop and execute the sale of bonds in the market place.
City - the City of Murrieta .
Community Facilities District (CFD) - a special district formed pursuant to the Mello-Roos Community Facilities Act of 1982, to finance specific public improvements or public services , and where propertie s within the district are levied a special tax in accordance with the rate and method of apportionment adopted as part of the district proceedings.
Developed Property - Properties within a District that have been issued a Certificate of Occupancy by the City.
District- Community Facilities District and/or Special Assessment District Fair market - the amount of cash or its equivalent which propert y would bring if exposed for sale on the open market under conditions in which neither buyer nor seller could take advantage of the exigencies of the other and both have knowledge of all of the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions upon uses and purposes .
Fee district - a special district formed to finance specific infrastructure and/or public facilities, and where landowners within the district are assessed a fee, payable at the time of development or permit approval , which fee is proportionate to the benefit received from the infrastructure and/or public facilities. There is no bond financing associated with a fee district.
Policy I 00-24
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Fiscal feasibility report - a study performed under the direction of the City to determine the financial viability of a proposed district.
Improvement acts- the Improvement Act of 1911, the Municipal Improvement Act of 1913, the Improvement Bond Act of 1915, or such other act or ordinance under which the proceedings are conducted , leading to formation of the district.
Infrastructure and public facilities- those public improvements including but not limited to major streets and arterials ; highway improvements and freeways; freeway interchange s; right of way acquisitions; bridges; street lights; water, flood, sewer and drainage improvement s; landscape and irrigation facilities; reclaimed water facilities ; environmental mitigation ; bicycle and pedestrian facilities ; fire and police stations; parks; wetlands; telephone ducts; electrical conduits; libraries; transit improvement s (including public parking facilities); and the provision of certain services (if applicable), that may be eligible for financing under this document, and which are authorized improvements under the improvement act or CFD selected by the City .
In-tract facilities - public facilities which serve an individual tract development , such as local subdivision streets, local utilities and local drainage systems.
Special assessment district - an assessment district formed pursuant to an improvement act to finance eligible specified infrastructure and/or public facilities, and
where properties within the district are assessed an amount proportionate to the benefit received from the improvements financed.
Special tax consultant- consultant retained by the City to develop the rate and method of apportionment and other special tax formulas and criteria for a Mello-Roos CFD.
Value-to-lien ratio -the value of a parcel of land as determined by an MAl appraisal relative to the amount for which land secured bonds may be sold for the parcel.
HISTORY
Adopted: January 21 ,2003
Amended: June 1, 2016
~ Randon K. Lane
Mayor
Policy I 00-24
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CITY OF MURRIETA
City Council Meeting Agenda
Report
12/5/2023
Agenda Item No.
CITY OF MURRIETA
NOTICE OF PENDING APPROVAL OF FINAL PARCEL MAP - PM 37185
FOR MURRIETA II MULTIFAMILY LLC, A DELAWARE LIMITED LIABILITY COMPANY NOTICE IS HEREBY GIVEN that on December 5, 2023, at 6:00 PM at City Hall, 1 Town Square, Murrieta, CA 92562, the City Council shall be notified of review and approval of final map application for Parcel Map 37185 (TPM 38185).
An application was filed by Murrieta II Multifamily LLC, A Delaware Limited Liability Company for Tentative Parcel Map No. 38185 to subdivide 28.9 acres into two (2) parcels for multi-family development. Included with the development are 453 apartments.
Engineering staff has completed a review of the final map for conformance with the Subdivision Map Act and the Murrieta Municipal Code. Final Parcel Map PM 37185 conforms to the conditions of approval and the tentative parcel map. All dedications and mitigation required in the conditions of approval have been offered and secured.
The mylars of the original final parcel map are available for review in the Engineering Department. Any questions concerning this matter should be directed to Jeff Lyall, Sr Development Services Technician at [email protected] <mailto:[email protected]> or 951-461-6039.
CITY OF MURRIETA Printed on 12/1/2023Page 1 of 1
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CITY OF MURRIETA
City Council Meeting Agenda
Report
12/5/2023
Agenda Item No.
Subject:
Received After Agenda Printed - GBA
CITY OF MURRIETA Printed on 1/5/2024Page 1 of 1
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MURRIETA CITY COUNCIL
Governing Body Announcements:
Council Member Holliday
December 5, 2023
Received After Agenda Printed
12/5/23 - Regular Meeting
Presentation (GBA)
648
Governing Body Announcements:
Council Member Holliday
November 8, 2023
November 9, 2023
November 10, 2023
November 11, 2023
November 11, 2023
November 13, 2023
November 14, 2023
November 16, 2023
Blessed to hear the letters from soldiers at the Candlelight Concert.
Attended the Murrieta Chamber Networking Breakfast.
Honored to attend the Marine Corps birthday celebration.
Proud to escort a Marine Veteran in Murrieta’s Veteran’s Day Parade.
Happy to see the unveiling of Murrieta’s Vietnam War Memorial.
Excited to attend the first “Future of Education” event.
Attended the 10th-anniversary celebration of Murrieta’s Youth Center.
Strolled through historic downtown at the Murrieta Market Nights. 649
Governing Body Announcements:
Council Member Holliday
December 2, 2023
December 4, 2023
Enjoyed watching all the kids get donuts with Santa.
Judged all of the decorated Christmas trees at Murrieta’s Festival of Lights.
Watched Santa light up Murrieta’s Christmas Tree.
Greeted all the residents who came out for the return of Murrieta’s Santa Stops. 650
MURRIETA CITY COUNCIL
Governing Body Announcements:
Council Member Levell
December 5, 2023
Received After Agenda Printed
12/5/23 - Regular Meeting
Presentation (GBA)
651
Governing Body Announcements:
Council Member Levell
November 16, 2023 Attended the Southwest Riverside County of Realtors – National Alliance on Mental Illness meeting.
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Governing Body Announcements:
Council Member Levell
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Governing Body Announcements:
Council Member Levell
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