City Council Agenda Report
TO: Mayor McCord and Members of the City Council
FROM: Ken Irwin, City Manager
BY: Saadiah Ryan, Finance Director
MEETING DATE: August 16, 2022
ITEM NO: 7.1
SUBJECT: Adopt Resolution No. 2022-57, Approving the Formation of Patterson Community Facilities District No. 2022-01 (Public Safety Services), Resolution No. 2022-58, Calling the Special Landowner Election, and Resolution No. 2022-59, Declaring the Results of the Special Election.
Motion to Approve First Reading and Introduction of Ordinance No. 861, Reading by Title Only, Waiving Further Reading, An Ordinance of the City Council of the City of Patterson, Levying Special Tax Within Community Facilities District No. 2022-01 (Public Safety Services)
RECOMMENDATION
Motion to Adopt Resolution No. 2022-57, Approving the Formation of Patterson Community Facilities District No. 2022-01 (Public Safety Services), Resolution No. 2022-58, Calling the Special Landowner Election, and Resolution No. 2022-59, Declaring the Results of the Special Election.
Motion to Approve First Reading and Introduction of Ordinance No. 861, Reading by Title Only, Waiving Further Reading, An Ordinance of the City Council of the City of Patterson, Levying Special Tax Within Community Facilities District No. 2022-01 (Public Safety Services)
BACKGROUND
The City of Patterson formed Community Facilities District No. 2003-1 (Public Safety/Fire Protection Services) (“CFD 2003-1”) in January 2003. At that time the Heartland Ranch and Miraggio development projects were included in the CFD 2003-1 boundary, and a future annexation area was designated for the area that would become the Patterson Gardens development. In 2017, additional undeveloped land was added to the designated future annexation area. Since its formation, more than 20 development projects have annexed to CFD 2003-1.
As the cost of providing service has increased over time, the City contracted with NBS to prepare a Fiscal Impact Analysis to determine of the special taxes within CFD 2003-1 are commensurate with the cost of providing services to new development. That Fiscal Impact analysis estimates the amount of revenue the City receives for ongoing services because of new development and compares that to the cost of providing public safety services. The result, as shown in the attached 2021 Comprehensive Public Safety Feasibility Study and Service Level Analysis (“2021 Analysis”), indicates that the rates established with CFD 2003-1 (as escalated pursuant to the methodology) are not sufficient to offset the negative fiscal impact for specific development types.
To implement the rates calculated by the 2021 Analysis, the formation of Community Facilities District No. 2022-01 (Public Safety Services) (“CFD 2022-01”) is presented for consideration. CFD 2022-01 designates future annexation area and is contemplated to be used going forward as the funding mechanism for public safety services for new development in the City. CFD 2003-1 would remain in place and those parcels that are within the boundaries of CFD 2003-1 would remain subject to CFD 2003-1 special taxes.
ANALYSIS
The formation of CFD 2022-01 will allow the City the levy special taxes on parcels within or that annex to in the future to fund public safety services. The Resolution Establishing the CFD is to be considered following tonight’s noticed public hearing. The Resolution Calling a Special Election is to be considered next. The ballots are to be tabulated and then the Resolution Declaring Results of a Special Election is to be considered. If the measure passes, the City Council may proceed with the introduction and first reading of the Ordinance Authorizing the Levy of Special Taxes. The second reading and adoption of the Ordinance Authorizing the Levy of Special Taxes will occur at a succeeding City Council meeting.
FISCAL IMPACT
The developers of the Baldwin Ranch project have been invoiced by the Department of Public Works for the costs to form the proposed CFD 2022-01, including the cost of formation counsel and the special tax consultant. If CFD 2022-01 is formed, the City will annually levy a special tax on the parcels in the CFD to fund the specified public safety services, with initial rates as specified in the Rate and Method off Apportionment of Special Tax for the CFD, increasing by the positive annual change in the April-to-April San Francisco-Oakland-Hayward, CA CPI-U index, with a minimum change of 3 percent and a maximum change of 6 percent. As parcels annex to CFD 2022-01 in the future, their maximum annual special tax rates will be determined at the time they annex to the CFD. Included in the special tax rates are amounts to help offset increased staff time to administer this CFD, along with costs associated with other administration costs anticipated to be incurred by the CFD.
Attachment:
1. Resolution No. 2022-57
2. Exhibit B - CFD 2022-01 (Public Safety Services)
3. Resolution No. 2022-58
4. Resolution No. 2022-59
5. Ordinance No. 861
6. Exhibit A - CFD 2022-01 (Public Safety Services) - CFD Report