City Council Agenda Report
TO: Mayor McCord and Members of the City Council
FROM: Ken Irwin, City Manager
BY: Mike Willett, Public Works Director
MEETING DATE: October 17, 2022
ITEM NO: 6.1
SUBJECT: Approve Resolution No. 2022-68, a Resolution of the City Council of the City of Patterson Declaring its Intentions to Annex Territory to Community Facilities District (CFD) 2018-02 and Authorizing the Levy of Special Taxes Pursuant to the Mello-Roos Community Facilities Act of 1982 for Residential Maintenance Services.
RECOMMENDATION
Motion to Approve Resolution No. 2022-68, a Resolution of the City Council of the City of Patterson Declaring its Intentions to Annex Territory to Community Facilities District (CFD) 2018-02 and Authorizing the Levy of Special Taxes Pursuant to the Mello-Roos Community Facilities Act of 1982 for Residential Maintenance Services.
BACKGROUND
to the Development Known as “The Baldwin Ranch North” (the “Development Agreement”) approved by Ordinance No. 859 adopted by the City Council on January 18, 2022. The territory so assigned includes parcels being developed within The Baldwin Ranch North development area, see attached exhibit(s).
The Development Agreement requires, among other matters, that the Developer (as defined in the Development Agreement) cooperate in the formation of such maintenance districts as the city may determine to be appropriate for the maintenance of public facilities in the Project (as defined in the Development Agreement), including but not limited to benefit assessment, landscape and/or lighting districts. In previous years projects formed their own Landscape Maintenance Districts (LMDs) and Benefit Assessment Districts (BADs) to provide funding for the maintenance of new public improvements. There have been recent court cases which make it difficult and more expensive to continue forming those types of districts. Instead, City staff and consultants are recommending a CFD for maintenance in lieu of an LMD and BAD.
The Department of Public Works has previously formed of a community facilities district under the provisions of the Mello-Roos Community Facilities Act of 1982 to fund street, park and other maintenance services. The formation proceedings completed back in 2018 for the district allowed for the annexation of other properties in the City to be completed in the future with residential structures, as and when they develop. This maintenance district was formed for only residential areas to be included for any special taxes to be levied in the proposed community facilities district.
The City Council is now being requested to take the initial action necessary to annex this area into the City’s existing Residential Maintenance Community Facilities District (CFD) 2018-02 that was formed in 2018 as part of the Villages of Patterson development. A non-residential maintenance CFD already exists. Specifically, the City Council is being asked to adopt a Resolution of Intention to start the annexation into the established community facilities district.
The Resolution of Intention makes reference to a boundary map showing the annexed parcels and the rate and method of apportionment of special taxes for the annexed area, specifying an annual special tax to be levied on parcels in the annexed area to pay for the maintenance services, which include maintenance of catch basins, storm water facilities, streets, sidewalks, signal lights, and landscaping. The Resolution directs the Director of Public Works to prepare a report for the proposed annexation describing the services to be funded and the costs of the services and related incidental and administrative costs and expenses.
The original process and Ordinance adopted during the initial formation of CFD 2018-02 also contemplated for future areas in the city designated for residential development to annex to the community facilities district 2018-02 as and when they develop. Only residential areas were included in any future annexations to the district. At the time the area where Baldwin Ranch North was zoned industrial / commercial and therefore not included in the future annexation boundary map for 2018-02. This process for annexation is required because the parcels to be annexed are outside of the originally designated “future annexation area” (which allows annexations to only occur with the written approval of the owner of any parcels to be annexed without Council action. It is expected that the Department of Public Works will review the annual budget for the maintenance services to be provided and may adjust the special tax rates for the parcels then being annexed to reflect any cost increases that may then be appropriate. .
It should be noted that, in 2018, the City of Patterson formed its residential maintenance CFD 2018-02 when the Villages of Patterson was developed. Baldwin Ranch North was also required to form a Safety Services CFD and Infrastructure CFD. The Safety Services has been completed and the Infrastructure CFD is currently going through the process. All commercial parcels within the Baldwin Ranch North will be required to annex into the existing Non-Residential Maintenance CFD 2013-1. No further action will be taken on those parcels since they are currently identified in the existing boundaries of this district.
ANALYSIS
The Resolution provides for a public hearing on the annexation into the community facilities district to occur at the December 6, 2022 at 7:00 p.m., in the City Hall, Council Chamber during a City Council meeting. Following the public hearing, it is expected that the City Council will conduct an election at which the owner of the parcels to be annexed to the district will vote in favor of the annexation to the district. The City Council will then be asked to adopt a resolution confirming the results of the election and directing the recordation of a notice of special tax lien on the parcels annexed in the County Recorder’s Office.
FISCAL IMPACT
The developer of The Baldwin Ranch North parcels will be invoiced by the Department of Public Works for all costs associated with this annexation process. The costs include the legal and consultant costs. The City will annually levy a special tax on the parcels in the district to fund the specified maintenance services, with an initial maximum special tax rate per acre of land in the district, increasing by a maximum of 3% per year. As parcels annex to the district in the future, their maximum annual special tax rates will be determined at the time they annex to the district. The city will also charge 15% Administration fee annually to help offset increased staff time to administer this district.
Attachment(s): Resolution of Intention No. 2022-68
Maintenance CFD RMA
Maintenance CFD Boundary Map(s) & APNs Listing
Maintenance CFD Annexation Schedule