WEST PATTERSON FINANCING AUTHORITY
AGENDA REPORT
TO: Chair McCord and Members of the West Patterson Financing Authority FROM: Ken Irwin, Executive Director
BY: Mike Willett, Public Works Director
MEETING DATE: November 15, 2022
ITEM NO: 7.5
SUBJECT: Adopt Resolution No. 2022-02 Approving the Formation and Future Annexation Area for Community Facility District (CFD) 2022-02 (Baldwin Ranch North); Adopting Resolution No. 2022-03 Determining Necessity to Incur Bonded Indebtedness; Approving Resolution No. 2022- 04 Calling Special Landowner Election; Approving Resolution No. 2022- 05 Declaring the Results of the Special Election; and Motion to Approve First Reading and Introduction of Ordinance No. 866, Reading by Title Only, Waiving Further Reading, An Ordinance of the West Patterson Financing Authority, Approving the Levy of Special Taxes RECOMMENDATION:
Once the protest proceedings are complete, and based on the results of the landowner election, staff recommends that the City Council:
1. Adopt Resolution 2022-02 of Formation of Community Facilities District and Future Annexation Area for CFD 2022-02; and
2. Adopt Resolution No. 2022-03 Determining Necessity to Incur Bonded Indebtedness for CFD 2022-02; and
3. Adopt Resolution No. 2022-04 Calling Special Landowner Election; and
4. Adopt Resolution No. 2022-05 Declaring Results of Special Landowners Election and Directing Recording of Notice of Special Tax Lien; and
5. Motion to Approve First Reading and Introduction of Ordinance No. 866, Reading by Title Only, Waiving Further Reading, An Ordinance of the City of Patterson City Council Levying Special Tax within CFD 2022-02.
SUMMARY
The City of Patterson (the “City”) is party to a development agreement relating to The Baldwin Ranch North (the “Development Agreement”), approved through the adoption of Ordinance No. 859 by the City Council on January 18, 2022. The Development Agreement requires, among other matters, that developers and participating landowners within The Baldwin Ranch North cooperate in the formation of a community facilities district or similar district for the purpose of financing public facilities and infrastructure totaling $17.5 million.
On October 4, 2022, the Board of the West Patterson Financing Authority (the “Authority”) adopted resolutions to initiate the formation of West Patterson Financing Authority Community Facilities District No. 2022-02 (Baldwin Ranch North) (“CFD 2022-02”). The resolutions adopted at the October 4, 2022, meeting called for a public hearing on the formation of CFD 2022-02 to take place on November 15, 2022, provided that the participating property owners in the proposed CFD 2022-02 entered into an Operating Memorandum with the City.
The attached resolutions are proposed to form CFD 2022-02, incur bonded indebtedness for CFD 2022-02, call a special landowner election, declare the results of the special election, and direct the recording of a notice of special tax lien. In addition, an ordinance is proposed to be introduced for first reading to levy special taxes within CFD 2022-02.
The territory of the proposed CFD 2022-02 will initially be comprised of a portion of the Baldwin Ranch North project area, which represents the participating landowners that are in various stages of residential development. The territory in the Future Annexation Area includes the entirety of Baldwin Ranch North project site. Parcels located in the Future Annexation Area, but not in the initial CFD 2022-02 boundary, will be eligible to annex into CFD 2022-02 at a later date.
The following actions are proposed in order to finalize the formation of CFD 2022-02 and the Future Annexation Area, and to levy special taxes within CFD 2022-02:
(1) Convene a public hearing to determine if interested parties wish to protest the formation of CFD 2022-02;
(2) Adopt the Resolution of Formation, which includes the eligible facilities to be financed and the Rate and Method of Apportionment of Special Tax, subject to landowner vote (“Resolution of Formation”);
(3) Adopt the Resolution Determining Necessity to Incur Bonded Indebtedness, which sets forth general terms for issuing bonds in connection with CFD 2022-02 (“Resolution of Bonded Indebtedness”);
(4) Adopt the Resolution Calling Election, and hold the special election of landowners (per waivers received from the participating property owners as to any waiting period); (5) Declare the results of the landowner election and authorize recording of a special tax lien; and
(6) Introduce for first reading an ordinance to levy special taxes within CFD 2022-02.
ANALYSIS
(1) Protest Proceedings
The proceedings to form CFD 2022-02 are governed by the Mello-Roos Community Facilities District Act of 1982 (Gov. Code § 53311 et seq) (the “CFD Act”). Under the CFD Act, a public hearing is required to determine if any interested parties wish to protest the formation of CFD 2022-02. Any protests pertaining to the conduct of the proceedings must be in writing and must clearly set forth the basis in which such objection is made. Protests may be made by any interested party, in writing or orally. Any written protest not personally presented by the author of that protest must be filed with the City Clerk at or before the opening of the public hearing. (Gov. Code § 53323.)
Under the CFD Act, if protests are submitted by owners of fifty percent (50%) or more of the territory proposed to be included in CFD 2022-02, and such protests are not withdrawn, no further
proceedings to form CFD 2022-02 or to authorize the special tax may be taken for a period of one
(1) year from today’s date.
The proposed CFD 2022-02 boundary is comprised of landowners that have actively participated in the formation of CFD 2022-02. Therefore, it is highly unlikely that any protest proceedings will
prevent the Authority from taking action to authorize and levy special taxes under CFD 2022-02. (2) Resolution of Formation
The Resolution of Formation sets forth the following substantive provisions in connection with CFD 2022-02:
Description of Eligible Facilities to be Financed by CFD 2022-02 A description of facilities to be financed by CFD 2022-02 is attached to the Resolution of Formation as Exhibit A (“Eligible Facilities”). Description of Eligible Facilities generally describes improvements for water, wastewater, transportation, storm drainage, fire department facilities, school facilities, community center, and administrative costs, to which CFD 2022-02 will be authorized to make expenditures. The allocation of CFD 2022-02 special tax and bond revenue is currently provided in the Development Agreement. Prior to the issuance of any bonds, A revised financing plan will be presented for adoption by the Authority.
Rate and Method of Apportionment of Special Tax
The Rate and Method of Apportionment of Special Tax is attached to this Resolution as Exhibit B (the “RMA”). The RMA establishes the Maximum Special Tax that can be levied on each parcel subject to the CFD 2022-02 special tax. For CFD 2022-02, the Maximum Special Tax is based on the proposed land use densities for each plan area within Baldwin Ranch North Master Development Plan, as indicated on the Master Land Use Diagram. The Maximum Special Tax therefore varies according to single-family property, other residential property, and nonresidential property.
Future Annexation of Other Parcels
The Resolution contemplates a simplified procedure for annexing property which is included within the Future Annexation Area. As noted above, the Future Annexation Area comprises the remaining properties in Baldwin Ranch North that have residential development potential.
Parcels in that area are eligible to annex into CFD 2022-02 upon signing a simple request to annex
and consent to be taxed and no further Authority action will be required. (3) Resolution of Bonded Indebtedness
This Resolution establishes some of the initial criteria for issuing bonds in connection with CFD 2022-02. The Resolution establishes maximum bonded indebtedness at $17.5 million. The $17.5 million maximum indebtedness is always set much higher than the actual amount of bonds anticipated to be issued, currently estimated at approximately $17.5 million including funding debt service reserve funds, capitalized interest and bond issuance costs. Bonds would be issued in series, as development proceeds. The first bond issuance could occur as early as 2023, and future bonds would continue to be issued in series thereafter. The actual amount of bonds issued can change over time depending on market conditions and interest rates at the time of sale for each series. The main consideration is to ensure that the $17.5 million in financing for public infrastructure, as provided in the Development Agreement, is realized over time. (4) Resolution Calling Special Landowner Election
This resolution provides that fewer than twelve (12) persons are registered to vote within the territory of CFD 2022-02. Therefore, pursuant to the CFD Act, the qualified electors consist of the
landowners within CFD 2022-02. All participating landowners within initial boundary of CFD 2022-02 have waived the ninety (90) day requirement for holding an election; therefore, the election may occur at this meeting to consent to and approve of the Authority’s formation of CFD 2022-02.
(5) Resolution Declaring Results of Special Landowners Election and Directing the Recording of a Notice of Special Tax Lien
The Authority should adopt this resolution once it is confirmed that the landowners have approved the formation of CFD 2022-02 and the levy of special taxes. (6) Ordinance of the West Patterson Financing Authority Levying Special Tax within CFD 2022-02
The proposed ordinance authorizes the Authority, or its designee or consultant, to determine the amount of special taxes to be levied pursuant to the Resolution of Formation on properties within CFD 2022-02. The special taxes will be collected in the same manner as ordinary property taxes and shall have the same lien priority and be subject to the same penalties for delinquency.
ALTERNATIVE ACTIONS
The City of Patterson is obligated to cooperate in good faith to form a financing district to fund ongoing maintenance services in the Baldwin North area, as set forth in the Development Agreement. Staff, therefore, does not recommend any alternatives to the above recommendations.
ATTACHMENTS
1. Resolution No. 2022-02 of Formation of Community Facilities District No. 2022-02.
2. Resolution No. 2022-03 Determining Necessity to Incur Bonded Indebtedness for CFD 2022-02.
3. Resolution No. 2022-04 Calling Special Landowner Election.
4. Resolution No. 2022-05eclaring Results of Special Landowners Election and Directing Recording of Notice of Special Tax Lien.
5. Ordinance No. 866 of the City Council of the City of Patterson Levying Special Tax within CFD 2022-02.
6. Rate and Method of Apportionment of Special Tax (RMA)
7. CFD 2022-02 Boundary Map (previously adopted with Resolution of Intention)
FISCAL IMPACT
All costs associated with the formation of this CFD are paid for by the developer. The Community Facilities District 2022-2 would establish the bond indebtedness limit in the amount of $17,500,000. All funds would be obtained through bonding and would help fund the list of improvements listed in Exhibit B.