City Council Agenda Report
TO: Mayor Clauzel and Members of the City Council
FROM: Fernando Ulloa, City Manager
BY: Mike Willett, Public Works Director
MEETING DATE: February 18, 2025
ITEM NO: 6.9
SUBJECT: Approve Resolution No. 2025-03, a Resolution of the City Council of the City of Patterson Declaring its Intentions to Add Territory to Future Annexation Area of Community Facilities District (CFD) No. 2013-01 (Non-Residential Maintenance Services); and Approve Resolution No. 2025-04, a Resolution of the City Council of the City of Patterson Declaring its Intentions to Add Territory to Future Annexation Area of Community Facilities District (CFD) No. 2018-02 (Residential Maintenance Services); and Approve Resolution No. 2025-05, a Resolution of the City Council of the City of Patterson Declaring its Intentions to Add Territory to Future Annexation Area of Community Facilities District (CFD) No. 2022-01 (Public Safety Services) and Authorizing the Levy of Special Taxes Pursuant to the Mello-Roos Community Facilities Act of 1982.
RECOMMENDATION
Motion to Approve Resolution No. 2025-03, a Resolution of the City Council of the City of Patterson
Declaring its Intentions to Add Territory to Future Annexation Area of Community Facilities District (CFD) No. 2013-01 (Non-Residential Maintenance Services); and Approve Resolution No. 2025-04, a Resolution of the City Council of the City of Patterson Declaring its Intentions to Add Territory to Future Annexation Area of Community Facilities District (CFD) No. 2018-02 (Residential Maintenance Services); and Approve Resolution No. 2025-05, a Resolution of the City Council of the City of Patterson Declaring its Intentions to Add Territory to Future Annexation Area of Community Facilities District (CFD) No. 2022-01 (Public Safety Services) and Authorizing the Levy of Special Taxes Pursuant to the Mello-Roos Community Facilities Act of 1982.
BACKGROUND
Development projects with new public amenities/improvements such as parks, landscaping, streets, streetlighting, sidewalks, and other public infrastructure are required, through conditions of approval, to provide for the long-term maintenance of the new infrastructure. The Villages of Patterson (VOP) located on the northeast portion of the city near Walnut Avenue and Sycamore Avenue, was conditioned to form a maintenance district to finance a portion of the maintenance and operation of various public amenities and infrastructure to be constructed within the Village of Patterson area. The owners of the project elected to form Residential Community Facilities District 2018-2 pursuant to the Mello-Roos Act. The formation of CFD 2018-2 established a Future Annexation Area that coincides with the VOP Area in order to allow for the ease of annexations of new properties within the specific plan boundary in the future. Annexations are numbered sequentially as distinct tax zones. Each tax zone is assessed separately, based on the pro rata share of the VOP public amenities. Under the Mello-Roos Act, the parcels in the Future Annexation Area are not subject to the special tax levied in the CFD until they annex into the CFD. Future zones may annex into the CFD if the owners execute a unanimous approval (UA) in which they agree to annex their parcel(s) into the CFD. Future development within the Villages of Patterson planned Area will be conditioned to annex into this CFD. Since then, new developments, for example Baldwin Ranch North Development, have been annexed into the boundaries of this Residential Maintenance CFD 2018-2 in 2022. With the recent annexation of the Zacharias Development, the city is now expanding the boundaries of CFD 2018-2 to incorporate new annexed parcels and/or properties identified as residential and allow for a streamline process and ensure that the funding mechanism for future ongoing maintenance of public amenities and improvements is set up once developed.
In 2013, with Amazon Distribution Center, the City formed the Non-Residential Maintenance CFD which funds ongoing maintenance of any public improvements in the public right-of-way dedicated to the city after they are constructed. This includes storm drainage, landscape medians, streets, sidewalks, traffic signals, etc. This maintenance CFD applies only to commercial and industrial development. The City does not maintain landscaping on private property. A landscape maintenance agreement is developed for each commercial/industrial properties and they are responsible for maintaining all landscaping and stormwater control measures put in place. As part of this CFD annexation area update, the City will also update the Boundaries of the NonResidential Maintenance CFD 2013-1 to include any undeveloped parcels that have been annexed into the city limits and/or identified as commercial/industrial property.
In 2022, as part of the Baldwin Ranch North development located on Baldwin/Sperry Avenue, the City established Public Safety/Fire CFD 2022-01 to fund fire protection and police services.
At the time, a boundary map was approved, but with the currently annexed areas from the Zacharias development, the Boundary areas of this district need to be updated.
ANALYSIS
Under the CFD Act, the City Council, as the legislative body for the CFD, is given the authority to create a Future Annexation Area (the “Future Annexation Area”) of the CFD, and now desires to undertake proceedings to designate territory as the Future Annexation Area of existing City CFD 2018-2 (Residential Maintenance); CFD 2013-1 (Non-Residential Maintenance); and CFD 2022-01 (Public Safety Services) to expand the boundaries of each CFD to accommodate any undeveloped properties that have recently been annexed into the City limits and/or were not previously included.
The territory now proposed for each of the CFDs Boundary Maps identify what needs to be added as the Future Annexation Area(s), CFD Boundary Maps attached. Adding Territory to Future Annexation Area, on file with the City Clerk, the boundaries of which territory are hereby preliminarily approved and to which map reference is hereby made for further particulars. The City Clerk is hereby directed to cause to be recorded such map, showing the territory to be added to the Future Annexation Area, in the office of the County Recorder of the County of Stanislaus within 15 days of the date of adoption of this resolution.
The existing rate and method of apportionment of special tax (the “Rate and Method”) among the parcels of real property within the existing territory of each of the CFDs will not be altered in connection with the proposed annexation and the territory proposed to be annexed. The proposed rate and method of apportionment of the special tax among the parcels of real property within the CFD, as now in existence and following the annexation proposed herein, in sufficient detail to allow each landowner within the territory proposed to be annexed to the CFD to estimate the maximum amount such owner will have to pay, are described in the Rate and Method.
Parcels within the Future Annexation Area shall be annexed to the CFD only with the unanimous approval (each, a “Unanimous Approval”) of the owner or owners of each parcel or parcels at the time that parcel or those parcels are annexed, without any requirement for further public hearings or additional proceedings.
The City Council is now being requested to approve all three Resolutions to initiate proceedings, which include noticing, and scheduling the public hearing required to annex territory into the city’s existing community facilities district boundaries to occur on Tuesday, April 1, 2025, at 7:00 p.m., in the City Hall, Council Chamber during a City Council meeting. Following the public hearing, the City Council will then be asked to adopt a resolution to complete this process and direct the recordation/filing of the boundary maps for all three CFDs (2018-2; 2013-1; and 2022-1) in the County Recorder’s Office.
FISCAL IMPACT
Developers for each of the annexed parcels will be invoiced for all costs associated with this annexation process. The costs include special tax consultant and legal counsel fees as needed.
The City will annually levy a special tax on the parcels in the district to fund the specified maintenance services or public safety 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.