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Placentia City Council
AGENDA REPORT
CITY COUNCIL
CITY ADMINISTRATOR
DEPUTY CITY ADMINISTRATOR / PUBLIC SERVICES AND INFRASTRUCTURE MAY 17, 2022
SUBJECT: SETTING OF THE ANNUAL SPECIAL TAX RATE FOR FISCAL YEAR 2022-23 FOR COMMUNITY FACILITIES DISTRICT NO. 2018-01
FISCAL
IMPACT: REVENUE: $29,979.60 (RECOUPED THROUGH ASSESSMENTS) SUMMARY:
On April 20, 2018, the City Council adopted Resolution No. R-2018-08, establishing Community Facilities District ("CFD") 2018-01 within the City's Transit Oriented District ("TOD") to provide a non -General Fund and sustainable funding source to payforthe ongoing maintenance and repairs of the public streetscape improvements constructed within the TOD.
CFD 2018-01 is subject to an annual escalation factor beginning on January 2019, which shall be the greater of three percent (3%) or the annual percentage increase, if any, of the Consumer Price Index ("CPI") — All Urban Consumers for Los Angeles -Long Beach -Anaheim, California as determined by the Bureau of Labor Statistics for the twelve (12) months ending the preceding December 31.
RECOMMENDATION:
It is recommended that the City Council take the following action:
1. Adopt Resolution R-2022-33, a Resolution of the City Council of the City of Placentia, California, setting the levy of an annual special tax for Community Facilities District No. 2018-01 (TOD Maintenance Services).
2. Authorize inclusion of the Annual Special Tax for Community Facilities District No.
Community Facilities District No. 2018-01 (TOD Maintenance Services).) for Fiscal Year 2022-23 on the Orange County Secured Property Tax Roll.
DISCUSSION:
In 1978, California voters enacted Proposition 13, which limited the ability of local public agencies to increase property taxes based on a property's assessed value. In 1982, the Mello -Roos Community Facilities Act of 1982 ("Act") was created to provide an alternate method of financing public infrastructure and services. Under the Act, a Community Facilities District ("CFD") may fund
1.h.
May 17, 2022
City Council Agenda
May 17, 2022
public improvements with a useful life of five (5) years or more, such as park and recreational facilities, streets, sewer systems, schools, libraries, childcare facilities, and other public infrastructure. CFDs may also fund the maintenance and servicing of public landscape areas, parks, streetlights, storm drain systems, and public safety services.
In 2018, the City Council created a new CFD to assist in the financing of maintenance and repairs of the new public amenities constructed within the TOD which includes street and pedestrian lighting, landscaping, storm water basins, and pedestrian amenities. All TOD developers are required to annex their properties into the District as a condition of approval for receiving their entitlements. Each fiscal year, the City determines the special tax requirement and associated annual special tax rates for the CFD based upon maintenance and servicing costs within the Project. The special tax is levied and collected in perpetuity, unless and until such time the City determines that the revenue is no longer needed.
The special taxes within the CFD will be levied according to formulas and provisions of the Rate and Method of Apportionment of Special Tax (the "RMA") cointained in the Special Tax Report ("Report") prepared for the formation of the TOD CFD. The Report describes the services to be funded by the CFD; and provides an estimate of the fair and reasonable cost of the Services and incidental expenses for the CFD. In addition, the Report specificed the tax rate needed to support services in the TOD by land use classificiaton.
Currently, the CFD has two annexations to date. In 2017, the City Council approved the land entitlements for the Integral/Lyon Living Project, also known as "The Herald," along with a Development Agreement. The Agreement required Integral/Lyon Living to be the first project to create and annex itself into the new District. This project has been completed and received its Certificate of Occupancy in Fall 2021 and accordingly, this property will be levied in Fiscal Year ("FY") 2022-23 at the rate for a Developed Multi -Family Property. The second property to be annexed was the JPI Luxury Apartments development at 505 W. Crowther Avenue. This project is currently under construction and this property will not be assessed in FY 2022-23. The RMA Report for CFD 2018-01 only allows for taxing developed property and developed property is defined as property that has received a Certificate of Occupancy issued prior to May 1 of the preceding fiscal year.
The CFD is subject to an Annual Escalation Factor beginning on July 1, 2019, which shall be the greater of three percent (3%) or the annual percentage increase, if any, of the CPI for the 12 months ending the preceding December 31. The index identified in the RMA was the All -Urban Consumers ("CPI -U") for the Los Angeles -Long Beach -Anaheim area. The CPI for the 12 months ending the preceding December 31, 2022 was 6.6%. Therefore, the special tax rates are being increased by 6.6% as allowed.
FISCAL IMPACT:
The anticipated revenue from these assessments in FY 2022-23 is $29,979.60.
City Council Agenda
May 17, 2022
Prepared by: Reviewed and approved:
EIsa Y. Ronson
Management Analyst
Jennifer Lampman
Director of Finance
Reviewed and approved: Reviewed and approved:
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Luis Estevez Damien R. Arrula
Deputy City Administrator City Administrator
Attachments:
1. Resolution No. R-2022-33 — CFD 2018-01
2. Rate and Method of Apportionment for CFD 2018-01