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Placentia City Council
AGENDA REPORT
CITY COUNCIL
CITY ADMINISTRATOR
DEPUTY CITY ADMINISTRATOR / PUBLIC SERVICES & INFRASTRUCTURE MAY 16, 2023
SUBJECT: SETTING OF THE ANNUAL SPECIAL TAX RATE FOR FISCAL YEAR 2023-24 FOR COMMUNITY FACILITIES DISTRICT NO. 2018-01 (TOD CFD) AND
DECLARING THE INTENTION TO ALLOW FOR FUTURE ANNEXATIONS TO COMMUNITY FACILITIES DISTRICT NO. 2018-01
FISCAL
IMPACT: REVENUE: $31,448.05 (800000-4505)
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 pay for the ongoing maintenance and repairs of the public streetscape improvements constructed within the TOD. At that time, the City Council also, in the adoption of the territory map, approved the area designated as future annexation to the CFD. Staff recommends that the City Council adopt a resolution to levy a special tax to pay for maintenance services in the TOD for Fiscal Year (FY) 2023-24 (Attachment 1), adopt a resolution declaring its intention to annex territory to the CFD and set a public hearing on June 20, 2023 (Attachment 2).
RECOMMENDATION:
It is recommended that the City Council take the following action:
1. Adopt Resolution No. R-2023-30, 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); and
2. Adopt Resolution No. R-2023-31, a Resolution of the City Council of the City of Placentia, California, declaring its intention to allow for future annexations of territory to Community Facilities District No. 2018-01 (TOD Maintenance Services); and
3. Authorize inclusion of the Annual Special Tax for Community Facilities District No. 2018-01 (TOD Maintenance Services) for Fiscal Year 2023-24 on the Orange County Secured Property Tax Roll.
1.d.
May 16, 2023
City Council Agenda
May 16, 2023
STRATEGIC PLAN STATEMENT:.
There is no specific Strategic Plan Goal or Objective associated with this Council action.
DISCUSSION:
In 1978, California voters enacted Proposition 13, which limited the ability of local public agencies to increase property taxes based upon 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 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 within 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. 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 tax rate needed to support maintenance services within the TOD was established at the base rates summarized in the table below:
Table 1: Base Tax Rate for CFD 2018-01(TODI
Land Use Classification
Developed Single Family Detached Property
Developed Single Family Attached Property
Developed Multi -Family Property
Developed Retail/Other Property
Developed Office Property
Developed Industrial Property
Undeveloped Property
Tax -Exempt Property
Base Year Maximum Rate
$138 per residential unit
$112 per residential unit
$127 per residential unit
$0.09 per square foot of building area
$0.13 per square foot of building area
$0.06 per square foot of building area
$0.00
$0.00
City Council Agenda
May 16, 2023
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 4.9%. Therefore, the special tax rates are being increased by 4.9% as allowed and summarize in the table below:
Table 3: FY 23-24 Tax Rate for CFD 2018-01(TOD)
Land Use Classification
Developed Single Family Detached Property
Developed Single Family Attached Property
Developed Multi -Family Property
Developed Retail/Other Property
Developed Office Property
Developed Industrial Property
Undeveloped Property
Tax -Exempt Property
FY 23-24 Assessment Tax Rate
$158.94 per residential unit
$129.00 per residential unit
$146.27 per residential unit
$0.103 per square foot of building area
$0.149 per square foot of building area
$0.069 per square foot of building area
$0.00
$0.00
Currently, the CFD has one annexation 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 was levied for the first time in Fiscal Year ("FY") 2022-23 at the rate for a Developed Multi -Family Property. The second property proposed for annexation to the CFD is the JPI development at 505 W. Crowther Avenue. This project is currently under construction. The JPI development will need to be annexed to the CFD prior to receiving a Certificate of Occupancy.
However, to allow for a more streamlined procedure in the annexation to the CFD, the City Council will need to declare its intention to allow for future annexation of territory to the CFD and establish those procedures. In the adoption of the CFD, the City Council approved the boundaries of the CFD, which included and specifically designated area for future annexation. Since the future annexation to the CFD was contemplated and approved by the City Council with the formation of the CFD, the attached Resolution establishes the annexation procedures (Attachment 2). This Resolution also establishes a date for a public hearing on the annexation action, and for an election among the authorized electors. The public hearing date by statute must be within 30-60 days following the adoption of the Resolution of Intention. Upon City Council approval, a public hearing on the annexation will be scheduled for June 20, 2023. Since there are Tess than twelve (12) registered voters in the territory proposed to be annexed, the election will be a landowner vote. Pursuant to waiver of election time limits from the landowner, a ballot will be mailed in advance of the public hearing. At the close of the public hearing, an election of the qualified electors (landowners in the District) will be held to determine if the electors approve the annexation to the District and the levy of the special tax.
City Council Agenda
May 16, 2023
FISCAL IMPACT:
The anticipated revenue from these assessments in FY 2023-24 is $31,448,05. The addition of the new annexation into the special tax district will generate future new revenue as summarized in the following table.
Development Number of Units
JPI/Cenza
Prepared by:
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Elsa Y. Robinson
Senior Management Analyst
Reviewed and approved:
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Luis Estevez
Deputy City Administrator
418
Annual Unit Rate
$146.27
Reviewed and approved:
Jennifer Lampman
Director of Finance
Reviewed and approved:
Damien R, Arrula
City Administrator
Total Annual
Revenue
$61,140.86
Attachments:
1. Resolution No. R-2023-30 — Annual Levy of for CFD 2018-01
2. Resolution No. R-2023-31 — Intention to Annex Territory to CFD 2018-01
3. Rate and Method of Apportionment for CFD 2018-01