Placentia City Council
TO: CITY COUNCIL
VIA: CITY ADMINISTRATOR
FROM: ACTING DIRECTOR OF PUBLIC WORKS
DATE: JUNE 4, 2024
AGENDA REPORT
SUBJECT: SETTING OF THE ANNUAL SPECIAL TAX RATE FOR FISCAL YEAR 2024-25 FOR COMMUNITY FACILITIES DISTRICT NO. 2018-01 (TOD MAINTENANCE
SERVICES)
FISCAL
IMPACT: REVENUE: $95,829.87 (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 pay for the ongoing maintenance and repairs of the public streetscape improvements constructed within the TOD. 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) 2024-25 (Attachment 1).
RECOMMENDATION:
It is recommended that the City Council take the following action:
1. Adopt Resolution R-2024-33, 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); and
2. Authorize inclusion of the Annual Special Tax for Community Facilities District No. 2018-01 (TOD Maintenance Services) for Fiscal Year 2024-25 on the Orange County Secured Property Tax Roll.
STRATEGIC PLAN STATEMENT:
There is no specific Strategic Plan Goal or Objective associated with this Council action.
June 4, 2@ 224.
City Council Agenda
June 4, 2024
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 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 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") contained within the Special Tax Report ("Report") prepared for the formation of the TOD CFD (Attachment 2). 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 specified 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(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
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
June 4, 2024
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, 2023, was 3.5%. Therefore, the special tax rates are being increased by 3.5% as allowed and summarize in the table below:
Table 3: FY 2024-25 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
Current Rates (FY 2023-24
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
FY 2024-25 Assessment
Tax Rate
$164.50 per residential
unit
$133.52 per residential
unit
$151.39 per residential
unit
$0.11 per square foot of
building area
$0.15 per square foot of
building area
$0.07 per square foot of
building area
$0.00
$0.00
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. The second property to be annexed was the JP! Luxury Apartments development at 505 W. Crowther Avenue also as "The Cenza". There are no new annexations for this fiscal year.
FISCAL IMPACT:
The recommended levy assessments for the TOD CFD will generate $95,829.87 in revenue for FY 2024-25. There is no fiscal impact to the general fund with these recommended actions.
City Council Agenda
June 4, 2024
Prepared by: Reviewed and approved:
Elsa Y. Robinson
Senior Management Analyst
Chris Tanio, PE
Acting Director of Public Works
Reviewed and approved: Reviewed and approved:
Jennifer Lampman
Director of Finance
Attachments:
Damien R. Arrula
City Administrator
1. Resolution No. R-2024-33 — Annual Levy for CFD 2018-01
2. Rate and Method of Apportionment for CFD 2018-01