Agenda Item No: 1.e
PLACENTIA CITY COUNCIL AGENDA REPORT
Meeting Date: June 3, 2025
Submitted by: Kiana Louie
From: Public Works
Subject:
Setting of the Annual Special Tax Rate for Fiscal Year 2025-26 for Community Facilities District No. 2014-01 (Public Services CFD)
Financial Impact:
Fiscal Impact:
There is no General Fund impact as a result of this special tax levy for public safety services.
If the recommended actions are approved, a total of 234 parcels will be assessed at the adjusted special tax rates as summarized below:
Land Use Type Number of
Parcels
Number of
Units Rate Total
Single-Family
Residential
Property
233 233 390.684 $91,029.37
Multi-Family
Residential
Property
1 418 295.186 $123,387.75
Total 234 $214,417.12
The total anticipated revenue from these assessments in FY 2025-26 is $214,417.12 .
Summary:
On February 18, 2014, the City Council adopted Resolution No. R-2014-10, establishing Community Facilities District No. (“CFD”) 2014-01 (“Public Services CFD”) to provide an ongoing sustainable funding source paid for by new developments to help fund the cost of public safety services. On March 4, 2014, the City Council adopted Ordinance No. 2014-03, authorizing the City Council to determine, by resolution, on or before August 1st of each year, the specific special tax to be levied on each parcel of land within the CFD. 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 public safety services for Fiscal Year (FY) 2025-26 (Attachment 1).
Recommendation:
Recommended Action: It is recommended that the City Council take the following actions:
1. Adopt Resolution No. R-2025-23, a Resolution of the City Council of the City of 1 Placentia, California, setting the levy of an Annual Special Tax for Community Facilities District No. 2014-01 (Public Services) for Fiscal Year 2025-26; and
2. Authorize inclusion of the Annual Special Tax for Community Facilities District No. 2014- 01 (Public Services) for Fiscal Year 2025-26 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.
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 2014, the City Council created CFD 2014-01 to provide a new revenue stream paid for by new residential developments to be used to help fund the cost of public safety services. All new residential development projects are required to annex their properties into the Public Services CFD as a condition of approval for receiving their entitlements. The special tax that is currently being assessed on properties within the CFD is based upon a Fiscal Impact Analysis (“FIA”) that was prepared for the initial formation of the CFD in 2014. Based on the FIA, the tax rate needed to support public safety services for new residential developments was established at $225.00 for each single-family residential unit per year. Therefore, the special tax rates for 2014-15 were $225.00 per residential unit for single-family residential property and $170.00 per residential unit for multi-family residential property. For the tax to be applied to a parcel, either construction must be completed or a building permit for the home needs to be issued by the City by June 1 of the preceding fiscal year.
FY 2025-26 Annexations to CFD
City Council Resolution No. R-2014-04 designated the entire territory of the City as a future annexation area for the District. This resolution also allows for voluntary annexation into the District. Annexations can occur without additional public hearings as long as the annexing landowner provides unanimous consent. To date, a total of 234 parcels have been annexed into the CFD. Since July 2024, the City has not received any new landowner petitions for annexations into the CFD as a result of new development.
FY 2025-26 Special Tax Rates
The CFD is subject to an Annual Escalation Factor beginning on July 1, 2015, which shall be the greater of five percent (5%) or the annual percentage increase, if any, of the Consumer Price Index for the twelve (12) months ending the preceding December 31. The index identified in the Rate and Method of Apportionment from 2014 was the All-Urban Consumers (CPI-U) for Los Angeles-Riverside-Orange County area. However, in January 2018, the Bureau of Labor and Statistics split the index geographically into a Los Angeles-Long Beach- Anaheim area and a Riverside-San Bernardino-Ontario area. The City has determined that the Los Angeles-Long Beach-Anaheim index is the most appropriate index as it includes both Los Angeles and Orange Counties. The CPI for the 12 months ending the preceding 2 December 31, 2024 was 3.4%. Therefore, the special tax rates are being increased by 5% as allowed. The adjusted special tax rates for FY 2025-26 are summarized below:
Land Use Type FY 2025-26 Special Tax Rate
Single-Family Residential Property $390.684 per residential unit Multi-Family Residential Property $295.186 per residential unit Fiscal Impact Summary:
Revenue: $214,417.12 Recouped Through Assessments (550000-4505) Attachments
Attachment 2 - Rate and Method of Apportionment for CFD 2014-01.pdf Attachment 1 - Resolution No. 2025-23 CFD 2014-01.pdf
3 RATE AND METHOD OF APPORTIONMENT OF
SPECIAL TAX
CITY OF PLACENTIA
COMMUNITY FACILITIES DISTRICT NO. 2014-01
(PUBLIC SERVICES)
A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels within the City of Placentia Community Facilities District No. 2014-01 (Public Services), ("CFD No. 2014-01"), other than Assessor's Parcels classified as Exempt Property as defined herein, and collected each Fiscal Year commencing in Fiscal Year 2014-2015, in an amount detei1nined by the C D Administrator through the application of the procedures desc11bed b low. All of the real property within CFD No. 2014-01, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided, including property subsequently annexed to CFD No. 2014-01, unless a separate Rate and Method of Apportionment of Special Tax ls adopted for the annexation area.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel, expressed in acres, as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent map or instrument recorded in the Office of the Country Recorder. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560.
"Act" means the Mello-Roos Communities Facilities Act of 1982 as amended, being Chapter
2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or r.easonably estimated expenses related to the administration of <CFD No. 2014-01: the costs of determining the amount of the levy of Special Taxes, the collection of Special Taxes, including the expenses of collecting delinquencies ~tnd pursuing foreclosutes, the payment of a proportional share of salaries and benefits of any City employee and City overhead whose duties are directly related to the administration of CFD No. 2014-01, fees and expenses for counsel, audits, costs associated with responding to public inquiries regarding CPD No. 2014-01, and any and all other costs incurred in connection with the administration of CFD No. 2014-01. "Annual Escalation Factor" means the greater of five percent (5%) or the annual percentage increase, if any, of the All Urban Consumers Consumer Price Index ("CPI").
The annual CPI used shall be for the area of Los Angeles -Riverside -Orange County, CA as determined by the Bureau of Labor Statistics for the twelve (12) months ending the preceding December 31.
"Assessor's Parcel" means a Condominium lot, Lot, or parcel shown in an Assessor's Parcel Map with an assigned assessor's parcel number.
"Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by assessor's parcel number.
"Base Year" means Fiscal Year beginning July 1, 2014 and ending June 30, 2015 . ..ii.i~YWILLDAN I 1 CFD No. 2014-01 Yt.r.1 Financial Sarvlcee EXHIBIT 8
ATTACHMENT 2 4
"Boundary Map" means the map of the boundaries of CPD No. 2014-01 recorded on January 21, 2014 in the Orange County Recorder's Office in Book 94, Pages 46, of Maps of Assessments and Community Facilities Districts (instrument number 2014-24969), as the same may be amended by annexation from time to time hereafter. "Building Permit" means a permit issued for new construction of a residential dwelling. For purposes of this defmition, "Building Permit" shall not include permits for construction or installation of retaining walls, grading, utility improvements, or other such improvements not intended for human habitation.
"CFD Administrator'' means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement for Services and providing for the levy and collection of the Special Taxes for CFD No. 2014-01.
"CFD No. 2014-01" means City of Placentia Community Facilities District No. 2014-01 (Public Services) established by the City Council under the Act. "City" means the City of Placentia.
"City Council" means the Council of the city of Placentia, acting as the legislative body of CFD No. 2014-01.
"Condominium" means an estate in real property consisting of an undivided interest in common in a portion of a parcel of real property together with a separate interest in space in a residential, industrial or commercial building on such real property, such as an apartment, office or store. A condominium may include in addition a separate interest in other portions of su-:h real property. Such estate may, with respect to the duration of its enjoyment, be either:
(1) An estate of inheritance or perpetual estate;
(2) An estate for life; or
(3) An estate for years, such as a leasehold or a sublease hold. "County" means the County of Orange.
"Developed Property" means an Assessor's Parcel of Taxable Property for which a Building Permit was issued on or before June 1 preceding the Fiscal Year for which Special Taxes are being levied.
"Developed Residential Property" means an Assessor's Parcel of Taxable Property for which a Building Permit was issued on or before June 1 preceding the Fiscal Year for which Special Taxes are being levied and which Building Permit was issued for purposes of constructing one or more Residential Unit(s).
"Exempt Property" means all Assessor's Parcels within CFD No. 2014-01 that are exempt from the Special Taxes pursuant to law or Section F herein. "Final Map" means an Assessor's Parcel Map, a Final Subdivision Map, condominium plan, lot line adjustment, or any other map functionally considered to be an equivalent developmeu map that has been recorded in the Office of the County Recorder. "Final Subdivision Map" means a subdivision of property creating single family residential buildable Lots by recordation of a final subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code § 66410, et seq.), or recordation of a condominium plan pursuant to California Civil Code § 1352, that creates individual Lots or condominium lots for which building permits may be issued without further subdivision and is recorded prior to June 1 preceding the Fiscal Year in which the Special Tax is being levied. "Fiscal Year" means the period commencing on July 1 of any year and ending the following June 30.
•e/w1LLDAN I 2 cFD No. 2014-01 U! Financial Services ATTACHMENT 2 5
"Future Annexation Area" means the areas designated for potential future annexation to CFD No. 2014-01 as shown in the "Map of Proposed Boundaries of City of Placentia Future Annexation Area of Community Facilities District No. 2014-01 (Public Services)" recorded and on file with the Orange County Recorder's Office.
"Land Use Type" means any of the land use types listed in Table 1 below. "Lot" means property within a Final Map identified by a lot number or condominium number for which a Building Permit has been issued or may be issued. "Maximum Special Tax" means the maximum Special Tax determined in accordance with Section C, which may be levied in any Fiscal Year on an Assessor's Parcel of Taxable Property. "Multi-Family Residential Property" or "MFR Property" means all Assessor's Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing a residential structure consisting of five (5) or more residential units that share common walls, including, but not limited to, condominiums, and apartment units. "Property Owner Association Property" means for each Fiscal Year any property within the boundaries of CFD 2014-01 that was owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder to, a property owner association, including any master or sub-association, as of June 1.
"Proportionately'' means in a manner such that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels within each Land Use Type. "Public Property" means any property that is owned by, dedicated or irrevocably dedicated to a city, the federal government, the State of California, the County, or any other public agency (each, a "Public Entity"); provided, however, that if any such property is leasep by such a Public Entity to a private entity and is thereby subject to taxation pursuant to § 53340.1 of the Act, such leasehold estate shall be classified and taxed according to the use thereof. "Residential Property" means all Assessor's Parcels of Developed Property within CFD No. 2014-01 for which a Building Permit has been issued for purposes of constructing one or more Residential Unit(s).
"Residential Unit" means any residence in which a person or persons may live, which is not considered to be used for non-residential purposes.
"Services" means those authorized services that may be funded by CFD No. 2014-01 pursuant to the Act, as amended, including, without limitation, those services authorized to be funded by CFD No. 2014-01 as set forth in the documents adopted by the City Council at the time CFD No. 2014-01 was formed.
"Single-Family Residential Property" or "SFR Property" means an Assessor's Parcel classified as Developed Property for which a Building Permit(s) has been issued for purposes of constructing one or more single-family residential dwelling units including residential structures or Condominium structures that consist of 4 or fewer units which share common walls. "Special Tax" means the special tax authorized to be levied within CFD No. 2014-01 pursuant to the Act to fund the Special Tax Requirement.
"Special Tax Requirement" means the amount, as determined by the CFD Administrator, for any Fiscal Year to: (i) pay the costs of providing the Services during such Fiscal Year, (ii) pay Administrative Expenses associated with the Special Tax, (iii) establish or replenish any operational reserve fund established for Services, (iv) pay incidental expenses related to the Services as authorized pursuant to the Act, (v) fund an amount equal to a reasonable estimate ...... a.,/w1LLDAN I
-.:· Flnanolal Sorvlcea
3 CFD No. 2014-01 ATTACHMENT 2 6
of delinquencies expected to occur in the Fiscal Year in which the Special Tax will be levied ("Estimated Special Tax Delinquency Amount") and (vi) fund the shortfall, if any, in the Special Tax revenues collected in the preceding Fiscal Year necessary to fund the Special ·Tax Requirement for Services for such Fiscal Year where such shortfall resulted from delinquencies in the payment of Special Taxes in such Fiscal Year that exceeded the Estimated Special Tax Delinquency Amount included in the Special Tax Requirement for Services for such Fiscal Year.
"Taxable Property" means all Assessor's Parcels that are not exempt from the Special Tax pursuant to law or Section F.
"Undeveloped Property'' means an Assessor's Parcel of Taxable Property for which a Building Permit has not been issued on or before June 1 preceding the Fiscal Year for which Special Taxes are being levied.
B. CLASS/FICA TION OF ASSESSOR'S PARCELS
Each Fiscal Year, beginning with Fiscal Year 2014-2015, using the definitions above, each Assessor's Parcel within CFD 2014-01 shall be classified by the CFD Administrator as Taxable Property or Exempt Property. In addition, each such Fiscal Year, each Assessor's Parcel of Taxable Property shall be further classified by the CFD Administrator as Developed Property or Undeveloped Property. Developed Property shall be further classified as Single-Family Residential Property or Multi-Family Residential Property. Commencing with Fiscal Year 2014-2015 and for each subsequent Fiscal Year, Developed Residential Property shall be subject to the levy of Special Taxes pursuant to Section C below.
C. MAXIMUM ANNUAL SPECIAL TAXES
1. Developed Residential Property
Each Fiscal Year commencing in Fiscal Year 2014-2015, each Assessor's Parcel of Developed Residential Property shall be subject to the Special Tax. The Maximum Special Tax for Developed Residential Property for Fiscal Year 2014-2015 is shown below in Table
1. TABLE 1
DEVELOPED RESIDENTIAL PROPERTY
MAXIMUM SPECIAL TAX RATES
Land Use Type Maximum
Special Tax
Residential
SFR Property $225 per Residential Unit
MFR Property $170 per Residential Unit
For each subsequent Fiscal Year following the Base Year, the Maximum Special Tax rate shall be increased from the Maximum Special Tax rate in effect for the prior Fiscal Year by the Annual Escalation Factor.
~!&/WILLDAN I R Financial Sarvlcee
4 CFD No. 2014-01
ATTACHMENT 2 7
2. Annexed Property
Each Fiscal Year commencing in Fiscal Year 2014-2015, each Assessor's Parcel of Developed Residential Property that has been annexed into CFD 2014-01 shall be subject to the prevailing Special Tax in effect during the then current Fiscal Year and as determined by Section C.1 above.
3. Undeveloped Property
Each Fiscal Year commencing in Fiscal Year 2014-2015, each Assessor's Parcel classified as Undeveloped Property shall be exempt from the levy of the Special Tax
4. Exempt Property
No Special Tax shall be levied on Exempt Property as defined in Section F.
For each Fiscal Year, if the use or ownership of an Assessor's Parcel or Exempt Property changes so that such Assessor's Parcel is no longer classified as one of the uses set forth in Section F, therefore making such Assessor's Parcel no longer eligible to be classified as Exempt Property, such Assessor's Parcel shall be deemed to be Taxable Property and shall be taxed pursuant to the provisions of Section C.
D. METHOD OF APPORTIONMENT OF SPECIAL TAX
Commencing in Fiscal Year 2014-2015 and for each subsequent Fiscal Year, the CFD Administrator shall levy the Special Tax on all Taxable Properr; of CFD No. 2014-01 until the total amount of Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property within CFD No. 2014-01 up to 100% of the applicable Maximum Special Tax to satisfy the Special Tax Requirement.
Notwithstanding any provision of this Section D to the contrary, under no circumstances will the Special Tax levied against any Assessor's Parcel of Developed Property that is classified as Residential Property be increased by more than ten percent (10%) per Fiscal Year as a consequence of delinquency or default in t:l-.e payment of Special Taxes by the owner of any other Assessor's Parcel, excluding therefrom the increased amount levied pursuant to the Annual Escalation Factor.
E. PREPAYMENT OF SPECIAL TAX
The Special Tax shall be levied in perpetuity for the purpose of financing ongoing authorized services and therefore may not be prepaid.
F. EXEMPTIONS
The City Council shall classify as Exempt Property: (i) Public Property, (ii) Property Owner Association Property, (iii)Assessor's Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, including but not limited to property designated for open space, trails, pathways, parks or park and recreation related facilities, (iv) property reasonably designated by the City or CFD Administrator as Exempt Property due to deed restrictions, conservation easement, or similar factors. ~·•<YWILLDAN I -Wi Financial Servlce8 5 CFD No. 2014-01 ATTACHMENT 2 8
G .. APPEALS
Any property owner claiming that the amount or application of the Speci:1l Tax is not correct may file a written notice of appeal with the CPD Administrator not later than twelve months after having paid the first installment of the Special Tax that is disputed. The CPD Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the decision of the CPD Administrator requires that the Special Tax for an Assessor's Parcel be modified or changed in favor of the property owner, a cash refund shall not be made but an adjustment shall be made to the Special Tax on that Assessor's Parcel in the subsequent Fiscal Year(s) to compensate for the overpayment of the Special Tax.
H. MANNER OF COLLECTION
The annual Special Taxes shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that the Special Taxes may be billed and collected at a different time or in a different manner if necessary to meet the financial obligations of CPD No. 2014-01.
.&ca.:o/w1 LLDAN I ft Financial SeNicee
6 CFD No. 2014-01
ATTACHMENT 2 9
Resolution R-2025-23
RESOLUTION NO. R-2025-23
A RESOLUTION OF CITY COUNCIL OF THE CITY OF
PLACENTIA, CALIFORNIA, SETTING THE LEVY OF AN
ANNUAL SPECIAL TAX FOR COMMUNITY FACILITIES
DISTRICT NO. 2014-01 (PUBLIC SERVICES) FOR FISCAL
YEAR 2025-26
A. Recitals.
(i). The City Council of the City of Placentia (“City Council”), has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors to authorize the levy of a special tax in a community facilities district, all as authorized pursuant to the terms and provisions of the “{Mello -Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the California Government Code (“Act”) denominated COMMUNITY FACILITIES DISTRICT NO. 2014-01 (Public Servicers) (“District”).
(ii). The City Council, by adoption of Ordinance No. 2014-03 (“Ordinance”) as authorized by § 53340 of the California Government Code, has authorized the levy of special taxes within the District to finance the authorized service in accordance with the Rate and Method of Apportionment of the Special Tax (“RMA”) set forth in Exhibit “B” to the Resolution of Formation, which is on file in the office of the City Clerk and incorporated by reference herein.
(iii). California Government Code § 53340 provides that the City Council may provide, by resolution, for the levy of the special tax in the current tax year or future tax years at the same rate or at a lower rate than the rate provided by the Ordinance, if the resolution is adopted and a certified list of all parcels subject to the special tax levy including the amount of the tax to be levied on each parcel for the applicable tax year, is filed by the Clerk or other official designated by the legislative body with the county auditor on or before the 10th day of August of that tax year.
(iv). The RMA provides for an annual escalation factor of the greater of five percent (5%) or the annual percentage increase, if any, of the All Urban Consumers Consumer Price Index (“CPI”) for the Los Angeles – Riverside – Orange County, CA area as determined by the Bureau of Labor Statistics for the twelve (12) months ending the preceding December 31, 2024.
(v). The All Urban Consumers Consumer Price Index (“CPI”) for the Los Angeles– Long Beach-Anaheim, CA area (part of the former Los Angeles-Riverside-Orange County, CA area) as determined by the Bureau of Labor Statistics for the twelve (12) months ending the preceding December 31, 2024 was 3.4%.
B. Resolution.
10 Resolution R-2025-23
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PLACENTIA DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
1. The facts set forth in the Recitals, Part A of this Resolution, are true and correct.
2. This City Council does hereby find and determine as follows:
A. The annual escalation for FY 2025-26 shall be 5%.
B. The City Council hereby levies a special tax within the District for Fiscal Year 2025-26 at the rate of $390.684 per residential unit for single-family residential property and $295.186 per residential unit for multi-family residential property.
C. The CFD Administrator herby is authorized and directed to file with the County Auditor on or before the 10th day of August a certified copy of this Resolution accompanied by a list of all parcels subject to the special tax levy with the taxes to be levied on each parcel based on the 2025-26 special tax rates set forth in Part B of this Resolution.
D. The special tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and same procedure and sale in cases of any delinquency for ad valorem taxes, and the Tax Collector is hereby authorized to deduct reasonable administrative costs incurred in collecting any said special tax.
E. The County Auditor is hereby directed to enter in the next County assessment roll on which taxes will become due, opposite each lot or parcel of land affected, in a space marked “Public Services Special Tax” or by any other suitable designation, the installment of the special tax.
F. The County Auditor shall, at the close of the tax collection period, promptly render to the District a detailed report showing the amount and/or amounts of such special tax installments, interest, penalties, and percentages so collected and from what property collected, and also provide a statement of any percentages retained for the expense of making any such collection.
G. This Resolution shall become effective upon its adoption.
APPROVED and ADOPTED this 3rd day of June 2025.
Kevin Kirwin, Mayor
ATTEST:
11 Resolution R-2025-23
_________________________________
Robert S. McKinnell, City Clerk
STATE OF CALIFORNIA
COUNTY OF ORANGE
I, Robert S. McKinnell, City Clerk of the City of Placentia do hereby certify that the foregoing Resolution was adopted at a regular meeting of the City Council held on the 3rd day of June 2025 by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ABSTAIN: Councilmembers:
______________________________
Robert S. McKinnell, City Clerk
APPROVED AS TO FORM:
___________________________________
Christian L. Bettenhausen, City Attorney
12