CITY OF~ MIRAG~
~ 21
STAFF REPORT
TO: Mayor and City Council DATE: December 21, 2023
FROM: Jacob De La Cruz, Financial Analyst
SUBJECT: Consideration of Resolution of Intention to Annex Territory Comprising 72.386 Acres to Community Facilities District No. 1 in Connection with Tentative Tract Map No. TTM38291
SPECIFIC REQUEST OR RECOMMENDATION
That the City Council adopt Resolution No. 2023-(Next-in-Order), declaring the City's intention to annex territory to Community Facilities District No. 1 and to levy a special tax therein for additional police and fire services, preliminarily approve a map of the area proposed to be annexed, and schedule a public hearing to consider the annexation and the levy of the special tax for Annexation No. 193.
JUSTIFICATION OR INFORMATION
Procedural Background
The proposed process for this annexation of territory into Community Facilities District No. 1 (police and fire) (sometimes, the "District") is the standard process followed by the City of Rancho Mirage ("City") for all development within the City's jurisdiction. This is the first step in the City's process to complete the annexation of this development project into the District (the second, and last step, will be considered by the City Council at its February 1, 2024 meeting).
Property Information
The territory proposed for annexation ("Annexed Territory") is located on the southwest corner of Monterey Avenue and Gerald Ford Drive.
The Annexed Territory is comprised of four parcels totaling approximately 72.386 acres (gross).
The zoning is Mixed Use (M-U); Section 31 Specific Plan, Planning Areas 1 & Town Center. The project has a condition of approval (#12) to annex into Community Facilities District No. 11.
District Background
The Mello-Roos Community Facilities District Act of 1982 (the "Mello-Roos Act" or the "Act," Government Code§ 53311 et seq.) provides the City with a means of financing public facilities, infrastructure, and services, especially in connection with new development through the imposition of special taxes approved by a vote of the qualified electorate of the District. 1 The Tract Map associated with this p roject also has a condition to annex into the District.
AGENDA ITEM#
21-1
DATE: December 21, 2023
CFO No. 1 Annexation No. 193; Section 31, Phases 1 B & 1 C Page 2 of 4 JUSTIFICATION OR INFORMATION CONTINUED:
On September 27, 1990, the City established the District pursuant to the Act, wherein a special tax is levied on new residential and commercial/industrial developments to recapture costs associated with the provision of additional police and fire services rendered to those new developments that are not reimbursed by property taxes.
In accordance with Condition No. 12 of Tentative Tract Map No. TTM38291, the owner of the Annexed Territory, EC Rancho Mirage Holding GP Corp. (the "Owner"), submitted a Petition for Annexation (the "Petition"), a copy of which is on file in the City Clerk's Office and is incorporated by reference to the attached Resolution of Intention (the "Resolution"), which requests the City Council to initiate annexation proceedings to annex the Annexed Territory into the District and provides for expedited approval of the annexation and the levy of the special tax.
The proposed annexation to the District contains approximately 72.386 acres (gross) as shown on the annexation map attached to the Resolution ("Annexation Map"), which will be preliminarily approved with adoption of the proposed Resolution. This annexation to the District is identified as Annexation Number 193.
The project is slated to subdivide the four parcels into 175 residential lots, some additional remainder lots, lots for open space, recreation, private streets, and a CVWD well site. For illustration purposes only, if residential homes were to be built on the parcels in FY23/24, the estimated annual District revenue generated for this annexation would be $59,454.50 (175 dwelling units x FY23/24 CFD per dwelling unit fee of $339.74 per dwelling unit).
Discussion
The process to accomplish an annexation to a community facilities district is governed by the Act (see Government Code Sections 53339 et seq.). The process can be expedited following the procedures authorized under Government Code Section 53327 of the Act, which permits the City to introduce the proposed Resolution at a City Council meeting and at the next City Council meeting, conduct the public hearing, call the special election, announce the results of the special election, and approve the annexation and levy the special tax using the rate and method of apportionment set forth in Exhibit "B" of the Resolution.
This expedited process is made possible by the Petition received from Owner which asserts, and the City has confirmed, that the Owner owns one hundred percent of the Annexed Territory, which is vacant land. Since Owner is the sole owner of the Annexed Territory, Owner will be the sole participant in the special election to approve the annexation and levy the tax. The Petition allows for a shortening of the time for the special election to expedite the annexation process and waives any requirement for notice, analysis and arguments in connection with the election.
The City Clerk concurs with the shortened time for the election.
Approval of the Resolution would allow the City to do the following:
1. Accept the Petition submitted by Owner requesting that the City initiate proceedings for the annexation of the Annexed Territory to the District, consent to the levy upon the Annexed Territory of the District's special tax for additional police and fire services, allow AGENDA ITEM#
21-2
DATE: December 21, 2023
CFD No. 1 Annexation No. 193; Section 31, Phases 1 B & 1 C Page 3 of 4 JUSTIFICATION OR INFORMATION CONTINUED :
a shortening of the time for the special election to expedite the annexation process, and waive requirements for notice, analysis and arguments in connection with the special election required to be conducted for the annexation.
2. Accept and preliminarily approve the Annexation Map and direct the City Clerk to record the map within fifteen days of the date of the adoption of the Resolution; and
3. Establish the date and time of the public hearing on the annexation and levy of the special tax and direct the City Clerk to mail/deliver to Owner the sole ballot on the issue of the annexation and levy of the special tax, which must be received prior to the start of the public hearing.
Assuming the City Council approves the Resolution, the following steps will remain in order to accomplish the annexation and levy the special tax:
1. The Annexation Map will be recorded.
2. The City Clerk will mail or deliver the special election ballot to Owner with a return deadline that is prior to the start of the public hearing.
3. On the date of the public hearing, the City Council will conduct the public hearing, at which time the qualified electors residing in the District may appear and be heard on the annexation and levy of the special tax. The City Clerk will report at the meeting on the number of protests. In the unlikely event fifty percent (50%) or more of the registered voters residing within the territory proposed to be included in the District file written protests against the levy, no action to annex the Annexed Territory will be taken by the City Council.
4. At the conclusion of the public hearing, provided written protests have not been filed, the City Council will be asked to consider adoption of a resolution calling a special election to submit to Owner, as the sole qualified elector of the Annexed Territory, the question of levying the special tax. The City Clerk will then canvass the voted ballot and report the results of the election to the City Council.
5. Finally, the City Council will consider the adoption of a resolution declaring the results of the election, approving the annexation of the Annexed Territory and the levy, and directing the City Clerk to complete, execute and cause to be recorded an amendment to the Notice of Special Tax Lien in the form required by the Act, within fifteen days of the date of the adoption of the resolution, as required by Section 3117.5 of the California Streets and Highways Code.
California Environmental Quality Act (CEQA)
The annexation of territory to a community facilities district constitutes the creation of a funding mechanism and/or other governmental fiscal activity, which will not involve commitment to a specific project that may result in a potentially significant physical impact on the environment.
AGENDA ITEM#
21-3
DATE: December 21, 2023
CFD No. 1 Annexation No. 193; Section 31, Phases 1 B & 1 C Page 4 of 4 JUSTIFICATION OR INFORMATION CONTINUED:
As such, the proposed annexation and levy of the special tax are exempt from environmental review under the California Environmental Quality Act ("CEQA"), pursuant to sections 15378(b) and 15061 (b)(3) of the CEQA Guidelines.
Attachment(s)
1. Resolution
AGENDA ITEM#
21-4
ATTACHMENT 1
RESOLUTION
(SEE ATTACHED)
21-5
RESOLUTION NO. 2023-__
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO MIRAGE,
CALIFORNIA, DECLARING THE CITY'S INTENTION TO ANNEX TERRITORY TO COMMUNITY FACILITIES DISTRICT NO.1 AND TO LEVY A SPECIAL TAX THEREIN
FOR ADDITIONAL POLICE AND FIRE SERVICES, PRELIMINARILY APPROVE A
MAP OF THE AREA PROPOSED TO BE ANNEXED, AND SCHEDULE A PUBLIC
HEARING TO CONSIDER THE ANNEXATION AND THE LEVY OF SPECIAL TAX FOR ANNEXATION NO. 193
WHEREAS, on September 27, 1990, the City Council (the "City Council") of the City of Rancho Mirage (the "City"), a charter city and recognized for certain purposes as a political subdivision of the State of California, approved Resolution No. 90-78 establishing Community Facilities District No. 1 (the "District") pursuant to the Mello-Roos Community Facilities Act of 1982 (the "Mello-Roos Act," Government Code§§ 53311 et. seq.), for the purpose of levying a special tax on parcels to provide funding for additional police and fire services, which are necessary to meet increased demands placed upon the City as a result of the development of the territory within the District; and WHEREAS, under the Mello-Roos Act, the City Council, as the legislative body for the District, is empowered with the authority to annex territory to the District; and WHEREAS, the City Council has received a petition from EC Rancho Mirage Holding GP Corp. ("Owner") requesting that the City initiate proceedings for the annexation of territory (the "Annexed Territory") to the District, and consent to the levy of the District's special tax upon the parcels located within the Annexed Territory (such process is sometimes referred to as "Annexation No. 193"); and WHEREAS, the petition received from Owner asserts and the City has confirmed Owner owns one hundred percent (100%) of the real property within the Annexed Territory, which is vacant land without registered voters residing thereon, and which is currently comprised of four parcels, also known as Riverside County Assessor's Parcel Numbers 685-220-016, 685-220-026, 685-220-032 and 685-220-039, which are located within the City's boundaries; and
WHEREAS, in order to avail the City of the expedited annexation process authorized by the Mello-Roos Act, Owner has authorized the distribution of official ballots by mail or by personal delivery and has authorized that such ballots be opened and canvassed and the results certified at the February 1, 2024, City Council meeting at which the annexation of the Annexed Territory to the District is to be heard; and WHEREAS, the City Attorney has advised the proceedings for this annexation were initiated in accordance with Government Code Sections 53339-53339.9 of the Mello-Roos Act, as they pertain to annexations; and
WHEREAS, the City Council now desires to undertake proceedings to annex the Annexed Territory to the District.
21-6
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO MIRAGE DOES HEREBY RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
Section 1. Recitals.
That the Recitals set forth above are true and correct.
Section 2. Determinations.
(a) That the petition submitted by Owner (the "Owner's Petition"), a copy of which is on file in the City Clerk's Office, is incorporated herein by this reference, and is received and accepted.
(b) That based upon the representations set forth in the Owner's Petition and staff's analysis of the same, the City Council determines to undertake proceedings to accomplish the annexation.
(c) That pursuant to Section 53339.7 of the Mello-Roos Act, the proposition of the levy of the special tax shall be submitted to the qualified electors (as defined below) of the District at an election called therefor as provided below. (d) That there are fewer than twelve (12) registered voters residing in the Annexed Territory and in accordance with Section 53326 of the Mello-Roos Act, for these proceedings, the sole qualified elector is Owner, who shall have one vote for each acre or portion of acre they own within the Annexed Territory. (e) That the applicable provisions of Section 53339.3 of the Mello-Roos Act requiring a minimum number of days following the adoption of the Resolution of Intention to elapse before the special election are for the protection of the qualified electors of the District.
(f) That the Owner's Petition allows for a shortening of the time for the special election to expedite the annexation process and waives any requirement for notice, analysis and arguments in connection with the election. (g) That the qualified electors have been fully apprised of and have agreed to the shortened time for the election and waiver of analysis and arguments and have thereby been fully protected in these proceedings.
(h) That the City Clerk has concurred in the shortened time for the election.
Analysis and arguments with respect to the ballot measures are hereby waived, as provided in Section 53327 of the Mello-Roos Act.
Section 3. Territory Described.
(a) That the territory included in the District is as shown on the map thereof filed in Book Number 685, Page 220, in the office of the County Recorder, County of Riverside, 2 21-7
California and the territory in the District has been expanded through annexations of additional territory to the District since the date of recording of such map. (b) That the territory now proposed to be annexed to the District is as shown on Annexation Map No. 193 of Community Facilities District No. 1 of the City of Rancho Mirage, County of Riverside, California (the "Annexation Map"), attached hereto as Exhibit "A" and incorporated herein by this reference, which is on file with the City, the boundaries of which territory are hereby preliminarily approved and to which map reference is hereby made for further particulars.
(c) That the City Clerk is hereby directed to cause the Annexation Map to be recorded in the office of the County Recorder, County of Riverside, California within fifteen days of the date of adoption of this resolution.
Section 4. Services.
That the types of public services financed by the District pursuant to the Mello Roos Act consist of additional police and fire services (the "Services"), as described in Resolution No. 90-78, adopted by the City Council on September 27, 1990 (the "Resolution of Formation") and that it is presently intended that the Services will be shared, without preference or priority, by the existing territory in the District and the Annexed Territory.
Section 5. Special Tax.
(a) That except to the extent that funds are otherwise available to the District to pay for the Services, a special tax sufficient to pay the costs thereof is intended to be levied annually within the District, and collected in the same manner as ordinary ad valorem property taxes.
(b) That the special tax proposed to pay for Services to be supplied within the Annexed Territory will be equal to the special taxes levied to pay for the same Services in the District, except that a higher or lower rate may be levied within the Annexed Territory or territory to be annexed in the future to the extent that the actual costs of providing the Services in that territory is higher or lower than the cost of providing these Services in the District.
(c) That the existing rate and method of apportionment of special tax among the parcels of real property within the existing territory of the District, as described in Exhibit "A" to the Resolution of Formation, will not be altered in connection with the proposed annexation.
(d) That for particulars as to the rate and method of apportionment of the proposed special tax, reference is made to the attached and incorporated Exhibit "B," which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within the Annexed Territory to clearly estimate the maximum amount that said person will have to pay on said special tax.
3 21-8
Section 6. Public Hearing.
(a) That on February 1, 2024, or as soon as possible thereafter, in the City Hall, Council Chambers at 69-825 Highway 111, Rancho Mirage, California, the City Council will conduct a public hearing on the proposed annexation of the Annexed Territory to the District, the proposed levy of the special tax and all other matters as set forth in this resolution. In consideration of the Owner's Petition, the applicable waiting period under the Mello-Roos Act for the holding of the public hearing is waived. (b) That at the public hearing, any persons interested, including all taxpayers, owners of property within the District, and registered voters residing within the District, may appear and be heard, and the testimony of all interested persons or taxpayers for or against the proposed annexation and the levy of the special tax within the territory to be annexed, or the additional police and fire services to be provided, or any other matters set forth herein, will be heard and considered.
(c) That any protests to the foregoing may be made orally or in writing by any interested persons or taxpayers, except that protests pertaining to the regularity or sufficiency of the proceedings must be in writing and must clearly set forth the irregularities and defects to which the objection is made. (d) That the City Council may waive any irregularities in the form or content of any written protest and at the Public Hearing may correct minor defects in the proceedings. All written protests must be filed with the City Clerk on or before the time fixed for the Public Hearing and any written protest may be withdrawn in writing at any time before the conclusion of the Public Hearing.
Section 7. Notice of Hearing
That the City Clerk is hereby directed to publish, or cause to be published, a notice of the public hearing one time in a newspaper of general circulation published in the Annexed Territory, in accordance with Government Code Section 53339.4. Said notice shall contain the information prescribed in Government Code Section 53339.4 of the Mello-Roos Act and publication of said notice shall be completed at least seven (7) days prior to the date herein fixed for the public hearing.
Section 8. Election Ballot
That the City Clerk is directed to mail or deliver, or cause to be mailed or delivered to the Owner at the Owner's address listed on the Owner's Petition an election ballot, in the form and within the time specified by the Mello-Roos Act.
Section 9. Election.
(a) That provided written protests have not been filed by fifty percent or more of the registered voters residing within the District or by fifty percent or more of the registered voters residing within the Annexed Territory, or by the owners of one-half (1/2) or more of the area within the District or by the owners of one-half (1/2) or more of the 4 21-9
Annexed Territory, the levy of the special tax shall be subject to the approval of Owner, as the sole owner of land within the Annexed Territory, at a special election. (b) That in consideration of the Owner's Petition, the applicable waiting period under the Mello-Roos Act for the holding of the election and the necessity for ballot arguments and analysis are waived.
(c) That the special election shall be held immediately following the close of the public hearing at which the City Council is to consider the annexation, or as soon thereafter as possible, at which time the ballot shall be opened and canvassed and the results certified.
Section 10. Severability.
That should any provision, section, paragraph, sentence or word of this Resolution be rendered or declared invalid by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences or words of this Resolution as hereby adopted shall remain in full force and effect.
Section 11. Repeal of Conflicting Provisions.
That all the provisions heretofore adopted by the City Council that are in conflict with the provisions of this Resolution are hereby repealed.
Section 12. Effective Date.
That this Resolution shall take effect upon its adoption.
Section 13. Certification.
That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
5 21-10
PASSED, APPROVED AND ADOPTED on this 21 st day of December 2023.
CITY OF RANCHO MIRAGE:
Steve Downs, Mayor
ATTEST:
Kristie Ramos, City Clerk
APPROVED AS TO FORM:
Colin Kirkpatrick, City Attorney
Exhibit "A": Map of Annexed Territory
Exhibit "B": Rate and Method of Apportionment of Special Tax 6 21-11
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PROPOSED BOUNDARY OF CITY OF RANCHO MIRAGE COMMUNITY FACILITIES DISTRICT NO. 1, ANNEX 193
(A PORTION or SECTION 31, TOWNSHIP 4 SOUTH, RANGE 6 EAST, S.B.M.)
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EXHIBIT "B"
Rate and Method of Apportionment of Special Tax
RATE AND AMOUNT OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 1 (POLICE AND FIRE)
DETERMINATION OF MUNICIPAL SERVICE COSTS
The fo l lowing procedures are used to establish the applicable specia l tax rate for all residential and commercial/industrial property subject to the Special Tax levied in accordance with the Rate and Method of Apportionment for Community Facilities District No. 1. For the FY 2023/24 tax year , the determination of tax rates is reflected below.
STEP ONE: Determine the amount of unreimbursed services costs.
Police
Fire
SERVICE
FY 2 021 / 22
ACTUAL EXPENSES
$9,811, 713 1
$7,479 , 603 3
1 2022 Annual Comprehensive Financial Report
FY 2 021 / 22
ACTUAL REVENUE
$238 , 384 2
$7,721, 625 4
Net FY 2 021 / 22
EXPENSES
$9,573 , 329
-$24 2 , 022
2 2022 Annual Comprehensive Financial Report, Fines and Forfeitures (VICR, Parking Tickets, Fund 105 transfer only)
3 2022 Annual Comprehensive Financial Report
4 Finance Department (Revenue Status Report FY21/22)
STEP TWO: Apportion service cost to land use categories.
LAND USE PERCENT AMOUNT
SERVICE CATEGORY ATTRIBUTABLE ATTRIBUTABLE
Police 11 1 Residential 47% $4 , 538 , 951
Commercial/Industrial 53% 5 , 034 , 378
$9 , 573 , 329
Fire 121 Residential 67% ($161,348)
Commercial/Industrial 33% (80,674)
($242,022)
TOTAL $9,331,307
(1) Police Costs: Percent attributable provided by Lieutenant Christopher Willison, Riverside County Sheriff ' s Department, Records for January 1-December 31 , 2022 .
( 2) Fire Costs: Percen t attribu table provided by Battalion Chief Matthew Kotz, and Riverside County Fire Department/CalFire from 2022 Cove Commission Annual Fire Report .
8 21-13
STEP THREE: Determine incremental cost of additional services .
SERVICE LAND USE INVENTORY NET
COSTS
INCREMENTAL
COSTS
Poli c e Res i dential 14 , 817 units <a>
Commercial/Industria l 5 , 893 ,1 85 sq . ft . (b l
Fire Residential 14 , 817 un i ts ( aj
Commercial/Industrial 5 , 893 , 185 sq . ft . (bl
$4 , 358 , 95 1
5 , 034 , 378
($161 , 348)
(80 , 674)
$306 . 33
$0 . 85
($10 . 89)
($0 . 01)
( aj So u rce : California Depa r t ment of Finance , E- 5 City Population & Housing Esti mates , Ja nu a r y 1, 2023.
(b l Sour c e : Based on total c ommercial square footage as of 3/3 1/ 23 .
Tota l Re s ide n tial i s $295 . 44 ; total Commercial is $0 . 84 STEP FOUR: Compare Amount Against CPI Limitations.
(The Communit y Fa c ilities Distri c t may not increas e the f ee higher than two tim es the annual Con s umer Price Inde x )
FACTOR
1 ) I ni t i al Rate
2 ) Base CPI (9/90)
3 ) Cu rrent CPI ( 1/23 )
4) Percent Increas e
5) Allowed Increas e
(2x )
6 ) P r oposed Tax
(wi tho u t Admin Ch arge )
7) Pe r cent Increase
8 ) With i n Allowable
I nc r ease?
AMOUNT FACTOR UNIT/ SOURCE
$129 . 96 Residential /unit (September 1990)
.38 Commerc i a l/S q . Ft . ( Septe mber 199 0 )
50 . 258 Converted fr om Los An geles-Long Beach- Ana hei m to Ri v erside San Bernardin o - On t a ri o -All Urban Consum e r s , All Items 127 . 683
154 . 1%
308 . 1%
$295 . 44 Per res i de nti al unit
0 . 84 Per commercial square foot
127 . 3% Residential
121. 1% Commercial
Yes Resident i al
Yes Commercia l
STEP FIVE: Determine If Collection Is Required for Prior Fiscal Year (The District may c oll e ct unrec o v e r e d costs from a prior fiscal y e ar provided that the Proposed Assessm e nt wi thout the Admini s trative Charg e does not e xcee d th e allowable inc r e as e of two times the annual Consumer Price Inde x .)
NOT APPLICABLE
9 21-14
STEP SIX: Identify Administrative Charges and Offsetting Property Tax
LAND INCREMENTAL ADMINISTRATIVE TOTAL PROPERTY
USE COST CHARGES (15%) ASSESSMENT TAX
Residential $295.44/unit $44.30 $339.74 To be
determined
Commercial $0.84/sq.ft $0.12 $0. 96 To be
determined
At the conclusion of STEP SIX, the amount of reimbursement can be determined and assessed annually to each parcel owner . [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
10 NET SERVICE
COST
To be
determined
To be
determined
21-15