Susana Alcala Wood, City Attorney Jorge Oseguera, City Auditor Mindy Cuppy, City Clerk Howard Chan, City Manager John Colville, City Treasurer City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00043 February 8, 2022 Consent Item 11
Title: Ordinance to Repeal Ordinance No. 2019-0036 and Levy Special Taxes within the Delta Shores Community Facilities District No. 2019-01 (Improvements)
Location: Districts 7 and 8
Recommendation: Adopt an Ordinance Repealing Ordinance No. 2019-0036 and Levying Special Taxes Within the City of Sacramento Delta Shores Community Facilities District No. 2019-01 (Improvements) (CFD).
Contact: Arwen Wacht, Senior Development Project Manager, (916) 808-7535, [email protected]
; Sheri Smith, Special Districts Manager, (916) 808-7204, [email protected]; Department of Finance
Presenter: None.
Attachments:
1-Description/Analysis
2-Background
3-Schedule of Proceedings
4-Ordinance
File ID: 2022-00043 Consent Item 11
February 8, 2022
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City of Sacramento
Description/Analysis
Issue Detail: On January 18, 2022, Council adopted Resolutions No. 2022-0023, 2022-0024 and 2022-0025 calling for special mailed ballot elections within the boundaries of Improvement Area No. 1 (IA-1), Improvement Area No. 2 (IA-2) and Improvement Area No. 3 (IA-3), respectively, on whether to:
Amend and restate the Rate and Method of Apportionment (RMA), change the authorized amount of bonded indebtedness, and change the appropriations limit for each of the three improvement areas. The authorized amount of bonded indebtedness and appropriations limit will be changed for IA-1 from $8.0 million to $17.0 million, for IA- 2 from $18.8 million to $18.0 million, and for IA-3 from $39.6 million to $63.0 million.
The special mailed ballot elections were held on January 25, 2022, and all votes received were in the affirmative. Therefore, Staff recommends that Council adopt the attached ordinance that will repeal and replace the original ordinance levying special taxes (Ordinance No. 2019-0036) within the CFD that will incorporate the amendments to the RMAs for IA-1, IA-2 and IA-3 as approved by the qualified electors of each of the improvement areas.
Policy Considerations: The attached ordinance reflects the approved modifications that will allow special tax bonds to be issued earlier in the development process and will increase the amount of special tax proceeds available for the acquisition of eligible facilities.
Economic Impacts: Not applicable.
Environmental Considerations:
California Environmental Quality Act (CEQA): Under CEQA Guidelines, modifying the RMA of a CFD (a CFD being a financing mechanism) or of a designated improvement area therein without commitment to any specific projects which could result in a significant impact to the environment does not constitute a project for purposes of CEQA and is therefore exempt from review [14 Cal. Code Regs. §15378(b)(4)].
Sustainability: Not applicable.
Commission/Committee Action: None.
File ID: 2022-00043 Consent Item 11
February 8, 2022
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City of Sacramento
Rationale for Recommendation: The recommended actions are required by the Mello-Roos Community Facilities Act of 1982 to implement the changes approved by the qualified electors of each of the three improvement areas of the CFD.
Financial Considerations: There are currently no financial impacts to any City funds. It is anticipated that special tax bonds will be issued in the future to finance the acquisition and construction of certain public improvements, and those bonds will be secured solely by the levy of special taxes within each improvement area pursuant to the amended and restated RMA for each improvement area. At this time, bonds have not been issued and no special taxes have been levied in any of the improvement areas of the CFD.
Local Business Enterprise (LBE): Not applicable.
ATTACHMENT 2
BACKGROUND
The CFD currently covers approximately 535± acres of property within the Delta Shores Planned Unit Development. The Delta Shores project is proposed for single-family, multi-family, commercial, mixed-use, parks, open space, detention basins, schools, a community center, and a fire station. The Delta Shores project area is generally bounded by Freeport Boulevard to the west, the Sacramento Regional Wastewater Treatment Plant to the south and east, the Stone-Boswell property and the Sacramento Job Corps Center to the east, and Meadowview Road to the north.
Bond information
As approved by Council, the CFD will finance, through the issuance of Mello-Roos special tax bonds or the incurrence of other debt for IA-1, IA-2 and IA-3, certain public improvements authorized for the CFD. On September 24, 2019, Council adopted Resolutions Nos. 2019-0372, 2019-0373, and 2019-0374 deeming it necessary to incur bonded indebtedness to finance the acquisition and construction of certain public facilities in each improvement area of the CFD. The aggregate principal amount of debt proposed to be issued, in one or more series on behalf of IA-1, IA-2, and IA-3 of the CFD, was originally not to exceed $8.0 million for IA-1, $18.8 million for IA-2 and $39.6 million for IA-3.
On February 1, 2022, Council adopted Resolution No. 2022-0036 to change the RMA and debt limit for each of the three improvement areas. Specifically, the modifications approved for the RMAs for IA-1 and IA-3 increased certain maximum special tax rates under the RMAs and increased the total amount of debt authorized to be issued in IA-1 and IA-3, increasing the maximum authorization for IA-1 from $8.0 million to $17.0 million and for IA-3 from $39.6 million to $63.0 million. The approved modifications for IA-2 changed land use designations under the RMA and decreased the total amount of debt authorized to be issued in IA-2 from $18.8 million to $18.0 million. The costs and improvements eligible for CFD financing did not change.
Process to Make Changes to the Improvement Areas
The process to modify the RMAs, the authorized amounts of bonded indebtedness and the appropriations limits for IA-1, IA-2 and IA-3 began with M&H Realty Partners VI LP (the “Landowner”) requesting the modifications and was followed by Council’s adoption of a “Resolution of Consideration” calling for a public hearing where all interested persons have the opportunity to protest the proposed modifications. A public hearing was held on January 18, 2022, after which Council adopted resolutions calling a special election on the modifications for each of the improvement areas (Resolution Nos. 2022-
0023, 2022-0024 and 2022-0025). The proposed modifications relating to each improvement area of the CFD were submitted to the “qualified electors” of that improvement area at a special election and all votes received were in the affirmative.
On February 1, 2022, Council adopted the Resolution of Change to enact the proposed changes to the improvement areas. The final step in the process will be to repeal the previously approved ordinance (Ordinance No. 2019-0036) and approve a new ordinance that will incorporate the amendments to the RMAs for each of the improvement areas and authorize the levy of a special tax for the CFD beginning in FY 2021-22, if so approved.
A proposed Schedule of Proceedings, outlining the timeline for this process, is included in Attachment 3 to this report.
ATTACHMENT 3
SCHEDULE OF PROCEEDINGS
DELTA SHORES COMMUNITY FACILITIES DISTRICT NO. 2019-01
(IMPROVEMENTS)
CHANGE PROCEEDINGS
December 14, 2021 Adopted Resolution of Consideration
Set date for Public Hearing
December 31, 2021 Notice of Public Hearing Mailed to Property Owners
January 4, 2022 Revised Notice of Public Hearing Mailed to Property Owners
January 7, 2022 Notice of Public Hearing Published
January 18, 2022 Public Hearing Held
Adopted Resolutions Calling Special Mailed Ballot Elections
January 25, 2022 Special Election Ballots Due
February 1, 2022 Adopted Resolution of Change
Passed for Publication Ordinance Repealing Ordinance No. 2019-0036 and Levying Special Taxes for Fiscal Year 2021- 2022 and Following Fiscal Years
February 8, 2022 Adopt Ordinance
ORDINANCE NO.
Adopted by the Sacramento City Council
February 8, 2022
Repealing Ordinance No. 2019-0036 Adopted on October 22, 2019, and Levying Special Taxes Pursuant to Amended and Restated Rates and Methods of Apportionment for Fiscal Year 2021-2022 and Following Fiscal Years Solely Within, and Relating to, Improvement Area No. 1, Improvement Area No. 2 and Improvement Area No. 3 of the Delta Shores Community Facilities District No. 2019-01 (Improvements), City of Sacramento, County of Sacramento, State of California
BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:
1. On September 24, 2019, the City Council adopted Resolution No. 2019-0371 (the “Resolution of Formation”), thereby establishing the Delta Shores Community Facilities District No. 2019-01 (Improvements), City of Sacramento, County of Sacramento, State of California (the “CFD”) and designating within the CFD “Improvement Area No. 1,” “Improvement Area No. 2,” and “Improvement Area No. 3” (each an “Improvement Area”).
2. Pursuant to Resolution No. 2021-0362, adopted by the City Council on December 14, 2021 (the “Resolution of Consideration”), and Resolution No. 2022-0036, adopted by the City Council on February 1, 2022 (the “Resolution of Change” and, together with the Resolution of Formation and the Resolution of Consideration, the “Resolutions”), the City Council approved amendments to the rates and methods of apportionment of special taxes (each an “Amended and Restated RMA”), changes to the appropriations limits and changes to the authorized amounts of bonded indebtedness in and for each Improvement Area, which changes were approved by elections of the qualified electors within each Improvement Area on January 25, 2022.
3. In accordance with section 53340 of the Government Code (the “Code”), the Resolutions and the Amended and Restated Rate and Method of Apportionment of Special Tax for Improvement Area No. 1 attached as Exhibit A to the Resolution of Consideration (the “Amended and Restated RMA for Improvement Area No. 1”), a special tax is hereby levied on all taxable parcels within Improvement Area No. 1 for the 2021-2022 fiscal year and for all subsequent fiscal years in the amount of the maximum authorized special tax for Improvement Area No. 1 under the Resolutions and the Amended and Restated RMA for Improvement Area No. 1 until collection of such special tax by the City Council, acting solely as the legislative body with respect to the CFD as contemplated by the provisions of the Mello-Roos Community Facilities Act of 1982, set forth at Code sections 53311 through 53368.3 (the “Act”), and not as
the legislative body of the City of Sacramento (the “City”) as a whole, ceases and a notice of cessation of special tax is recorded in accordance with section 53330.5 of the Code. This amount may be adjusted annually, subject to the maximum authorized special tax for Improvement Area No. 1 under the Resolutions and the Amended and Restated RMA for Improvement Area No. 1.
4. In accordance with section 53340 of the Code, the Resolutions and the Amended and Restated Rate and Method of Apportionment of Special Tax for Improvement Area No. 2 attached as Exhibit B to the Resolution of Consideration (the “Amended and Restated RMA for Improvement Area No. 2”), a special tax is hereby levied on all taxable parcels within Improvement Area No. 2 for the 2021- 2022 fiscal year and for all subsequent fiscal years in the amount of the maximum authorized special tax for Improvement Area No. 2 under the Resolutions and the Amended and Restated RMA for Improvement Area No. 2 until collection of such special tax by the City Council, acting solely as the legislative body with respect to the CFD as contemplated by the provisions of the Act, and not as the legislative body of the City as a whole, ceases and a notice of cessation of special tax is recorded in accordance with section 53330.5 of the Code. This amount may be adjusted annually, subject to the maximum authorized special tax for Improvement Area No. 2 under the Resolutions and the Amended and Restated RMA for Improvement Area No. 2.
5. In accordance with section 53340 of the Code, the Resolutions and the Amended and Restated Rate and Method of Apportionment of Special Tax for Improvement Area No. 3 attached as Exhibit C to the Resolution of Consideration (the “Amended and Restated RMA for Improvement Area No. 3”), a special tax is hereby levied on all taxable parcels within Improvement Area No. 3 for the 2021- 2022 fiscal year and for all subsequent fiscal years in the amount of the maximum authorized special tax for Improvement Area No. 3 under the Resolutions and the Amended and Restated RMA for Improvement Area No. 3 until collection of such special tax by the City Council, acting solely as the legislative body with respect to the CFD as contemplated by the provisions of the Act, and not as the legislative body of the City as a whole, ceases and a notice of cessation of special tax is recorded in accordance with section 53330.5 of the Code. This amount may be adjusted annually, subject to the maximum authorized special tax for Improvement Area No. 3 under the Resolutions and the Amended and Restated RMA for Improvement Area No. 3.
6. The City Treasurer or the City Treasurer’s designee (in the instance of the use of debt financing) or the Finance Director or the Finance Director’s designee (when no debt has been issued) is the Manager of the CFD (the “Manager”). The Manager shall serve as the “CFD Administrator” of each Amended and Restated RMA (i.e. as “official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Tax”; section A of each Amended and Restated RMA) with the aid of the
appropriate officers and agents of the City. The Manager is hereby authorized and directed, without further action by the City Council, to do the following:
(a) calculate the appropriate amount of the special tax for each Improvement Area each year (as authorized by, and as provided in, the Resolutions and the applicable Amended and Restated RMA);
(b) prepare the annual special-tax roll for each Improvement Area in accordance with the Resolutions and the applicable Amended and Restated RMA; and
(c) provide to the Sacramento County Auditor-Controller all information in proper form, and in proper time, that is necessary and appropriate to effect the correct and timely billing and collection of the special tax for each Improvement Area on the secured property-tax roll of Sacramento County (the “County”).
7. As provided in section 53340 of the Code, the Resolutions and each Amended and Restated RMA, the special tax for each Improvement Area is to be collected in the same manner and at the same time and to be subject to the same enforcement mechanism and the same penalties and interest for late payment as regular ad valorem taxes, except that the City Council, acting solely as the legislative body with respect to the CFD as contemplated by the provisions of Act and not as the legislative body of the City as a whole, reserves the right to utilize any other lawful means of billing, collecting, and enforcing the special tax within each Improvement Area, including direct billing, supplemental billing, and, when lawfully available, judicial foreclosure of the applicable special-tax lien.
8. The appropriate officers and agents of the City are hereby authorized to make adjustments to the special-tax roll for each Improvement Area before the final posting of the applicable special taxes to the County tax roll each year, as may be necessary to achieve a correct match of the applicable special-tax levy for each Improvement Area with the assessor's parcel numbers used by the County in sending out property-tax bills. The County may deduct its reasonable and agreed-upon charges for collecting the special tax within each Improvement Area from the amounts collected before remitting the special-tax collections to the City.
9. Any property owner may appeal the levy of the special tax within each Improvement Area by filing a written notice of appeal in accordance with section F of the applicable Amended and Restated RMA, each of which is supplemented as follows:
(a) A property owner may file a notice of appeal with the Manager not more than one calendar year after having paid the special tax that is disputed, and the property owner’s failure to do so within that time constitutes a bar to appeal. The notice of appeal must specify in detail the grounds of the
appeal, which are limited to (1) clerical errors in assigning an amount of tax to a parcel and (2) an error in defining the use of a parcel or its classification. No other appeals are allowed.
(b) Not more than 30 days after an appeal is filed, the Manager shall review the appeal, meet with the property owner (if necessary), and mail the property owner a written decision on the appeal. If the Manager finds that the special tax should be modified, then the Manager shall correct the special-tax levy or grant the property owner a credit against the next year's special-tax levy, as appropriate under the circumstances. The Manager's failure to timely mail a written decision will constitute a decision denying the appeal.
(c) If the property owner disagrees with the Manager's decision, and if the property owner is current on payments of the special tax, then the property owner may appeal to the City Council by filing a written notice of appeal with the City Clerk not more than 30 days after the Manager mails the notice of decision or has failed to timely mail a written decision, and the property owner's failure to do so constitutes a bar to further appeal. The notice of appeal must specify in detail the grounds of appeal. The City Council shall, in accordance with chapter 1.24 of the City Code, either hear the appeal itself or refer the appeal to a hearing officer. The hearing on the appeal from the Manager's decision is to be conducted not more than 30 days after the property owner files the appeal with the City Council, and the City Council or the hearing officer, as appropriate, shall mail a written decision to the property owner not more than 30 days after the hearing concludes. The decision of the City Council or the hearing officer will be final for all purposes. The failure of the City Council or the hearing officer to hear the appeal or to render a decision within the specified time will constitute a denial of the appeal.
10. The filing of an appeal under section 9 of this ordinance will not relieve the property owner of the obligation to pay the applicable special tax when due.
11. If for any reason a court with jurisdiction finds any portion of this ordinance to be invalid or finds the applicable special tax for any Improvement Area to be inapplicable to any particular parcel, then the balance of this ordinance and the application of the applicable special tax to the remaining parcels within each Improvement Area will not be affected.
12. Ordinance No. 2019-0036 adopted by the City Council on October 22, 2019, is hereby repealed and superseded in its entirety by this ordinance.