City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-02019 12/6/2022 Public Hearing Item 1.
Expansion of Future Annexation Area for Sacramento Services Community Facilities District No. 2018-05 (Noticed 11/23/2022)
File ID: 2022-02019
Location: District 1
Recommendation: Conduct a public hearing and upon conclusion adopt a Resolution establishing the unanimous approval process for future annexation of territory from the Future Annexation Area No. 2 into the Sacramento Services Community Facilities District No. 2018-05.
Contact: Mary Jean Rodriguez, Senior Development Project Manager, (916) 808-1980, [email protected]; Sheri Smith, Special Districts Manager, (916) 808-7204, [email protected]; Department of Finance
Presenter: Mary Jean Rodriguez, Senior Development Project Manager, (916) 808-1980, Department of Finance
Attachments:
1-Description/Analysis
2-Schedule of Proceedings
3-Resolution to Establish Future Annexation Area No. 2
4-Exhibit A: Map of Existing District and Future Annexation Area No. 1 5-Exhibit B: Map of Future Annexation Area No. 2
6-Exhibit C: List of Authorized Services
7-Exhibit D: Rate and Method of Apportionment of Special Tax Description/Analysis
Issue Detail: The City Council (Council) established the Sacramento Services Community Facilities District No. 2018-05 (District) under the Mello-Roos Community Facilities Act of 1982 (Government Code Sections 53311 to 53368.3) (the Act) on November 27, 2018 (City Council Resolution No. 2018 -0462). A special tax is currently levied on property in the District to fund maintenance and related services within the District, in accordance with the Act and Chapter 3.124 of the Sacramento City
File ID: 2022-02019 12/6/2022 Public Hearing Item 1.
Code (Chapter 3.124).
In 2013, Section 53340 of the Act was amended to allow parcels to be annexed into an existing community facilities district at special tax rates sufficient to fund operations and maintenance in the annexed area and with the unanimous approval of the owner or owners of the parcel to be annexed.
This change introduced a streamlined and creative solution to providing operation and maintenance services for development projects. The traditional process was to bring each development project to Council four times over a period of three months to complete the annexation proceedings.
To utilize the unanimous approval process, Council is required by the Act to create a “future annexation area” to an existing district by Resolution. Parcels annexing into the District would be levied a special tax apportioned and collected according to the methodology specified in the Rate and Method of Apportionment of Special Tax (RMA) established for the District and at the rate required to meet the actual cost of providing the services to that annexed territory.
On January 22, 2019, Council established a future annexation area for the District (Resolution No. 2019-0031). The boundary of the future annexation area was coterminous with the City limits at the time. However, on April 3, 2019, the Sacramento Local Agency Formation Commission (LAFCO) approved annexation of the Panhandle Planned Unit Development project (Panhandle) into the City’s territorial limits, per LAFCO Resolution No. 019-04-0403-02-18. The Panhandle consists of approximately 589 acres of primarily vacant land located in North Natomas. City staff now desires to expand the future annexation area to include the Panhandle area within the District’s boundaries. For clarity, the future annexation area established in 2019 is referred to as the “Future Annexation Area No. 1” and the territory now desired to be added will be referred to as the “Future Annexation Area No. 2.”
Expanding the boundary of the future annexation area will allow Panhandle property owners to annex into the District to satisfy the entitlement conditions for maintenance by authorizing the City to levy special taxes in an amount sufficient to provide maintenance services. A full list of the services authorized to be funded by the District is provided in Exhibit C attached to the Resolution.
On November 1, 2022, Council adopted a Resolution of Intention (Resolution No. 2022-0330) to create Future Annexation Area No. 2 and allow development projects within the Panhandle area to annex into the District administratively using the unanimous approval process. Resolution No. 2022- 0330 called for a public hearing to be held on December 6, 2022.
Once this unanimous consent process is established, Council action will not be required for future unanimous annexations from Future Annexation Area No. 2 parcels into the District. The District was formed to provide for the maintenance of landscaping, parks, open space, and other public improvements that are beyond those typically provided by the City. No new or additional services beyond those already authorized under the District will be provided in the territory proposed to be
File ID: 2022-02019 12/6/2022 Public Hearing Item 1.
annexed to the District. No special tax or lien is imposed until required by project entitlements.
Policy Considerations: The recommended action is consistent with City policy to implement special districts to fund the maintenance and repair of amenities, facilities, and improvements above what the City provides. In addition, the recommended action will allow use of the streamlined annexation process that is less costly and provides flexibility to customize special tax rates for annexing projects based on the specific cost of services provided. As required by the Act, these services will not supplant services already available within that territory prior to annexation. In the future, development projects can be annexed into the District administratively, without additional Council action and allows special tax rates to be set at levels appropriate to the services provided to each annexation area. The procedures for creation of a future annexation area are set forth in the Act, and several community facilities districts in the City are already successfully utilizing the streamlined annexation process.
Annexation into the District ensures that developing properties participate in funding the infrastructure they benefit from.
Economic Impacts: Not applicable.
Environmental Considerations:
California Environmental Quality Act (CEQA): Under CEQA Guidelines, the formation of a community facilities district and continuing administrative activities do not constitute a project and are therefore exempt from review [14 Cal. Code Regs. § 15378(b)(4)].
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The recommended action is necessary under Government Code section 53339.7 of the Act to allow for annexations to the District using the unanimous approval process.
Financial Considerations: The owner or owners of annexing parcels will pay all costs associated with the District and the annexation. The maximum special tax rates for annexing parcels are outlined in the RMA document provided as Exhibit D to the Resolution, but may vary for each annexation depending on the needs of the territory being annexed. The maximum special tax rates for parcels in the existing District is specified in the RMA and will not change based on annexation of parcels into the District. However, the special tax levied on all parcels in the District may be escalated for inflation per Chapter 3.124, as specified in the RMA.
Local Business Enterprise (LBE): Not applicable.
Attachment 2
Schedule of Proceedings
EXPAND FUTURE ANNEXATION AREA OF
SACRAMENTO SERVICES COMMUNITY FACILITIES DISTRICT NO. 2018-05 November 1, 2022 City Council - Consent
o Adopt Resolution of Intention to Expand Future Annexation Area (set hearing date and approve proposed map for
expanded annexation area)
November 10, 2022 Record Boundary Map of Future Annexation Area No. 2 November 23, 2022 Publish Notice of Hearing
December 6, 2022 City Council – Public Hearing
o Conduct Public Hearing
o Adopt Resolution Expanding Future Annexation Area
December 13, 2022 City Council – Consent
o Pass for Publication Ordinance to Levy Special Tax at Varying Rates within Future Annexation Area No. 2
January 3, 2023 City Council – Consent
o Adopt Ordinance to Levy Special Tax at Varying Rates
within Future Annexation Area No. 2
RESOLUTION NO.
Adopted by the Sacramento City Council
Resolution Establishing Future Annexation Area No. 2 for the Sacramento Services Community Facilities District No. 2018-05 and Specifying Special Taxes that Would be Levied within Future Annexation Area No. 2
BACKGROUND
A. The City Council (“Council”) of the City of Sacramento (“City”) established the Sacramento Services Community Facilities District No. 2018-05 (“District”) under the Mello-Roos Community Facilities Act of 1982 (Government Code sections 53311 to 53368.3) (the “Act”) on November 27, 2018 (Resolution No. 2018-0462) and has previously levied a special tax on property in the District to pay for maintenance services provided within the District, all in accordance with the Act and Chapter 3.124 of the Sacramento City Code (“Chapter 3.124”).
B. On January 22, 2019, Council established a future annexation area (“Future Annexation Area No. 1”) to allow for annexations to the District by the unanimous approval of the owner or owners of parcels to be annexed (Resolution No. 2019- 0031). A map of Future Annexation Area No. 1 is attached hereto as Exhibit A.
The boundary of Future Annexation Area No. 1 was coterminous with the City limits at the time Future Annexation Area No. 1 was established.
C. However, on April 3, 2019, the Sacramento Local Agency Formation Commission (“LAFCO”) approved annexation of the Panhandle Planned Unit Development project (the “Panhandle”) into the City’s territorial limits, per LAFCO Resolution No. 019-04-0403-02-18. The Panhandle consists of approximately 589 acres of primarily vacant land located in North Natomas. It is now necessary to expand the future annexation area for the District to provide for future inclusion of the Panhandle area within the District’s boundaries.
D. On November 1, 2022, Council adopted Resolution No. 2022-0330 (the “Resolution of Intention”), declaring its intention to provide for the future annexation to the District of parcels within the territory identified as “Future Annexation Area No. 2” in Exhibit B attached hereto, without any further public hearings or additional proceedings, on the condition that a parcel within Future Annexation Area No. 2 be annexed to the District only with the unanimous approval of the owner or owners of the parcel when it is annexed. The map of Future Annexation Area No. 2, as shown on Exhibit B, was recorded with the Sacramento County Clerk/Recorder.
E. The Resolution of Intention specifies that the cost of providing services will be unique to the needs of the parcels within Future Annexation Area No. 2 being annexed to the District. The special tax for parcels annexed to the District would be levied pursuant to Government Code section 53340 at a rate required to meet the actual cost of providing the services to the annexed parcel, and would be apportioned and collected according to the methodology specified in the Rate and Method of Apportionment of Special Tax (the “RMA”) attached as Exhibit C to the District’s Resolution of Formation (Resolution No. 2018-0462) and as Exhibit D to this resolution. The Resolution of Intention further specifies that the future annexation of territory to the District would not alter the special tax levied within the existing District or increase the maximum special tax rate in the existing District.
F. The Resolution of Intention fixed December 6, 2022, at 5:00 p.m., in the Council Chambers at City Hall, 915 I Street, Sacramento, California (and via teleconference due to the COVID-19 pandemic), as the time and place for a public hearing at which Council would consider the future annexation of territory pursuant to the Act, the levying of special taxes within the territory proposed to be annexed in the future, and all other matters set forth in the Resolution of Intention.
G. The Public Hearing was duly convened by the Council and all protests received by the City Clerk were presented to the Council. The Council considered all protests and heard and considered testimony at such Public Hearing from all interested persons, including taxpayers, property owners, and registered electors within the existing District and the Future Annexation Area No. 2, for or against the identification of territory for possible future annexation to the District, the levying of a special tax within the territory proposed to be annexed in the future, and any other matters set forth in the Resolution of Intention.
H. The District was formed solely to fund the maintenance of roadway facilities, transit facilities, parks, bikeway and pedestrian paths, storm water drainage facilities, landscape areas, and any other services authorized under the Act. The District will not finance capital improvements or issue bonds. Public convenience and necessity may require that territory be added to the District in the future. The Future Annexation Area No. 2 territory proposed for possible annexation in the future is shown in Exhibit B, attached hereto and incorporated herein.
I. The services authorized to be provided in the existing District are set forth in Exhibit C, attached hereto and incorporated herein. For any future annexation, the services that may be provided are those described in Exhibit C, however services need not be shared in common between the existing District and the territory proposed to be annexed in the future. The services in Exhibit C are authorized by the Act and by Chapter 3.124.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The Council finds and determines that the Background statements above are true and correct.
Section 2. The Council finds and determines that written protests to the proposed identification of territory for possible future annexation to the District, or the levy of the special tax in the Future Annexation Area No. 2, are insufficient in number and in amount under the Act. Therefore, a majority protest against establishment of Future Annexation Area No. 2 or any other matters in the Resolution of Intention does not exist.
Section 3. The Council hereby establishes Future Annexation Area No. 2 (identified in Exhibit B), providing for the possible future annexation to the District of parcels within the Future Annexation Area No. 2 on the condition that when using this procedure parcels within Future Annexation Area No. 2 may be annexed into the District only with the unanimous approval of the owner or owners of each parcel or parcels at the time that parcel or those parcels are annexed. The map of Future Annexation Area No. 2, as shown on Exhibit B, is hereby approved.
Section 4. At the time a parcel within the Future Annexation Area No. 2 is annexed to the District, the boundaries of each annexed parcel must be particularly described on a map titled “SACRAMENTO SERVICES COMMUNITY FACILITIES DISTRICT NO. 2018-05 Annexation Map No. ____.” Each annexation map must be numbered consecutively. Upon annexation of a parcel within the Future Annexation Area No. 2 to the District, the City Clerk is hereby authorized and directed to record a copy of each annexation map with the Sacramento County Clerk/Recorder in accordance with Streets and Highways Code section 3113.
Section 5. The attached Exhibit C specifies the services that are provided within the existing District. Those services specified on Exhibit C will also be provided in the Future Annexation Area No. 2 territory proposed to be annexed to the District in the future. The services may, but need not be, shared in common between the existing District and the Future Annexation Area No. 2 territory proposed to be annexed in the future.
Prior to each annexation, a determination will be made regarding which services, if any, will be shared in common between the existing District and the territory proposed to be annexed. If it is determined that certain services are to be shared in common, the territory proposed to be annexed will only pay its share of the actual costs of those services and will not pay for services provided outside the annexed territory.
Section 6. Upon adoption of an ordinance, the Council hereby proposes to levy a special tax annually on all nonexempt parcels within the Future Annexation No. 2 that are annexed to the District. The special tax would be sufficient to pay the parcel’s share of: the cost of providing the services specified in Exhibit C, costs incurred to carry out the authorized purposes of the District, and costs incidental to the administration of the District. The special tax proposed to be levied on parcels within the Future Annexation Area No. 2 that are annexed to the District would be equal to the special tax levied in the existing District, except that a higher or lower tax may be levied within the territory to be annexed in the future to the extent that the actual cost of providing the services in that territory is higher or lower than the cost of providing those services in the existing District.
Section 7. Special tax rates for parcels within Annexation Area No. 2 that are annexed to the District would be set according to Government Code section 53340 once annexation is approved unanimously by the owner or owners of each parcel. The special tax for annexed parcels would be apportioned according to the RMA, attached hereto as Exhibit D. The maximum special tax rates for parcels in the existing District are specified in the RMA and will not change based on annexation of parcels into the District. However, the special tax levied on all parcels in the District may be escalated for inflation per Chapter 3.124, as specified in the RMA.
Section 8. In accordance with Chapter 3.124, City-owned property may be subject to the special tax if it is specified as taxable public property. The special tax levied on Future Annexation Area No. 2 parcels annexed to the District will be collected as a separately stated item on the Sacramento County property tax bill and collected in the same manner as ordinary ad valorem property taxes; provided that the provisions of Chapter 3.124 will control and provided further that the Council reserves the right to change the method of collection at any time. If tax collections at the stated rates exceed the amount required to pay the annual costs of providing the authorized services in the District, the rates may be reduced in accordance with the formula set forth in the RMA. The special tax levied and collected for the District is in perpetuity, unless and until the need for the services no longer exists.
Section 9. The Council authorizes and directs the City Attorney to approve forms for owners of parcels within the Future Annexation Area No. 2 to petition for annexation of territory and to provide unanimous approval of such annexation and the levy of special taxes on the parcel to be annexed, pursuant to Government Code sections 53329.6, 53339.3(b), and 53340(a).
Section 10. The City Clerk is authorized and directed to execute and record an amendment to the Notice of Special Tax Lien listing each annexed parcel within 15 days after the unanimous approval of the annexation by the owner or owners of the parcel, in accordance with Streets and Highways Code section 3117.5.
Section 11. The future annexation of territory to the District in accordance with this resolution will not alter the special tax levied within the existing District or increase the maximum special tax rate in the existing District.
Section 12. The Exhibits to this Resolution are a part of this Resolution.
Table of Contents:
Exhibit A – Map of Existing District and Future Annexation Area No. 1 Exhibit B – Map of Future Annexation Area No. 2
Exhibit C – List of Authorized Services
Exhibit D – Rate and Method of Apportionment of Special Tax
Exhibit A
Map of Existing District and Future Annexation Area No. 1
Exhibit B
Map of Future Annexation Area No. 2
EXHIBIT C
CITY OF SACRAMENTO
SACRAMENTO SERVICES
COMMUNITY FACILITIES DISTRICT NO. 2018-05
LIST OF AUTHORIZED SERVICES
The authorized services to be financed with the Special Tax are set forth below. The S pecial Tax may be levied to pay for any authorized services and to accumulate funds for that purpose. The primary function of the Sacramento Services CFD No. 2018 -05 is to fund any of the services authorized under the Mello-Roos Community Facilities Act of 1982 and authorized under the charter of the City of Sacramento. Such services may include, but are not limited to, the maintenance of roadway facilities, transit facilities, parks, bikeway and pedestrian paths, storm water drainage facilities and/or landscape areas. Funds may be used within the territory of the Sacramento Services CFD No. 2018-05.
The authorized services for the Sacramento Services CFD No. 2018-05 consist of the following:
1. The repair and maintenance of roadway facilities, transit facilities, bikeway and pedestrian paths, parks, and landscaped areas, including but not limited to hardscape, special paving features, ramps, sidewalks, walkways, irrigation facilities, water & hose bibbs, plantings, weed removal, lighting, sound walls, ornamental and chain link fences, monuments, signage, bollards, fans, coil gates, security cameras and system monitoring, water-quality facilities, storm-water drainage facilities, water fountains and other water features, and other appurtenances within and along public rights-of-way.
2. Scheduled inspection of maintenance of roadway facilities, water-quality facilities, storm- water drainage facilities, transit facilities, bikeway and pedestrian paths, parks, and landscaped areas
3. Paying utility bills associated with maintenance of roadway facilities, transit facilities, water- quality facilities, storm-water drainage facilities, parks, bikeway and pedestrian paths, and landscaped areas.
4. Costs of levying and collecting the Special Tax and annually administering the Sacramento Services CFD No. 2018-05.
5. Miscellaneous costs related to any of the items described above, including costs of planning, engineering, legal services, and administration.
6. Any other services authorized under the Mello-Roos Community Facilities Act of 1982 and authorized under the charter of the City of Sacramento.
A Special Tax authorized under the Mello- Roos Community Facilities Act of 1982 and applicable to each Assessor’s Parcel in the Sacramento Services Community Facilities District No. 2018-05 of the City of Sacramento will be levied and collected according to the tax liability the City determines through the application of the appropriate amount or rate for Taxable Property, as described below. All of the property in the CFD, unless exempted by law or by Section G below, will be taxed for the purposes, to the extent, and in the manner herein provided, including property subsequently annexed to the CFD unless a separate rate and method of apportionment of Special Tax is adopted for the annexation area.
A. DEFINITIONS
“Acre
” means 43,560 square feet of land area of an Assessor’s Parcel 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 Map or other map recorded at the County Recorder’s Office. “Act”
means the Mello -Roos Community Facilities Act of 1982, as amended, set forth at California Government Code § 53311 through 53368.3.
“Adm
inistrative Expenses ” means the actual or reasonably estimated costs related to administration of the CFD, including but not limited to the following:
• Cost
s of com puting the Special Tax and preparing the annual Special Tax collection schedules (whether by the City or its designee or both). • Cost
s of collecting, auditing, dispersing, and accounting for the Special Tax (whether by the County, the City, or otherwise).
• Cost
s incurred in responding to public inquiries regarding the Special Tax. • Costs to the City or its designee related to any appeal of the Special Tax. • Amounts estimated to be advanced for any other administrative purposes, including but not limited to attorney’s fees and other costs related to collection of the Special Tax. • Costs associated with annexations into the CFD.
• All other costs and expenses of the City and County in any way related to the administration of the CFD
CFD
No. 2018-05 1 October 16, 2018
Exhibit D
CITY OF SACRAMENTO
SACRAMENTO SERVICES
COMMUNITY FACILITIES DISTRICT NO. 2018-05
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
“Administrator” means the C ity’s Special Districts Manager, his/her designee, or such other person or department as the City may designate to serve as Administrator of the CFD.
“Affordable Unit” means a Residential Unit that is subject to deed restrictions, resale restrictions, or regulatory agreements recorded on the property that provide housing for persons that meet Low- , Very Low-, or Extremely Low-Income levels pursuant to the California Health and Safety Code Sections 50079.5, 50105, or 50106. The Residential Unit shall no longer be considered an Affordable Unit following termination of the agreement containing covenants or similar instruments.
“Airspace Parcel” means a parcel with an as signed Assessor’s Parcel Number that constitutes vertical space of the underlying land.
“Assessor’s Parcel” means a lot or parcel (including an Airspace Parcel ) that is shown on an Assessor’s Parcel Map and has an assigned Assessor’s Parcel Number.
“Assessor’s Parcel Map ” means an official map of the County Assessor designating lots or parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means the number assigned to an Assessor’s Parcel by the County Assessor for purposes of identification.
“Authorized Services” means the public services authorized to be funded through the CFD.
“Building Permit” means a single permit or set of permits required to construct a residential or non-residential structure. If a per mit is issued for a foundation, parking, landscaping , or other similar facility or amenity but a building permit has not yet been issued for the structure to be served by the facility or amenity, then the permit for the facility or amenity will not be considered a “Building Permit” for purposes of levying the Special Tax.
“CFD” means the Sacramento Services Community Facilities District No. 2018-05 of the City of Sacramento.
“CFD Formation” means the date on which the Resolution of Formation to form the CFD was adopted by the City Council.
“City” means the City of Sacramento, California.
“City Council” means the Sacramento City Council.
“Condominium Property” means, in any Fiscal Year, al l Assessor’s Parcels of Developed Property for which a Building Permit was issued for construction of a residential structure that meets the statutory definition of a condominium contained in Civil Code Section 1351, as determined by the City.
“County” means the County of Sacramento, California.
CFD No. 2018-05 2 October 16, 2018
“Developed Property” means, in any Fiscal Year, all Taxable Property for which a B uilding Permit was issued before June 1 of the preceding Fiscal Year.
“Development Class” means, individually, Developed Property , Final Map Property, and Undeveloped Property.
“Escalation Factor” means, in any Fiscal Year, the lesser of: (i) the percentage increase, if any, in the Consumer Price Index (CPI) for All Urban Consumers in the San Francisco- Oakland-San Jose region (base years 1982- 1984=100) (prior calendar year annual average) published by the Bureau of Labor Statistics of the United States Department of Labor, or, if such index no longer is published, a similar escalator that is determined by the City to be appropriate, and (ii) 4%.
“Exempt Property” means any of the following:
• Public Property.
• Owners Association Property.
• Assessor’s Parcels that are owned by a public utility and developed with an unoccupied facility.
• Assessor’s Parcels that are subject to a conservation, open space, recreation, or similar easement that precludes any use other than the use set forth in the easement, as determined by the City.
• Affordable Units.
“Final Map ” means a final map or portion of a final map, approved by the City under the Subdivision Map Act (California Government Code § 66410 et seq.), that creates lots that do not need to be further subdivided prior to issuance of a Building Permit for a residential structure , as determined by the City. “Final Map” does not include any large-lot subdivision map, Assessor’s Parcel Map, or subdivision map, or any portion of such a map, that does not create lots that are in their final configuration.
“Final Map Property” means, in any Fiscal Year, all Assessor’s Parcels of Taxable Property for which a Final Map has recorded and which have not yet become Developed Property.
“Fiscal Year” means the period starting July 1 and ending on the following June 30.
“Land Use Category” means, individually, Single Family Detached Property, Single Family Attached Property, Condominium Property, Multi -Family Residential Property, and Non- Residential Property.
“Maximum Special Tax” means the Maximum Special Tax , determined in accordance with Section C below, that can be levied in any Fiscal Year on any Assessor’s Parcel.
CFD No. 2018-05 3 October 16, 2018
“Multi-Family Residential Property” means all parcels of Developed Property for which Building Permits were issued for construction of a residential structure with three or more residential units that are offered for rent to the general public and cannot be purchased by individual homebuyers.
“Non-Residential Property” means all parcels of Developed Property for which Building Permits were issued for construction of an office, commercial, retail, industrial or mixed- use building, as determined by the City.
“Non-Residential Square Foot” means an indi vidual square foot unit of the Non- Residential Square Footage of a structure.
“Non-Residential Square Footage” means the following:
• For buildings that do not include Residential Units, the gross square footage of the building as reflected on the Building Permit or, if the gross square footage is not specified on the Building Permit, as otherwise determined by the City.
• For buildings that include both Residential Units and non- residential land uses, the net saleable or net leasable square footage that is used or expected to be used for commercial, industrial, office, or other non-residential land uses, as determined by the Administrator.
“Other Residential Property” means, in any Fiscal Year, all Assessor’s Parcels of Developed Property that are in a residential use but do not meet the definition of Single Family Detached Property, Single Family Attached Property, Condominium Property, or Multi -Family Residential Property, as determined by the Administrator.
“Owners Association” means any homeowners or property owners association (including any master or sub- association) that provides services to, and collects dues, fees, or charges from, owners of property within the CFD.
“Owners Association Property” means any property owned in fee or as an easement by an Owners Association, not including any such property that is located directly under a residential structure.
“Proportionately” means, for each Development Class, that the ratio of the actual Special Tax levied in any Fiscal Year to the Maximum Special Tax authorized to be levied in that Fiscal Year is equal for all parcels assigned to the Development Class.
“Public Property” means any property within the CFD that is owned by the City, the County, the State of California, the federal government, or other public agency, except that any property leased by a public agency to a private entity and subject to taxation under § 53340.1 of the Act will be taxed and classified in accordance with its use. Privately owned property will be considered Public Property if its development is otherwise constrained by public use and necessity through an easement, a lease, or a license.
CFD No. 2018-05 4 October 16, 2018
“Residential Unit” means an individual single-family detached unit or an individual residential unit within a duplex, triplex, fourplex, townhome, condominium, or apartment structure . A secondary / accessory dwelling unit (granny flat) that shares an Assessor’s Parcel with a single - family-detached unit is not a Residential Unit for purposes of levying the Special Tax.
“RMA” means this Rate and Method of Apportionment of Special Tax.
“SFD Lot” means an individual residential lot, identified and numbered on a recorded Final Map, on which a Building Permit has been or is permitted to be issued for construction of a Residential Unit without further subdivision of the lot and for which no further subdivision of the lot is anticipated pursuant to a Tentative Map.
“Single Family Detached Property” means, in any Fiscal Year, all Assessor’s Parcels for which a Building Permit was issued for construction of a Residential Unit that does not share a common wall with another Residential Unit.
“Single Family Attached Property” means, in any Fiscal Year, all Assessor’s Parcels of Developed Property for which a B uilding Permit was issued for construction of a residential structure consisting of two or more Residential Units that share common walls, have separate Assessor’s Parcel numbers assigned to them (except for a duplex unit, which may share an Assessor’s Parcel with another duplex unit), and are offered as for-sale units (which shall still be the case even if the Residential Units are purchased and subsequently offered for rent by the owner), not including residential structures that are Condominium Property.
“Special Tax” means a Special Tax levied in any Fiscal Year to pay the Tax Zone Special Tax Requirement.
“Tax Zone” means a mutually exclusive geographic area within which the Special Tax may be levied pursuant to this RMA. All of the property within the CFD at CFD Formation is within Tax Zone 1. Property may be annexed into Tax Zone 1, and additional Tax Zones may be created when property is annexed into the CFD. Separate Maximum Special Taxes may be identified for property within the new Tax Zone at the time of such annexation. The Assessor’s Parcels included within a new Tax Zone established when such parcels are annexed to the CFD shall be identified by Assessor’s Parcel Number in the Unanimous Approval Form that is signed by the owner(s) of the parcels at the time of annexation.
“Tax Zone 1” means the property included in the CFD at C FD Formation and any property that is part of the same development project that is subsequently annexed into Tax Zone 1.
“Tax Zone Budget” means, in any Fiscal Year, the City’s estimate of costs for Authorized Services within a particular Tax Zone for that Fiscal Year, net of any surplus amounts available (as determined by the City) from the levy of the Special Tax in the Tax Zone in prior Fiscal Years, including revenues from collection of delinquent Special Taxes and associated penalties and interest.
CFD No. 2018-05 5 October 16, 2018
“Tax Zone Special Tax Requirement” means the amount of revenue needed from a particular Tax Zone in any Fiscal Year to pay: (i) the Tax Zone Budget for that Tax Zone, (ii) Administrative Expenses associated with the Tax Zone, which may include a proportional share of Administrative Expenses incurred by the City associated with general administration of the CFD, and (iii) amounts needed to cure any delinquencies in the payment of Special Taxes which have occurred in the Tax Zone in the prior Fiscal Year.
“Taxable Property” means all property within the CFD that is not exempt from the Special Tax pursuant to law or Section G below.
“Tentative Map” means a map that is: (i) made for the purpose of showing the design of a proposed subdivision, including the individual SFD Lots that are expected within the subdivision, as well as the conditions pertaining thereto, (ii) not based on a detailed surve y of the property within the map, and (iii) not recorded at the County Recorder’s Office to create legal lots.
“Unanimous Approval Form” means that form executed by the record owner of fee title to one or more Assessor’s Parcels annexed into the CFD that constitutes a property owner’s approval and unanimous vote in favor of annexing into the CFD and the levy of the Special Tax against his/her Assessor’s Parcel(s) pursuant to this RMA.
“Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Final Map Property or Developed Property.
B. D
ATA FOR ADMINISTRATION OF SPECIAL TAX
On or about July 1 of each Fiscal Year, the Administrator shall identify the Tax Zone Special Tax Requirement for each Tax Zone for the Fiscal Year. The Administrator shall also determine the following for each Assessor’s Parcel: (1) the current Assessor’s Parcel Number; (2) the Tax Zone within which each Assessor’s Parcel is located, (3) whether it is Developed Property, Final Map Property, or Undeveloped Property; ( 4) for Single Family Attached Property, Condominium Property, and Multi -Family Residential Property, the number of Residentia l Units on the Assessor’s Parcel, and (5) for Non-Residential Property, the Non-Residential Square Footage of each building on the Assessor’s Parcel.
In any Fiscal Year, if the Administrator determines—
• that a Final Map or other map for an Assessor’s Parcel within the CFD was recorded after April 30 of the prior Fiscal Year (or on any other date after which the County Assessor will not incorporate the newly created parcels into the then-current tax roll);
• that because of the date the map was recorded, the County Assessor does not yet recognize the new parcels created by the map; and
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• that one or more of the newly created parcels is in a different Development Class from other parcels created by the map,
then the Administrator shall calculate the Special Tax for the property affected by recordation of the map by determining the Special Tax that applies separately to the property within each Development Class and then applying the sum of the individual Special Taxes to the Assessor’s Parcel that was subdivided by recordation of the map.
C. M
AXIMUM SPECIAL TAX
1. Developed Property
Table 1 below identifies the Maximum Special Tax for Developed Property within Tax Zone 1.
For property that annexes into the CFD, different maximum rates for Developed Property may be established by creating a separate Tax Zone for such annexed property. Alternatively, property may be annexed into Tax Zones that were established prior to the annexation, and such property shall be subject to the Maximum Special Tax for Developed Property applicable to that Tax Zone.
Table 1
Maximum Special Tax for Developed Property in Tax Zone 1
Land Use Category
Maximum Special Tax
(Fiscal Year 2018-19)*
Single Family Detached Property
$587 per Residential Unit
Single Family Attached Property $587 per Residential Unit Condominium Property $587 per Residential Unit
Multi-Family Residential Property $329 per Residential Unit Non-Residential Property $0.41 per Non-Residential Square Foot Other Residential Property $6,184 per Acre
* On July 1, 2019, and on each July 1 thereafter, the Maximum Special Taxes shown above will be increased by the Escalation Factor.
If, in any Fiscal Year, the Administrator determines that a n Assessor’s Parcel of Developed Property is built or proposed to be built with both Residential Units and non-residential land uses, the Maximum Special Tax for the Assessor’s Parcel shall be determined as follows:
Step 1. Calculate the aggregate Maximum Special Tax that can be levied on all Residential Units in the building.
Step 2. Calculate the aggregate Maximum Special Tax that can be levied on all Non- Residential Square Footage in the building.
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Step 3. The Maximum Special Tax for the Assessor’s P arcel shall be the sum of the amount calculated in Step 1 for r esidential property and the amount determined in Step 2 for Non-Residential Property.
2. Final Map Property
The Fiscal Year 2018-19 Maximum Special Tax for Final Map Property in Tax Zone 1 is $6,184 per Acre, which amount shall increase on July 1, 2019 and each July 1 thereafter by the Escalation Factor. For property that annexes into the CFD, different maximum rates may be established for Final Map Property by creating a separate Tax Zone for such annexed property. Alternatively, property may be annexed into Tax Zones that were established prior to the annexation, and such property shall be subject to the Maximum Special Tax for Final Map Property applicable to that Tax Zone.
3. Undeveloped Property in Tax Zone 1
For Assessor’s Parcels of Undeveloped Property in Tax Zone 1, the Maximum Special Tax is $6,184 per Acre for Fiscal Year 201 8-19, which amount shall increase on July 1, 2019 and each July 1 thereafter by the Escalation Factor . For property that annexes into the CFD, a different maximum special tax may be established for Undeveloped Property by creating a separate Tax Zone for such annexed property. Alternatively, property annexed into Tax Zones that were established prior to the annexation shall be subject to the Maximum Special Tax for Undeveloped Property that is applicable to that Tax Zone.
D. C
HANGES TO MAXIMUM SPECIAL TAX
1. Annual Escalation
Beginning July 1, 2019 and each July 1 thereafter, the Maximum Special Taxes set forth in Section C above, and the Maximum Special Tax assigned to each Assessor’s Parcel shall be increased by the Escalation Factor.
2. Land Use Changes
If an Assessor’s Parcel in the CFD is rezoned or otherwise changes land use pri or to becoming Developed Property, the City may, in its sole discretion, move the Assessor’s Parcel to a different Tax Zone based on the maintenance and services needed to serve the Assessor’s Parcel after the change in land use . If a n Assessor’s Parcel rezones after being taxed as Developed Property in prior Fiscal Years, the City can either continue to apply the Maximum Special Tax that applied prior to the land use change or, in the City’s sole discretion, move the parcel to a different Tax Zone.
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3. Conversion of an Assessor’s Parcel of Public Property to Private Use
If, in any Fiscal Year, a n Assessor’s Parcel of Public Property is converted to private use, such Assessor’s Parcel shall be subject to the levy of the Special Tax. The Maximum Special Tax for each such Assessor’s Parcel shall be determined based on the Tax Zone in which the Assessor’s Parcel is located and the land use on or expected on the Assessor’s Parcel , as determined by the Administrator.
E. METHOD OF LEVY OF SPECIAL TAX
Each Fiscal Year, the Administrator shall determine the Tax Zone Special Tax Requirement to be collected in that Fiscal Year from each Tax Zone; t he City shall then levy the Special Tax according to the following steps:
Step 1. The Special Tax will be levied Proportionately on Developed Property within a particular Tax Zone up to 100% of the Maximum Special Tax for each Assessor’s Parcel in that Tax Zone until the amount levied is equal to the Tax Zone Special Tax Requirement.
Step 2. If additional revenue is needed after Step 1 to meet the Tax Zone Special Tax Requirement, the Special Tax will be levied Proportionately on Final Map Property in that Tax Zone up to 100% of the Maximum Special Tax for each Assessor’s Parcel of Final Map Property in the Tax Zone.
Step 3. If additional revenue is needed after Step 2 to meet the Tax Zone Special Tax Requirement, the Special Tax will be levied Proportionately on Undeveloped Property up to 100% of the Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property in the Tax Zone.
F. M
ANNER OF COLLECTION OF SPECIAL TAX
The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes, except that the City may directly bill the Special Tax, may collect the Special Tax at a different time or in a different manner, and may collect delinquent Special Taxes through foreclosure or other available methods. The Special Tax will be levied and collected in perpetuity.
G. E
XEMPTIONS
Notwithstanding any other provision of this RMA, the Special Tax will not be levied in any Fiscal Year on Exempt Property.
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H. RECORDS MAINTAINED FOR THE CFD
As development occurs in the CFD, the Administrator shall maintain a file containing records of the following information for each Assessor’s Parcel:
• The current Assessor’s Parcel Number
• The current Final Map status for the Assessor’s Parcel • The current Building Permit status for the Assessor’s Parcel • The designated and existing uses for the Assessor’s Parcel • The total number of Residential Units assigned to the Assessor’s Parcel • The Maximum Special Tax assigned to the Assessor’s Parcel
I. INTERPRETATION OF SPECIAL TAX FORMULA
The City Council may, by resolution, interpret this RMA for purposes of clarifying any vagueness or ambiguity in the Special Tax rates, method of apportionment, classification of properties, and definitions applicable to the CFD. The City Council’s interpretation will be conclusive. In addition, the City, upon request of an owner of land that is not Developed Property, may amend this RMA to reallocate the Special Tax applicable to such owner’s land in a manner acceptable to the City, without resolution or ordinance of the City Council, upon the affirmative vote of such owner and without the vote of owners of any other land within the CFD, provided such amendment: (i) only affects such owner’s land, and (ii) provides for a Special Tax distribution upon development of such land which is reasonably proportional and consistent with Special Tax rates provided for in Section C (including escalations thereto) for similar land uses and is compliant with the tax assessment loan exception contained in U.S. Treasury Regulation Section 1.141-5(d), as determined by the City.
J. A
PPEALS
A taxpayer who believes that the amount of the Special Tax assigned to the taxpayer’s Assessor’s Parcel is in error may file a notice with the Administrator , who will then promptly review the appeal and, if necessary, meet with the taxpayer. If the Administrator determines that the Special Tax should be modified, then the Special Tax levy will be corrected and, if applicable, a credit or refund will be grante d. The Administrator may do the following without the City Council’s approval:
(1) Interpret this RMA for purposes of clarifying matters as they relate to the Special Tax rate, the method of apportionment, the classification of properties, or the definitions applicable to the CFD.
(2) Make minor, non- substantive administrative and technical changes to this RMA for purposes of administrative efficiency or convenience or to comply with new applicable federal, state, or local law, but only if the changes do not materially affect the rate, method of apportionment, and manner of collection of the Special Tax.
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