City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-02219 1/10/2023 Consent Item 28.
(Pass for Publication) Ordinance to Levy Special Tax on Land within Future Annexation Area No. 2 Annexed to Sacramento Services Community Facilities District No. 2018-05 File ID: 2022-02219
Location: District 1
Recommendation: 1) Pass a Motion bypassing review of the attached ordinance by the Law and Legislation Committee pursuant to Council Rules of Procedure, Chapter 13, Section B(1)(b)(ii); review an ordinance to levy a special tax on land within Future Annexation Area No. 2 when it is annexed into Sacramento Services Community Facilities District No. 2018-05 at a future date; and 2) pass for publication the ordinance title as required by Section 32(c) of the Sacramento City Charter for adoption on January 17, 2023.
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: None.
Attachments:
1-Description/Analysis
2-Schedule of Proceedings
3-Ordinance
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 (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 Code (Chapter 3.124).
In 2013, Section 53340 of the Act was amended to allow parcels to be annexed into an existing
File ID: 2022-02219 1/10/2023 Consent Item 28.
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.
On January 22, 2019, Council established a future annexation area for the District (Resolution No. 2019-0031). For clarity, the future annexation area established in 2019 is referred to as the “Future Annexation Area No. 1.” The boundary of Future Annexation Area No. 1 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 (the Panhandle”) into the City’s territorial limits, per LAFCO Resolution No. 019-04-0403-02-18.
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. On December 6, 2022, the City Council established Future Annexation Area No. 2 for the District (Resolution No. 2022 -0388) to allow future annexation of parcels within the Panhandle area to 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 Future Annexation Area No. 2; however, services need not be shared in common between the existing District and the Future Annexation Area No. 2. No special tax or lien is imposed until required by project entitlements.
Policy Considerations: The recommended actions are 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 actions will provide a mechanism to fund services provided by the City for project areas annexed to the District with flexibility to customize special tax rates 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. Further, the unanimous approval process allows future development projects to 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 portion of annexed territory.
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
File ID: 2022-02219 1/10/2023 Consent Item 28.
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 actions are necessary under Government Code section 53339.7 of the Act to allow for future 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 Rate and Method of Apportionment of Special Tax (RMA) (included as Exhibit D to both Resolution No. 2022-0330 and Resolution No. 2022-0388) but may vary for each annexation depending on the services needed in the territory being annexed. 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. There is no impact on the General Fund or any other funds of the City as a result of this action.
Local Business Enterprise (LBE): Not applicable.Page 3 of 3 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
January 10, 2023 City Council – Consent
o Pass for Publication Ordinance to Levy Special Tax
at Varying Rates within Future Annexation Area No. 2
January 17, 2023 City Council – Consent
o Adopt Ordinance to Levy Special Tax at Varying Rates
within Future Annexation Area No. 2
ORDINANCE NO.
Adopted by the Sacramento City Council
______, 2023
Providing for a Levy of Special Taxes on Parcels within the Future Annexation Area No. 2 that will be Annexed to the Sacramento Services Community Facilities District No. 2018-05 at the Rate to be Approved Unanimously by the Owner of Each Parcel to be Annexed
BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:
1. On November 27, 2018, the City Council adopted Resolution No. 2018-0462 (the "Resolution of Formation"), thereby establishing the Sacramento Services Community Facilities District No. 2018-05 (the "District"). On December 11, 2018, the City Council adopted Ordinance No. 2018-0053, which levied a special tax solely within and relating to the District.
2. On January 22, 2019, the City Council established Future Annexation Area No. 1 for the District (Resolution No. 2019-0031). The boundary of Future Annexation Area No. 1 was coterminous with the City of Sacramento (“City”) limits at the time. However, on April 3, 2019, the Sacramento Local Agency Formation Commission 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. On December 6, 2022, the City Council established Future Annexation Area No. 2 for the District (Resolution No. 2022-0388) to allow future annexation of parcels within the Panhandle area to the District.
3. In 2013, California Government Code section 53340 of the Mello-Roos Community Facilities Act of 1982 (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. In accordance with the Act, the Resolution of Formation, and the Rate and Method of Apportionment of Special Tax attached as Exhibit C to the Resolution of Formation (the "RMA"), a special tax is hereby authorized to be levied on all taxable parcels within Future Annexation Area No. 2 that will be annexed to the District at the rate or rates to be approved unanimously by the owner or owners of each parcel or parcels to be annexed to the District.
4. The City’s Special Districts Manager, his/her designee, or such other person as the City may designate as administrator of the District (the "Manager"), with the aid of the appropriate officers and agents of the City and without further action by the City Council, is authorized and directed to do the following for parcels annexed from Future Annexation Area No. 2 into the District: (a) calculate the appropriate amount of the special tax each year; (b) prepare the annual special- tax roll in accordance with the Resolution of Formation and the RMA; and (c) provide to the Sacramento County Auditor-Controller all information in proper form, and in proper time, to effect the correct and timely billing and collection of the special taxes on the secured property-tax roll of Sacramento County (the “County”). As provided in Section 53340 of the Act, the Resolution of Formation, and the RMA, the special taxes shall be collected in the same manner and at the same time and be subject to the same enforcement mechanism, and the same penalties and interest for late payment, as regular ad valorem taxes; provided, that the City Council has reserved the right to utilize any other lawful means of billing, collecting, and enforcing the special taxes, including direct billing and supplemental billing.
5. The appropriate officers and agents of the City are authorized to make adjustments to the special-tax roll for parcels within Future Annexation Area No. 2 before the final posting of the special taxes to the County tax roll each year to correctly match the special tax levy with the assessor’s parcel numbers used by the County when sending out property-tax bills. The County may deduct its reasonable and agreed charges for collecting the special taxes from the amounts collected, before remitting the special-tax collections to the City.
6. Except as set forth in the RMA, parcels of the State, federal or local governments within Future Annexation Area No. 2 shall be exempt from any levy of special taxes for the District. In no event shall the special taxes be levied on any parcel within the District in excess of the maximum tax specified in the Resolution of Formation.
7. Any taxpayer may appeal the levy of the special tax on a parcel within Future Annexation Area No. 2 by filing a written notice of appeal in accordance with section J of the RMA, which is supplemented as follows:
a. A taxpayer may file a written notice of appeal with the Manager not more than two years after the end of the tax year for which the taxpayer is contesting the levy, and the taxpayer’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) errors 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 taxpayer (if necessary), and mail the taxpayer 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 taxpayer 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 taxpayer disagrees with the Manager’s decision, and if the taxpayer is current on payments of the special tax, then the taxpayer 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 taxpayer’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 shall be conducted not more than 30 days after the taxpayer files the appeal with the City Council, and the City Council or the hearing officer, as appropriate, shall mail a written decision to the taxpayer 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.
8. The filing of an appeal under Section 7 of this ordinance will not relieve the taxpayer of the obligation to pay the special tax when due.
9. If for any reason a court with jurisdiction finds any portion of this ordinance to be invalid or finds the special tax to be inapplicable to any particular parcel, then the balance of this ordinance and the application of the special taxes to the remaining parcels will not be affected.
10. In accordance with Section 32(c) of the City Charter, after the City Council has passed this ordinance for publication, the City Clerk shall have the title of this ordinance, and only the title, published at least once in a newspaper of general circulation that is published in the City and designated by the City Council as the
official newspaper of the City, with the publication to occur at least three days before the City Council adopts this ordinance.