City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-01595 2/6/2024 Consent Item 19.
Rescind Resolution No. 2024-0008 Which Called a Special Election to Annex Territory and Make Certain Changes to the Greenbriar Community Facilities District No. 2018-03 (Improvements)
File ID: 2023-01595
Location: District 1, Represented by Councilmember Kaplan Recommendation: Adopt a Resolution rescinding Resolution No. 2024-0008 which called a special election on proposals to annex property to Improvement Area No. 2 (IA-2) of the Greenbriar Community Facilities District No. 2018-03 (Improvements) (CFD) and to change the Rate and Method of Apportionment of Special Tax (RMA) for IA-2 of the CFD.
Contact: Eric Frederick, Senior Development Project Manager, (916) 808-5129 [email protected]; Sheri Smith, Special Districts Manager, [email protected], (916) 808-7204, Department of Finance.
Presenter: None.
Attachments:
1-Description/Analysis
2-Background
3-Schedule of Proceedings
4-Resolution
Description/Analysis
Issue Detail: Issue Detail: On January 9, 2024, Council adopted Resolution No. 2024-0008 (the Resolution Calling Election) calling for a special mailed ballot election on whether to:
(1) Annex territory to IA-2 of the CFD; and
(2) Amend the rate and method of apportionment of the special taxes for IA-2 to add a maximum special tax rate for the area to be annexed to IA-2, add a new land use category for “Welfare Exemption Property” and related terms and provisions, identify planned non-residential development in the area to be annexed to IA-2 as exempt from the special tax, and to update
File ID: 2023-01595 2/6/2024 Consent Item 19.
the “Public Facilities Requirement” amount used in connection with prepayments, through the adoption of an amended and restated rate and method of apportionment for IA-2 in the form attached as Exhibit A to the Resolution of Intention, adopted by Council on November 28, 2023 (Resolution No. 2023-0379).
The special mailed ballot election was scheduled to be held on January 16, 2024. Following the adoption of the Resolution Calling Election, the owner of all taxable property in the area proposed to be annexed the (Annexation Territory) and the owner of all taxable property currently in IA-2 (the Existing IA-2 Territory) (Greenbriar Project Owner, LLC, and Greenbriar Phase 2, LLC, respectively, and both affiliates of Integral Communities) requested the special election be postponed to a future date yet to be determined due to uncertainties in the municipal finance markets surrounding certain state-wide initiatives proposed for the November 2024 general election. When more clarity on these issues is known, the special election on the proposals outlined above can move forward. At that time, staff will bring another resolution to Council to call the special mailed ballot election once again.
Policy Considerations: Rescinding the Resolution Calling Election will give the property owners additional time to complete and return their ballots. This will delay the proposed annexation of the Annexation Territory to IA-2 of the CFD and enacting the changes to the CFD outlined above.
However, special taxes are not currently being levied in IA-2 so this delay will not affect property currently in IA-2 of the CFD. In addition, an approved Tentative Map condition for the Annexation Property will remain unsatisfied until the annexation process is completed.
Economic Impacts: Not applicable.
Environmental Considerations:
California Environmental Quality Act (CEQA): Under the CEQA Guidelines, the annexation of property to a CFD and modifying the RMA of a CFD (a CFD being a funding mechanism) 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 [CEQA Guidelines section 15378(b)(4)].
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: The completion of the special mailed ballot election is required by the Mello-Roos Community Facilities Act of 1982 to annex the Annexation Territory to IA-2 of the CFD and to implement the changes to IA-2 of the CFD. To meet the request of the property owners to postpone the election, the Resolution Calling Election must be rescinded and a new resolution calling a special election must be adopted at a future date.
File ID: 2023-01595 2/6/2024 Consent Item 19.
Financial Considerations: There are currently no financial impacts to any City funds. Once annexed to the CFD residential development in the Annexation Territory will be subject to the levy of an annual special tax as described in the second amended rate and method of apportionment of the special taxes for IA-2 (Second Amended RMA). The proposed changes set forth in the Second Amended RMA, which was attached as Exhibit A to the Resolution of Intention, adopted by Council on November 28, 2023 (Resolution No. 2023-0379), that add provisions to exempt “Welfare Exemption Property” from the levy of the special tax do not affect the maximum amount of special taxes anticipated to be collected in IA-2 because no properties are currently anticipated to be classified as such. In addition, any property that is classified as “Welfare Exemption Property” after bonds have been issued may still be subject to the special tax if certain other conditions are met.
Special tax bonds may be issued in the future to finance the acquisition and construction of certain public improvements and to finance certain governmental fees for public facilities. Those bonds will be secured solely by the levy of special taxes within IA-2, including within the Annexation Territory, pursuant to the Second Amended RMA. At this time bonds have not been issued and no special taxes have been levied in IA-2 of the CFD.
Local Business Enterprise (LBE): Not applicable.
ATTACHMENT 2
BACKGROUND
The CFD was established by the City Council on November 27, 2018, under the Mello- Roos Community Facilities Act of 1982 (the “Mello-Roos Act”). The CFD currently covers approximately 545± acres of property within the Greenbriar Planned Unit Development. The Northlake development project (formerly known as Greenbriar) is proposed for single-family, multi-family, and commercial development, as well as parks, open space, lakes/detention basins, light rail corridor and station, park and ride lot, and a school site. The Northlake project area is generally bounded by Elkhorn Boulevard to the north, State Highway 99 to the east, Interstate 5 to the south, and the City of Sacramento city limits to the west and north.
As approved by Council, the CFD will finance, through the issuance of Mello-Roos special tax bonds or the incurrence of other debt for the two improvement areas designated as such within the CFD (referred to as IA-1 and IA-2), certain development fees and public improvements authorized for the CFD. On November 27, 2018, Council adopted Resolution No. 2018-0460 deeming it necessary to incur bonded indebtedness to finance the acquisition and construction of certain public facilities and to finance certain governmental fees for 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 and IA-2 of the CFD, was originally not to exceed $55 million for IA-1 and $50 million for IA-2.
On December 1, 2020, Council adopted Resolution No. 2020-0377 to change the rate and method of apportionment (RMA), the boundary map, and the debt limit for IA-1. The changes resulted in (1) amending the RMA for IA-1 to reduce the maximum special tax rates, modify the provisions for partial prepayment of special taxes, and make related and clarifying changes, (2) amending the boundary map of the CFD by removing two parcels from IA-1 planned for commercial development, and (3) lowering the debt limit for IA-1 from $55 million to $47 million. Following this change, in February 2021, the City issued its Greenbriar CFD No. 2018-03 (Improvements) Improvement Area No. 1 Special Tax Bonds, Series 2021, in the aggregate principal amount of $43.47 million to finance the acquisition and construction of certain public facilities and to finance certain governmental fees for public facilities for the CFD, secured by special taxes levied on taxable property within IA-1.
On December 7, 2021, Council adopted Resolution No. 2021-0356 to change the RMA and debt limit for IA-2. The changes resulted in (1) amending the RMA for IA-2 to increase the maximum special tax rates, modify the provisions for partial prepayment of special taxes, and make related and clarifying changes, and (2) increasing the debt limit for IA-2 from $50 million to $67 million. To date, no special tax bonds have been issued for the CFD secured by special taxes levied on taxable property within IA-2
Proposed Annexation and Change Proceedings for IA-2 of the CFD
The proposed annexation would add additional territory to IA-2 of the CFD (the Annexation Territory) that will be levied a special tax pursuant to a further amended and restated RMA for IA-2 (the Second Amended RMA). Only residential development within the proposed annexation area will be subject to the levy of a special tax; the area planned for non-residential development will be exempt. The authorized debt limit and public facilities and facilities fees eligible for CFD financing would not change as a result of this annexation.
Because of the addition of a new land use category in the Second Amended RMA and to comply with recent changes to Section 53340(c) of the California Government Code, change proceedings must also be undertaken for the territory already within IA-2 that is subject to the special tax (the Existing IA-2 Territory). This is being done concurrently with the annexation as there are currently no homeowners in the Existing IA-2 Territory and affiliates of Integral Communities own all of the land in the Annexation Territory and all of the existing taxable property in the Existing IA-2 Territory.
Process to Undertake Annexation and Change Proceedings
The process to annex territory to IA-2 of the CFD and modify the IA-2 RMA began with a landowner petition requesting the annexation and modifications, followed by Council’s adoption of a “resolution of intention and consideration” on November 28, 2023 (Resolution No. 2023-0379), which also called for a public hearing to be held on January 9, 2024, where all interested persons had the opportunity to protest the proposed annexation and the proposed IA-2 RMA modifications. That public hearing was held on such date, after which Council adopted a resolution calling an election on the annexation and modifications (Resolution No. 2024-0008). Subsequent to the adoption of that resolution, the “qualified electors” for these proposals requested that the election be delayed to a future date yet to be determined. Therefore, Resolution No. 2024-0008 must be rescinded so the election can be called once again when that future date is determined.
After the election takes place and if votes are received in the affirmative, Council can then adopt a Resolution Determining Results and Resolution of Change to complete the annexation process and to enact the proposed changes to IA-2 of the CFD. The final step in the process will be to adopt an ordinance supplementing and amending Ordinance Nos. 2018-0052 and 2021-0033 to incorporate the amendments to the rate and method of apportionment of the special taxes for IA-2 as so approved.
A proposed Schedule of Proceedings, outlining the timeline for these concurrent processes, is included in Attachment 3 to this report.
SCHEDULE OF PROCEEDINGS
GREENBRIAR COMMUNITY FACILITIES DISTRICT NO. 2018-03 (IMPROVEMENTS) ANNEXATION NO. 1 to IMPROVEMENT AREA NO. 2 and
CHANGE PROCEEDINGS for IMPROVEMENT AREA NO. 2
November 28, 2023 City Council: Adopted Resolution of Intention to Annex and Consider Changes to Rate and Method of Apportionment of Special Taxes for IA-2
November 30, 2023 Annexation Map Recorded
December 29, 2023 Notice of Public Hearing Published
January 9, 2024 City Council: Held Public Hearing
Adopted Resolution Calling Special Election
January 16, 2024 Special Election Postponed
February 6, 2024 City Council: Adopt Resolution Rescinding Resolution Calling Special Election
TBD City Council: Adopt Resolution Calling Special Election
TBD City Council: Adopt Resolution Declaring Election Results Adopt Resolution of Change
Pass for Publication Amendment Ordinance
TBD Record Amendment to Notice of Special Tax Lien
TBD City Council: Adopt Amendment Ordinance
RESOLUTION NO.
Adopted by the Sacramento City Council
Resolution Rescinding Resolution No. 2024-0008 Which Authorized Submitting Annexation of Territory to Improvement Area No. 2 of the City of Sacramento Greenbriar Community Facilities District No. 2018- 03 (Improvements), Changes to Rate and Method of Apportionment of Special Taxes for said Improvement Area and Levy of Special Taxes to Qualified Electors
BACKGROUND
A. In 2018, the City Council conducted proceedings under the Mello-Roos Community Facilities Act of 1982, set forth at Government Code sections 53311 through 53368.3 (the “ Act”), to form the “City of Sacramento Greenbriar Community Facilities District No. 2018 -03 (Improvements)” (the “ CFD”), to create two improvement areas within the CFD known as “Improvement Area No. 1 of the City of Sacramento Greenbriar Community Facilities District No. 2018 -03 (Improvements)” (“IA-1”) and “Improvement Area No. 2 of the City of Sacramento Greenbriar Community Facilities District No. 2018-03 (Improvements)” (“IA-2”), to authorize the levy of special taxes upon the land within IA -1 and IA-2 pursuant to the rate and method of apportionment for IA -1 and for IA -2, respectively, and to issue bonds secured by the special taxes in order to finance certain public facilities, either directly or through the financing of governmental fees, all as described in those proceedings.
B. In 2020, at the request of the owner of all of the land in IA -1, the City Council undertook change proceedings under the Act to (1) amend the boundary map for the CFD by removing two parcels from IA -1, (2) amend and restate the rate and method of apportionment of special taxes for IA -1, and (3) decrease the indebtedness limit for IA-1.
C. In 2021, at the request of the owner of all of the land in IA-2, the City Council undertook change proceedings under the Act to (1) amend and restate the rate and method of apportionment of special taxes for IA -2 to increase the maximum special tax rates, modify the provisions for partial prepayment of special taxes, and make related and clarifying changes, and (2) increase the indebtedness limit for IA-2.
D. The City has received a petition, a copy of which is on file with the City Clerk, from the owner of all the land proposed for annexation to IA -2 (the “ Annexation Territory”) and all the land subject to the special tax currently within IA -2 (the “Existing IA-2 Territory”), requesting that the City annex the Annexation Territory to IA-2 and, in connection therewith, undertake change proceedings to adopt a
2 further amended and restated rate and method of apportionment of special taxes for IA-2 (the “Second Amended Rate and Method”).
E. To date, the City has not issued any bonds or indebtedness secured by special taxes to be levied within IA-2.
F. Under the Act, the City Council, as the legislative body for the CFD, is empowered with the authority to undertake proceedings to annex territory to IA -2 of the CFD and, in connection therewith, undertake change proceedings to adopt the Second Amended Rate and Method.
G. The City Council has determined that the proposed proceedings for IA -2 are consistent with and follow the local goals and policies concerning the use of the Act that have been adopted by the City Council and are now in effect.
H. Accordingly, in proceedings heretofore conducted by the City Council pursuant to the Act, the City Council on January 9, 2024 adopted a “Resolution Submitting Annexation of Territory to Improvement Area No. 2 of the City of Sacramento Greenbriar Community Facilities District No. 2018-03 (Improvements), Changes to Rate and Method of Apportionment of Special Taxes for said Improvement Area and Levy of Special Taxes to Qualified Electors” (the “ Election Resolution ”) calling a special election of the qualified landowner electors with respect to (1) the measure regarding the annexation of the Annexation Territory to IA-2, and (2) the measure for the City Council to undertake change proceedings to adopt the Second Amended Rate and Method, all as further described in that resolution.
I. At the request of the owner s of all of the land in the Annexation Territory and the Existing IA-2 Territory, this City Council has been asked to rescind the Election Resolution and to reconsider it at a future date to be requested by such owner.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Council finds that the statements in the Background are true.
Section 2. All prior proceedings taken by the City Council with respect to the CFD, the proposed annexation of the Annexation Territory to IA -2 and the proposed adoption of the Second Amended Rate and Method have been duly considered and are hereby determined to be valid and in conformity with the Act.
Section 3. The provisions of the Res olution of Intention to Annex and the Resolution of Formation with respect to the CFD adopted by the Board on November 27, 2018 as Resolution No. 2018 -0459 (the “ Resolution of Formation ”), are by this reference incorporated herein, as if fully set forth herein and shall remain in effect.
3 Section 4. The Council hereby rescinds, in full, the Election Resolution. The authorities granted in the Election Resolution shall no longer be effective, from and after the date of approval and adoption of this Resolution.
Section 5. This resolution takes effect when adopted.