City of Sacramento
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File ID: 2024-00539 3/19/2024 Consent Item 2.
Ordinance to Levy a Special Tax within the Greenbriar Community Facilities District No. 2018- 03 (Improvements) and Supplementing and Amending Ordinance Nos. 2018-0052 and 2021- 0033 (Passed for Publication 03/12/2024; Published 03/15/2024) File ID: 2024-00539
Location: District 1, Represented by Councilmember Kaplan Recommendation: Adopt an Ordinance Supplementing and Amending Ordinance Nos. 2018-0052 and 2021-0033 and Levying a Special Tax Within the City of Sacramento Greenbriar Community Facilities District No. 2018-03 (Improvements) (CFD).
Contact: Eric Frederick, Senior Development Project Manager, (916) 808-5129, [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
Description/Analysis
Issue Detail: On February 27, 2024, Council adopted Resolution No. 2024-0063 calling for a special mailed ballot election on whether to:
(1) Annex territory to Improvement Area No. 2 (IA-2) of the CFD; and (1) 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 the “Public Facilities Requirement” amount used in connection with prepayments, through the
File ID: 2024-00539 3/19/2024 Consent Item 2.
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 held on March 5, 2024, and all votes received were in the affirmative. Therefore, Staff recommends that City Council adopt the attached ordinance that will incorporate the amendments to the RMA for IA-2 as approved by the qualified electors of IA-2, which includes the area annexed to IA-2 pursuant to said election.
Policy Considerations: The attached ordinance reflects the approved modifications, as outlined above, to the RMA for IA-2. In addition, the RMA will be hereafter be applicable to all property in IA-2, including the territory annexed to IA-2. Based on projected future home prices, the overall tax burden for future homeowners in this portion of the Northlake development project is estimated to be below the threshold outlined in the City’s adopted Policies and Procedures for Use of Special Assessment and Mello-Roos Community Facilities District Financing for Infrastructure and Public Facilities.
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 recommended actions are required by the Mello-Roos Community Facilities Act of 1982 to implement the changes approved by the qualified electors of IA-
2. Financial Considerations: There are no financial impacts to any City funds. Residential development in IA-2 will be subject to the levy of an annual special tax as described in the RMA.
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 pursuant to the RMA. At this time, bonds have not been issued and no special taxes have been levied in IA-2 of the CFD.
File ID: 2024-00539 3/19/2024 Consent Item 2.
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
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, 2023, 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 postponed and Resolution No. 2024-0008 was rescinded by Council on February 6, 2024 (Resolution No. 2024-0038). Council re- called the election on February 27, 2024 (Resolution No. 2024-0063) and ballots were resubmitted to the “qualified electors” of the Annexation Territory and of the Existing IA- 2 Territory at a special election and all votes received were in the affirmative. Based on the results of this election, Council adopted 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 on March 12, 2024. The final step in the process will be to adopt the attached 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: Hold Public Hearing
Adopted Resolution Calling Special Election
February 6, 2024 City Council: Adopted Resolution Rescinding Resolution Calling Special Election
February 27, 2024 City Council: Adopted Resolution Calling Special Election
March 5, 2024 Special Election Ballots Received
March 12, 2024 City Council: Adopted Resolution Declaring Election Results Adopted Resolution of Change
Passed for Publication Amendment Ordinance
March 13, 2024 Recorded Amendment to Notice of Special Tax Lien
March 19, 2024 City Council: Adopt Amendment Ordinance
ORDINANCE NO.
Adopted by the Sacramento City Council
Supplementing and Amending Ordinance No. 2021-0033 and Ordinance No. 2018-0052 and Levying a Special Tax for Fiscal Year 2023-24 and Following Fiscal Years Within Improvement Area No. 2 of the City of Sacramento Greenbriar Community Facilities District No. 2018-03 (Improvements)
BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:
SECTION 1. On November 27, 2018, the City Council adopted Resolution No. 2018-0459 (the “Resolution of Formation”) pursuant to the Mello-Roos Community Facilities Act of 1982, set forth at Government Code sections 53311 through 53368.3 (the “Act”), thereby establishing the City of Sacramento Greenbriar Community Facilities District No. 2018-03 (Improvements) (the “CFD”), designating within the CFD two improvement areas, 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”), authorizing the levying of a special tax on taxable property within IA-1 in accordance with a Rate and Method of Apportionment of Special Tax for IA-1 (the “Original RMA-1”), and authorizing the levying of a special tax on taxable property within IA-2 in accordance with a Rate and Method of Apportionment of Special Tax for IA-2 (the “Original RMA-2”).
SECTION 2. On December 11, 2018, the City Council enacted Ordinance No. 2018-0052, which levied a special tax on all taxable parcels within IA-1 and within IA-2 for fiscal year 2018-2019 and for all subsequent fiscal years in the amounts and at the rates authorized by the Resolution of Formation and the Original RMA-1 and the Original RMA-2, as applicable.
SECTION 3. On December 1, 2020, as authorized by the Act and a vote of the qualified electors within IA-1, the City Council adopted Resolution No. 2020-0377 (the “Resolution of Change (IA-1)”), which among other changes, replaced the Original RMA-1 with an Amended and Restated Rate and Method of Apportionment of Special Tax for IA-1 in the form attached thereto (the “Amended RMA-1”).
SECTION 4. On December 8, 2020, the City Council enacted Ordinance No. 2020-0046,
which implemented the provisions of the Resolution of Change (IA-1) by amending and supplementing Ordinance No. 2018-0052 with respect to the levy and collection of the special tax within IA-1.
SECTION 5. On December 7, 2021, as authorized by the Act and a vote of the qualified electors within IA-2, the City Council adopted Resolution No. 2021-0356 (the “Resolution of Change (IA-2)”), which among other changes, replaced the Original RMA-2 with an Amended and Restated Rate and Method of Apportionment of Special Tax for IA-2 in the form attached thereto (the “First Amended RMA-2”).
SECTION 6. On December 14, 2021, the City Council enacted Ordinance No. 2021-0033, which implemented the provisions of the Resolution of Change (IA-2) by amending and supplementing Ordinance No. 2018-0052 with respect to the levy and collection of the special tax on taxable property within IA-2.
SECTION 7. On March 12, 2024, as authorized by the Act and a vote of the qualified electors within territory proposed for annexation to IA-2 (the “Annexation Territory”) and the territory within IA-2, the City Council adopted Resolution No. 2024-____ (the “Second Resolution of Change (IA-2)”), which determined that the proposed changes to the rate and method of apportionment of special tax for IA-2 had been lawfully authorized, and the rate and method of apportionment of special tax for IA-2 shall be as set forth in the Second Amended and Restated Rate and Method of Apportionment of Special Tax for IA-2 attached to the Second Resolution of Change (IA-2) (the “Second Amended RMA-2”).
SECTION 8. A special tax is hereby levied on all taxable parcels within IA-2 for fiscal year 2023-24 (which includes the Annexation Territory) and for all subsequent fiscal years in the amount of the maximum tax authorized by the Second Amended RMA-2, subject to the following: in any fiscal year, the City Council may determine by resolution that the tax be levied at a lesser amount. The levy of the tax will continue until the City Council ceases collecting the tax and a Notice of Cessation of Special Tax is recorded in accordance with Government Code section 53330.5.
SECTION 7. The Manager of the Infrastructure Finance Division of the City Finance Department (the “Manager”) is authorized and directed (a) to determine each year, without further action of the City Council, the appropriate amount of the special tax to be levied within IA-2 in accordance with the CFD proceedings; and (b) to prepare the annual special-tax roll in accordance with the Second Amended RMA-2 and the CFD proceedings—all with the aid of appropriate City officers and agents. The Manager’s address and phone number are as follows:
915 “I” Street
Finance Department, Infrastructure Finance
Division
New City Hall, Fifth Floor
Sacramento, California 95814
Telephone: (916) 808-7204
SECTION 8. The Manager is hereby authorized and directed, without further action of the City Council, to provide to the Auditor-Controller Division of the Sacramento County Department of Finance, in proper form and in proper time, all appropriate information needed to effect the correct and timely billing and collection of the special tax within IA-2 on the secured property-tax roll of Sacramento County, subject to the following: as provided in Government Code section 53340 and the CFD proceedings, the City Council has reserved the right to use any method of collecting the special tax that it determines to be in the City’s best interests, including but not limited to direct billing by the City to the property owners, supplemental billing, and judicial foreclosure, all or any of which the City Council may in its discretion implement from time to time.
SECTION 9. The appropriate officers and agents of the City are authorized to make adjustments to the special-tax roll before the final posting of the special taxes to the Sacramento County tax roll each fiscal year as may be necessary to achieve a correct match of the special-tax levy with the assessor's parcel numbers finally used by the County in sending out property-tax bills.
SECTION 10. If the special tax is collected on Sacramento County’s secured tax roll, then, before remitting the special-tax collections to the City, the County may deduct from the amounts collected its reasonable and agreed charges for collecting the special tax.
SECTION 11. Each taxpayer who claims that the amount of the special tax levied on the taxpayer’s property within IA-2 is not correct is referred to the claims procedure in the Second Amended RMA-2.
SECTION 12. If a court with jurisdiction finds, for any reason, that any portion of this ordinance is invalid or that the special tax does not apply to a particular parcel, then the balance of this ordinance, and the application of the special tax to all other parcels, will not be affected.
SECTION 13. In accordance with City Charter section 32(c), 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.