TO:Andrew P. Powers, City Manager
FROM:Jaime Boscarino, Finance Director
DATE:November 19, 2024
SUBJECT: 1994-1 Community Facilities District Annual Report RECOMMENDATION:
1. Receive and file Annual Report on the 1994-1 Community Facilities District (Marketplace Public Pedestrian, Traffic Circulation, and Parking Facilities) in compliance with the Local Agency Special Tax Bond and Accountability Act.
2. Find that this action is not a project as defined under the California Environmental Quality Act.
LEVINE ACT ITEM: No
FINANCIAL IMPACT:
No Additional Funding Requested. Staff time and costs to prepare the Annual Report are fully offset by revenue from landowners.
BACKGROUND:
The Local Agency Special Tax Bond and Accountability Act (the Act), enacted by Senate Bill 165 and codified in California Government Code Sections 53410 through 53412 and 50075 through 50077.5, requires local agencies to submit an annual report to its governing bodies on local bond measures sold after January 1, 2001, and local special tax measures approved by voters after January 1, 2001.
In 1994, the owners of the Janss Marketplace mall (Attachments #1 and #2) petitioned the City to establish a community facilities district and voted to accept a continuing property lien to secure an annual special tax assessment used to pay principal and interest on special tax bonds. City Council approved the creation of the 1994-1 Community Facilities District and the issuance of the 1994 Special Tax Bonds to construct a parking structure, pedestrian walkways, and other public improvements.
1994-1 Community Facilities District Annual Report
November 19, 2024
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In 2011, the owners of Janss Marketplace contacted staff to discuss restructuring options for the outstanding special tax bonds to reduce the annual debt service payments. In August 2012, the 1994 Special Tax Bonds were refunded by the 2012 Special Tax Refunding Bonds. The 2012 bonds have a final maturity date of September 1, 2031, but can be redeemed on any interest payment date on or after September 1, 2022. Due to the refunding, the 2012 bonds fall within the Act’s reporting requirements.
In the spring of 2024, the two property owners indicated they intended to prepay their special taxes in full, with the prepaid special taxes used to redeem the outstanding special tax bonds on September 1, 2024. On June 18, 2024, City Council adopted a resolution providing for the acceptance of the prepayments and the defeasance of the special tax bonds. After City Council’s action, only one of the two property owners prepaid its special taxes in full while the other property owner decided against prepaying its special taxes at that time.
The prepaid special taxes of the single property owner were deposited into an escrow account with Bank of New York Mellon Trust Company as escrow agent and, Causey Demgen and Moore, an independent certified public accountant, verified the escrowed funds were sufficient to repay the single property owner’s proportionate share of the debt. The City then cancelled the special tax lien on the single property owner’s parcels. Going forward the special tax required to fund the annual principal and interest payments will be levied on the parcels of the remaining single property owner.
DISCUSSION/ANALYSIS:
The Act was created to provide accountability measures for special taxes and/or local bond measures subject to voter approval. The Act requires that an annual report be filed by the local agency levying the special tax and/or issuing a bond measure no later than January 1. Some of the requirements of the Act are handled at the formation of the Special Tax District and others are handled through annual reporting. The Fiscal Agent Agreement the City entered into with Bank of New York Mellon Trust Company for the 2012 Special Tax Refunding Bonds also requires the Finance Director to prepare the annual report.
The attached annual report (Attachment #3) is intended to comply with the Act and Section 5.19 (C) of the Fiscal Agent Agreement requiring the Finance Director to file an annual report with City Council containing (i) the amount of Special Taxes collected and expended with respect to the District, (ii) the amount of Bond Proceeds collected and expended with respect to the District, and (iii) the status of the Project.
1994-1 Community Facilities District Annual Report
November 19, 2024
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During FY 2023-24, the City collected $4,106,915 (including a $1,650,895 special tax prepayment by a property owner) and expended $2,008,506. The $3,900,290 balance on June 30, 2024, included $1,650,909 necessary to make the principal and interest payment due on September 1, 2024, as well as $2,010,000 for a partial redemption of the bonds on September 1, 2024, as a result of the special tax prepayment by one of the two property owners. The annual report is an obligation related to the public improvements at Janss Marketplace financed by City Council approved special tax bonds.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
I. Maintain a strong local employment base geared toward retaining high quality businesses; Sustain a healthy business community; and, Diversify the local economy, with a specific emphasis on small businesses and high technology/biomedical jobs.
PREPARED BY: Jane Adelmann, Debt and Investment Analyst Attachments:
Attachment #1 – Vicinity Map
Attachment #2 – Site Plan
Attachment #3 – Local Agency Special Tax and Bond Accountability Report
FIN: 340-70\ja\H:\COMMON\Council\2024\Administration\111924 1994-1 CFD Annual Report - Staff Rpt.docx