10B
Date: January 13, 2026
To: Honorable Mayor and Members of the City Council
From: Ian Dailey, Finance Director
By: Sheila Poisson, Deputy Finance Director | [email protected] Subject: Finance – Adopt RESOLUTION of Intention to Establish Community Facilities District (CFD) No. 2026-01 (Public Services) and Future Annexation Area, Direct Staff to Record the Boundary Map, and Set a Date for a Public Hearing to Consider Formation of CFD No. 2026-01 and Calling for a Special Election.
Expenditure: None.
RECOMMENDATION
Recommendation of the Finance Director that City Council:
1. Adopt a RESOLUTION of Intention to Establish Community Facilities District (CFD) No. 2026-01 (Public Services) and Future Annexation Area; and
2. Direct staff to record the Boundary Map by January 28, 2026; and
3. Set a date of February 24, 2026 for a Public Hearing to consider formation of CFD No. 2026-01 and calling for a Special Election in accordance with the Mello-Roos Community Facilities Act of 1982.
FUNDING
None required.
DISCUSSION
BACKGROUND
The City of Torrance (“City”) continues to experience significant development interest. While existing Development Impact Fees (DIFs) fund one-time capital improvements such as streets, parks, and utilities, they cannot be used for recurring municipal services such as police, fire, park maintenance, and street repair. The CFD achieves fiscal neutrality for new development by levying an annual special tax on annexed properties proportionate to their land use intensity, offset by the estimated revenues the projects may generate. This structure provides a sustainable funding mechanism for public safety, maintenance, and community services as growth continues citywide.
At the direction of the City Council, the following actions have been taken to date:
• January 23, 2024: City Council directed staff to proceed with the formation of a Citywide CFD to mitigate project-related service impacts.
1 City Council
January 13, 2026
8 4
4 • July 24, 2024: Planning Commission reviewed the draft Torrance Municipal Code amendment regarding CFD formation and recommended approval to Council. • September 10, 2024: City Council conducted a public hearing and adopted Ordinance No. 3937 and Resolution No. 2024-75, establishing policies and procedures for the creation and administration of a Citywide CFD pursuant to the Mello-Roos Community Facilities Act of 1982 (Government Code Sections 53311–53368.3).
Following these approvals, the CFD now allows new projects to annex by landowner consent as a condition of development approval.
On November 5, 2025, the Planning Commission approved a request by Vista Homes for the construction of a new residential development consisting of 449 residential units, located within the Hawthorne Boulevard Corridor Specific Plan-Del Amo Business District One (H-DA1 Zone) at 3610 Torrance Boulevard (APN 7366-019-101). The project replaces underutilized commercial use with a high-quality, transit-oriented residential community that advances the City’s housing goals and supports its Regional Housing Needs Assessment (RHNA) allocation. As part of its conditions of approval, the project applicant/property owner has agreed to annex the property into the Citywide CFD prior to issuance of building permits to ensure fair-share contributions toward municipal service impacts. Should Council approve tonight’s recommendations and the project applicant move forward with the required actions, annual CFD revenue from this project will be $114,736, increasing by the Consumer Price Index annually.
Next Steps
After approval of the proposed resolution, a series of proceedings will need to take place and brought to Council before formation:
Date Action
January 28, 2026
(or earlier)
Boundary Map Filing: Prepare and record the updated boundary map reflecting the inclusion of 3610 Torrance Boulevard within the CFD’s annexation area.
February 17, 2026
(or earlier)
Notice of Public Hearing: Publish notice in Daily Breeze and mail notice of the Public Hearing to the property owner (Vista Homes).
February 24, 2026
Public Hearing and Election: Conduct the public hearing and special election by unanimous landowner consent in accordance with the Mello-Roos Act.
Adoption of the following:
1. Resolution of Formation (ROF) of the CFD and Establishment of Future Annexation Area
2. Resolution Calling Special Election
3. Resolution Confirming Results of Election: calls for the required vote by the qualified electors in the CFD (not including the Future Annexation Area)
4. Ordinance Ordering Levy of Special Taxes (First Reading) March 3, 2026 Ordinance Ordering Levy of Special Taxes (Second Reading) 2 City Council
January 13, 2026
8 4
4 Conclusion
Annexation of the Vista Homes Project into the Citywide CFD is consistent with the City Council’s adopted goals and policies for fiscal neutrality. The project’s annual CFD contribution of $114,736 will ensure that the City recovers the incremental cost of providing public safety and other services related to the new development, thereby maintaining balanced long-term service levels without additional burden to the General Fund.
ATTACHMENTS
1. Resolution
2. Boundary Map
3 124/062579-0133
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RESOLUTION NO. _______
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TORRANCE, CALIFORNIA DECLARING ITS INTENTION
TO ESTABLISH CITY OF TORRANCE COMMUNITY
FACILITIES DISTRICT NO. 2026-01 (PUBLIC SERVICES),
AND FUTURE ANNEXATION AREAS, AND TO
AUTHORIZE THE LEVY OF SPECIAL TAXES THEREIN
WHEREAS , the City Council of the City of Torrance (the “City”) has determined that the formation of a community facilities district (the “CFD”) over certain property in the City would be in the public interest; and
WHEREAS , pursuant to the Mello-Roos Community Facilities Act of 1982, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing at Section 53311, of the California Government Code, (the “Act”), the City Council (the “City Council”) of the City is authorized to establish and desires to so establish, the City of Torrance Community Facilities District No. 2026-01 (Public Services) (the “Community Facilities District”), and Future Annexation Areas, for the purpose of financing certain services (the “Services”); and
WHEREAS , this City Council now desires to proceed with the establishment of the Community Facilities District, and Future Annexation Areas, under the Act in order to levy special taxes to finance the acquisition and construction of certain certain services (the “Services”); and
WHEREAS , the City Council intends to annex additional areas to expand the boundaries of the Community Facilities District (the “Future Annexation Areas”) pursuant to the unanimous approval of all of the landowners in the Future Annexation Areas, and each of them, at such future time as determined by the City Council, pursuant to the authority set forth in Sections 53329.6, 53339.2 and 53339.3 of the Act; and
WHEREAS, pursuant to Section 53340 of the Act, the legislative body may, by ordinance, provide for the levy of special taxes on parcels that will be annexed to the Community Facilities 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 Community Facilities District and for apportionment and collection of the special taxes in the manner specified in the Resolution of Formation; and
NOW, THEREFORE, the City Council of the City of Torrance DOES HEREBY RESOLVE as follows:
SECTION 1. For the purposes of contributing to the funding of the Services to be financed by the Community Facilities District, the City Council proposes to establish the Community Facilities District pursuant to the Act.
4 ATTACHMENT 1
124/062579-0133
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SECTION 2. The name proposed for the Community Facilities District is “City of Torrance Community Facilities District No. 2026-01 (Public Services).” SECTION 3. The City Council hereby finds and determines that the City Clerk of the City has similar powers and duties as the “Clerk” (as that term is defined in Section 53317(a) of the Act), and therefore, the City Clerk, or their designee (the “Clerk” herein) is hereby authorized and directed to perform all functions of the Clerk.
SECTION 4. The proposed boundaries of the Community Facilities District, and Future Annexation Areas, are described in the Boundary Map (the “Boundary Map”) on file with the Clerk, which boundaries are hereby preliminarily approved and to which map reference is hereby made for further particulars. The Clerk is hereby directed to sign the original Boundary Map and record, or cause to be recorded, said the Boundary Map with all proper endorsements thereon in the office of the County Recorder of the County of Los Angeles within fifteen (15) days of the date of adoption of this Resolution as required by Section 3111 of the California Streets and Highways Code.
SECTION 5. The Services authorized to be funded by the Community Facilities District pursuant to the Act are described in Exhibit A hereto, which is by this reference incorporated herein.
SECTION 6. Except where funds are otherwise available to the Community Facilities District to pay for the Services, a special tax sufficient to pay for all Services, secured by recordation of a continuing lien against all nonexempt real property in the Community Facilities District, will be annually levied within the Community Facilities District as provided in the attached rate and method of apportionment of special tax for each Improvement Area (each a “Rate and Method”). The Rate and Method that contains sufficient detail to allow each landowner within the Community Facilities District to estimate the maximum amount that he or she will have to pay is described in Exhibit B attached hereto which by this reference is incorporated herein. The special tax for the Community Facilities District will be collected in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council shall determine, including direct billing of the affected property owners. The tax year after which no further special tax for the Community Facilities District to pay for Services levied against any parcel used for private residential purposes is specified in the Rate and Method.
Under no circumstances shall the special tax for the Community Facilities District levied in any fiscal year against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the Community Facilities District by more than 10% above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. For purposes of this paragraph, a parcel shall be considered “used for private residential purposes” not later than the date on which an occupancy permit for private residential use is issued.
SECTION 7. The City Council hereby fixes February 24, 2026 at 6:00 p.m., or as soon thereafter as the City Council may reach the matter, at the City Council Chambers, 3031 Torrance Boulevard, Torrance, California as the time and place when and where 5 124/062579-0133
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the City Council will conduct a public hearing on the establishment of the Community Facilities District, and the levy of the special taxes within the Community Facilities District pursuant to the Rate and Method.
SECTION 8. The Clerk is hereby directed to publish, or cause to be published, a notice of said public hearing one time in a newspaper of general circulation published in the area of the Community Facilities District. The publication of said notice shall be completed at least seven days prior to the date herein fixed for said hearing. Said Notice shall contain the information prescribed by Section 53322 of the Act.
SECTION 9. The levy of said proposed special tax for the Community Facilities District shall be subject to the approval of the qualified electors of the Community Facilities District at a special election. The proposed voting procedure shall be by hand- delivered ballot among the property owners in the Community Facilities District, with each person who is the owner of land at the close of said hearing having one vote for each acre or portion of an acre of land that he or she owns in the Community Facilities District not exempt from such special tax.
SECTION 10. The City Manager, or designee, of the City, as the officer having charge and control of the Services in and for the Community Facilities District, is hereby directed to study said proposed Services and to make, or cause to be made, and file with the Clerk a report in writing, presenting the following: (a) a description of the Services by type, which will be required to adequately meet the needs of the Community Facilities District; and (b) an estimate of the fair and reasonable cost of financing the Services, and incidental expenses in connection with said financing, including the costs of bond financing and all other related costs as provided in Section 53345.3 of the Act. The report shall be made a part of the record of the public hearing.
SECTION 11. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions thereof.
SECTION 12. This Resolution shall take effect immediately upon its adoption.
SECTION 13. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. 6 124/062579-0133
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INTRODUCED , APPROVED , and ADOPTED this 13th day of January, 2026.
Mayor George K. Chen
APPROVED AS TO FORM:
Patrick Q. Sullivan, City Attorney
________________________________
Tatia Y. Strader, Assistant City Attorney
ATTEST:
________________________________
Rebecca Poirier, MMC, City Clerk
Attachment:
Exhibit A – Authorized Services
Exhibit B – Proposed Rate and Method of Apportionment
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EXHIBIT A
AUTHORIZED SERVICES
The services to be funded, in whole or in part, by the Community Facilities District (the "District") include all direct and incidental costs related to providing for the maintenance of public infrastructure within the area of the District, the future voluntary annexation area, and areas adjacent to or in the vicinity of such areas. More specifically, the services may include, but not be limited to: (i) police and related services of the City of Torrance required to sustain the public safety service delivery capability for emergency and non-emergency services including related equipment, vehicles, services, supplies and personnel; (ii) maintenance and lighting of parks, parkways, streets, roads and open space; (iii) flood and storm protection services; as well as the provision of other public services authorized to be funded under Section 53313 of the California Government Code. The District may fund any of the following related to the services described in the preceding sentence: obtaining, constructing, furnishing, operating and maintaining equipment, apparatus or facilities related to providing the services and/ or equipment, apparatus, facilities or fixtures in areas to be maintained, paying the salaries and benefits of personnel necessary or convenient to provide the services, payment of insurance costs and other related expenses and the provision of reserves for repairs and replacements and for the future provision of services. It is expected that the services will be provided by the City of Torrance, either with its own employees or by contract with third parties, or any combination thereof. The services to be financed by the District are in addition to those provided in the territory of the District before the date of creation of the District, and will not supplant services already available within that territory when the District is created.
Administrative Expenses: The administrative expenses to be funded by the District include the direct and indirect expenses incurred by the City in carrying out its duties with respect to the District (including, but not limited to, the levy and collection of the special taxes) including the fees and expenses of attorneys, any fees of the County of Los Angeles related to the District or the collection of special taxes, an allocable share of the salaries of the City staff directly related thereto and a proportionate amount of the City's general administrative overhead related thereto, any amounts paid by the City from its general fund with respect to the District or the services authorized to be financed by the District, and expenses incurred by the City in undertaking action to foreclose on properties for which the payment of special taxes is delinquent, and all other costs and expenses of the City in any way related to the District. 8 1
Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES
C ITY OF TORRANCE
COMMUNITY FACILITIES DISTRICT NO. 2026 -01
(PUBLIC SERVICES )
A Special Tax as hereinafter defined shall be levied on all Assessor’s Parcels in City of Torrance Community Facilities District No. 2026-01 (Public Services) ("CFD No. 2026-01") and collected each Fiscal Year commencing in Fiscal Year 2025-2026, in an amount determined by the Council, through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 2026-01, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.
A DEFINITIONS
T
he terms hereinafter set forth have the following meanings:
"Acre" o r "Acreage" m eans the 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, parcel map, condominium plan, or other recorded County parcel map.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No 2026-01: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2026-01 or any designee thereof related to an appeal of the Special Tax; and the City’s annual administration fees and third party expenses.
Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2026-01 for any other administrative purposes of CFD No. 2026-01, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure, or otherwise addressing the disposition of delinquent Special Taxes.
“Affordable Housing Property” means Dwelling Units, located on one or more Assessor’s Parcels for which a Building Permit for new construction was issued on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Special Taxes are being levied, that are subject to deed restrictions, resale or rental restrictions, and/or regulatory agreements recorded in favor of the City providing affordable housing for households with incomes below 120% of the City of Torrance median income, and are therefore exempt from the Special Tax.
"Assessor’s Parcel" means any real property to which an Assessor’s Parcel Number is assigned as shown on an Assessor’s Parcel Map.
"Assessor’s Parcel Map" means an official map of the County Assessor of the County Exhibit B
9 2
Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” means that number assigned to an Assessor’s Parcel by the County for purposes of identification.
“Authorized Services” means those services eligible to be funded, as defined in the Resolution of Formation and authorized to be financed by CFD No. 2026-01 pursuant to Section 53313 and Section 53313.5 of the Act. C FD No. 2026-01 shall finance Authorized Services only to the extent that they are in addition to those provided in the territory before the CFD was created and such Authorized Services may not supplant services already available within CFD No. 2026-01 when the CFD was created.
"Building Permit" means the first legal document issued by the City giving official permission for the construction of a building on an Assessor’s Parcel. For purposes of this definition and application of the Special Tax, “Building Permit” may or may not include any subsequent building permits issued or changed after the first issuance, as determined by the CFD Administrator.
"CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and pro viding for the levy and collection of the Special Taxes.
"CFD No. 2026 -01 " means the City of Torrance Community Facilities District No. 2026-01 (Public Services).
“City” means the City of Torrance.
“Commercial Center Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing two or more acres in land area and building, or combination of buildings, greater than 25,000 gross square feet of commercial uses. This definition also includes mixed-use developments, regardless of the land area size and/or building(s) square feet, that consist of a combination of residential and non-residential uses. The City Manager, or his/her designee, shall make the decision whethe r an Assessor’s Parcel is Commercial Center Property, if the primary use is commercial. For mixed use developments, each use will be charged independentl y based on corresponding Land Use Class.
“Consumer Price Index” means, for each Fiscal Year, the Consumer Price Index published by the U.S. Bureau of Labor Statistics for Urban Wage Earners & Clerical Workers (CPI-W) in the Los Angeles – Long Beach – Anaheim Area, measured as of the month of December in the previous Fiscal Year. In the event this index ceases to be published, the Consumer Price Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Consumer Price Index for the Los Angeles – Long Beach – Anaheim Area.
"Cou ncil" means the City Council.
"County" means the County of Los Angeles.
"Single Family Residential Property" means Assessor’s Parcel of Developed Property for which Building Permits have been issued for Dwelling Units that are or are expected to be (i) each located on a separate lot designated by a Final Map, and (ii) surrounded by freestanding walls and that do not share an inside wall with any 10 3
Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
other Dwelling Unit, as determined by the CFD Admin istrator. "Developed Property" means, for each Fiscal Year, all Taxable Property for which a Building Permit was issued prior to May 1 of the prior Fiscal Year. “Dwelling Unit” means one residential unit of any configuration, including, but not limited to, a single-family attached or detached dwelling, condominium, mobile home, or otherwise. A casita or additional dwelling unit ("ADU") of any configuration shall not be counted as a separate dwelling unit for purposes of this Rate and Method of Apportionment.
“Exempt Welfare Exemption Property” means, for each Fiscal Year, an Assessor’s Parcel that is (a) receiving a welfare exemption under subdivision (g) of Section 214 of the California Revenue and Taxation Code (or any successor statute), as indicated in the County’s assessor’s roll finalized as of January 1 of the previous Fiscal Year, and (b) exempt from the Special Tax pursuant to Section 53340(c) of the Act. "Final Map" means (i) a final map, or portion thereof, approved by the County pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots or parcels for which Building Permits may be issued without further subdivision, or (ii) for condominiums, a final map approved by the County and a condominium plan recorded pursuant to California Civil Code Section 4285 creating such individual lots or parcels.
"Fiscal Year" means the period starting July 1 and ending on the following June 30. “General Commercial Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing less than two acres in land area and building, or combination of buildings, less than 25,000 gross square feet of commercial uses. This definition also includes mixed-use developments that consist of a combination of residential and non-residential uses. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is General Commercial Property.
“Heavy Industrial Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for primary and secondary processing, manufacturing and remanufacturing or reprocessing o f all types, and freight forwarding/logistics use/distribution centers. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Heavy Industrial Property. “Industrial Business Park Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing more than one light and/or heavy industrial use. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Industrial Business Park Property. "Land Use Class" means any of the categories listed in Table 1 below. “Light Industrial Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for light manufacturing (not involving the processing of hazardous materials animal products), warehousing, processing, and distribution of goods and other low intensity industrial uses. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Light Industrial Property.
"Maximum Special Tax" means the maximum Special Tax, determined in accordance 11 4
Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
with Section C below, that can be levied in any Fis cal Year on any Assessor’s Parcel. “Mixed-Use Property” means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for any site containing a combination of residential uses with non-residential uses such as commercial or industrial uses. Each use will be charged independently based on corresponding Land Use Class.
"Multi-Family Residential Property" means Assessor’s Parcel of Developed Property for which Building Permits were issued for construction of a residential structure consisting of two or more Dwelling Units that share common walls, including garage walls. Dwelling Units to be included in this category shall include, but not be limited to, townhomes, condominiums, triplex units, and duplex units. “Non -Residential Floor Area” means the total building square footage of the non- residential building(s) located on an Assessor’s Parcel, measured from outside wall to outside wall, not including space devoted to stairwells, public restrooms, lighted courts, vehicle parking and areas incident thereto, and mechanical equipment incidental to the operation of such building. The determination of Non-Residential Floor Area shall be made by reference to the Building Permit(s) issued for such Assessor’s Parcel and/or to the appropriate records kept by the City, as reasonably determined by the CFD Administrator.
"Non -Residential Property" means all Assessor's Parcels of Taxable Property for which a Building Permit(s) was issued for General Commercial Property, Commercial Center Property, Light Industrial Property, Heavy Industrial Property, and Industrial Business Park Property. The City Manager, or his/her designee, shall make the decision whether an Assessor’s Parcel is Non-Residential Property. “Property Owner Association” means, collectively, any property owner association or homeowners association, including any master of sub-association, created for the property in CFD No. 2026-01.
"Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2026-01 that was owned by a Property Owner Association, as of January 1 of the prior Fiscal Year.
"Proportionately" means, for Developed Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor’s Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor’s Parcels of Undeveloped Property.
"Public Property" means, for each Fiscal Year, any property within CFD No. 2026-01 that is owned by, irrevocably offered for dedication to, or dedicated to the federal government, the State, the City, or any other public agency as of June 30 of the prior Fiscal Year; provided however that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. To ensure that property is classified as Public Property in the first Fiscal Year after it is acquired by, irrevocably offered for dedication to, or dedicated to a public agency, the property owner shall notify the CFD Administrator in writing of such acquisition, offer, or dedication not later than June 30 of the Fiscal Year in which the acquisition, offer, or dedication occurred. 12 5
Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
“Rate and Method of Apportionment’ means this Rate and Method of Apportionment of Special Taxes, City of Torrance, Community Facilities District No. 2026-01 (Public Services).
"Reserve Fund" means a reserve fund to be used for one-time setup costs, capital replacement, and maintenance costs.
"Reserve Fund Requirement" means an amount equal to up to 100% of the anticipated annual cost of Authorized Services at buildout. “Resolution of Formation” means the resolution adopted by the Council pursuant to Section 53325.1 of the Act, establishing CFD No. 2026-01. "Special Tax" means a special tax levied in any Fiscal Year to pay the Special Tax Requirement.
“Special Tax Requirement” means that amount to (i) pay for Authorized Services; (ii) build up the Reserve Fund up to the Reserve Fund Requirement not to exceed in any given Fiscal Year 20% of Authorized Services; and (iii) pay Administrative Expenses; less (iv) a credit for funds available to reduce the Special Tax levy, if any, as determined by the CFD Administrator. Under no circumstances shall the Developed Property Special Tax Requirement include debt service payments for debt financings by CFD No. 2026-01.
"State" means the State of California.
"Taxable Property" means all of the Assessor’s Parcels within the boundaries of CFD No. 2026-01 which are not exempt from the Special Tax pursuant to law or Section G below.
"Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed Property, Public Property, or Property Owner’s Association Property.
B ASSIGNMENT TO LAND USE CLASSES
Each Fiscal Year, beginning with Fiscal Year 2025-2026, each Assessor’s Parcel of Taxable Property shall be classified as Developed Property, Undeveloped Property, Public Property, and/or Property Owner’s Association Property.
Assessor’s Parcels of Developed Property shall further be classified as Single Family Residential Property, Multi-Family Residential Property, General Commercial Property, Commercial Center Property, Light Industrial Property, Heavy Industrial Property, and Industrial Business Park Property.
C MAXIMUM SPECIAL TAX
C.1 Developed Property
Maximum Special Tax
The Maximum Special Tax for Fiscal Year 2025-2026 for Developed Property is shown below in Table 1.
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Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
Table 1 : Maximum Special Taxes for Developed Property
Land
Use
Class
Description Fiscal Year 2025 -2026
Maximum Special Tax
1 SINGLE FAMILY RESIDENTIAL PROPERTY $560 PER DWELLING UNIT 2 MULTI-FAMILY RESIDENTIAL PROPERTY $284 PER DWELLING UNIT 3 GENERAL COMMERCIAL PROPERTY $62.21 PER 1,000 SQUARE FEET OF
NON-RESIDENTIAL FLOOR AREA
4 COMMERCIAL CENTER PROPERTY $0.00 PER 1,000 SQUARE FEET OF
NON-RESIDENTIAL FLOOR AREA
5 LIGHT INDUSTRIAL PROPERTY $23.27 PER 1,000 SQUARE FEET OF
NON-RESIDENTIAL FLOOR AREA
6 HEAVY INDUSTRIAL PROPERTY $30.06 PER 1,000 SQUARE FEET OF
NON-RESIDENTIAL FLOOR AREA
7 INDUSTRIAL BUSINESS PARK PROPERTY $42.37 PER 1,000 SQUARE FEET OF
NON-RESIDENTIAL FLOOR AREA
Multiple Land Use Classes
In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for all Land Use Classes located on the Assessor’s Parcel. The CFD Administrator’s allocation to each Land Use Class shall be final.
Increase in the Maximum Special Tax
On each July 1, commencing on July 1, 2026, the Max imum Special Tax for Developed Property shall be increased annually by the change in the Consumer Price Index during the 12 months prior to December of the previous Fiscal Year.
C.2 Undeveloped Property
There will be no Special Tax levied on Undeveloped Property.
D ANNEXATIONS
Additional properties may be annexed into CFD No. 2026-01 from time to time. For Land Use Classes not included in the initial boundaries of CFD No. 2026-01, a study and report describing the Authorized Services to be provided to such properties and the estimated cost of such Authorized Services shall be provided to the Council as the legislative body of the CFD No. 2026-01 in accordance with Section 53321.5 of the Mello-Roos Act. Based on this analysis, the property to be annexed, pursuant to California Government Code section 53339 et. seq. will be assigned an appropriate Maximum Special Tax rate by Land Use Class as provided herein or as defined and detailed when annexed.
E APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2025-2026 and for each following Fiscal Year, the City shall levy the Special Tax as follows:
First: Determine the Special Tax Requirement and Proportionately levy the Special Tax on each Assessor’s Parcel of Developed Property until the amount levied on Developed 14 7
Rate and Method of Apportionment
CFD No. 2026-01 (Public Services)
Property is equal to the lesser of (i) the Special Tax Requirement, or (ii) 100% of the applicable Maximum Special Tax for Developed Property.
F PREPAYMENT
No prepayments of the Special Tax are permitted.
G EXEMPTIONS
No Special Tax shall be levied on (i) Assessor’s Parcels which are Public Property, Property Owner Association Property, Affordable Housing Property, or Exempt Welfare Exemption Property; (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religio us organization; (iii) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement; (iv) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses; or (v) Assessor’s Parcels restricted to other types of public uses determined by the Council.
H APPEALS AND INTERPRETATIONS
Any taxpayer may file a written appeal of the Special Tax on his/her property with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes.
During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall eliminate or reduce the Special Tax on the appellant’s property and/or provide a refund to the appellant. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has 30 days in which to appeal to the Council by filing a written notice of appeal with the clerk of the Council, provided that the appellant is current in his/her payments of Special Taxes. The second appeal must specify the reasons for its disagreement with the CFD Administrator’s determination.
Interpretations may be made by the Council by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this Rate and Method of Apportionment.
I MANNER OF COLLECTION
The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2026-01 may directly bill the Special Tax, may collect the Special Tax at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.
J TERM OF SPECIAL TA X
The Special Tax shall be levied in perpetuity as necessary to meet the Special Tax Requirement, unless no longer required to pay for Authorized Services as determined at the discretion of the Council.
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