City Council Staff Report Page 1 of 5 May 26, 2026
Staff Report
Agenda Item No. 6.1
DATE: May 26, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Adopt a Resolution Adopting Amended and Restated Statement of Goals and Policies Regarding Use of the Mello-Roos Community Facilities Act of 1982,
Adopt a Resolution Declaring Intention to Form the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Designate an Initial Improvement Area Therein and Establish a Future Annexation Area, and to Levy Special Taxes Therein to Finance Certain Public Services and the Acquisition and Construction of Certain Public Facilities, and
Adopt a Resolution Declaring Intention to Incur a Bonded Indebtedness in and for the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) in an Amount not to Exceed $38,000,000 to Finance the Acquisition and Construction of Certain Public Facilities
EXECUTIVE SUMMARY
Staff recommends that the City Council adopt three resolutions: (1) a resolution adopting Amended and Restated Statement of Goals and Policies Regarding Use of the MelloRoos Community Facilities Act of 1982 (Attachment 1), (2) a resolution declaring intention to form the Community Facilities District No. 2026-1 (Station East Facilities and Services) of the City of Union City, designate an initial improvement area therein and establish a future annexation area, and to levy special taxes therein to finance certain public services and the acquisition and construction of certain public facilities (Attachment 2), and (3) a resolution declaring intention to incur a bonded indebtedness in and for the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) in an amount not to exceed $38,000,000 to finance the acquisition and construction of certain public facilities (Attachment 3).
These three actions will initiate the process to form the new community facilities district for Station East, as anticipated in the Station East Development Agreement. The final steps in forming the proposed community facilities district will occur at the City Council meeting on July 14, 2026.
Agenda Item No. 6.1
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STRATEGIC PLAN ALIGNMENT
This agenda item is in alignment with:
• Goal C. Economic, Community Development and Public Safety - Institute forward-thinking business, land use development, housing, social services, and public safety strategies that promote community growth and innovation. • Strategy 3: Promote housing development for all income levels in the community by implementing the Housing Element, updating the zoning ordinance to include objective standards for new multi-family residential development to streamline the review of applications for housing developments, and other measures.
BACKGROUND
A community facilities district (CFD), also a Mello-Roos District, is a special-purpose district formed to finance specific public infrastructure and services. The property owners within the CFD pay a special tax in addition to their other property taxes, which is used to fund improvements and/or pay off bonds. The City has an existing CFD, CFD 2006-1, formed in 2007 to fund certain public services, including police services, fire protection and suppression services, paramedic services, and park maintenance.
The Station East Development Agreement, approved by Ordinance 886-21, requires the formation of a CFD or equivalent mechanism for the project. The priority for the CFD is to offset any temporary negative fiscal impact resulting from the Project’s location within the former Redevelopment Project Area. This temporary condition will remain in effect until 2038, when the last bond payment related to the Redevelopment Project Area will be made. The CFD also allows the developer to use the CFD mechanism to finance facilities and services. The First Amendment to the Development Agreement, approved by Ordinance 913-23, establishes the following priorities for financing services and facilities:
1. Offset the temporary fiscal imbalance due to the Project’s location in the former Redevelopment Project Area.
2. Capital facilities – remaining capacity may be used for financing capital facilities.
3. Agency Fees – remaining capacity may be used to finance agency fees.
The City has received a petition from the Lennar Corporation, the owner and developer of APN Nos. 087-0023-013-10 and 087-0023-012-00 (the “Property”), requesting the formation of the proposed community facilities district (the “CFD”) encompassing the Property, to finance:
(b) sewer system facilities, including capacity in existing facilities and sewage treatment and disposal capacity; storm drain improvements; transportation improvements, including street and traffic improvements of the City; park improvements; and such other improvements authorized by the Act; and (b) the incidental expenses proposed to be incurred are: (i) the cost of planning and designing the public facilities thereof, (ii) all costs associated with the formation of the proposed community facilities district, the issuance of the bonds thereof, the determination of the amount of and collection of special taxes, the payment of Agenda Item No. 6.1
City Council Staff Report Page 3 of 5 May 26, 2026
special taxes, and costs otherwise incurred to carry out the authorized purposes of the proposed community facilities district, and (iii) any other expenses incidental to the construction, completion, and inspection of the public facilities.
A special tax will be levied upon property owners within the Property to address the items listed above and will be known as the Facilities Special Tax.
In addition to the facilities to be financed, the CFD will also fund additional public services required for the development of the Property. A separate special tax will be levied upon property owners within the Property and will be known as the Services Special Tax.
The City has assembled a team of experts to advise the City on various aspects of the CFD, including:
NBS Government Finance Group
Jones Hall, Bond Counsel
Columbia Capital Management, LLC
Raymond James Financial, Inc.
DISCUSSION
Approval of the resolutions described above is the first step to establishing the proposed CFD for the Property. The resolutions:
adopt new and restated goals and policies for use of the Mello-Roos Community Facilities Act of 1982
approve the boundaries of the proposed community facilities district; specify the Facilities to be financed;
specify the Services to be financed;
specify that special taxes will be levied on all parcels of taxable property in the proposed community facilities district to pay principal of and interest on the bonds of the district, which will be issued to finance the Facilities; specify that special taxes will be levied on all parcels of taxable property in the proposed community facilities district, which will be issued to finance the Services; declare the necessity to incur bonded indebtedness; and Schedule public hearings regarding the formation of the community facilities district and the necessity to incur bonded indebtedness
To use the Mello-Roos Community Facilities Act of 1982, a local jurisdiction must adopt local goals and policies as provided in Government Code Section 53312.7. The City adopted local goals and policies in 1997. The requirements for the content of local goals and policies have changed since 1997, and some provisions of the adopted policies are outdated. A draft resolution to adopt the Amended and Restated Statement of Goals and Policies, in conformance with current requirements, has been prepared for consideration by the City Council (Attachment 1).
A resolution of intention to form the CFD Community Facilities District No. 2026-1 (Station East Facilities and Services) is also attached for the City Council’s consideration (Attachment 2), and includes the following:
Agenda Item No. 6.1
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Exhibit A: Rate and Method of Apportionment of Special Tax Exhibit B: Authorized Facilities and Services
Exhibit C: Form of Notice of Public Hearing
Adoption of the resolution of intention to form the CFD is required to identify the purpose of the CFD, identify the method of levy and apportionment of the special tax, and set the date for public hearing. See Attachment 4 for the CFD Boundary map on file containing the proposed boundaries. The proposed Improvement Area No. 1, shown on the map, includes the portion of Station East now owned by Lennar, the subject of the first Final Map, which will be before the City Council for approval in the next few weeks. The remaining areas of Station East in the Boundary Map are shown as potential annexation areas that could be added to the CFD at a later date. The portions of the already-entitled Station East (Planning Areas 1, 2, and 3) will be annexed into the CFD before the issuance of a building permit, as required by the Tentative Map conditions of approval and the Development Agreement. The portions of Station East south of Bradford Way have not received entitlements and would be eligible to be annexed into the CFD once entitlements are received.
The resolution declaring intention to incur bonded indebtedness is required to establish the City’s intent to issue and sell bonds, define the maximum debt amount, and set the date for a public hearing (Attachment 3).
The final steps for the formation of the proposed community facilities district are planned to occur at the City Council’s meeting on July 14, 2026. The City Council will conduct a public hearing on such day and, following the public hearing, may adopt resolutions to form the proposed community facilities district, determine the necessity to incur bonded indebtedness, and call a special election of the qualified voters to approve the levy of special taxes and incur bonded indebtedness, conduct a special election, and declare election results.
FISCAL IMPACT
City staff will work with Lennar Corporation, the owner and developer, to issue up to $38,000,000 in bonds to pay for sewer system facilities, storm drain improvements, transportation improvements, park improvements, and incidental expenses within the proposed CFD. The property owners of the proposed CFD will be fully responsible for paying any fees and expenses associated with the Facilities or Services to be financed.
This includes all debt service payments and a separate special tax for services. Any bonds issued will not be obligations of the City but of the CFD.
RECOMMENDATION
Staff recommends that the City Council adopt three resolutions: (1) a resolution adopting Amended and Restated Statement of Goals and Policies Regarding Use of the MelloRoos Community Facilities Act of 1982 (Attachment 1), (2) a resolution declaring intention to form the Community Facilities District No. 2026-1 (Station East Facilities and Services) of the City of Union City, designate an initial improvement area therein and establish a future annexation area, and to levy special taxes therein to finance certain public services Agenda Item No. 6.1
City Council Staff Report Page 5 of 5 May 26, 2026
and the acquisition and construction of certain public facilities (Attachment 2), and (3) a resolution declaring intention to incur a bonded indebtedness in and for the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) in an amount not to exceed $38,000,000 to finance the acquisition and construction of certain public facilities (Attachment 3).
Prepared by: Leslie Carmichael, Consultant Planner
Submitted by: Carmela Campbell, Economic and Community Development Director Attachments
1. Draft Resolution Adopting Amended and Restated Statement of Goals and Policies Regarding Use of the Mello-Roos Community Facilities Act of 1982 a. Exhibit A - City of Union City Amended and Restated Statement of Goals and Policies Regarding Use of the Mello-Roos Community Facilities Act of 1982
2. Draft Resolution Declaring Intention to Form Community Facilities District No. 2026-1 (Station East Facilities and Services), Designate an Initial Improvement Area therein and Establish a Future Annexation Area, and to Levy Special Taxes Therein to Finance Certain Public Services and the Acquisition and Construction of Certain Public Facilities
a. Exhibit A – Rate and Method of Special Tax
b. Exhibit B – Authorized Facilities and Services
c. Exhibit C – Form of Notice of Public Hearing
3. Draft Resolution Declaring Intention to Incur a Bonded Indebtedness in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services) in an Amount Not to Exceed $38,000,000 to Finance the Acquisition and Construction of Certain Public Facilities
4. Boundary Map of Community Facilities District 2026-1(Station East Facilities and Services)