City Council Staff Report Page 1 of 5 July 14, 2026
Staff Report
Agenda Item No. 3.1
DATE: July 14, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Adopt the Following Resolutions and Waive Full Reading and Introduce by Title Only the Following Ordinance Related to the Formation and Financing of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services):
1. Adopt a Resolution Forming City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Designating Improvement Area No. 1 Therein,
Establishing a Future Annexation Area, and Authorizing the Levy of Special Taxes to Finance Certain Public Services and the Acquisition and Construction of Certain Public Facilities;
2. Adopt a Resolution Deeming It Necessary to Incur 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;
3. Adopt a Resolution Calling a Special Election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services);
4. Adopt a Resolution Declaring the Results of the Special Election for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services); and
5. Waive Full Reading and Introduce by Title Only an Ordinance Levying Special Taxes Within City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)
Agenda Item No. 3.1
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EXECUTIVE SUMMARY
Staff recommends that the City Council adopt the following resolutions and waive full reading and introduce by title only the following ordinance related to the formation and financing of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services): (1) a resolution forming City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), designating Improvement Area No. 1 therein, establishing a future annexation area, and authorizing the levy of special taxes to finance certain public services and the acquisition and construction of certain public facilities; (2) a resolution deeming it necessary to incur 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; (3) a resolution calling a special election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services); (4) a resolution declaring the results of the special election for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services); and (5) waive full reading and introduce by title only an ordinance levying special taxes within City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services).
These actions will finalize the process to form the new community facilities district for Station East, as anticipated in the Station East Development Agreement.
STRATEGIC PLAN ALIGNMENT
This agenda item is in alignment with:
- Goal C. Economic, Community Development, and Public Safety - Institute forward-thinking strategies in business, land use development, housing, social services, and public safety 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 housing development applications, and other measures.
BACKGROUND
A community facilities district (CFD), also known as a Mello-Roos District, is a specialpurpose district formed to finance specific public infrastructure and services. Property owners within the CFD pay a special tax in addition to their other property taxes. The revenue is used to fund services, improvements, and/or to pay off bonds. The City has an existing CFD, CFD 2006-1, formed in 2007 to fund certain public services, including police, fire protection and suppression, paramedic, and park maintenance.
The Station East Development Agreement, approved by Ordinance 886-21, requires the formation of a CFD or an equivalent mechanism for the project. The CFD allows the developer 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 fiscal imbalance for services provided; 2) Finance capital facilities (i.e., project infrastructure such as roads or other public Agenda Item No. 3.1
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improvements); and 3) Finance outside agency fees (i.e., ACWD, NHUSD, USD).
The special tax levied on property owners to fund infrastructure improvements or agency fees is known as the Facilities Special Tax. In addition, the portion of the CFD that offsets the fiscal imbalance will be used to support City services and is known as the Services Special Tax. The City has engaged consultants specializing in CFD formation to advise it on various aspects of the CFD.
On May 26, 2026, the City adopted Resolution No. 2026-074, setting forth the City’s intention to establish Community Facilities District No. 2026 (Station East Facilities and Services) (“CFD-2026-1”), designate Improvement Area No. 1 therein, establish the Future Annexation Area, and authorize the levy of special taxes. The City also adopted Resolution 2026-075 to Incur Bonded Indebtedness to Finance the Acquisition and Construction of Certain Public Facilities in Order to Mitigate the Impacts of Development within the proposed CFD No. 2026-1. In addition, the City Council approved Resolution No. 2026-073, adopting the “Amended and Restated Statement of Goals and Policies Regarding Use of the Mello-Roos Community Facilities Act of 1982,” which had not been updated for several years. Click here for a link to the City Council staff report and attachments for this item.
DISCUSSION
Approval of the resolutions described below is the next step toward establishing the proposed CFD and designating the initial Improvement Area therein. Each resolution to be approved complies with the Act and the City’s CFD policy.
A Public Hearing is required on (a) the formation of the City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), the designation of an initial Improvement Area No. 1 therein, and the establishment of the Future Annexation Area; (b) the levy of special taxes within Improvement Area No. 1; and (c) the need to incur bonded indebtedness for the CFD and the improvement areas therein. Following the public hearing, the City Council will consider the following resolutions and an ordinance levying special taxes:
1. “Resolution of the City Council of the City of Union City to form City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), designate Improvement Area No. 1 therein and establish a future annexation area, and to authorize the levy of special taxes therein to finance certain public services and the acquisition and construction of certain public facilities.”
2. “Resolution of the City Council of the City of Union City deeming it necessary to incur 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.”
3. “Resolution of the City Council of the City of Union City calling special election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services).”
4. “Resolution of the City Council of the City of Union City declaring election results Agenda Item No. 3.1
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of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services).”
In addition to forming the CFD, the Resolution of Formation also approves an Acquisition Agreement between the City, for and on behalf of the CFD, and Lennar Homes of California, LLC (Lennar Homes), as the developer of the land within Improvement Area No. 1. Under the Acquisition Agreement, the City would acquire public facilities from Lennar Homes using proceeds of the facilities special tax and/or bonds issued for Improvement Area No. 1 that are secured by that tax.
If the proposed actions are approved, the City would be authorized to incur bonded indebtedness for the CFD in an amount not to exceed $38,000,000 (the “Authorization”), initially allocated as follows: (i) for Improvement Area No. 1, the bonded indebtedness limit is $20,000,000 and (ii) for the portion of the CFD that is not currently in Improvement Area No. 1, the bonded indebtedness limit is not to exceed $18,000,000 (the “Future Improvement Area Indebtedness Limit”). There is no series of bonds to be authorized at this time.
Finally, the proposed ordinance would authorize the imposition of special taxes within the CFD. If the foregoing actions are approved, the final steps for the formation of the CFD (second reading and approval of the Ordinance) would occur on July 28, 2026.
FISCAL IMPACT
All costs of forming the CFD, designating Improvement Area No. 1 therein, and establishing the Future Annexation Area are being funded by a deposit from Lennar Homes, the applicant. Going forward, the special taxes levied for Facilities and for Services will be used by the City to pay any fees, expenses, or debt service associated with the Facilities or Services to be financed. The special taxes will offset the City’s costs of providing the Facilities and Services to the new development planned within the CFD.
If and when special tax bonds are issued in the future to pay for the Facilities, debt service on the bonds will be payable solely from the special taxes levied for the Facilities within the CFD and not from the City’s General Fund or any other funds or accounts of the City.
RECOMMENDATION
Staff recommends that the City Council conduct a public hearing, adopt the following resolutions, waive full reading, and introduce by title only the following ordinance related to the formation and financing of City of Union City Community Facilities District No. 2026- 1 (Station East Facilities and Services): (1) a resolution forming City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), designating Improvement Area No. 1 therein, establishing a future annexation area, and authorizing the levy of special taxes to finance certain public services and the acquisition and construction of certain public facilities; (2) a resolution deeming it necessary to incur 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; (3) a resolution calling a special election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services); (4) a resolution declaring the results of the special election for City of Union City Community Facilities District No. 2026-1 (Station East Agenda Item No. 3.1
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Facilities and Services); and (5) waive full reading and introduce by title only an ordinance levying special taxes within City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services).
Prepared by: Leslie Carmichael, Consulting Planner
Submitted by: Carmela Campbell, Economic and Community Development Director Attachments
1. Draft Resolution of the City Council of the City of Union City to Form City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services), Designate Improvement Area No. 1 therein and Establish a Future Annexation Area, and to authorize the Levy of 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 Acquisition Agreement
2. Draft Resolution of the City Council of the City of Union City Deeming it Necessary to Incur 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
3. Draft Resolution of the City Council of the City of Union City Calling Special Election in and for City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)
a. Exhibit A – Form of Special Election Ballot
4. Draft Resolution of the City Council of the City of Union City Declaring Election Results of City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)
a. Exhibit A – Form of Canvass and Statement of Results of Election
5. Draft Ordinance of the City Council of the City of Union City Levying Special Taxes within City of Union City Community Facilities District No. 2026-1 (Station East Facilities and Services)